As filed with the Securities and Exchange Commission on January 13, 1997
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
DREYFUS GROWTH AND VALUE FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
200 Park Avenue - 55th Floor
New York, New York 10166
(Address of Principal Executive Offices)
(800) 225-5267
(Registrant's Area Code and Telephone Number)
John E. Pelletier, Secretary
Dreyfus Growth and Value Funds, Inc.
200 Park Avenue - 55th Floor
New York, New York 10166
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: as soon as practicable
after this Registration Statement becomes effective.
The Registrant has filed a declaration registering an indefinite number
of securities pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended. Accordingly, no filing fee is payable herewith. The Registrant filed
on October 30, 1996, the notice required by Rule 24f-2 for its fiscal year ended
August 31, 1996.
<PAGE>
DREYFUS GROWTH AND VALUE FUNDS, INC.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following documents:
Cover Sheet
Contents of Registration Statement
Cross Reference Sheet
Letter to Shareholders
Notice of Special Meeting
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Pages
Exhibits
<PAGE>
DREYFUS AGGRESSIVE GROWTH FUND
FORM N-14 CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Part A Item No. Prospectus/Proxy
and Caption Statement Caption
----------- -----------------
<S> <C>
1. Beginning of Registration Statement and Outside Front Cover Page
Cover Page of Prospectus
2. Beginning and Outside Back Cover Page of Prospectus Table of Contents
3. Synopsis Information and Risk Factors Summary; Comparison of Investment Objectives and
Policies; Risk Factors
4. Information About the Transaction Summary; Reasons for the Reorganization;
Information about the Reorganization; Comparative
Information on Shareholders' Rights
5. Information About the Registrant Summary; Comparison of Investment Objectives and
Policies; Risk Factors; Additional Information
About the Acquiring Fund and the Acquired Fund;
See Also, the Prospectus of Dreyfus Aggressive
Growth Fund, dated December 16, 1996, previously
filed on EDGAR, Accession No.
0000914775-96-000033.
6. Information About the Company Being Acquired Summary; Comparison of Investment Objectives and
Policies; Risk Factors; Additional Information
About the Acquiring Fund and the Acquired Fund;
See Also, the Prospectus of Dreyfus Special
Growth Fund, dated May 1, 1996, previously filed
on EDGAR, Accession No. 0000053808-96-000017
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Summary; Information about the Reorganization
9. Additional Information Required for Reoffering by Not Applicable
Persons Deemed to be Underwriters
</TABLE>
<PAGE>
DREYFUS AGGRESSIVE GROWTH FUND
FORM N-14 CROSS REFERENCE SHEET
(continued)
<TABLE>
<CAPTION>
Part B Item No. Statement of Additional
and Caption Information Caption
----------- -------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Registrant Statement of Additional Information of Dreyfus
Aggressive Growth Fund, dated December 16, 1996,
previously filed on EDGAR, Accession No.
0000914775-96-000033.
13. Additional Information About the Company Being Statement of Additional Information of Dreyfus
Acquired Special Growth Fund, dated May 1, 1996,
previously filed on EDGAR, Accession No.
0000053808-96-000017
14. Financial Statements Audited Financial Statements for the Period Ended
August 31, 1996, in the Statement of Additional
Information of Dreyfus Aggressive Growth Fund,
dated December 16, 1996, previously filed on
EDGAR, Accession No. 0000914775-96-000033.
Annual Report of Dreyfus Special Growth Fund, for
Fiscal Year Ended December 31, 1995 previously
filed on EDGAR, Accession No. 0000053808-96-000005
Semi-Annual Report of Dreyfus Special Growth Fund
for Period Ended June 30, 1996 (unaudited),
previously filed on EDGAR, Accession No.
0000053808-96-000018
Pro Forma Financial Statements as of August 31,
1996 (unaudited)
</TABLE>
PART C
------
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
THE DREYFUS/LAUREL FUNDS TRUST
DREYFUS SPECIAL GROWTH FUND
200 PARK AVENUE
NEW YORK, NEW YORK 10166
February __, 1997
Dear Shareholder:
The Board of Trustees of The Dreyfus/Laurel Funds Trust (the "Trust")
has recently reviewed and unanimously endorsed a proposal for the reorganization
of Dreyfus Special Growth Fund (the "Fund"), a series of the Trust, that the
Trustees judge to be in the best interests of the shareholders of the Fund.
Under the terms of the proposal, Dreyfus Aggressive Growth Fund (the
"Acquiring Fund"), a series of Dreyfus Growth and Value Funds, Inc., would
acquire all the assets and assume liabilities of the Fund. Holders of Investor
and Class R Shares of the Fund would become shareholders of the Acquiring Fund,
receiving (in exchange for such shares) shares of the Acquiring Fund with an
aggregate net asset value equal to the aggregate net asset value of their
investment in the Fund at the time of the transaction, and the Fund would be
terminated. The transaction would, in the opinion of counsel, be free from
federal income tax to you and the Fund. The Board of Trustees of the Trust has
determined that the proposed reorganization should provide benefits to
shareholders due, in part, to enhanced operations.
Detailed information about the proposed transaction is described in the
enclosed prospectus/proxy statement.
The Board of Trustees has called a Special Meeting of Shareholders to
be held April 7, 1997 to consider this transaction. WE STRONGLY INVITE YOUR
PARTICIPATION BY ASKING YOU TO REVIEW THE ENCLOSED MATERIAL, AND COMPLETE AND
RETURN YOUR PROXY CARD AS SOON AS POSSIBLE.
I thank you for your participation as a shareholder and urge you to
exercise your right to vote by completing, dating, signing and returning the
enclosed proxy card. A self-addressed, postage-paid envelope has been enclosed
for your convenience.
If you have any questions regarding the proposed transaction, please
call toll-free 1-800-645-6561.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN APRIL 6, 1997.
Sincerely,
Marie E. Connolly,
President, The Dreyfus/Laurel Funds Trust
<PAGE>
THE DREYFUS/LAUREL FUNDS TRUST
DREYFUS SPECIAL GROWTH FUND
200 PARK AVENUE
NEW YORK, NEW YORK 10166
-----------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 7, 1997
-------------------------------------------
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of Dreyfus Special Growth Fund (the "Acquired Fund"), a series of The
Dreyfus/Laurel Funds Trust (formerly known as The Laurel Funds Trust and prior
to that as The Boston Company Fund) (the "Trust"), will be held at the offices
of the Trust, 200 Park Avenue, New York, New York on April 7, 1997 at 10:00 a.m.
for the following purposes:
1. For Investor and Class R shareholders of the Acquired Fund to approve
or disapprove the Agreement and Plan of Reorganization dated as of
December 31, 1996 (the "Plan") providing for (a) the acquisition of all
the assets of the Acquired Fund by Dreyfus Aggressive Growth Fund (the
"Acquiring Fund"), a series of Dreyfus Growth and Value Funds, Inc.
(formerly known as Dreyfus Focus Funds, Inc.), in exchange solely for
shares of the Acquiring Fund and the assumption by the Acquiring Fund
of liabilities of the Acquired Fund, (b) the distribution of those
shares of the Acquiring Fund to the holders of the Investor and Class R
Shares of the Acquired Fund in each case in an amount equal in net
asset value to the holders of Investor and Class R Shares of the
Acquired Fund, and (c) the subsequent termination of the Acquired Fund.
2. To transact any other business that may properly come before the
Meeting or any adjournment or adjournments thereof.
The Trustees of the Trust have fixed the close of business on January
31, 1996 as the record date for the determination of shareholders of the
Acquired Fund entitled to notice of and to vote at the Meeting or any
adjournment or adjournments thereof.
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY. SHAREHOLDERS WHO
DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED WITHOUT DELAY TO SIGN
AND RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE PREPAID ENVELOPE PROVIDED, SO
THAT THEIR SHARES MAY BE REPRESENTED AT THE MEETING. YOUR PROMPT ATTENTION TO
THE ENCLOSED PROXY MATERIALS WILL HELP TO AVOID THE EXPENSE OF FURTHER
SOLICITATION.
February __, 1997 By order of the Board of Trustees
JOHN E. PELLETIER
Secretary
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating your
vote if you fail to sign your proxy card(s) properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card(s).
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration on
the proxy card(s).
3. All Other Accounts: The capacity of the individual signing the proxy
card(s) should be indicated. For example:
Registration Valid Signature
-------------------- ---------------------
Corporate Accounts
------------------
(1) ABC Corp. John Doe, Treasurer
(2) ABC Corp.
c/o John Doe, Treasurer John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
--------------
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d/ 12/28/78 Jane B. Doe, Trustee
Custodial or Estate Accounts
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
<PAGE>
DREYFUS AGGRESSIVE GROWTH FUND
A SERIES OF DREYFUS GROWTH AND VALUE FUNDS, INC.
---------
DREYFUS SPECIAL GROWTH FUND
A SERIES OF THE DREYFUS/LAUREL FUNDS TRUST
---------
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-645-6561
PROSPECTUS/PROXY STATEMENT DATED FEBRUARY 12, 1997
This Prospectus/Proxy Statement (the "Proxy Statement") is being
furnished to shareholders of Dreyfus Special Growth Fund (the "Acquired Fund"),
a separate, diversified portfolio of The Dreyfus/Laurel Funds Trust (formerly
known as The Laurel Funds Trust and prior to that known as The Boston Company
Fund) (the "Trust"), a management investment company, in connection with a
proposed Agreement and Plan of Reorganization (the "Plan") between the Trust, on
behalf of the Acquired Fund, and Dreyfus Growth and Value Funds, Inc. (formerly
known as Dreyfus Focus Funds, Inc.) (the "Company"), a management investment
company, on behalf of Dreyfus Aggressive Growth Fund (the "Acquiring Fund"), a
separate, diversified portfolio of the Company, to be submitted to shareholders
of the Acquired Fund for consideration at a Special Meeting of Shareholders to
be held on April 7, 1997 at 10:00 a.m. Eastern time, at the offices of the
Trust, 200 Park Avenue, New York, New York, and any adjournments thereof (the
"Meeting"). A conformed copy of the Plan is attached to this Proxy Statement as
Appendix A.
AVAILABLE INFORMATION. This Proxy Statement, which should be retained
for future reference, sets forth concisely the information about the Acquiring
Fund that shareholders of the Acquired Fund should know before voting on the
Plan and receiving Acquiring Fund Shares (as defined below). A Prospectus dated
December 16, 1996, describing the Acquiring Fund in greater detail, and the
Acquiring Fund's Annual Report for the period ended August 31, 1996 (including
its audited financial statements for the period then ended), accompany this
Proxy Statement. Certain relevant documents listed below have been filed with
the Securities and Exchange Commission ("SEC"), are incorporated herein in whole
or in part by reference, and are available upon request and without charge by
calling toll-free 1-800-645-6561 or by writing to 144 Glenn Curtiss Boulevard,
Uniondale, New York 11566-0144.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THE NET ASSET VALUE
OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
1
<PAGE>
A Statement of Additional Information dated February 12, 1997, relating
to this Proxy Statement, incorporating by reference the audited financial
statements of the Acquiring Fund at August 31, 1996, and the audited financial
statements of the Acquired Fund at December 31, 1995, has been filed with the
SEC and is incorporated by reference in its entirety into this Proxy Statement.
A Statement of Additional Information relating to the Acquiring Fund's
Prospectus dated December 16, 1996, has also been filed with the SEC and is
incorporated by reference in its entirety into this Proxy Statement. A copy of
such Statements of Additional Information of the Acquiring Fund are available
from the Acquiring Fund through the toll-free number and at the address above.
The Prospectus of the Trust describing the Acquired Fund dated May 1,
1996, and a Statement of Additional Information of the same date relating to
that Prospectus, are incorporated by reference herein in their entirety. Copies
of that Prospectus and Statement of Additional Information, the Annual Report of
the Acquired Fund for its fiscal year ended December 31, 1995, including its
audited financial statements, and the Semi-Annual Report of the Acquired Fund
for the period ended June 30, 1996, including its unaudited financial
statements, are also available from the Acquired Fund through the toll-free
number and at the address above.
THE FUNDS. The Dreyfus Corporation ("Dreyfus"), a wholly-owned
subsidiary of Mellon Bank, N.A. ("Mellon Bank"), serves as investment manager to
both the Acquiring Fund and the Acquired Fund (together, the "Funds," or
individually, a "Fund"). The Acquiring Fund seeks capital appreciation. It does
so by investing principally in a portfolio of publicly-traded equity securities
of domestic and foreign issuers which would be characterized as "growth"
companies according to criteria established by Dreyfus. The Acquiring Fund
offers a single class of shares. The Acquired Fund seeks above-average growth of
capital without regard to income. It does so through investments principally in
securities of issuers thought to have significant growth potential. The Acquired
Fund offers two classes of shares -- Investor Shares and Class R Shares.
THE PLAN. The Plan provides for all the assets of the Acquired Fund to
be acquired by the Acquiring Fund in exchange solely for shares of the Acquiring
Fund (the "Acquiring Fund Shares") and the assumption by the Acquiring Fund of
liabilities of the Acquired Fund. Those Acquiring Fund Shares will then be
distributed to holders of Investor and Class R Shares of the Acquired Fund
(together, the "Acquired Fund Shares"), in liquidation of the Acquired Fund, and
the Acquired Fund will be terminated. (All such transactions are referred to
herein as the "Reorganization"). As a result of the Reorganization, each holder
of Acquired Fund Shares will receive that number of full and fractional
Acquiring Fund Shares having an aggregate net asset value equal to the aggregate
net asset value of such shareholder's Acquired Fund Shares held as of the time
of the Reorganization. The Funds have been advised by counsel that the
Reorganization will constitute a tax-free reorganization for federal income tax
purposes.
Holders of Investor and Class R shares of the Acquired Fund are
requested to vote to approve the Plan.
2
<PAGE>
TABLE OF CONTENTS
PAGE
Summary.......................................................................4
Reasons for the Reorganization...............................................10
Information About the Reorganization.........................................11
Comparison of Investment Objectives and Policies.............................14
Risk Factors.................................................................16
Comparative Information on Shareholders' Rights..............................19
Additional Information About the Acquiring Fund and the Acquired Fund........21
Other Business...............................................................22
Voting Information...........................................................22
Financial Statements and Experts.............................................24
Legal Matters................................................................25
Appendix A: Agreement and Plan of Reorganization............................A-1
3
<PAGE>
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT, THE
PROSPECTUS OF THE ACQUIRING FUND DATED DECEMBER 16, 1996, THE PROSPECTUS OF THE
ACQUIRED FUND DATED MAY 1, 1996, AND THE PLAN, A COPY OF WHICH IS ATTACHED TO
THIS PROXY STATEMENT AS APPENDIX A.
PROPOSED REORGANIZATION. The Plan provides for the transfer of all the
assets of the Acquired Fund in exchange solely for the Acquiring Fund Shares and
the assumption by the Acquiring Fund of liabilities of the Acquired Fund. Under
the Plan, those Acquiring Fund Shares will then be distributed to holders of the
Acquired Fund Shares, in liquidation of the Acquired Fund, and the Acquired Fund
will be terminated. As a result of the Reorganization, each holder of Acquired
Fund Shares will receive that number of Acquiring Fund Shares having an
aggregate net asset value equal to the aggregate net asset value of such
shareholder's Acquired Fund Shares held as of the close of regular trading on
the New York Stock Exchange (the "NYSE") on the date of the Reorganization (the
"Closing Date"). See "Information About the Reorganization."
For the reasons set forth below under "Reasons for the Reorganization,"
the Board of Trustees of the Trust, including the Trustees who are not
"interested persons," as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act") (the "non-interested" Trustees), of the Trust
has unanimously determined that the Reorganization would be in the best
interests of the Acquired Fund and its shareholders and that the interests of
the Acquired Fund's existing shareholders will not be diluted as a result of the
Reorganization. The Trust's Board of Trustees has therefore submitted the Plan
for the approval of the Acquired Fund's shareholders. In addition, the Company's
Board of Directors, including the Company's non-interested Directors, has
unanimously determined that the Reorganization would be in the best interests of
the Acquiring Fund and that the interests of the Acquiring Fund's existing
shareholders will not be diluted as a result of the Reorganization.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS APPROVAL OF THE PLAN.
Approval of the Plan on the part of the Acquired Fund will require the
affirmative vote of "a majority of the outstanding voting securities" of the
Acquired Fund and of each class thereof, which for this purpose means the
affirmative vote of the lesser of: (i) 67% of the voting securities of the
Acquired Fund or class present at the Meeting, if the holders of more than 50%
of the outstanding voting securities of the Acquired Fund or class are present
or represented by proxy, or (ii) more than 50% of the outstanding voting
securities of the Acquired Fund or class. See "Voting Information."
If the shareholders of the Acquired Fund do not vote to approve the
Plan, the Trustees of the Trust will continue the management of the Acquired
Fund and may consider other alternatives in the best interests of the
shareholders.
TAX CONSEQUENCES. The Trust has been advised by its counsel,
Kirkpatrick & Lockhart LLP, to the effect that the Reorganization will
constitute a tax-free reorganization for federal income tax purposes and that,
accordingly, no gain or loss will be recognized for those purposes as a result
of the Reorganization either to the Acquired Fund (except, possibly, with
respect to certain hedging instruments held by the Acquired Fund) or to its
shareholders. Consequently, the holding period and aggregate tax basis of the
4
<PAGE>
Acquiring Fund Shares that are to be received by each holder of Acquired Fund
Shares will be the same as the holding period and aggregate tax basis of the
Acquired Fund Shares previously held by such shareholder. In addition, the
holding period and tax basis of the assets to be transferred to the Acquiring
Fund (other than the instruments mentioned above) will be the same in the
Acquiring Fund's hands as in the Acquired Fund's hands immediately prior to the
Reorganization. See "Information About the Reorganization -- Federal Income Tax
Consequences."
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Acquiring Fund's
investment objective is capital appreciation. It seeks to achieve this
investment objective by investing at least 65% of its assets (except when
maintaining a temporary defensive position) in a portfolio of publicly-traded
equity securities of domestic and foreign issuers which are characterized as
"growth" companies according to criteria established by Dreyfus. The Acquiring
Fund may invest up to 30% of its total assets in securities of foreign companies
which are not publicly-traded in the United States and the debt securities of
foreign governments. The 's securities selections generally will
be made without regard to an issuer's market capitalization.
The Acquired Fund seeks above-average capital growth without regard to
income. It seeks to achieve this investment objective through investments
principally in securities of issuers thought to have significant growth
potential. The Acquired Fund places emphasis on smaller companies believed to
possess above-average growth opportunities. Investments will also be made in
larger, more established companies which appear to have opportunities for
above-average growth. In addition, the Acquired Fund looks for issuers with
unique or proprietary products or services leading to a rapidly growing market
share, and for issuers with well-above-average sales and earnings growth
expected for the next several years.
Although the respective investment objectives and policies of the
Acquiring Fund and the Acquired Fund are similar in their concentration in
companies believed to have above-average potential for growth, shareholders of
the Acquired Fund should consider certain differences in such objectives and
policies. See "Comparison of Investment Objectives and Policies." IN ADDITION,
SHAREHOLDERS OF THE ACQUIRED FUND SHOULD RECOGNIZE THAT THE ACQUIRING FUND HAS
BEEN IN OPERATION FOR ONLY APPROXIMATELY 16 MONTHS AND THAT THE NET ASSET VALUE
PER SHARE OF THE ACQUIRING FUND IS LIKELY TO BE VOLATILE. FOR THE FISCAL PERIOD
ENDED AUGUST 31, 1996, THE ACQUIRING FUND'S TOTAL RETURN WAS 81.68%
(UNANNUALIZED) AS STATED IN ITS ANNUAL REPORT FOR SUCH PERIOD (A COPY OF WHICH
ACCOMPANIES THIS PROSPECTUS). FOR THE TWELVE-MONTH PERIOD ENDED DECEMBER 31,
1996, THE ACQUIRING FUND'S TOTAL RETURN WAS 20.64%. THE PERFORMANCE OF THE
ACQUIRING FUND DURING THESE PERIODS IS NOT NECESSARILY INDICATIVE OF ITS FUTURE
RESULTS.
MANAGEMENT AND OTHER SERVICE PROVIDERS. The business affairs of the
Company are managed by its Board of Directors, and the business affairs of the
Trust are managed by its Board of Trustees.
Dreyfus, a wholly-owned subsidiary of Mellon Bank, serves as the
investment manager for both the Acquiring Fund and the Acquired Fund. As of
September 30, 1996, Dreyfus managed or administered approximately $81 billion in
assets for more than 1.7 million investor accounts nationwide.
Each Fund's primary portfolio manager is Michael L. Schonberg. He has
held that position with the Acquiring Fund since September, 1995 and with the
Acquired Fund since February, 1996. He has been employed by Dreyfus since July,
1995. Prior to joining Dreyfus, Mr. Schonberg was a General Partner of Omega
Advisors since 1994 and, for more than five years prior thereto, Chief
Investment Officer and a Managing Director at UBS Asset Management.
5
<PAGE>
Premier Mutual Fund Services, Inc. ("Premier") acts as distributor for
both Funds, and Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, is
the transfer agent for both Funds. Mellon Bank, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, serves as custodian for both Funds.
FEES AND EXPENSES. The Acquiring Fund has agreed to pay Dreyfus, as its
investment manager, a fee, computed daily and payable monthly, at the annual
rate of .75 of 1% of the value of its average daily net assets. The Acquiring
Fund's shares are subject to a Shareholder Services Plan whereby the Acquiring
Fund pays Premier for the provision of certain shareholder services to Acquiring
Fund shareholders a fee at the annual rate of .25 of 1% of the value of the
Acquiring Fund's average daily net assets. See "Purchase and Redemption
Procedures." In addition, the Acquiring Fund pays expenses to third parties for
the provision of custody, transfer agency, legal, audit and other services.
The Acquiring Fund engages in leveraging activity and in so doing
incurs expenses for interest and loan commitment fees. See "Risk Factors -
Borrowing." Interest expenses and loan commitment fees for the Acquiring Fund
for the period from September 29, 1995 (commencement of operations) to August
31, 1996 amounted to .24% of the Acquiring Fund's average daily net assets, or
.26% of the Acquiring Fund's average daily net assets on an annualized basis.
Total fund operating expenses for the Acquiring Fund, including interest
expense and loan commitment fees, for such period were 1.70% of the Acquiring
Fund's average daily net assets on an annualized basis. From time to time,
Dreyfus may waive receipt of a portion or all of its fees, or voluntarily assume
certain expenses of the Acquiring Fund, either of which would have the effect of
lowering the overall expense ratio of the Acquiring Fund and increasing yield to
investors. Dreyfus has agreed, for the two-year period following the
consummation of the Reorganization, to waive receipt of a portion of the
Acquiring Fund's management fee, and/or absorb certain operating expenses of the
Acquiring Fund, so that total operating expenses of the Acquiring Fund,
including interest expense and loan commitment fees, are limited to 1.20% of
its average daily net assets.
Shares of the Acquiring Fund acquired on or after February 28, 1997,
and redeemed or exchanged less than 15 days after they are acquired, will be
subject to a redemption fee equal to 1% of the net asset value of shares
redeemed or exchanged. See "Purchase and Redemption Procedures".
The Acquired Fund currently pays Dreyfus, as its investment manager, a
fee, computed daily and payable monthly, at the annual rate of 1.15% of the
value of its average daily net assets less certain expenses. Dreyfus arranges
and pays for all of the expenses of the Acquired Fund, except brokerage fees,
taxes, interest, Rule 12b-1 fees, and extraordinary expenses. In addition, the
Acquired Fund's Investor Shares are sold subject to a distribution plan adopted
by the Acquired Fund pursuant to Rule 12b-1 under the 1940 Act ("12b-1 plan"),
under which fees are assessed at an annual rate of .25 of 1% of average daily
net assets attributable to the Investor Shares. See "Purchase and Redemption
Procedures."
Prior to April 4, 1994, the Acquired Fund operated pursuant to a
predecessor investment management agreement under which it paid a fee to its
investment manager at an annual rate of 1.00% of its average daily net assets,
and the Acquired Fund arranged and separately paid for administrative, custody,
transfer agency, fund accounting, securities registration, legal and audit
services.
The following table shows the actual annual fund operating expenses
allocable to the Investor and Class R Shares of the Acquired Fund for the
6
<PAGE>
Acquired Fund's fiscal year ended December 31, 1995, the actual annual fund
operating expenses paid by the Acquiring Fund for its fiscal period ended August
31, 1996, and estimated total annual fund operating expenses to be paid by the
Acquiring Fund after giving effect to the Reorganization (the "Combined Fund" in
the table) with and without the two year voluntary expense limitation agreed to
by Dreyfus.
7
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)*
<TABLE>
<CAPTION>
Acquired Fund Acquiring Fund
(12 month period (Fiscal Period
Ended 8/31/96) Ended 8/31/96) Combined Fund
-------------- -------------- -------------
(Two year
Investor Class R voluntary
Shares Shares (no cap) cap)
------ ------ -------- ----
<S> <C> <C> <C> <C> <C>
Management Fees 1.15% 1.15% .75%** .75% .60%****
12b-1 Fees .25% none none none none
Other Expenses .00% .00% .95%**+ .60%***+ .60%****+
----- ----- ----- ---- ----
Total Fund
Operating Expenses 1.40% 1.15% 1.70%** 1.35%*** 1.20%****
</TABLE>
EXAMPLE: You would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) redemption at the end of each
time period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1 year $ 14 $ 12 $ 17 $ 14 $ 12
3 years $ 44 $ 37 $ 54 $ 43 $ 40
5 years $ 77 $ 63 $ 92 $ 74 $ 71
10 years $168 $140 $ 201 $162 $160
</TABLE>
* The table does not reflect a 1% redemption fee that will be imposed by
the Acquiring Fund on shares acquired on or after February 28, 1997 and
redeemed or exchanged less than 15 days following the issuance of such
shares.
** Management Fees and Total Fund Operating Expenses have not been
restated to reflect a voluntary undertaking by Dreyfus, through the
fiscal period ended August 31, 1996, to waive its fee or bear certain
expenses to the extent that the Acquiring Fund's expenses, including
management fees but excluding interest expense and loan commitment
fees, exceeded 1.25% of the value of the Acquiring Fund's average daily
net assets. The expenses noted above, after such fee waiver or
reimbursement, were: Management Fees --.57%, Other Expenses --.68% and
Total Fund Operating Expenses -- 1.25%.
*** Other Expenses (annualized, as a percentage of average daily net
assets) reflect the increase in the average assets of the Acquiring
Fund that is expected to result from the consummation of the
Reorganization. Accordingly, Total Fund Operating Expenses, as a
percentage of average daily net assets, are expected to be reduced as a
result of the Reorganization.
**** Dreyfus has agreed to limit the Acquiring Fund's Total Fund Operating
Expenses to 1.20% of the Acquiring Fund's average daily net assets for
a period of two years following the completion of the Reorganization.
Management fees may be higher than indicated and Other Expenses may be
reduced pursuant to this limitation.
+ The Acquiring Fund pays a fee of .25% of its average daily net assets
pursuant to its Shareholder Services Plan, which is included in "Other
Expenses." Other Expenses includes interest expense and loan
commitment fees related to the Acquiring Fund's leveraging activities,
which for the period ended August 31, 1996, were .26% (annualized) of
the Acquiring Fund's average daily net assets. Interest expense and
loan commitment fees in subsequent periods may be higher or lower,
depending on the degree to which the Acquiring Fund engages in such
activities. Operating Expenses for the Combined Fund are based on
interest expenses and loan commitment fees of .11% of the average daily
net assets of the Combined Fund.
THE AMOUNTS LISTED ABOVE SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF PAST OR
FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, A FUND'S
ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN ACTUAL RETURNS GREATER OR LESS
THAN 5%.
8
<PAGE>
PURCHASE AND REDEMPTION PROCEDURES. The Acquired Fund offers two
classes of shares: Investor and Class R Shares. Investor Shares are sold
primarily to retail investors by Premier and by banks, securities brokers or
dealers and other financial institutions (including Mellon Bank and its
affiliates) (collectively, "Agents") that have entered into a Selling Agreement
with Premier. Class R Shares are sold primarily to bank trust departments and
other financial service providers (including Mellon Bank and its affiliates)
acting on behalf of customers having a qualified trust or investment account or
relationship at such institution, or to customers who have received and hold
shares distributed to them by virtue of such an account or relationship. The
Acquiring Fund offers a single class of shares that are also offered by Agents
that have entered into a Selling Agreement with Premier and are also directly
available from Premier.
All shares of each Fund are sold without a sales charge at their
respective net asset values per share determined as of the close of trading on
the floor of the NYSE on the day the purchase order is deemed accepted. The
Acquiring Fund has adopted a Shareholder Services Plan pursuant to which it pays
Premier for the provision of certain services to Acquiring Fund shareholders a
fee at the annual rate of .25 of 1% of the value of that Fund's average daily
net assets. The services provided pursuant to the Shareholders Services Plan may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Acquiring Fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. Shares of the Acquiring Fund acquired by purchase or exchange after
February 28, 1997 and redeemed or exchanged less than 15 days after they are
acquired, will be subject to a redemption fee of 1% of the value of the shares
redeemed or exchanged. The redemption fee will be retained by the Acquiring Fund
and will be used to offset expenses associated with these short-term
transactions. No redemption fee will be charged on the redemption or exchange of
shares (1) through the Acquiring Fund's Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege, (2) through accounts that are reflected on the records
of the Transfer Agent as omnibus accounts approved by Dreyfus Service
Corporation, (3) through accounts established by Service Agents approved by
Dreyfus Service Corporation that utilize the National Securities Clearing
Corporation's networking system, or (4) acquired through the reinvestment of
dividends or capital gains distributions. For purposes of calculating the 15-day
holding period, the Acquiring Fund will employ the "first in, first out" method,
which assumes that the shares redeemed or exchanged are the ones held the
longest. The redemption fee may be waived, modified or terminated at any time.
Investor Shares of the Acquired Fund are sold subject to the Acquired
Fund's 12b-1 plan, under which the Acquired Fund spends annually up to .25 of 1%
of the value of the average daily net assets attributable to Investor Shares to
compensate Dreyfus Service Corporation, an affiliate of Dreyfus, for shareholder
servicing activities and Premier for shareholder servicing activities and for
activities or expenses primarily intended to result in the sale of Investor
Shares.
EXCHANGE PRIVILEGES. Shareholders of the Acquired Fund may exchange
those shares for shares of the same class of certain other funds advised by
Dreyfus. Shareholders of the Acquired Fund are limited to six exchanges out of
that Fund during a calendar year. Shareholders of the Acquiring Fund may
exchange shares thereof for shares of certain other funds advised by Dreyfus.
Currently, there is no limit on the number of exchanges for shareholders of the
Acquiring Fund. As part of the Reorganization, each holder of Investor or Class
R Shares of the Acquired Fund who receives Acquiring Fund Shares will be
entitled to the exchange privileges offered by the Acquiring Fund. In the case
of each Fund, except for personal retirement plans, the shares being exchanged
and the shares of the fund being acquired must have a current value of at least
$500 and otherwise meet the minimum investment requirement of the fund being
9
<PAGE>
acquired. For further information see "Shareholder Services -- Fund Exchanges"
in the accompanying Prospectus of the Acquiring Fund and the Prospectus of the
Acquired Fund (which is available upon request).
DIVIDENDS. The policies of each Fund with regard to dividends and other
distributions are similar. Each Fund's policy is to declare and pay dividends
from net investment income annually and to distribute net realized capital and
foreign currency gains, if any, once a year. Unless a shareholder instructs that
dividends and other distributions be paid in cash and credited to the
shareholder's account at the transfer agent, dividends and other distributions
will be reinvested automatically in additional shares of the Fund at net asset
value. Shareholders of the Acquired Fund that have elected to receive dividends
and other distributions in cash will continue to receive distributions in such
manner from the Acquiring Fund. Subsequent to the Reorganization, former
shareholders of the Acquired Fund that received dividends or other distributions
therefrom in cash may elect at any time to have their dividends and other
distributions from the Acquiring Fund reinvested automatically in additional
shares of the Acquiring Fund by writing to the Acquiring Fund. See "Dividends,
Distributions and Taxes" in the accompanying Prospectus of the Acquiring Fund.
REASONS FOR THE REORGANIZATION
The Board of Trustees of the Trust has determined that it is
advantageous to combine the Acquired Fund with the Acquiring Fund. The Funds
have substantially similar investment objectives, restrictions and policies, and
the same adviser, primary portfolio manager, transfer agent, custodian and
distributor.
The Board of Trustees of the Trust has determined that the
Reorganization should provide certain benefits to the Acquired Fund
shareholders. In making such determination, the Board of Trustees considered,
among other things: the benefit to the Acquired Fund of consolidations that
would promote more efficient operations through the elimination of duplication
of services and the greater portfolio diversification and more efficient
portfolio management resulting from a larger asset base (including the
possibility of reduced commissions or more favorable pricing based on larger
portfolio transactions); the comparative investment performance of the Funds
(while considering that without the absorption by Dreyfus of certain expenses
the Acquiring Fund's performance would have been lower and that the Acquiring
Fund's limited asset size, combined with a period of high stock market
performance and the Acquiring Fund's leveraging activities, may have contributed
to the high returns of the Acquiring Fund, which may not be replicated over the
long term); and the advantages of eliminating duplication inherent in marketing
funds with similar investment objectives, which could lead to increased growth
of the combined Acquiring Fund following the Reorganization.
The Board of Trustees also noted that, although the Acquiring Fund's
annualized total operating expenses were 1.70% of average daily net assets for
the period ended August 31, 1996, the relatively small amount of assets in the
Acquiring Fund during its start-up caused the Acquiring Fund's average assets to
be lower for the entire period, leading, in turn, to a higher expense ratio. The
Board further noted that, based on the average assets of the Acquiring Fund and
the Acquired Fund for the three-month period ended August 31, 1996, Dreyfus
expects the PRO FORMA total fund operating expenses for the Acquiring Fund as a
percentage of average daily net assets, without giving effect to the two-year
voluntary limitation by Dreyfus on total fund operating expenses, to be
approximately 1.44% of average daily assets, of which .24% would be attributable
to fees and expenses related to the Acquiring Fund's leveraging activities. The
Board considered that, based on such three month period ended August 31, 1996,
Dreyfus expects the Acquiring Fund's total fund operating expenses as a
percentage of average daily net assets, excluding fees and expenses related to
leveraging activities, to be 1.20%, or .20% lower than that ratio applicable to
10
<PAGE>
the Acquired Fund's Investor Shares and 0.05% higher than that ratio applicable
to the Acquired Fund's Class R Shares. The Board also considered that Dreyfus
had agreed to limit total fund operating expenses to 1.20% of the Acquiring
Fund's average daily net assets for a period of two years following the
Reorganization. Finally, the Board of Trustees considered the estimated costs to
be incurred by the Acquired Fund pursuant to the Reorganization.
In addition, the Board of Trustees of the Trust was advised by Dreyfus
that, although the same individual currently serves as portfolio manager of both
the Acquired Fund and the Acquiring Fund, the Funds had different portfolio
managers prior to February 1, 1996. Furthermore, the Acquired Fund, which
commenced operations in May, 1982, had an investment adviser that was
unaffiliated with Dreyfus prior to August, 1994. As a result, although the Funds
have similar investment objectives, the management policies and investment
techniques of the Funds do differ, and those of the Acquiring Fund are more
consistent with those that Dreyfus currently finds more desirable in managing
growth funds of this type.
In light of the foregoing, the Board of Trustees of the Trust,
including the non-interested Trustees, determined that it is in the best
interests of the Acquired Fund and its shareholders to combine with the
Acquiring Fund and that a combination of the Funds will not result in a dilution
of the Acquired Fund's shareholders' interests.
INFORMATION ABOUT THE REORGANIZATION
PLAN OF REORGANIZATION. The following summary of the Plan is qualified
in its entirety by reference to the Plan (Appendix A hereto). The Plan provides
that the Acquiring Fund will acquire all the assets of the Acquired Fund. In
exchange for those assets, the Acquired Fund will receive Acquiring Fund Shares
with an aggregate net asset value equal to that of the assets transferred minus
the liabilities of the Acquired Fund that will be assumed by the Acquiring Fund
on the Closing Date. Prior to the Closing Date, the Acquired Fund will endeavor
to discharge all of its known liabilities and obligations. The Acquiring Fund
will not assume any liabilities or obligations of the Acquired Fund other than
those reflected in an unaudited statement of assets and liabilities of the
Acquired Fund prepared as of the close of regular trading on the NYSE on the
Closing Date (the "Valuation Time") and certain indemnification obligations. The
number of full and fractional Acquiring Fund Shares to be issued to the Acquired
Fund's shareholders will be determined by dividing the aggregate net asset value
of the Acquired Fund by the net asset value of one Acquiring Fund Share, each
computed as of the Valuation Time.
Both the Acquired Fund and the Acquiring Fund will utilize Dreyfus as
agent to determine the value of their respective portfolio securities. The
method of valuation employed by each Fund will be consistent with the
requirements set forth in the Fund's Prospectus, Rule 22c-1 under the 1940 Act,
and the interpretation of such rule by the SEC's Division of Investment
Management.
As soon after the Closing Date as conveniently practicable, the
Acquired Fund will distribute in kind PRO RATA to its shareholders of record as
of the Valuation Time, in liquidation of the Acquired Fund, the Acquiring Fund
Shares received by the Acquired Fund pursuant to the Reorganization. Such
distribution will be accomplished by establishing an account in the name of each
holder of Acquired Fund Shares on the share records of the Acquiring Fund's
transfer agent and transferring to each such account a number of Acquiring Fund
Shares equal to the aggregate net asset value of Acquired Fund Shares held by
such shareholder divided by the net asset value of one Acquiring Fund Share.
11
<PAGE>
Each account will represent the respective PRO RATA number of full and
fractional Acquiring Fund Shares due to such shareholder of the Acquired Fund.
The Acquiring Fund Shares received pursuant to the Reorganization will not be
subject to the Acquiring Fund's redemption fee. After such distribution and the
winding up of its affairs, the Acquired Fund will be terminated.
On or before the Closing Date, the Acquired Fund shall have declared a
dividend and/or other distributions that, together with all previous dividends
and other distributions, shall have the effect of distributing to the Acquired
Fund's shareholders all investment company taxable income for all taxable years
ending on or prior to the Closing Date and for its current taxable year through
the Closing Date (computed without regard to any deduction for dividends paid)
and all of its net capital gain realized in all such taxable years (after
reduction for any capital loss carryforward).
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including the condition that the parties to the
Reorganization shall have received exemptive relief from the SEC with respect to
certain restrictions under the 1940 Act that could otherwise impede or inhibit
consummation of the Reorganization. Notwithstanding approval of the Acquired
Fund's shareholders, the Plan may be terminated at any time at or prior to the
Closing Date by either party because: (a) its governing board determines that
circumstances have developed that make proceeding with the Reorganization
inadvisable; (b) a material breach by the other party of any representation,
warranty, or agreement contained therein has occurred; or (c) a condition to the
obligation of the terminating party cannot reasonably be met.
The expenses of the Reorganization are expected to be approximately
$82,000. The Funds will bear these expenses PRO RATA according to the
aggregate net assets of each Fund on the Closing Date. Costs and fees of the
Reorganization shall be the responsibility of the Funds whether or not the
Reorganization is consummated. The expenses of the Funds will be charged against
the assets of the relevant Fund at or prior to the Reorganization.
If the Reorganization is not approved by the shareholders of the
Acquired Fund, the Board of Trustees of the Trust will continue the management
of the Acquired Fund and may consider other possible courses of action.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS APPROVAL OF
THE PLAN.
DESCRIPTION OF SHARES OF THE ACQUIRING FUND AND THE ACQUIRED FUND. Full
and fractional shares of common stock (without class) of the Acquiring Fund will
be issued for both Investor and Class R Shares of the Acquired Fund in
accordance with the procedures detailed in the Plan. All issued and outstanding
Acquired Fund Shares, including those represented by certificates, will be
canceled. Generally, the Acquiring Fund does not issue share certificates to
shareholders unless a specific request is submitted to the Acquiring Fund's
transfer agent. Similar to the Acquired Fund Shares, the Acquiring Fund Shares
to be issued in the Reorganization will have no preemptive or conversion rights.
FEDERAL INCOME TAX CONSEQUENCES. The exchange of the Acquired Fund's
assets for Acquiring Fund Shares and the Acquiring Fund's assumption of
liabilities of the Acquired Fund is intended to qualify for federal income tax
purposes as a tax-free reorganization under section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"). The Company, on behalf of the
Acquiring Fund, and the Trust, on behalf of the Acquired Fund, have received an
opinion from Kirkpatrick & Lockhart LLP, the Trust's counsel, substantially to
the effect that, on the basis of the facts and assumptions stated therein and
the existing provisions of the Code, U.S. Treasury regulations issued
12
<PAGE>
thereunder, current administrative rules and pronouncements and court decisions,
for federal income tax purposes:
(1) The Acquiring Fund's acquisition of all the Acquiring Fund's assets
in exchange solely for Acquiring Fund Shares and the assumption by the
Acquiring Fund of liabilities of the Acquired Fund, followed by the
distribution of those shares PRO RATA to the shareholders of the
Acquired Fund constructively in exchange for Acquired Fund Shares, will
constitute a "reorganization" within the meaning of section
368(a)(1)(C) of the Code, and each Fund will be a "party to a
reorganization" within the meaning of section 368(b) of the Code;
(2) No gain or loss will be recognized to the Acquired Fund on the
transfer of its assets to the Acquiring Fund in exchange solely for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
Acquired Fund's liabilities or on the subsequent distribution of those
shares to the Acquired Fund's shareholders in exchange for their
Acquired Fund Shares;
(3) No gain or loss will be recognized to the Acquiring Fund on its
receipt of the assets from the Acquired Fund in exchange solely for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
Acquired Fund's liabilities;
(4) The Acquiring Fund's basis for the transferred assets will be the
same as the basis of those assets in the Acquired Fund's hands
immediately before the Reorganization, and the Acquiring Fund's holding
period for those assets will include the period during which the assets
were held by the Acquired Fund;
(5) No gain or loss will be recognized to an Acquired Fund shareholder
on the constructive exchange of all the shareholder's Acquired Fund
Shares solely for Acquiring Fund Shares pursuant to the Reorganization;
and
(6) An Acquired Fund shareholder's basis for the Acquiring Fund Shares
to be received by the shareholder in the Reorganization will be the
same as the basis for the shareholder's Acquired Fund Shares to be
constructively surrendered in exchange for those Acquiring Fund Shares;
and the shareholder's holding period for those Acquiring Fund Shares
will include the shareholder's holding period for those Acquired Fund
Shares, provided they are held as capital assets by the shareholder on
the Closing Date.
Notwithstanding paragraphs (2) and (4) above, such counsel's opinion
may state that no opinion is expressed as to the effect of the Reorganization on
the Acquired Fund, the Acquiring Fund or any Acquired Fund shareholder with
respect to any asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year (or on
the termination or transfer thereof) under a mark-to-market system of
accounting.
Shareholders of the Acquired Fund should consult their tax advisers
regarding the effect, if any, of the Reorganization in light of their individual
circumstances. Because the foregoing discussion only relates to the federal
income tax consequences of the Reorganization, those shareholders also should
consult their tax advisers as to state and local tax consequences, if any, of
the Reorganization.
CAPITALIZATION. The following table shows the capitalization of the
Acquiring Fund and the Acquired Fund as of August 31, 1996, and on a pro forma
basis as of that date, giving effect to the Reorganization:
13
<PAGE>
<TABLE>
<CAPTION>
Acquired Fund Acquiring Pro Forma
------------- --------- ---------
Fund After
---- -----
Reorganization
--------------
Investor Class R
-------- -------
<S> <C> <C> <C> <C>
Net Assets $56,049,660 $4,480,487 $119,340,536 $179,870,683
Net Asset $18.47 $18.72 $22.71 $22.71
Value Per
Share
Shares 3,035,269 239,400 5,256,078 7,921,430
Outstanding
</TABLE>
As of January 31, 1997, there were ____________ shares of the Acquiring
Fund outstanding.
[RESERVED]
As of January 31, 1997, the officers and Directors of the Company and
the officers and Trustees of the Trust, respectively, beneficially owned as a
group less than 1% of the outstanding shares of the Acquiring Fund. To the best
knowledge of the Directors of the Acquiring Fund, as of January 31, 1997, no
other shareholder or "group" (as that term is used in Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), owned
beneficially or of record 5% or more of the Acquiring Fund's outstanding shares
except as shown in the table below:
[Table will indicate ownership before and after Reorganization]
[RESERVED]
For information with respect to the beneficial ownership of the
Acquired Fund, see the section of this Proxy Statement entitled "Voting
Information."
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing the investment objectives, policies
and restrictions of the Acquiring Fund and the Acquired Fund is based upon and
qualified in its entirety by the respective investment objectives, policies and
restrictions sections of the Prospectuses of the Acquiring Fund and the Acquired
Fund. For a full discussion of the investment objective, policies and
restrictions of the Acquiring Fund, please refer to the Acquiring Fund's
Prospectus dated December 16, 1996 (which accompanies this Proxy Statement)
under the caption "Description of the Fund." For a discussion of these matters
as they apply to the Acquired Fund, please refer to the Acquired Fund's
Prospectus dated May 1, 1996 (which is available upon request) under the caption
"Description of the Fund." The policies described below in this "Comparison of
Investment Objectives and Policies" section can be changed without shareholder
approval, unless indicated otherwise or required by the 1940 Act.
INVESTMENT OBJECTIVES. The investment objective of the Acquiring Fund
is capital appreciation. The Acquiring Fund pursues its objective by investing
14
<PAGE>
in securities of issuers characterized as "growth" companies according to
criteria established by Dreyfus. The Acquired Fund seeks above-average growth of
capital. It pursues this objective through investments principally in securities
of issuers thought to have significant growth potential.
Although the language used by the Acquiring Fund and the Acquired Fund
to define their respective investment objectives is different, the investment
objectives of the Funds are similar in that their emphasis is on capital
appreciation. There can be no assurance that either the Acquiring Fund or the
Acquired Fund will meet its investment objective. While the Acquired Fund's
investment objective is considered non-fundamental and may be changed with
approval by the Trust's Board of Trustees, the investment objective of the
Acquiring Fund is fundamental and may not be changed without approval of a
majority of its voting securities (as defined in the 1940 Act).
PRIMARY INVESTMENTS. The Acquiring Fund invests at least 65% of its
total assets (except when maintaining a temporary defensive position) in equity
securities of domestic and foreign issuers which would be characterized as
"growth" companies according to criteria established by Dreyfus. The Acquiring
Fund's securities selections generally will be made without regard to an
issuer's market capitalization. Equity securities consist of common stocks and
preferred stocks. The Acquiring Fund may invest up to 30% of its total assets in
the securities of foreign companies which are not publicly traded in the United
States and the debt securities of foreign governments.
To manage the Acquiring Fund, Dreyfus classifies issuers as "growth" or
"value" companies. The Acquiring Fund employs a growth-oriented approach to
investing in stocks based on the belief that relative stock performance is
driven by relative earnings performance. The Fund looks for companies,
regardless of size, which, in the opinion of Dreyfus, will experience earnings
growth at an above average rate. When selecting its core holdings, the Acquiring
Fund focuses on projected earnings growth for the upcoming 12 to 18 months.
While seeking desirable equity investments, the Acquiring Fund may invest in
money market instruments consisting of U.S. government securities, certificates
of deposit, time deposits, bankers' acceptances, short-term investment grade
corporate bonds and other short-term debt instruments, and repurchase
agreements. Under normal market conditions, the Acquiring Fund does not expect
to have a substantial portion of its assets invested in money market
instruments. However, when Dreyfus determines that adverse market conditions
exist, the Acquiring Fund may adopt a temporary defensive posture and invest all
of its assets in money market instruments.
The Acquired Fund places emphasis on smaller companies which Dreyfus
believes to possess above-average growth opportunities. Dreyfus considers
factors such as current and anticipated economic cycles, cyclical changes in the
industry and a company's past performance (using a benchmark of performance that
ranges between 50% and 200% higher than the Standard and Poor's 500 Composite
Stock Price Index) in identifying companies believed to possess the potential
for above-average growth. The Acquired Fund may also invest in larger, more
established companies which appear to have opportunities for above-average
growth. In addition, the Acquired Fund looks for issuers with unique or
proprietary products or services leading to a rapidly growing market share, and
for issuers with well-above-average sales and earnings growth expectations for
the next several years. The Acquired Fund normally expects to be substantially
invested in common stocks and securities convertible into common stocks and, to
a minor degree, in cash or U.S. government securities. The Acquired Fund may,
however, temporarily invest a substantial portion of its assets in U.S.
government securities and other high-grade, short-term money market instruments,
including repurchase agreements with respect to such instruments, when, in the
opinion of Dreyfus, a defensive posture is warranted.
Both the Acquiring Fund and the Acquired Fund may invest in foreign and
illiquid securities and may lend portfolio securities. The Acquiring Fund may
15
<PAGE>
invest up to 30% of the value of its assets in foreign securities, and the
Acquired Fund may invest up to 20% of its net assets in foreign securities. Each
Fund may invest up to 15% of the value of its assets in illiquid securities.
Each Fund may lend portfolio securities representing up to 33-1/3% of its total
assets. The Acquiring Fund, however, currently does not engage in securities
lending activities.
The Acquiring Fund has the ability to borrow money, including the
ability to borrow money for investment purposes (leveraging), to the extent
permitted by the 1940 Act (currently, 33-1/3% of the Fund's total assets) and
has in the past engaged in such activity. The Acquired Fund may borrow money for
temporary administrative purposes in an amount not to exceed 33-1/3% of the
Acquired Fund's total assets, but, as a matter of non-fundamental policy, will
not purchase securities while borrowings represent more than 5% of its total
assets. See "Risk Factors - Borrowing".
Both the Acquiring Fund and the Acquired Fund may also invest in
futures, options and other derivative instruments. Each Fund may purchase and
sell options on securities (including index options) and options on foreign
currencies, may engage in currency exchange transactions, and may invest in
futures contracts for the purchase or sale of instruments based on stock indices
listed on national securities exchanges or traded in the over-the-counter
market. Neither Fund may purchase put or call options on specific securities in
an amount exceeding 5% of its total assets, represented by the premium paid. In
addition, the Acquiring Fund may engage in short sales, while the Acquired Fund
generally may not do so (unless it owns or has the right to obtain securities
equivalent in kind and amounts to the securities sold short). See "Risk Factors
- - Futures, Options and Derivatives."
CERTAIN FUNDAMENTAL POLICIES. Both the Acquiring Fund and the Acquired
Fund have adopted certain fundamental polices which may not be changed without
the approval of a majority of that Fund's outstanding voting securities (as
defined in the 1940 Act). Neither Fund may: (i) borrow in excess of 33-1/3% of
the Fund's total assets; (ii) invest more than 5% of the Fund's total assets in
securities of any one issuer, except that in the case of each Fund this
limitation applies only with respect to 75% of the Fund's total assets and does
not apply to investments in obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities ("U.S. Government Securities") nor
(iii) invest more than 25% of the Fund's assets in securities of issuers in any
industry (excluding U.S. Government Securities and, in the case of the Acquired
Fund, certain investments in domestic banks). For a complete list of each Fund's
fundamental investment restrictions, see "Investment Objective and Management
Policies -- Investment Restrictions" in the Statements of Additional Information
of the respective Funds.
RISK FACTORS
Due to the similarities of investment objectives and policies of the
Acquiring Fund and Acquired Fund, many of the Funds' investment risks are
generally similar. Such risks, and certain differences in the risks associated
with investing in the Acquiring Fund or Acquired Fund, are discussed under the
caption "Description of the Fund" in the Prospectus of the Acquiring Fund
enclosed with this Proxy Statement and in the Prospectus of the Acquired Fund
(which is available upon request).
BORROWING. Borrowing by an investment company exaggerates the effect on
net asset value of any increase or decrease in the market value of the company's
portfolio and generally tends to amplify both positive and negative performance
by the company. When borrowing is undertaken for the purpose of funding
investments, it is considered leveraging. Borrowings will be subject to interest
costs that may or may not be recovered by appreciation of the securities
16
<PAGE>
purchased. In certain cases, interest costs may exceed the return received on
the securities purchased.
Each Fund is permitted to borrow for investment purposes up to 33-1/3%
of its total assets. However, as a matter of non-fundamental policy, the
Acquired Fund will borrow only for temporary administrative purposes and will
not purchase securities while borrowings represent more than 5% of its total
assets outstanding. The Acquiring Fund, on the other hand, may borrow to finance
investments, and did so during the fiscal period ended August 31, 1996. The
Acquiring Fund's use of leverage could subject Acquiring Fund Shares to greater
share price volatility and an increased risk of loss compared to Acquired Fund
Shares.
The Acquiring Fund, but not the Acquired Fund, may enter into reverse
repurchase agreements with banks, brokers or dealers. This form of borrowing
involves the transfer by the Acquiring Fund of an underlying debt instrument in
return for cash proceeds based on a percentage of the value of the security. The
Acquiring Fund retains the right to receive interest and principal payments on
the security. At an agreed upon future date, the Acquiring Fund repurchases the
security at principal plus accrued interest. Except for these transactions, the
Acquiring Fund's borrowings generally will be unsecured.
FOREIGN SECURITIES. Both the Acquiring Fund and the Acquired Fund may
invest in securities of foreign issuers. Investment in foreign securities
presents certain risks. The Acquired Fund may also invest in obligations of
foreign branches of domestic banks. In making foreign investments, each Fund
will give appropriate consideration to the following factors, among others.
Foreign securities markets generally are not as developed or efficient
as those in the United States. Securities of some foreign issuers are less
liquid and more volatile than securities of comparable U.S. issuers. Similarly,
volume and liquidity in most foreign securities markets are less than in the
United States and, at times, volatility of price can be greater than in the
United States.
Because evidences of ownership of foreign securities usually are held
outside the United States, each Fund will be subject to additional risks which
include: adverse political and economic developments, seizure or nationalization
of foreign deposits and adoption of governmental restrictions which might
adversely affect the payment of principal and interest on the foreign securities
or might restrict the payment of principal and interest to investors located
outside the country of the issuer, whether from currency blockage or otherwise.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations.
SHORT-SELLING. The Acquiring Fund may make short sales, which 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. To complete such a
transaction, the Acquiring Fund must borrow the security to make delivery to the
buyer. The Fund is obligated to replace the security borrowed by purchasing it
subsequently at the market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
Fund, which would result in a loss or gain, respectively.
The Acquiring Fund will not sell securities short if, after effect is
given to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Acquiring Fund's net assets. The
Acquiring Fund may not sell short the securities of any single issuer listed on
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<PAGE>
a national securities exchange to the extent of more than 5% of the value of the
Fund's net assets. The Acquiring Fund may not make a short sale which results in
the Fund having sold short in the aggregate more than 5% of the outstanding
securities of any class of an issuer.
In addition to short sales by the Acquiring Fund as discussed above,
each Fund may make short sales "against the box," a transaction in which it
enters into a short sale of a security which it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short. The
Acquiring Fund at no time will have more than 15% of the value of its net assets
in deposits on short sales against the box. The Acquiring Fund anticipates that
it will make short sales against the box for purposes of protecting the value of
the Fund's net assets.
CALL AND PUT OPTIONS ON SPECIFIC SECURITIES. Each Fund may invest up to
5% of its assets, represented by the premium paid, in the purchase of call and
put options in respect of specific securities (or groups or "baskets" of
specific securities). In the case of the Acquired Fund, this limitation does not
apply to standby commitments. The Acquiring Fund may write covered call and put
option contracts to the extent of 20% of the value of its net assets at the time
such option contracts are written. The Acquired Fund may also write covered call
options, but has no express limitation on the extent to which it may do so.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the exercise price at
any time during the option period, or at a specific date. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security at the exercise price at any time during
the option period. A covered call option written by a Fund is a call option with
respect to which the Fund owns the underlying security or otherwise covers the
transaction by segregating cash or other securities. A put option written by the
Acquiring Fund is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option are
placed in a segregated account with the Acquiring Fund's custodian to fulfill
the obligation undertaken. The principal reason for writing covered call and put
options is to realize, through the receipt of premiums, a greater return than
would be realized on the underlying securities alone. A Fund receives a premium
from writing covered call or put options which it retains whether or not the
option is exercised.
Each Fund will purchase options only to the extent permitted by the
policies of state securities authorities in states where shares of the Fund are
qualified for offer and sale.
FOREIGN CURRENCY TRANSACTIONS. Both the Acquiring Fund and the Acquired
Fund may engage in currency exchange transactions to protect against uncertainty
in the level of future exchange rates in connection with hedging and other
non-speculative strategies involving specific settlement transactions. Foreign
currency transactions may involve, for example, a Fund's purchase of foreign
currencies for U.S. dollars or the maintenance of short positions in foreign
currencies, which would involve the Fund agreeing to exchange an amount of a
currency it did not currently own for another currency at a future date in
anticipation of a decline in the value of the currency sold relative to the
currency the Fund contracted to receive in the exchange. A Fund's success in
these transactions will depend principally on Dreyfus' ability to predict
accurately the future exchange rates between foreign currencies and the U.S.
dollar.
Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign governments or
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<PAGE>
central banks or the failure to intervene or by currency controls or political
developments in the United States or abroad.
OTHER INVESTMENT CONSIDERATIONS. The securities of the smaller
companies in which the Acquiring Fund and the Acquired Fund may invest may be
subject to more abrupt or erratic market movements than larger, more-established
companies, in which the Funds also are permitted to invest, both because the
securities typically are traded in lower volume and because the issuers
typically are subject to a greater degree to changes in earnings and prospects.
As a result, investment in smaller companies may be subject to greater risks.
Shareholders of the Acquired Fund should recognize that the Acquiring
Fund has been in operation for only approximately 16 months, that the net asset
value per share of the Acquiring Fund Shares is likely to be volatile, and that
the performance of the Acquiring Fund since commencement of its operations may
not be indicative of its future results. In addition, the total return of the
Acquiring Fund will depend in part on its ratio of total expenses to assets.
While this could result in higher total returns for the Acquiring Fund if its
total assets increase, higher expense ratios and lower total returns could
result if the total assets of the Acquiring Fund decrease.
Each Fund's investment policies may result in a high portfolio turnover
rate which usually generates additional brokerage commissions and transaction
costs for the Fund. In addition, short-term gains realized from portfolio
transactions are taxable to shareholders as ordinary income.
The ability of the Acquiring Fund or the Acquired Fund to engage in
certain short-term transactions may be limited by the requirement that, to
qualify as a regulated investment company, it must earn less than 30% of its
gross income from the disposition of securities held for less than three months.
This 30% test limits, among other strategies, the extent to which securities
held for less than three months may be sold or sold short and the writing of
options expiring in less than three months. However, portfolio turnover is not
otherwise a limiting factor in investment decisions for either the Acquiring
Fund or the Acquired Fund.
Investment decisions for each Fund are made independently from those of
the other investment companies advised by Dreyfus. However, if such other
investment companies are prepared to invest in, or desire to dispose of,
securities of the type in which either Fund invests at the same time, available
investments or opportunities for sales will be allocated equitably to each
investment company. In some cases, this procedure may adversely affect the size
of the position obtained for or disposed of by either Fund or the price paid or
received by either Fund.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
FORM OF ORGANIZATION. The Company and the Trust are open-end management
investment companies registered with the SEC under the 1940 Act which
continuously offer to sell shares at their current net asset value. The Company
is organized as a Maryland corporation and is governed by its Articles of
Incorporation, By-Laws, Board of Directors and the Maryland General Corporation
Law. The Trust is organized as a Massachusetts business trust and is governed by
its Second Amended and Restated Master Trust Agreement ("Trust Instrument"),
By-Laws, Board of Trustees, and applicable Massachusetts law. Both the Company
and the Trust are also governed by applicable federal law. Certain differences
and similarities between the Company and the Trust are summarized below.
CAPITALIZATION. The beneficial interest in the Acquiring Fund is
represented by transferable shares of common stock, $.001 par value per share.
The Company's Articles of Incorporation authorize the issuance of one billion
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shares of common stock with equal voting rights (with 100 million shares
allocated to the Acquiring Fund). Fractional shares may be issued. The Company
is a "series fund" and a shareholder of one series is not deemed to be a
shareholder of any other series. For certain matters shareholders vote together
as a group; as to others they vote separately by series. Shareholders of the
Acquiring Fund are entitled to receive PRO RATA dividends declared by the
Company's Board of Directors and distributions upon liquidation.
The beneficial interest in the Acquired Fund is represented by
transferable shares without par value. The Trust permits the Trustees to issue
an unlimited number of shares of beneficial interest and to allocate such shares
into an unlimited number of series, each of which may issue separate classes of
shares, with rights determined by the Trustees, all without shareholder
approval. The Acquired Fund is one of three series of the Trust. The Acquired
Fund issues two classes of shares, Investor Shares and Class R Shares.
Fractional shares of each class may be issued. The Acquired Fund Shares
represent equal proportionate interests in the assets belonging to the Acquired
Fund, and are entitled to receive PRO RATA dividends and other distributions as
determined by the Trust's Board of Trustees and distributions upon liquidation.
All shares of all series of the Trust (and classes thereof) vote
together as a single class, except as to any matter for which a separate vote of
any series or class is required by the 1940 Act, and except as to any matter
which affects the interest of one or more particular series or classes, in which
case only the shareholders of the affected series or classes are entitled to
vote, each as a separate class. Only holders of Investor Shares are entitled to
vote on matters submitted to shareholders pertaining to the 12b-1 plan relating
to that class.
SHAREHOLDER LIABILITY. Under Maryland law, shareholders of the
Acquiring Fund have no personal liability as such for the Company's acts or
obligations. Under Massachusetts law, shareholders of a series could, under
certain circumstances, be held personally liable for the obligations of the
Trust. However, the Trust's Trust Instrument disclaims shareholder liability for
acts or obligations of the series and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. The Trust Instrument provides for indemnification out
of each of the series' property for all losses and expenses of any shareholder
held personally liable for the obligations of the series. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
considered remote since it is limited to circumstances in which a disclaimer is
inoperative and the series itself would be unable to meet its obligations. A
substantial number of mutual funds in the United States are organized as
Massachusetts business trusts.
SHAREHOLDER MEETINGS AND VOTING RIGHTS. Neither the Acquiring Fund nor
the Acquired Fund is required to hold annual meetings of its shareholders, but
each is required to call a meeting of shareholders for the purpose of voting
upon the question of removal of a Director or Trustee, as the case may be, or
for any other purpose, when requested in writing to do so by the holders of at
least 10% of their respective outstanding shares. In addition, each of the
Company and the Trust is required to call a meeting of shareholders for the
purpose of electing Directors or Trustees, if, at any time, less than a majority
of the Directors or Trustees then holding office were elected by shareholders.
Neither the Acquiring Fund nor the Acquired Fund currently intends to hold
regular shareholder meetings. Neither the Company nor the Trust permits
cumulative voting. In the case of the Company, a quorum is one-third of the
shares entitled to vote on a matter; in the case of the Trust, a quorum is a
majority of shares entitled to vote on a matter. In either case, a majority of
the shares voting is sufficient to act on a matter (unless otherwise
specifically required by the applicable governing documents or other law,
including the 1940 Act).
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LIQUIDATION OR DISSOLUTION. In the event of the liquidation of the
Acquiring Fund or the Acquired Fund or a class thereof, the shareholders of the
Fund or class are entitled to receive, when, and as declared by the Directors or
Trustees, as the case may be, the excess of the assets belonging to the Fund or
attributable to the class over the liabilities belonging to the Fund or
attributable to the class. In either case, the assets so distributable to
shareholders of the Fund will be distributed among the shareholders in
proportion to the number of shares of the Fund held by them and recorded on the
books of that Fund.
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND TRUSTEES. The Trust
Instrument provides that no Trustee, officer or agent of the Trust shall be
personally liable to any person for any action or failure to act, except for his
own bad faith, willful misfeasance, gross negligence, or reckless disregard of
his duties. The Trust Instrument also provides that a Trustee or officer is
entitled to indemnification against liabilities and expenses with respect to
claims related to his position with the Trust, unless such Trustee or officer
shall have been adjudicated to have acted with bad faith, willful misfeasance,
or gross negligence, or in reckless disregard of his duties, or not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the Trust, or, in the event of settlement, unless there has been a
determination that such trustee or officer has engaged in willful misfeasance,
bad faith, gross negligence, or reckless disregard of his duties. The Articles
of Incorporation and By-Laws of the Company contain similar indemnification
provisions for its Directors and officers.
RIGHTS OF INSPECTION. Under Maryland law, persons who have been
shareholders of record for six months or more and who own at least 5% of the
shares of the Company may inspect the books of account and stock ledger of the
Company during regular business hours, following a written demand stating a
proper purpose related to corporate business. Shareholders of the Trust have the
same right to inspect in Massachusetts the governing documents, records of
meetings of shareholders, shareholder lists, share transfer records, accounts
and books of the Trust as are permitted shareholders of a corporation under the
Massachusetts corporation law. The purpose of inspection must be for interests
of shareholders relative to the affairs of the Trust.
The foregoing is only a summary of certain characteristics of the
operations of the Acquired Fund, the Trust, the Acquiring Fund, the Company, the
Articles of Incorporation, the Trust Instrument, By-Laws, and Maryland and
Massachusetts law. The foregoing is not a complete description of the documents
cited. Shareholders should refer to the provisions of such respective Articles
of Incorporation, Trust Instrument, By-Laws, and Maryland and Massachusetts law
directly for a more thorough description.
ADDITIONAL INFORMATION ABOUT
THE ACQUIRING FUND AND THE ACQUIRED FUND
ACQUIRING FUND. Information about the Acquiring Fund is incorporated
herein by reference from the Acquiring Fund's Prospectus dated December 16,
1996, a copy of which is enclosed, and Statement of Additional Information dated
December 16, 1996, a copy of which is available upon request and without charge
by writing to the Acquiring Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11566-0144 or by calling toll-free 1-800-645-6561.
ACQUIRED FUND. Information about the Acquired Fund is included in its
current Prospectus dated May 1, 1996 and Statement of Additional Information
dated May 1, 1996, both of which have been filed with the SEC and are
incorporated herein by reference. A copy of the Acquired Fund's Prospectus and
Statement of Additional Information are available upon request and without
21
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charge by writing to the Acquired Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11566-0144 or by calling toll-free 1-800-645-6561.
Each of the Trust and the Company is subject to the informational
requirements of the Exchange Act and the 1940 Act and in accordance therewith
files reports and other information, including proxy materials and charter
documents with the SEC. These materials can be inspected, and copies obtained at
prescribed rates, at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, the Midwest Regional Office of
the SEC, Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60611, and the Northeast Regional Office of the SEC, Seven World Trade
Center, Suite 1300, New York, New York 10048.
OTHER BUSINESS
The Trustees of the Trust do not intend to present any other business
at the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.
VOTING INFORMATION
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Trustees of the Trust to be used at the Meeting to be
held at 10:00 a.m., Eastern time, on April 7, 1997, at 200 Park Avenue, New
York, New York 10166, and at any adjournments thereof. This Proxy Statement,
along with a Notice of the Meeting and a proxy card, is first being mailed to
shareholders of the Acquired Fund on or about February __, 1997. Only
shareholders of record as of the close of business on January 31, 1997 (the
"Record Date") will be entitled to notice of, and to vote at, the Meeting or any
adjournment thereof. The holders of a majority of the shares of the Acquired
Fund and each class of the Acquired Fund outstanding at the close of business on
the Record Date present in person or represented by proxy will constitute a
quorum for the Meeting of the Acquired Fund and its classes. If the enclosed
form of proxy is properly executed and returned in time to be voted at the
Meeting, the proxies named therein will vote the shares represented by the proxy
in accordance with the instructions marked thereon. Unmarked proxies will be
voted FOR the Plan and FOR any other matters deemed appropriate.
Proxy cards that reflect abstentions and "broker non-votes" (I.E.,
shares held by brokers or nominees as to which (1) instructions have not been
received from the beneficial owners or the persons entitled to vote or (2) the
broker or nominee does not have discretionary voting power on a particular
matter) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum, but not as votes cast. A proxy
may be revoked at any time on or before the Meeting by written notice to the
Secretary of the Trust, 200 Park Avenue, New York, New York 10166. Unless
revoked, all valid proxies will be voted in accordance with the specifications
thereon or, in the absence of such specifications, for approval of the Plan and
the Reorganization contemplated thereby.
Approval of the Plan will require the affirmative vote of a "majority
of the outstanding voting securities" of the Acquired Fund and of each class of
the Acquired Fund, which for this purpose means the lesser of: (i) 67% of the
voting securities of the Acquired Fund or class present at the Meeting, if the
holders of more than 50% of the outstanding voting securities of the Acquired
Fund or class are present or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Acquired Fund or class. Each full share
outstanding is entitled to one vote, and each fractional share outstanding is
entitled to a proportionate share of one vote for such purposes.
Holders of Investor Shares and Class R Shares of the Acquired Fund are
requested to vote on the Plan. Under the Trust Instrument, a majority of the
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shares of the Acquired Fund or class within the Fund outstanding and entitled to
vote on a matter shall be a quorum for the transaction of business at the
Meeting, except as otherwise provided by the 1940 Act or other applicable law.
The Trustees of the Trust have established January 31, 1997, as the record date
for determining holders of Investor and Class R Shares entitled to vote at the
Meeting. As of January 31, 1997, the number of shares outstanding and the
approximate shares of each class of the Acquired Fund and those beneficially
owned by Dreyfus and its affiliates were as follows:
Shares Beneficially Owned
By Dreyfus And Affiliates
-------------------------
Total Shares Number Of % Of Total
Class Designation Outstanding Shares Outstanding
- ----------------- ----------- ------ -----------
Investor __ __ __
Class R __ __ __
It is not anticipated that Dreyfus or any of its affiliates will own
beneficially or of record 5% or more of the Acquiring Fund's outstanding shares
as a result of the Reorganization.
Because Dreyfus and its affiliates exercise voting discretion over more
than 25% of the Class R shares of the Acquired Fund, they may be deemed to
control such class of securities. Dreyfus has advised the Trust that shares
owned by Dreyfus or an affiliate of Dreyfus with respect to which Dreyfus or
such affiliate exercises voting discretion will be voted FOR the Plan described
in this Proxy Statement, unless Dreyfus and its affiliates vote more than 25% of
the outstanding shares of a class of the Acquired Fund entitled to vote, in
which case all such shares of that class will be voted in proportion to the vote
of the remaining shares of that class voted at the Meeting, provided such vote
is consistent with the fiduciary duties of Dreyfus and its affiliates.
To the best knowledge of the Trustees of the Trust, as of January 31,
1997, no other single shareholder or "group" (as the term is used in Section
13(d) of the Exchange Act) owned beneficially or of record 5% or more of any
class of the Acquired Fund's outstanding shares, except as shown in the table
below:
Shares Of %
Record of
Class Designation Shareholder Address Owned Total
- ----------------- ----------- ------- ----- -----
Investor ___ ___ ___ ___
Class R ___ ___ ___ ___
It is not anticipated that any of the 5% record or beneficial owners identified
above will own beneficially or of record 5% or more of the Acquiring Fund's
outstanding shares as a result of the Reorganization.
At January 31, 1997, the Trustees and officers of the Trust and the
Directors and officers of the Company as a group beneficially owned less than 1%
of the shares of each class of the Acquired Fund and of the Acquired Fund's
shares in the aggregate.
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Proxy solicitations will be made primarily by mail, but proxy
solicitations may also be made by telephone or other electronic medium or
personal solicitations conducted by officers and employees of Dreyfus, its
affiliates or other representatives of the Trust in accordance with procedures
and policies adopted by the Trust's Board of Trustees. The cost of the
solicitation, which are estimated to total approximately $17,000, will be
borne pro rata by the Funds.
The Funds will bear the expenses of the Reorganization pro rata
according to the aggregate net assets in each Fund on the Closing Date. Costs
and fees of the Reorganization shall be the responsibility of the Funds, whether
or not the Reorganization is consummated.
In the event that sufficient votes to approve the Reorganization are
not received by April 7, 1997, 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 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 shareholders with respect to the reasons for the solicitation.
Any such adjournment will require an affirmative vote by the holders of a
majority of the shares present in person or by proxy and entitled to vote at the
Meeting. The persons named as proxies will vote upon such adjournment after
consideration of all circumstances which may bear upon a decision to adjourn the
Meeting.
A shareholder of the Acquired Fund who objects to the proposed
transaction will not be entitled under either Maryland law, Massachusetts law or
the Trust's Trust Instrument to demand payment for, or an appraisal of, his or
her shares. Shareholders should be aware that, if the Reorganization is
consummated, they will be free to redeem the Acquiring Fund Shares that they
receive in the Reorganization at their then-current net asset value. Shares of
the Acquired Fund may be redeemed at any time prior to the consummation of the
Reorganization.
The votes of the shareholders of the Acquiring Fund are not being
solicited by this Proxy Statement and are not required to carry out the
Reorganization.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES.
Please advise the Acquired Fund, 200 Park Avenue, New York, New York 10166,
whether other persons are beneficial owners of shares for which proxies are
being solicited and, if so, the number of copies of this Proxy Statement needed
to supply copies to the beneficial owners of the respective shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Acquiring Fund, which include
the statement of assets and liabilities of the Acquiring Fund as of August 31,
1996, and the statement of operations, the statement of changes in net assets
and financial highlights for the period ended August 31, 1996, have been
incorporated by reference into this Proxy Statement in reliance on the authority
of the report of Ernst & Young LLP, independent auditors for the Company, as
experts in accounting and auditing.
The audited financial statements of the Acquired Fund, which include
the statement of assets and liabilities of the Acquired Fund as of December 31,
1995, and the statement of operations, the statement of changes in net assets
and financial highlights for the year ended December 31, 1995, have been
incorporated by reference into this Proxy Statement in reliance on the report of
KPMG Peat Marwick LLP, independent auditors for the Trust for each of the two
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years ended December 31, 1995, incorporated by reference; and upon the
authority of said firm as experts in accounting and auditing. Information for
fiscal years (periods) prior to the fiscal year ended December 31, 1994, was
audited by other independent auditors.
The unaudited financial statements of the Acquired Fund, as of June 30,
1996, and the statement of operations, the statement of changes in net assets
and financial highlights for the period ended June 30, 1996, have been
incorporated by reference into this Proxy Statement from the Semi-Annual Report
of the Acquired Fund.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the
Acquiring Fund will be passed upon by Stroock & Stroock & Lavan, Seven Hanover
Square, New York, New York 10004-2594.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THOSE TRUSTEES WHO ARE
NOT CONSIDERED "INTERESTED PERSONS" OF THE TRUST AS DEFINED IN THE 1940 ACT,
UNANIMOUSLY RECOMMEND APPROVAL OF THE PLAN. ANY UNMARKED PROXIES WITHOUT
INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLAN.
--------------------------
February __, 1997
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APPENDIX A TO PROXY STATEMENT
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made as of the 31st day of December, 1996, by and between THE DREYFUS/LAUREL
FUNDS TRUST (formerly The Laurel Funds Trust and prior to that The Boston
Company Fund), a Massachusetts business trust, with a principal place of
business at 200 Park Avenue, New York, New York 10166 (the "Trust"), on behalf
of DREYFUS SPECIAL GROWTH FUND, a series of the Trust (the "Acquired Fund"), and
DREYFUS GROWTH AND VALUE FUNDS, INC. (formerly Dreyfus Focus Funds, Inc.), a
Maryland corporation, with a principal place of business at 200 Park Avenue, New
York, New York 10166 (the "Company"), on behalf of DREYFUS AGGRESSIVE GROWTH
FUND, a series of the Company (the "Acquiring Fund"). All agreements,
representations, actions and obligations described herein that are made or to be
taken or undertaken by the Acquired Fund are made and shall be taken or
undertaken by the Trust on behalf of the Acquired Fund. All agreements,
representations, actions and obligations described herein that are made or to be
taken or undertaken by the Acquiring Fund are made and shall be taken or
undertaken by the Company on behalf of the Acquiring Fund.
WHEREAS, the Trust and the Company wish to effect a
reorganization (the "Reorganization"), which will consist of the transfer of all
of the assets of the Acquired Fund in exchange solely for shares of common
stock, par value $.001 per share, of the Acquiring Fund (the "Acquiring Fund
Shares") and the assumption by the Acquiring Fund of liabilities of the Acquired
Fund and the distribution of the Acquiring Fund Shares to the shareholders of
the Acquired Fund in termination of the Acquired Fund as provided herein, all
upon the terms and conditions hereinafter set forth in this Agreement;
WHEREAS, the Trust and the Company intend this Agreement to be
a plan of a reorganization within the meaning of section 368(a)(1)(C) of the
United States Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Trust and the Company are registered, open-end
management investment companies and the Acquired Fund owns securities that are
assets of the character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Company is authorized to issue shares of common
stock of the Acquiring Fund and the Trust is authorized to issue two classes of
shares of beneficial interest in the Acquired Fund, designated (and referred to
herein) as "Investor shares" and "Class R shares" (referred to herein together
as "Acquired Fund Shares");
A-1
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WHEREAS, the Board of Trustees of the Trust has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of liabilities of the Acquired Fund by the Acquiring
Fund is in the best interests of the Acquired Fund and its shareholders and that
the interests of the existing shareholders of the Acquired Fund would not be
diluted as a result of the Reorganization; and
WHEREAS, the Board of Directors of the Company has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of liabilities of the Acquired Fund by the Acquiring
Fund is in the best interests of the Acquiring Fund and its shareholders and
that the interests of the existing shareholders of the Acquiring Fund would not
be diluted as a result of the Reorganization:
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND ASSUMPTION OF ACQUIRED FUND
LIABILITIES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1. Subject to the requisite approval of the shareholders of
the Acquired Fund and to the other terms and conditions contained herein:
(a) The Acquired Fund agrees to assign, transfer and
convey to the Acquiring Fund at the Closing (as provided for in paragraph 3.1)
all of the Assets of the Acquired Fund (as defined in paragraph 1.2).
(b) The Acquiring Fund agrees in exchange therefor at the
Closing (i) to issue and deliver to the Acquired Fund the number of full and
fractional Acquiring Fund Shares determined by dividing the aggregate net asset
value of the Acquired Fund (computed as set forth in paragraph 2.1) by the net
asset value (computed as set forth in paragraph 2.2) of one share of the
Acquiring Fund and (ii) to assume the Liabilities of the Acquired Fund (as
defined in paragraph 1.3). In lieu of delivering certificates for the Acquiring
Fund Shares, the Acquiring Fund shall credit the Acquiring Fund Shares to the
Acquired Fund's account on the books of the Acquiring Fund and shall deliver a
confirmation thereof to the Acquired Fund.
1.2. (a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund (the "Assets") shall consist of all property, including without
limitation, all cash, cash equivalents, securities, commodities and futures
interests, dividend and interest receivables, claims and rights of action that
are owned by the Acquired Fund, and any deferred or prepaid expenses shown as
assets on the books of the Acquired Fund, on the Closing Date (as defined in
paragraph 3.1), but shall not include corporate books, records or minutes of the
Acquired Fund. The Assets shall be invested at all times through the Closing in
a manner that ensures compliance with paragraph 4.1(k).
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(b) The Acquired Fund has provided the Acquiring Fund with
a list of all of its property, including all of the Assets, as of the date of
execution of this Agreement. The Acquired Fund reserves the right to sell any of
these assets. The Acquiring Fund will, within a reasonable time prior to the
Closing Date, furnish the Acquired Fund with a list of any assets on such list
that do not conform to the Acquiring Fund's investment objective, policies and
restrictions or that the Acquiring Fund otherwise does not desire to hold. The
Acquired Fund will dispose of such assets prior to the Closing Date to the
extent practicable and to the extent the Acquired Fund would not be affected
adversely by such a disposition. In addition, if it is determined that the
portfolios of the Acquired Fund and the Acquiring Fund, when aggregated, would
contain investments exceeding certain percentage limitations imposed upon the
Acquiring Fund with respect to such investments, the Acquired Fund, if requested
to do so by the Acquiring Fund, will dispose of and/or reinvest a sufficient
amount of such investments as may be necessary to avoid violating such
limitations as of the Closing Date.
1.3. The Acquired Fund will endeavor to discharge all of its
known liabilities and obligations prior to the Closing Date. At the Closing, the
Acquiring Fund shall assume all liabilities, debts, obligations, expenses,
costs, charges and reserves reflected on an unaudited statement of assets and
liabilities of the Acquired Fund prepared by The Dreyfus Corporation, the
investment manager of the Acquiring Fund and the Acquired Fund (the "Manager"),
as of the Valuation Time (as defined in paragraph 2.1), in accordance with
generally accepted accounting principles consistently applied from the prior
audited period (collectively, the "Liabilities"). The Acquiring Fund shall
assume only the Liabilities and shall not assume any other liabilities, whether
absolute or contingent, other than the obligation to indemnify the Trustees and
officers of the Trust with respect to the Acquired Fund to the extent provided
in the Trust's Second Amended and Restated Agreement and Declaration of Trust
dated December 9, 1992, as amended ("Declaration of Trust"), and By-Laws.
1.4. The Acquired Fund shall deliver the Assets at the Closing
to Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh, Pennsylvania 15258,
the Acquiring Fund's custodian (the "Custodian"), for the account of the
Acquiring Fund, with all securities not in bearer form duly endorsed, or
accompanied by duly executed separate assignments or stock powers, in proper
form for transfer, with signatures guaranteed, and with all necessary stock
transfer stamps, sufficient to transfer good and marketable title thereto
(including all accrued interest and dividends and rights pertaining thereto) to
the Custodian for the account of the Acquiring Fund free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered shall be in
the form of immediately available funds payable to the order of the Custodian
for the account of the Acquiring Fund.
1.5. The Acquired Fund will pay or cause to be paid to the
Acquiring Fund any dividends or interest received on or after the Closing Date
with respect to any of the Assets. The Acquired Fund will transfer to the
Acquiring Fund any dividends, interest, distributions, rights or other assets
received by the Acquired Fund after the Closing Date as distributions on or with
respect to any of the Assets. Any such dividends, interest, distributions,
rights, or other assets so paid or transferred, or received directly by the
Acquired Fund, shall be allocated by the Acquired Fund to the account of the
Acquiring Fund, and shall be deemed included in the Assets and shall not be
separately valued.
1.6. As soon after the Closing Date as is conveniently
possible, the Trust will distribute PRO RATA to the Acquired Fund's shareholders
of record determined as of the Valuation Time (as defined in paragraph 2.1) (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares received by the
Acquired Fund pursuant to paragraph 1.1. Such distribution will be accomplished
by transferring the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on such books
in the names of the Acquired Fund Shareholders and representing the respective
PRO RATA number of the Acquiring Fund Shares to which each such Acquired Fund
Shareholder is entitled. With respect to each Investor share held, an Acquired
Fund Shareholder shall be entitled to receive that number of full and fractional
Acquiring Fund Shares equal to the net asset value of one Investor share as of
the Valuation Time (determined in accordance with paragraph 2.1) divided by the
net asset value of one Acquiring Fund Share as of the Valuation Time (determined
in accordance with paragraph 2.2). With respect to each Class R share held, an
Acquired Fund Shareholder shall be entitled to receive that number of full and
fractional Acquiring Fund Shares equal to the net asset value of one Class R
share as of the Valuation Time (determined in accordance with paragraph 2.1)
divided by the net asset value of one Acquiring Fund Share as of the Valuation
Time (determined in accordance with paragraph 2.2). All issued and outstanding
shares of the Acquired Fund will be canceled on the books of the Acquired Fund
simultaneously with the distribution of Acquiring Fund Shares to former holders
of Investor and Class R shares. Ownership of Acquiring Fund Shares will be shown
on the books of the Acquiring Fund's transfer agent.
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1.7. Any transfer taxes payable upon issuance of the Acquiring
Fund Shares in a name other than the registered holder of the Acquired Fund
Shares on the books of the Acquired Fund shall, as a condition of such issuance
and transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
1.8. Any reporting responsibility of the Acquired Fund is and
shall remain the responsibility of the Acquired Fund up to and including the
Closing Date and such later date on which the Acquired Fund is terminated.
2. VALUATION.
2.1. The value of the Assets and the amount of the
Liabilities, and the net asset value of an Investor share and a Class R share,
shall each be computed as of the close of regular trading on the New York Stock
Exchange ("NYSE") (except that options contracts will be valued 15 minutes after
such close of trading) on the Closing Date (such time and date being hereinafter
called the "Valuation Time"), using the valuation procedures set forth in the
Declaration of Trust and the Acquired Fund's then-current prospectus or
statement of additional information.
2.2. The net asset value of an Acquiring Fund Share shall be
computed as of the Valuation Time, using the valuation procedures set forth in
the Company's Articles of Incorporation dated November 16, 1993, as amended
("Charter"), and the Acquiring Fund's then-current prospectus or statement of
additional information.
2.3. The number of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Assets shall be
determined by dividing: (a) the value of the Assets minus the Liabilities
determined in accordance with paragraph 2.1, by (b) the net asset value of one
Acquiring Fund Share determined in accordance with paragraph 2.2.
2.4. All computations and calculations of value shall be made
by the Manager in accordance with its regular practices as fund accountant for
the Acquired Fund and the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1. The Reorganization, together with all related acts
necessary to consummate the Reorganization (the "Closing"), shall take place on
the first day on which the NYSE is open for business that occurs not less than
seven calendar days after the approval of this Agreement by the shareholders of
the Acquired Fund, or such other date as the parties may mutually agree
("Closing Date"). All acts taking place at the Closing shall be deemed to take
place simultaneously as of the close of business on the Closing Date, unless
otherwise provided. The Closing shall be held at 4:30 p.m., New York time, at
the offices of the Manager, 200 Park Avenue, New York, New York, or at such
other time on the Closing Date and/or place as the parties may mutually agree.
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3.2. The Trust, on behalf of the Acquired Fund, shall deliver
to the Company, on behalf of the Acquiring Fund, at the Closing a statement of
Assets and Liabilities, including a schedule of the Assets setting forth for all
portfolio securities thereon their adjusted tax basis and holding period by lot,
as of the Closing, certified by the Trust's Treasurer or Assistant Treasurer.
The Custodian shall deliver at the Closing a certificate of an authorized
officer stating that the Assets have been presented for examination to the
Acquiring Fund prior to the Closing Date and have been delivered in proper form
to the Acquiring Fund.
3.3. If at the Valuation Time (a) the NYSE or another primary
trading market or markets for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted;
or (b) trading or the reporting of trading in such market or markets shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.4. The Acquired Fund shall cause Dreyfus Transfer, Inc., as
transfer agent for the Acquired Fund, to deliver at the Closing a certificate of
an authorized officer stating that its records contain the names and addresses
of the Acquired Fund Shareholders and the number and percentage ownership of
outstanding Acquired Fund Shares of each class owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund, or its transfer agent on
its behalf, shall issue and deliver to the Secretary of the Trust a
confirmation, or other evidence satisfactory to the Trust, that the Acquiring
Fund Shares to be credited on the Closing Date have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each
party shall deliver to the other such bills of sale, checks, assignments,
receipts or other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES.
4.1. The Trust, on behalf of the Acquired Fund, represents and
warrants to the Company, on behalf of the Acquiring Fund, as follows:
(a) The Trust is a trust with transferable shares of the
type commonly referred to as a "Massachusetts business trust", duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts.
(b) The Trust is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management investment
company, of which the Acquired Fund is a separate diversified portfolio, and
such registration has not been revoked or rescinded and is in full force and
effect.
(c) The Acquired Fund is a duly established and designated
series of the Trust.
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(d) The current prospectus and statement of additional
information of the Acquired Fund conform in all material respects to the
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act and the rules and regulations of the Securities and
Exchange Commission (the "SEC") thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) The Acquired Fund is not, and the execution, delivery
and performance of this Agreement will not result, in any material violation of
the Declaration of Trust or the Trust's By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquired
Fund to which the Trust is a party or by which it is bound.
(f) The Acquired Fund has no material contracts or other
commitments outstanding (other than this Agreement) that will be terminated with
liability to it on or prior to the Closing Date.
(g) Except as otherwise disclosed in writing to and
accepted by the Acquiring Fund, no litigation or administrative proceeding or
investigation of or before any court or governmental body is currently pending
or to its knowledge threatened against the Trust with respect to the Acquired
Fund or any of the properties or assets thereof that, if adversely determined,
would materially and adversely affect its financial condition or the conduct of
its business. The Trust knows of no facts that might form the basis for the
institution of such litigation, proceeding or investigation, and is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects the Acquired Fund's
business or its ability to consummate the transactions contemplated herein.
(h) The Statements of Assets and Liabilities of the
Acquired Fund for the fiscal years ended December 31, 1991, 1992 and 1993 have
been audited by Coopers and Lybrand L.L.P., independent auditors, and the
Statements of Assets and Liabilities of the Acquired Fund for the fiscal years
ended December 31, 1994 and 1995 have been audited by KPMG Peat Marwick LLP,
independent auditors; such statements (copies of which have been furnished to
the Company) are in accordance with generally accepted accounting principles,
consistently applied, and such statements fairly reflect the financial condition
of the Acquired Fund as of such dates; and there are no known contingent
liabilities of the Acquired Fund as of such dates not disclosed therein.
(i) Since December 31, 1995, there has not been any
material adverse change in the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Fund of indebtedness maturing more
than one year from the date such indebtedness was incurred, except as disclosed
on the statement of Assets and Liabilities referred to in Section 3.2; provided
that, for the purposes of this subparagraph (i), a decline in net asset value
per share of either class of the Acquired Fund shall not constitute a material
adverse change.
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(j) At the Closing Date, all federal and other tax returns
and reports of the Acquired Fund required by law to have been filed by such date
shall have been filed, and all federal and other taxes shown as due on such
returns and reports shall have been paid, or provision shall have been made for
the payment thereof; and to the best of the Trust's knowledge no such return is
currently under audit and no assessment has been asserted with respect to any
such return.
(k) The Acquired Fund is a "fund" as defined in section
851(h)(2) of the Code; for each taxable year of its operation ended on or prior
to the Closing Date, the Acquired Fund met all the requirements of Subchapter M
of the Code ("Subchapter M") for qualification and treatment as a "regulated
investment company"; it will continue to meet all such requirements for its
taxable year that includes the Closing Date; and it has no earnings and profits
accumulated in any taxable year to which the provisions of Subchapter M did not
apply to it.
(l) The Liabilities were incurred by the Acquired Fund in
the ordinary course of its business.
(m) The Acquired Fund is not under the jurisdiction of a
court in a proceeding under Title 11 of the United States Code or similar case
within the meaning of section 368(a)(3)(A) of the Code.
(n) Not more than 25% of the value of the Acquired Fund's
total assets (excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not more than 50% of
the value of such assets is invested in the stock and securities of five or
fewer issuers.
(o) The Acquired Fund will be terminated as soon as
reasonably practicable after the Reorganization, but in all events within six
months after the Closing Date.
(p) All issued and outstanding Acquired Fund Shares are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Acquired Fund, except to the extent that under
Massachusetts law shareholders of a Massachusetts business trust may, under
certain circumstances, be held personally liable for its obligations. All of the
issued and outstanding Acquired Fund Shares, at the time of Closing, will be
held by the persons and in the amounts set forth in the records of the transfer
agent as provided in paragraph 3.4. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any of the
Acquired Fund Shares, nor is there outstanding any security convertible into any
of the Acquired Fund Shares, except as contemplated herein.
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(q) On the Closing Date, the Acquired Fund will have full
right, power and authority to sell, assign, transfer and deliver the Assets.
(r) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Trust's Board of Trustees; and, subject to
the approval of the Acquired Fund Shareholders and assuming due execution and
delivery hereof by the Company on behalf of the Acquiring Fund, this Agreement
will constitute the valid and legally binding obligation of the Trust, on behalf
of the Acquired Fund, enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether the enforceability
is considered in a proceeding in equity or at law).
(s) The prospectus/proxy statement and statement of
additional information of the Acquired Fund (the "Proxy Statement") included in
the Registration Statement (as defined in paragraph 5.5) and the information
incorporated by reference into the Registration Statement (in each case other
than information that has been furnished by the Company) will, on the effective
date of the Registration Statement and on the Closing Date, not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
4.2. The Company, on behalf of the Acquiring Fund, represents
and warrants to the Trust, on behalf of the Acquired Fund, as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and has
power to carry on its business as it is now being conducted and to carry out
this Agreement.
(b) The Company is registered under the 1940 Act as an
open-end management investment company, of which the Acquiring Fund is a
separate diversified portfolio, and such registration has not been revoked or
rescinded and is in full force and effect.
(c) The Acquiring Fund is a duly established and
designated series of the Company.
(d) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the SEC thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) The Acquiring Fund is not, and the execution, delivery
and performance of this Agreement will not result, in any material violation of
the Charter or the Company's By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking with respect to the Acquiring Fund to which
the Company is a party or by which it is bound.
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(f) Except as otherwise disclosed in writing to and
accepted by the Acquired Fund, no litigation or administrative proceeding or
investigation of or before any court or governmental body is currently pending
or to its knowledge threatened against the Company with respect to the Acquiring
Fund or any of the properties or assets thereof that, if adversely determined,
would materially and adversely affect its financial condition or the conduct of
its business. The Company knows of no facts that might form the basis for the
institution of such litigation, proceeding or investigation, and is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects the Acquiring Fund's
business or its ability to consummate the transactions contemplated herein.
(g) The Statement of Assets and Liabilities of the
Acquiring Fund for the fiscal period ended August 31, 1996 has been audited by
Ernst & Young LLP, independent auditors; such statement (a copy of which has
been furnished to the Trust) is in accordance with generally accepted accounting
principles, consistently applied, and such statement fairly reflects the
financial condition of the Acquiring Fund as of such date; and there are no
known contingent liabilities of the Acquiring Fund as of such date not reflected
therein.
(h) Since August 31, 1996, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred; provided that, for the purposes of
this subparagraph (h), a decline in net asset value per share of the Acquiring
Fund shall not constitute a material adverse change.
(i) At the Closing Date, all federal and other tax returns
and reports of the Acquiring Fund required by law to have been filed by such
date shall have been filed, and all federal and other taxes shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof; and to the best of the Company's knowledge, no such return
is currently under audit and no assessment has been asserted with respect to any
such return.
(j) The Acquiring Fund is a "fund" as defined in section
851(h)(2) of the Code; for its taxable year ended August 31, 1996 (its first
taxable year), the Acquiring Fund met all the requirements of Subchapter M for
qualification and treatment as a regulated investment company; it will continue
to meet all such requirements for its taxable year that includes the Closing
Date; and it has no earnings and profits accumulated in any taxable year to
which the provisions of Subchapter M did not apply to it.
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(k) No consideration other than the Acquiring Fund Shares
(and the Acquiring Fund's assumption of the Liabilities) will be issued in
exchange for the Assets in the Reorganization.
(l) The Acquiring Fund has no plan or intention to issue
additional Acquiring Fund Shares following the Reorganization except for shares
issued in the ordinary course of its business as a series of an open-end
investment company; nor does the Acquiring Fund have any plan or intention to
redeem or otherwise reacquire any Acquiring Fund Shares issued to the Acquired
Fund Shareholders pursuant to the Reorganization, other than through redemptions
arising in the ordinary course of that business.
(m) The Acquiring Fund (i) will, after the Reorganization,
actively continue the Acquired Fund's historic business in substantially the
same manner that the Acquired Fund conducted that business before the
Reorganization, (ii) has no plan or intention to sell or otherwise dispose of
any of the Assets, except for dispositions made in the ordinary course of that
business and dispositions necessary to maintain its status as a regulated
investment company, and (iii) expects to retain substantially all the Assets in
the same form as it receives them in the Reorganization, unless and until
subsequent investment circumstances suggest the desirability of change or it
becomes necessary to make dispositions thereof to maintain such status.
(n) There is no plan or intention for the Acquiring Fund
to be dissolved or merged into another corporation or business trust or any
"fund" thereof (within the meaning of section 851(h)(2) of the Code) following
the Reorganization.
(o) Immediately after the Reorganization, (i) not more
than 25% of the value of the Acquiring Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the stock and
securities of any one issuer and (ii) not more than 50% of the value of such
assets will be invested in the stock and securities of five or fewer issuers.
(p) The Acquiring Fund does not own, directly or
indirectly, nor on the Closing Date will it own, directly or indirectly, nor has
it owned, directly or indirectly, at any time during the past five years, any
shares of the Acquired Fund.
(q) All issued and outstanding Acquiring Fund Shares are,
and the Acquiring Fund Shares issued in the Reorganization will be, duly and
validly issued and outstanding, fully paid and non-assessable by the Acquiring
Fund. The Acquiring Fund does not have outstanding any options, warrants or
other rights to subscribe for or purchase any of the Acquiring Fund Shares, nor
is there outstanding any security convertible into any Acquiring Fund Shares,
except as contemplated herein.
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(r) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action, if any, on the part of the Company's Board of Directors; and,
subject to the approval of the Acquired Fund Shareholders and assuming due
execution and delivery hereof by the Trust on behalf of the Acquired Fund, this
Agreement will constitute the valid and legally binding obligation of the
Company, on behalf of the Acquiring Fund, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect thereto,
and to general principles of equity and the discretion of the court (regardless
of whether the enforceability is considered in a proceeding in equity or at
law).
(s) The Registration Statement and the information
incorporated by reference therein (only insofar as it relates to the Acquiring
Fund and is based on information furnished by the Acquiring Fund) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading.
4.3. Each of the Trust, on behalf of the Acquired Fund, and
the Company, on behalf of the Acquiring Fund, represents and warrants as
follows:
(a) The fair market value of the Acquiring Fund Shares,
when received by the Acquired Fund Shareholders, will be approximately equal to
the fair market value of their Acquired Fund Shares constructively surrendered
in exchange therefor.
(b) Its management (i) is unaware of any plan or intention
of Acquired Fund Shareholders to redeem or otherwise dispose of any portion of
the Acquiring Fund Shares to be received by them in the Reorganization and (ii)
does not anticipate dispositions of those Acquiring Fund Shares at the time of
or soon after the Reorganization to exceed the usual rate and frequency of
dispositions of shares of the Acquired Fund as a series of an open-end
investment company. Consequently, its management expects that the percentage of
Acquired Fund Shareholder interests, if any, that will be disposed of as a
result of or at the time of the Reorganization will be DE MINIMIS. Nor does its
management anticipate that there will be extraordinary redemptions of Acquiring
Fund Shares immediately following the Reorganization.
(c) The Acquired Fund Shareholders will pay their own
expenses, if any, incurred in connection with the Reorganization.
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(d) Immediately following consummation of the
Reorganization, the Acquiring Fund will hold substantially the same assets and
be subject to substantially the same liabilities that the Acquired Fund held or
was subject to immediately prior thereto, plus any liabilities and expenses of
the parties incurred in connection with the Reorganization.
(e) The fair market value on a going concern basis of the
Assets will equal or exceed the Liabilities to be assumed by the Acquiring Fund
and those to which the Assets are subject.
(f) There is no intercompany indebtedness between the
Acquired Fund and the Acquiring Fund that was issued or acquired, or will be
settled, at a discount.
(g) Pursuant to the Reorganization, the Acquired Fund will
transfer to the Acquiring Fund, and the Acquiring Fund will acquire, at least
90% of the fair market value of the net assets, and at least 70% of the fair
market value of the gross assets, held by the Acquired Fund immediately before
the Reorganization. For the purposes of this representation, any amounts used by
the Acquired Fund to pay its Reorganization expenses and redemptions and
distributions made by it immediately before the Reorganization (except for (i)
distributions made to conform to its policy of distributing all or substantially
all of its income and gains to avoid the obligation to pay federal income tax
and/or the excise tax under section 4982 of the Code and (ii) redemptions not
made as part of the Reorganization) will be included as assets thereof held
immediately before the Reorganization.
(h) None of the compensation received by any Acquired Fund
Shareholder who is an employee of the Acquired Fund will be separate
consideration for, or allocable to, any of the Acquired Fund Shares held by such
Acquired Fund Shareholder-employee; none of the Acquiring Fund Shares received
by any such Acquired Fund Shareholder-employee will be separate consideration
for, or allocable to, any employment agreement; and the consideration paid to
any such Acquired Fund Shareholder-employee will be for services actually
rendered and will be commensurate with amounts paid to third parties bargaining
at arm's-length for similar services.
(i) Immediately after the Reorganization, the Acquired
Fund Shareholders will not own shares constituting "control" of the Acquiring
Fund within the meaning of section 304(c) of the Code.
5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
5.1. The Acquired Fund and the Acquiring Fund each will
operate its respective business in the ordinary course between the date hereof
and the Closing Date, it being understood that such ordinary course of business
will include payment of customary dividends and other distributions.
A-12
<PAGE>
5.2. The Trust will call a meeting of the Acquired Fund's
shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3. Subject to the provisions of this Agreement, the Acquired
Fund and the Acquiring Fund will each take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary, proper or advisable
to consummate and make effective the transactions contemplated herein.
5.4. As promptly as practicable, but in any case within sixty
days after the Closing Date, the Trust shall furnish the Company, in such form
as is reasonably satisfactory to the Company, a statement, certified by the
Trust's President or a Vice President, of the earnings and profits of the
Acquired Fund for federal income tax purposes that will be carried over to the
Acquiring Fund as a result of Section 381 of the Code.
5.5. The Trust, on behalf of the Acquired Fund, and the
Company, on behalf of the Acquiring Fund, shall cooperate in the provision of
all information reasonably necessary for the preparation and filing of the
registration statement of the Company relating to the Acquiring Fund Shares on
Form N-14, in compliance with the 1933 Act, the Securities Exchange Act of 1934,
as amended, and the 1940 Act and applicable state Blue Sky laws (the
"Registration Statement"), including the Proxy Statement in connection with the
meeting of the Acquired Fund's shareholders to consider approval of this
Agreement and the transactions contemplated herein.
5.6. The Acquiring Fund and the Acquired Fund shall cooperate
in the preparation and filing as promptly as practicable with the SEC of an
application, in form and substance reasonably satisfactory to their respective
counsel, for exemptive relief from the provisions of Section 17 of the 1940 Act,
and from any other provision of the 1940 Act deemed necessary or advisable by
such counsel, to permit consummation of the Reorganization as contemplated
herein (the "Exemptive Application"). The Acquiring Fund and the Acquired Fund
shall use all reasonable efforts to obtain the relief requested by the Exemptive
Application.
A-13
<PAGE>
5.7. The Acquiring Fund shall use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Acquired Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
6.1. All representations and warranties of the Trust, on
behalf of the Acquired Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated herein, as of the Closing Date with
the same force and effect as if made on the Closing Date and as of the Closing.
6.2. The Trust, on behalf of the Acquired Fund, shall have
delivered to the Company at the Closing a certificate executed in its name by
its President or a Vice President, in form and substance reasonably satisfactory
to the Company, to the effect that the Trust's representations and warranties,
on behalf of the Acquired Fund, made in this Agreement are true and correct at
and as of the Closing, except as they may be affected by the transactions
contemplated herein, and as to such other matters as the Company shall
reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
7.1. All representations and warranties of the Company, on
behalf of the Acquiring Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated herein, as of the Closing Date with
the same force and effect as if made on the Closing Date and as of the Closing.
7.2. The Company, on behalf of the Acquiring Fund, shall have
delivered to the Trust at the Closing a certificate executed in its name by its
President or a Vice President, in form and substance reasonably satisfactory to
the Trust, to the effect that the Company's representations and warranties, on
behalf of the Acquiring Fund, made in this Agreement are true and correct at and
as of the Closing, except as they may be affected by the transactions
contemplated herein, and as to such other matters as the Trust shall reasonably
request.
A-14
<PAGE>
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED
FUND AND THE ACQUIRING FUND.
If any of the conditions set forth below does not exist on or
before the Closing Date with respect to the Acquired Fund or the Acquiring Fund,
the other party to this Agreement, at its option, shall not be required to
consummate the transactions contemplated herein.
8.1. This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of the outstanding
Acquired Fund Shares in accordance with the provisions of the Declaration of
Trust and the 1940 Act.
8.2. On the Closing Date, no action, suit or other proceeding
shall be pending before any court or governmental agency in which it is sought
to restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents,
orders and permits of Federal, state and local regulatory authorities (including
those of the SEC and of state Blue Sky and securities authorities) deemed
necessary by the Acquired Fund or the Acquiring Fund to permit consummation, in
all material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
the Acquired Fund or the Acquiring Fund.
8.4. The Registration Statement shall have become effective
under the 1933 Act, and no stop orders suspending the effectiveness thereof
shall have been issued, and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 1933 Act.
8.5. The relief requested by the Exemptive Application shall
have been granted in form and substance reasonably satisfactory to the
respective counsel for the Acquiring Fund and the Acquired Fund.
8.6. The Acquired Fund shall have declared a dividend and/or
other distributions that, together with all previous dividends and other
distributions, shall have the effect of distributing to the Acquired Fund's
shareholders all of the Acquired Fund's investment company taxable income for
all taxable years ending on or prior to the Closing Date and for its current
taxable year through the Closing Date (computed without regard to any deduction
for dividends paid) and all net capital gain realized in all such taxable years
(after reduction for any capital loss carryforward).
A-15
<PAGE>
8.7. The Trust and the Company shall have received an opinion
of Kirkpatrick & Lockhart LLP, counsel to the Trust, in a form reasonably
satisfactory to the Manager, as to the federal income tax consequences mentioned
below ("Tax Opinion"). In rendering the Tax Opinion, such counsel may rely as to
factual matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters addressed to such
counsel) and the certificates delivered pursuant to paragraphs 6.2 and 7.2. The
Tax Opinion shall be substantially to the effect that, based on the facts and
assumptions stated therein, for federal income tax purposes:
(a) The Acquiring Fund's acquisition of the Assets to the
Acquiring Fund in exchange solely for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Liabilities, followed by the Acquired
Fund's distribution of those shares to the Acquired Fund Shareholders
constructively in exchange for their Acquired Fund Shares, will constitute a
"reorganization" within the meaning of section 368(a)(1)(C) of the Code, and
each of the Acquiring Fund and the Acquired Fund will be a "party to a
reorganization" within the meaning of section 368(b) of the Code;
(b) No gain or loss will be recognized to the Acquired
Fund on the transfer of the Assets to the Acquiring Fund in exchange solely for
the Acquiring Fund Shares and the assumption by the Acquiring Fund of the
Liabilities or on the subsequent distribution of those Acquiring Fund Shares to
the Acquired Fund Shareholders in constructive exchange for their Acquired Fund
Shares;
(c) No gain or loss will be recognized to the Acquiring
Fund on its receipt of the Assets in exchange solely for the Acquiring Fund
Shares and the assumption by the Acquiring Fund of the Liabilities;
(d) The Acquiring Fund's basis for the Assets will be the
same as the basis of the Assets in the Acquired Fund's hands immediately before
the Reorganization, and the Acquiring Fund's holding period for the Assets will
include the period during which the Assets were held by the Acquired Fund;
(e) No gain or loss will be recognized to an Acquired Fund
Shareholder on the constructive exchange of all of his, her or its Acquired Fund
Shares solely for Acquiring Fund Shares pursuant to the Reorganization; and
A-16
<PAGE>
(f) An Acquired Fund Shareholder's basis for the Acquiring
Fund Shares to be received by such shareholder in the Reorganization will be the
same as the basis for such shareholder's Acquired Fund Shares to be
constructively surrendered in exchange for those Acquiring Fund Shares; and such
shareholder's holding period for those Acquiring Fund Shares will include such
shareholder's holding period for those Acquired Fund Shares, provided they are
held as capital assets by such shareholder on the Closing Date.
Notwithstanding paragraphs (b) and (d) above, the Tax Opinion
may state that no opinion is expressed as to the effect of the Reorganization on
the Acquired Fund, the Acquiring Fund or any Acquired Fund Shareholder with
respect to any asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year (or on
the termination or transfer thereof) under a mark-to-market system of
accounting.
9. TERMINATION OF AGREEMENT.
9.1. This Agreement and the transactions contemplated hereby
may be terminated and abandoned by resolution of the Board of Trustees of the
Trust or the Board of Directors of the Company at any time prior to the Closing
Date (notwithstanding any vote of the Acquired Fund's shareholders) if:
(a) circumstances should develop that, in the opinion of
either party's Board, make proceeding with the Agreement inadvisable;
(b) a material breach by the other party of any
representation, warranty or agreement contained herein has occurred; or
(c) a condition to the obligation of the terminating party
cannot reasonably be met.
9.2. If this Agreement is terminated and the Reorganization is
abandoned pursuant to the provisions of this Section 9, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto or the Trustees, Directors, officers or shareholders of the Trust or of
the Acquired Fund, or of the Company or the Acquiring Fund, as the case may be,
in respect of this Agreement, except that the parties shall bear the aggregate
expenses of the transaction contemplated hereby in proportion to their
respective net assets as of the date this Agreement is terminated or the
exchange contemplated hereby is abandoned.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions set forth in Sections 6, 7 and 8 may be waived by the Board of
Trustees of the Trust, on behalf of the Acquired Fund, or the Board of Directors
of the Company, on behalf of the Acquiring Fund, as the case may be, if, in the
judgment of either, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the shareholders of the Acquired Fund
or of the Acquiring Fund, as the case may be.
A-17
<PAGE>
11. EXPENSES OF THE REORGANIZATION.
The Acquiring Fund and the Acquired Fund will bear the aggregate
expenses incurred in connection with the Reorganization in proportion to their
respective net assets as of the Closing Date; and such expenses will be charged
against the assets of the relevant Fund at or before the Valuation Time.
12. MISCELLANEOUS.
12.1. None of the representations and warranties included or
provided for herein shall survive consummation of the Reorganization.
12.2. This Agreement constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the subject
matter hereof. Neither party shall be bound by any condition, definition,
warranty or representation, other than as set forth or provided in this
Agreement or as may be, on or subsequent to the date hereof, set forth in a
writing signed by the party to be bound thereby.
12.3. Copies of the Declaration of Trust and of the Charter
are on file with the Secretary of the Commonwealth of Massachusetts and the
Secretary of State of the State of Maryland, respectively. This Agreement is
executed by the undersigned officers on behalf of the Trust (on behalf of the
Acquired Fund) and on behalf of the Company (on behalf of the Acquiring Fund),
respectively, and not on behalf of such officers or the Trustees or Directors of
either the Trust or the Company as individuals. The respective obligations of
the Trust and the Company under this Agreement are not binding upon any of their
respective Trustees, Directors, officers, shareholders or partners individually.
The obligations of the Company hereunder are binding only upon the assets and
property of the Acquiring Fund, and the obligations of the Trust hereunder are
binding only upon the assets and property of the Acquired Fund.
12.4. This Agreement shall be governed and construed in
accordance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement by the Trust and the
Company shall be governed and construed in accordance with the internal laws of
the Commonwealth of Massachusetts and the State of Maryland, respectively, in
each case without giving effect to principles of conflict of laws; and provided
further that, in the case of any conflict between any such laws and the federal
securities laws, the latter shall govern.
12.5. This Agreement may be executed in counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
A-18
<PAGE>
12.6. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall be
made by either party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
IN WITNESS WHEREOF, the Trust, on behalf of the Acquired Fund,
and the Company, on behalf of the Acquiring Fund, have caused this Agreement and
Plan of Reorganization to be executed and attested on its behalf by its duly
authorized representatives as of the date first above written.
THE DREYFUS/LAUREL FUNDS TRUST,
on behalf of
DREYFUS SPECIAL GROWTH FUND
ATTEST:/s/ Douglas C. Conroy By:/s/ John E. Pelletier
------------------------ --------------------------
Assistant Secretary Vice President
DREYFUS GROWTH AND VALUE FUNDS,
INC.,
on behalf of
DREYFUS AGGRESSIVE GROWTH FUND
ATTEST:/s/ Elizabeth Keeley By:/s/ Mark A. Korpe
-------------------------- --------------------------
Assistant Secretary Vice President
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF
DREYFUS AGGRESSIVE GROWTH FUND
A SERIES OF DREYFUS GROWTH AND VALUE FUNDS, INC.
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-645-6561
DATED FEBRUARY 12, 1997
This Statement of Additional Information, which is not a Prospectus,
relates to the acquisition of the Investor and Class R Shares of Dreyfus Special
Growth Fund (the "Acquired Fund"), a portfolio of The Dreyfus/Laurel Funds Trust
(formerly known as The Laurel Funds Trust and also formerly known as The Boston
Company Fund), by Dreyfus Aggressive Growth Fund (the "Acquiring Fund"), a
portfolio of Dreyfus Growth and Value Funds, Inc. (formerly known as Dreyfus
Focus Funds, Inc.) and supplements and should be read in conjunction with the
Prospectus/Proxy Statement dated February 12, 1997 (the "Proxy Statement"). To
obtain a copy of the Proxy Statement, please write to the Acquiring Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11566-0144, or call toll-free
1-800-645-6561.
This Statement of Additional Information incorporates by reference the
following documents, a copy of each of which accompanies this Statement of
Additional Information:
A. The Statement of Additional Information of the Acquiring Fund
dated December 16, 1996, including the Acquiring Fund's
audited financial statements for the fiscal period ended
August 31, 1996, previously filed on EDGAR, Accession number
0000914775-96-000033.
B. The Statement of Additional Information of the Acquired Fund
dated May 1, 1996, previously filed on EDGAR, Accession number
0000053808-96-000017.
C. The audited financial statements of the Acquired Fund for the
fiscal year ended December 31, 1995, which are included in the
Acquired Fund's Annual Report for the period ending December
31, 1995, previously filed on EDGAR, Accession number
0000053808-96-000005.
D. The unaudited financial statement of the Acquired Fund as at
June 30, 1996, which are included in the Acquired Funds
Semi-Annual Report for the period ending June 30, 1996,
previously filed in EDGAR, Accession number
0000053808-96-000018.
The following are pro forma financial statements of the Acquiring Fund
and the Acquired Fund giving effect to the proposed Reorganization described in
the Proxy as of August 31, 1996:
<PAGE>
PRO FORMA STATEMENT OF INVESTMENTS
DREYFUS AGGRESSIVE GROWTH FUND
AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL VALUE
AMOUNT
---------------------------- --------------------------------------------------
DREYFUS DREYFUS DREYFUS DREYFUS
AGGRESSIVE SPECIAL AGGRESSIVE SPECIAL
GROWTH GROWTH GROWTH GROWTH
FUND FUND TOTAL FUND FUND ADJUSTMENT TOTAL
-------- -------- ------- ------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Common Stocks--109.8%
Commercial
Services--7.9% Corrections Corporation of
America...................(a) 150,000 150,000 $4,837,500 $ $ $4,837,500
Katz Digital Technologies... 150,000 150,000 637,500 637,500
NuCo2.......................(a) 130,000 130,000 3,380,000 3,380,000
PC Service Source...........(a) 115,000 115,000 1,610,000 1,610,000
Quintel Entertainment....... 250,000 320,000 570,000 1,625,000 2,080,000 3,705,000
----------- --------- -------- ---------
12,090,000 2,080,000 14,170,000
----------- --------- -------- ----------
Consumer
Durables--1.5% Black Rock Golf.............. 140,000 140,000 805,000 805,000
Diamond Home Services........ 60,000 60,000 1,860,000 1,860,000
----------- --------- -------- ---------
805,000 1,860,000 2,665,000
----------- --------- -------- ----------
Consumer Non-
Durables--8.2% DonnKenny.................... 70,000 70,000 1,233,750 1,233,750
Quicksilver.................. 50,000 50,000 1,175,000 1,175,000
Ultrafem..................... 265,000 265,000 530,000 5,962,500 5,962,500 11,925,000
Vista 2000...................(a) 350,000 310,000 660,000 218,750 193,750 412,500
----------- ---------- -------- ----------
6,181,250 8,565,000 14,746,250
----------- ---------- -------- ----------
Consumer
Services--14.7% Alma International...........(a) 1,000,000 300,000 1,300,000 3,000,000 900,000 3,900,000
Casino Data Systems..........(a) 210,000 145,000 355,000 3,858,750 2,664,375 6,523,125
Checkfree.................... 170,000 170,000 2,826,250 2,826,250
Cinar Films, Cl. B...........(a) 205,000 120,000 325,000 4,894,375 2,865,000 7,759,375
Koo Koo Roo..................(a) 75,000 180,000 255,000 590,625 1,417,500 2,008,125
Metromedia International
Group....................... 150,000 150,000 1,687,500 1,687,500
Wiztec Solutions............. 250,000 250,000 1,781,250 1,781,250
----------- --------- ------- ----------
16,951,250 9,534,375 26,485,625
----------- --------- ------- ----------
Electronic
Technology--8.2% Advanced Photonix, Cl. A.....(a) 420,000 420,000 1,443,750 1,443,750
Gilat Satellite
Networks...................(a) 220,000 220,000 4,317,500 4,317,500
MRV Communications...........(a) 150,000 50,000 200,000 2,997,656 999,219 3,996,875
Personal Computer Products...(a) 1,325,000 100,000 1,425,000 2,442,969 184,375 2,627,344
Tridex.......................(a) 150,000 150,000 1,490,625 1,490,625
TSL Holdings................. 10 10 0 0
Voice Control Systems........(a) 150,000 150,000 881,250 881,250
----------- -------- ------- ----------
12,692,500 2,064,844 14,757,344
----------- --------- ------- ----------
Energy
Minerals--1.5% Rutherford-Moran Oil......... 110,000 110,000 2,681,250 2,681,250
----------- --------- ------- ----------
Finance--7.8% American Medical
Technologies...............(a) 350,000 350,000 765,625 765,625
ASTA Funding................. 40,000 40,000 220,000 220,000
Executive Risk............... 75,000 75,000 2,578,125 2,578,125
Frontier Insurance Group..... 110,000 110,000 4,290,000 4,290,000
Hooper Holmes................ 205,000 114,800 319,800 2,613,750 1,463,700 4,077,450
Security First Network Bank.. 30,600 30,600 833,850 833,850
Titan Holdings............... 84,000 84,000 1,197,000 1,197,000
----------- --------- ------- ----------
12,498,350 1,463,700 13,962,050
----------- --------- ------- ----------
<PAGE>
Health
Services--8.9% Atlantic Pharmaceuticals.....(b) 140,000 140,000 966,875 966,875
Complete Management.......... 310,000 43,000 353,000 4,766,250 661,125 5,427,375
Comprehensive Care...........(a) 130,000 130,000 1,088,750 1,088,750
Core.........................(a) 152,500 175,000 327,500 1,544,063 1,771,875 3,315,938
HemaCare.....................(a) 325,000 325,000 690,625 690,625
Northstar Health Services.... 15,500 15,500 27,125 27,125
OncorMed.....................(a) 250,000 100,000 350,000 843,750 337,500 1,181,250
OnGard Systems...............(a) 220,000 175,000 395,000 797,500 634,375 1,431,875
Pace Health Management
Systems....................(a) 200,000 200,000 400,000 925,000 925,000 1,850,000
---------- --------- -------- ---------
11,649,938 4,329,875 15,979,813
---------- ---------- -------- ----------
Health
Technology--18.6% Amgen....................... 38,000 38,000 2,213,500 2,213,500
Avigen...................... 290,000 290,000 1,758,125 1,758,125
BioCryst Pharmaceuticals....(a) 280,000 280,000 4,235,000 4,235,000
Bone Care International..... 130,000 130,000 780,000 780,000
Boston Life Sciences........(a) 1,000,000 1,000,000 843,750 843,750
ChiRex...................... 50,000 50,000 612,500 612,500
Cytoclonal Pharmaceutics.... 135,000 135,000 523,125 523,125
Cytoclonal
Pharmaceutics,
Cl. C (Warrants).......... 200,000 200,000 275,000 275,000
Fuisz Technologies.......... 270,000 180,000 450,000 4,860,000 3,240,000 8,100,000
MacroChem...................(a) 240,000 300,000 540,000 960,000 1,200,000 2,160,000
Microvision................. 140,000 140,000 787,500 787,500
Microvision (Warrants)...... 140,000 140,000 323,750 323,750
NeoPharm.................... 60,000 60,000 855,000 855,000
NeoPharm (Warrants)......... 12,500 12,500 100,000 100,000
Oncor....................... 550,000 550,000 2,750,000 2,750,000
Teva Pharmaceutical
Industries................ 20,000 20,000 728,750 728,750
VIMRx Pharmaceuticals.......(a) 1,150,000 100,000 1,250,000 5,246,875 456,250 5,703,125
Virus Research Institute.... 125,000 125,000 812,500 812,500
----------- ---------- ------- ----------
25,723,125 7,838,500 33,561,625
----------- ---------- ------- ----------
Industrial
Services--9.1% Commodore Applied
Technologies.............. 525,000 200,000 725,000 4,725,000 1,800,000 6,525,000
Commodore Applied
Technologies (Warrants)... 300,000 50,000 350,000 900,000 150,000 1,050,000
ERD Waste...................(a) 285,000 285,000 2,155,312 2,155,312
Global Marine............... 180,000 180,000 2,587,500 2,587,500
Sonat Offshore.............. 25,000 25,000 1,365,625 1,365,625
Varco International......... 170,000 170,000 2,741,250 2,741,250
----------- ---------- ------- ----------
7,780,312 8,644,375 16,424,687
----------- ---------- ------- ----------
Process
Industries--2.5% Chromatics Color
Science International.....(a) 240,000 210,000 450,000 750,000 656,250 1,406,250
Crompton & Knowles......... 125,000 125,000 1,875,000 1,875,000
Ocal....................... 150,000 230,000 380,000 515,625 790,625 1,306,250
----------- ---------- ------- ---------
3,140,625 1,446,875 4,587,500
----------- ---------- ------- ---------
Producer Motorcar Parts &
Manufacturing--.3% Accessories...............(a) 50,000 50,000 612,500 612,500
----------- ---------- ------- --------
Retail Trade--.2% CML Group 100,000 100,000 412,500 412,500
----------- ---------- ------- ---------
<PAGE>
Technology
Services--18.5% Aspen Tech Inc............ 25,000 25,000 1,731,250 1,731,250
IMNET Systems.............(a) 210,000 70,000 280,000 3,963,750 1,321,250 5,285,000
McAfee Associates......... 62,000 62,000 3,696,750 3,696,750
Mercury Interactive.......(a) 425,000 180,000 605,000 5,950,000 2,520,000 8,470,000
Microware Systems......... 260,000 260,000 5,362,500 5,362,500
Safeguard Scientifics.....(a) 70,000 70,000 2,257,500 2,257,500
Systems of Excellence.....(a) 500,000 500,000 1,040,000 1,040,000
Registry.................. 22,000 22,000 731,500 731,500
TriTeal................... 325,000 325,000 4,631,250 4,631,250
------------ --------- ------- ----------
23,936,500 9,269,250 33,205,750
------------ --------- ------- ----------
Utilities-- 1.9% AMNEX....................(a) 250,000 300,000 550,000 859,375 1,031,250 1,890,625
Noram Energy............. 100,000 100,000 1,462,500 1,462,500
------------ ---------- ------- ---------
859,375 2,493,750 3,353,125
------------ ---------- ------- ------------
Total Common Stocks $138,014,475 $59,590,544 $ $197,605,019
(cost $200,149,340) ============ =========== ======= ============
U.S. Treasury
Bills--.6% 5.21%,09/19/96.......... 70,000 70,000 69,811 69,811
5.06%,10/03/96.......... 45,000 45,000 44,793 44,793
5.02%,10/10/96.......... 51,000 51,000 50,713 50,713
5.30%,10/17/96.......... 19,000 19,000 18,875 18,875
5.14%,11/07/96.......... 280,000 280,000 277,301 277,301
5.15%,11/14/96.......... 502,000 502,000 496,664 496,664
5.07%,11/29/96.......... 70,000 70,000 69,099 69,099
Total Short-Term ------------ --------- ------- -----------
Investments (cost $1,027,837) 1,027,255 1,027,255
============ ========= ======= ===========
TOTAL INVESTMENTS (cost $146,067,532,
$55,109,645 and $201,177,177 respectively) 110.2% $138,014,475 $60,617,799 $ - $ 198,632,274
========= ============ =========== ======== ============
LIABILITIES, LESS CASH AND RECEIVABLES...... (10.2%) $(18,673,939)$ (87,652) $344,388 $(18,417,203)
========= ============ =========== ======== =============
NET ASSETS 100.0% $119,340,536 $60,530,147 $344,388 $180,215,071
========= ============ =========== ======== =============
</TABLE>
Notes to Pro Forma Statement of Investments:
(a) Non-income producing.
(b) Security restricted as to public resale. Investment in restricted security,
with an aggregate of $966,875, represents approximately .54% of pro forma net
assets;
<TABLE>
<CAPTION>
PERCENTAGE OF
ACQUISION PURCHASE PRO FORMA
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------ --------- -------- ------------- ---------
<S> <C> <C> <C> <C>
Atlantic Pharmaceuticals..... 08/16/96 $6.12 .54% 15% discount
to market value
</TABLE>
* The valuation of this security has been determined in good faith under the
direction of the Board of Directors.
See notes to proforma financial statements.
<PAGE>
PRO FORMA STATEMENT OF ASSETS AND
LIABILITIES
AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
DREYFUS DREYFUS
AGGRESSIVE SPECIAL PRO-FORMA
GROWTH GROWTH COMBINED
FUND FUND ADJUSTMENTS (NOTE 1)
---------- ------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
--see statement ............................... $ 138,014,475 $60,617,799 $ - $ 198,632,274
Cash............................................... 145,111 (2,354) - 142,757
Dividends and interest receivable.................. 8,010 11,954 - 19,964
Receivable for shares of Common Stock subscribed .. 1,117,777 - - 1,117,777
Prepaid expenses................................... 31,335 - - 31,335
Due from The Dreyfus Corporation................... - - 171,441 171,441
------------- ------------ ------------- -------------
Total Assets....................................... 139,316,708 60,627,399 171,441 200,115,548
------------- ------------ ------------- -------------
LIABILITIES:
Due to The Dreyfus Corporation and affiliates.... 113,203 66,642 (179,845) -
Due to Distributor............................... 24,612 12,418 - 37,030
Bank loans payable............................... 16,599,850 - - 16,599,850
Payable for Common Stock redeemed................ 2,862,868 18,192 - 2,881,060
Payable for investment securities purchased...... 165,400 - - 165,400
Loan commitment fees and interest payables....... 119,451 - - 119,451
Accrued expenses and other liabilities........... 90,788 - 6,898 97,686
------------- ------------ ------------- -------------
Total Liabilities............................. 19,976,172 97,252 (172,947) 19,900,477
------------- ------------ ------------- -------------
NET ASSETS.......................................... $ 119,340,536 $ 60,530,147 $ 344,388 $ 180,215,071
============= ============ ============= =============
REPRESENTED BY:
Paid-in capital.................................. $ 129,548,179 $ 49,068,094 $ 344,388* $ 178,960,661
Accumulated net realized gain (loss)
on investments................................. (2,154,586) 5,953,908 - 3,799,322
Accumulated net unrealized appreciation
(depreciation) on investments and
foreign currency transactions.................. (8,053,057) 5,508,145 - (2,544,912)
------------- ------------ ------------- -------------
NET ASSETS, at value................................ $ 119,340,536 $ 60,530,147 $ 344,388 $ 180,215,071
============= ============ ============= =============
Shares of Common Stock outstanding:
Aggressive Growth Fund.............................. 5,256,078 2,665,352** 7,921,430
=============
Special Growth Fund................................. 3,274,669 (3,274,669) -
============
NET ASSET VALUE per share:
Aggressive Growth Fund
Common Shares
($119,340,536/5,256,078 shares)............... $ 22.71
=============
Special Growth Fund
Investor Shares
($56,049,660/3,035,269 shares)................ $ 18.47
============
Class R shares
($4,480,487/239,400 shares)................... $ 18.72
============
Proforma Combined Portfolio
($180,215,071/7,921,430 shares)............... $ 22.75
==========
</TABLE>
- ------------------------------------
* Represents the net income effect of pro forma adjustments. This offsets the
reclassification of $870,654 of investment loss - net of the Dreyfus Special
Growth Fund to paid-in capital.
** Assumes the issuance of 2,665,352 shares applicable to common stockholders of
the Dreyfus Special Growth Fund.
See notes to pro forma financial statements.
<PAGE>
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
DREYFUS DREYFUS
AGGRESSIVE SPECIAL PRO-FORMA
GROWTH GROWTH COMBINED
FUND* FUND ADJUSTMENTS (NOTE 1)
------------ --------- ------------ ---------
<S> <C> <C> <C> <C>
Investment Income:
Income:
Interest.............................................. $ 110,148 $ 166,382 $ - $ 276,530
Cash dividends net of $3,333 foreign taxes at
source for the Dreyfus Special Growth Fund.......... 75,605 138,033 - 213,638
------------ ----------- ----------- -----------
Total Income........................................ 185,753 304,415 - 490,168
------------ ----------- ----------- -----------
Expenses:
Management fee....................................... $ 352,634 $ 788,587 $ (311,383)(a,c) $ 829,838
Shareholder servicing costs.......................... 187,457 - 196,263 (b,c) 383,720
Interest............................................. 119,374 - - 119,374
Registration fees.................................... 51,983 - 1,727 (c) 53,710
Legal fees........................................... 28,873 - - 28,873
Custodian fees....................................... 14,315 - 8,021 (c) 22,336
Director's fees and expenses......................... 13,713 10,372 (10,372)(f) 13,713
Auditing fees........................................ 12,800 - 185 (c) 12,985
Prospectus and shareholders' reports................. 12,138 - 6,875 (c) 19,013
Loan commitment fees................................. 5,139 - - 5,139
Distribution fees.................................... - 160,238 (160,238)(d) 0
Miscellaneous........................................ 1,010 - 462 (c) 1,472
----------- ----------- ----------- -----------
799,436 959,197 (268,460) 1,490,173
Less--expense reimbursement from Manager due to
undertakings....................................... 86,505 - 75,928 (e) 162,433
----------- ----------- ------------ -----------
Total Expenses.................................. 712,931 959,197 (344,388) 1,327,740
----------- ----------- ------------ -----------
INVESTMENT INCOME (LOSS)--NET (527,178) (654,782) 344,388 (837,572)
----------- ----------- ------------ -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on investments:
Long transactions (including foreign
currency transactions)........................... $(2,195,261) $10,035,586 - $ 7,840,325
Short sale transactions............................. 40,675 - - 40,675
Forward currency exchange contracts................. - 326 - 326
------------ ----------- ----------- -----------
Net Realized gain (loss)............................ (2,154,586) 10,035,912 - 7,881,326
------------ ----------- ----------- -----------
Net unrealized (depreciation) on investments
and foreign currency transactions................. (8,053,057) (8,390,998) - (16,444,055)
------------ ----------- ----------- -----------
NET REALIZED AND UNREALIZED (LOSS)
ON INVESTMENTS................................ (10,207,643) 1,644,914 - (8,562,729)
------------ ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... $(10,734,821) $ 990,132 $ 344,388 $ (9,400,301)
- -------------------------- ============ =========== =========== ============
</TABLE>
* From September 29, 1995 (commencement of operations) to August 31, 1996.
(a) Total combined average net assets for the period ended August 31, 1996
multiplied by the management fee of .75%.
(b) Total combined average net assets for the period ended August 31, 1996
multiplied by the shareholder servicing fees of .25%.
(c) Represents a reclassification of costs due to the prior existence of a
unitary fee structure that is being eliminated.
(d) Represents the elimination of distribution fees.
(e) Reflects the effects of an increase in expense reimbursement resulting from
a 1.20% expense limitation.
(f) Reflects reduction in expenses due to elimination of duplicative services.
See notes to pro forma financial statements.
<PAGE>
DREYFUS AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - BASIS OF COMBINATION:
On October 31, 1996 the Boards of Dreyfus Growth and Value Funds, Inc. (DGV)
and Dreyfus Special Growth Fund approved an Agreement and Plan of Reorganization
whereby, subject to approval by the shareholders of Dreyfus Special Growth Fund.
Dreyfus Aggressive Growth Fund, a series of DGV, will acquire all the assets of
the Dreyfus Special Growth Fund subject to the liabilities of such Series, in
exchange for a number of shares equal to the pro rata net assets of shares of
the Dreyfus Aggressive Growth Fund (the "Merger").
The Merger will be accounted for as a tax free merger of investment
companies. The pro forma combined financial statements are presented for the
information of the reader and may not necessarily be representative of what the
actual combined financial statements would have been had the reorganization
occurred at August 31, 1996. The unaudited pro forma statements of investments,
and of assets and liabilities reflect the financial position of Dreyfus
Aggressive Growth Fund and Dreyfus Special Growth Fund at August 31, 1996. The
unaudited pro forma statement of operations reflect the results of operations of
the respective series of Dreyfus Aggressive Growth Fund for the period of
September 29, 1995 (commencement of operations) to August 31, 1996 and Dreyfus
Special Growth Fund for the year ended August 31, 1996. These statements have
been derived from the Funds' respective books and records utilized in
calculating daily net asset value at the dates indicated above for Dreyfus
Aggressive Growth Fund and Dreyfus Special Growth Fund under generally accepted
accounting principles. The historical cost of investment securities will be
carried forward to the surviving entity and results of operations of Dreyfus
Aggressive Growth Fund for pre-combination periods will not be restated.
The pro forma statements of investments, assets and liabilities and
operations should be read in conjunction with the historical financial
statements of the Funds included or incorporated by reference in the Statements
of Additional Information.
NOTE 2 - PORTFOLIO VALUATION:
Investments in securities (including options and financial futures) are
valued at the last sale price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board. Investments denominated in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
Most debt securities (excluding short-term investments) are valued each
business day by an independent pricing service ("Service") approved by the
Board. Debt securities for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service are
valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other debt
securities are carried at fair value as determined by the Service, based on
methods which include consideration of: yields or prices of securities of
comparable quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions.
NOTE 3 - CAPITAL SHARES:
The pro forma net asset value per share assumes 2,665,352 additional shares
of Common Stock of Dreyfus Aggressive Growth were issued in connection with the
proposed acquisition of Dreyfus Special Growth Fund by Dreyfus Aggressive Growth
Fund as of August 31, 1996. The number of additional shares issued was
calculated by dividing the net assets of Dreyfus Special Growth Fund at August
31, 1996 by the net asset value per share of Dreyfus Aggressive Growth Fund at
August 31, 1996 of $22.71 for Common Shares. The pro forma combined number of
shares outstanding of 7,921,430 consists of the 2,665,352 shares issuable to
Dreyfus Special Growth Fund the merger and 5,256,078 shares of Dreyfus
Aggressive Growth Fund outstanding at August 31, 1996.
<PAGE>
NOTE 4 - PRO FORMA OPERATING EXPENSES:
The accompanying pro forma financial statements reflect changes in fund
shares as if the merger had taken place on August 31, 1996. Adjustments were
made to reflect the elimination of the unitary fee structure of Dreyfus Special
Growth Fund and for duplicated services that would not have been incurred if the
merger took place on September 29, 1995. In addition, the accompanying pro forma
financial statements reflect the undertaking by Dreyfus to limit the Acquiring
Fund's Total Fund Operating Expenses to 1.20% of the Acquiring Fund's average
daily net assets for a period of two years following the completion of the
Reorganization.
NOTE 5 - MERGER COSTS:
Merger costs are estimated at approximately $82,000 and are not included in
the pro forma statement of operations since these costs are not reoccurring.
These costs represent the estimated expense of both Funds carrying out their
obligations under the Agreement and Plan of Reorganization and consist of
management's estimate of legal fees, accounting fees, printing costs and mailing
charges related to the proposed merger.
NOTE 6 - FEDERAL INCOME TAXES:
Each Fund has elected to be taxed as a "regulated investment company" under
the Internal Revenue Code. After the Merger, Dreyfus Aggressive Growth Fund
intends to continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by complying with
the provisions available to certain investment companies, as defined in
applicable sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all, Federal
income taxes.
The identified cost of investments for the Funds is substantially the same
for both financial accounting and federal income tax purposes. The tax cost of
investments will remain unchanged for the combined entity.
The Dreyfus Special Growth Fund will distribute substantially all its
investment income and any realized gains prior to the merger date.
<PAGE>
DREYFUS GROWTH AND VALUE FUNDS, INC.
PART C
Item 15. Indemnification.
The Statement as to the general effect of any contract, arrangements or
statute under which a director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified in any manner against any liability which
may be incurred in such capacity, other than insurance provided by any director,
officer, affiliated person or underwriter for their own protection, is
incorporated herein by reference to Item 27 of Part II of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed under the
Securities Act of 1933 on December 22, 1993.
Reference is also made to the Distribution Agreement, which is
incorporated by reference to Exhibit 7 of this Registration Statement.
Item 16. Exhibits
1 Registrant's Articles of Incorporation and Articles of
Amendment are incorporated herein by reference to Exhibit 1 of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed under the Securities Act of 1933 on December
22, 1993, and Exhibits 1(b) and 1(c) of Post-Effective
Amendment No. 5 to the Registrant's Registration Statement of
Form N-1A, filed under the Securities Act of 1933 on September
27, 1995 ("Post Effective Amendment No. 5").
2 Registrant's By-Laws are as amended, are incorporated herein
by reference to Exhibit 2 of Post-Effective Amendment No. 5.
3 Not Applicable.
4 The Agreement and Plan of Reorganization is filed herewith as
Appendix A to Part A of this Registration Statement.
5 Not Applicable.
6(a) Registrant's Management Agreement is incorporated herein by
reference to Exhibit 5(a) of Post-Effective Amendment No. 5.
6(b) Registrant's Sub-Investment Advisory Agreement is incorporated
herein by reference to Exhibit 5(b) of Post-Effective
Amendment No. 5.
7(a) Registrant's Distribution Agreement is incorporated herein by
reference to Exhibit 6 of Post-Effective Amendment No. 5.
<PAGE>
7(b) Registrant's Shareholder Services Plan Agreements are
incorporated by reference to Exhibit 6(b) of Post-Effective
Amendment No. 6 to the Registration Statement on Form N-1A,
filed under the Securities Act of 1933 on February 16, 1996
("Post-Effective Amendment No. 6").
8 Not Applicable.
9 Registrant's Amended and Restated Custody Agreement is
incorporated herein by reference to Exhibit 8(a) of
Post-Effective Amendment No. 5.
10 Not Applicable.
11(a) Opinion of Stroock & Stroock & Lavan, Counsel to Registrant,
as to the legality of the securities being registered is
incorporated herein by reference to Exhibit 10 of
Post-Effective Amendment No. 6.
11(b) Consent of Stroock & Stroock & Lavan, counsel to Registrant.
12 Tax opinion and consent of Kirkpatrick & Lockhart LLP.
13 Registrant's Shareholder Services Plan is incorporated herein
by reference to Exhibit 9 of Post-Effective Amendment No. 5.
14(a) Consent of Ernst & Young LLP, Independent Auditors to
Registrant, as to the use of their report dated September 27,
1996, concerning the financial statements of Dreyfus
Aggressive Growth Fund dated August 31, 1996.
14(b) Consent of KPMG Peat Marwick LLP, Independent Auditors to The
Dreyfus/Laurel Funds Trust, as to the use of their report
dated February 6, 1996 concerning the financial statements of
Dreyfus Special Growth Fund dated December 31, 1995.
14(c) Consent of Stroock & Stroock & Lavan, Counsel to Registrant,
as to the use of its opinion as to the legality of the
securities being registered and as to the use of its name as
Counsel to such Fund. SEE Exhibit 11(b).
14(d) Consent of Kirkpatrick & Lockhart LLP as to the use of its tax
opinion. See Exhibit 12.
15 Not Applicable.
16(a) Powers of Attorney of the Directors and officers are
incorporated by reference herein to Other Exhibits (a) of
Post-Effective Amendment No. 6.
16(b) Certificate of Secretary are incorporated by reference herein
to Other Exhibits (b) of Post-Effective Amendment No. 6.
17(a) Form of Proxy Card.
17(b) Registrants's Declaration of Rule 24f-2 filed on December 29,
1994 (Accession No. 0000914775-94-000016) is incorporated
herein by reference.
<PAGE>
Item 17. Undertakings.
1 The undersigned Registrant agrees that prior to any public
offering of the securities registered through the use of a
prospectus which is part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the
applicable registration form for offerings by persons who may
be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
2 The undersigned Registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as a part of
an amendment to the registration statement and will not be
used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933,
each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and
the offering of the securities at that time shall be deemed to
be the initial bona fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement has been
signed on behalf of the Registrant, in the City of Boston and the Commonwealth
of Massachusetts, on the 31st day of December, 1996.
DREYFUS GROWTH AND VALUE FUNDS, INC.
/s/ Marie E. Connolly*
By: ________________________________
Marie E. Connolly
President
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the dates indicated.
This instrument may be executed in one or more counterparts, all of which shall
together constitute a single instrument.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Marie E. Connolly* President, Treasurer 12/31/96
________________________ (Principal Executive, Finan-
Marie E. Connolly cial and Accounting Officer)
/s/ Joseph S. DiMartino*
_________________________ Director 12/31/96
Joseph S. DiMartino
/s/ John M. Fraser, Jr.*
_________________________ Director 12/31/96
John M. Fraser, Jr.
/s/ Ehud Houminer*
_________________________ Director 12/31/96
Ehud Houminer
/s/ Gloria Messinger*
__________________________ Director 12/31/96
Gloria Messinger
<PAGE>
/s/ David J. Mahoney*
__________________________ Director 12/31/96
David J. Mahoney
*By: /s/ Elizabeth Keeley
----------------------
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBITS:
---------
11(b) Consent of Stroock & Stroock & Lavan, Counsel to Registrant.
12 Tax opinion and consent of Kirkpatrick & Lockhart LLP.
14(a) Consent of Ernst & Young LLP, Independent Auditors to
Registrant, as to the use of their report dated September 27,
1996, concerning the financial statements of Dreyfus
Aggressive Growth dated August 31, 1996.
14(b) Consent of KPMG Peat Marwick LLP, Independent Auditors to The
Dreyfus/Laurel Funds Trust, as to the use of their report
dated February 6, 1996, concerning the financial statements of
Dreyfus Special Growth Fund dated December 31, 1995.
17(a) Form of Proxy Card.
Exhibit (11)(b)
STROOCK & STROOCK & LAVAN
7 Hanover Square
New York, New York 10004
We hereby consent to the use of our legal opinion regarding the legality of the
issuance of Registrant's shares and other matters filed as Exhibit (1) of
Post-Effective Amendment No. 6 to the Registrant's Registraton Statement on Form
N-1A filed on February 16, 1996, which opinion is incorporated by reference as
an exhibit to this Registration Statement on Form N-14. In giving such
permission, we do not admit hereby that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933 as
amended, or the rule and regulations of the Securities and Exchange Commission
hereunder.
Very truly yours,
/s/ Stroock & Stroock & Lavan
STROOCK & STROOCK & LAVAN
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Second Floor
Washington, D.C. 20036-1800
December 31, 1996
The Dreyfus/Laurel Funds Trust
200 Park Avenue
New York, NY 10166
Dreyfus Growth and Value Funds, Inc.
200 Park Avenue
New York, NY 10166
Ladies and Gentlemen:
The Dreyfus/Laurel Funds Trust (formerly The Laurel Funds Trust and
before that The Boston Company Fund) ("Trust"), on behalf of Dreyfus Special
Growth Fund, a segregated portfolio of assets ("series") thereof ("Target"), and
Dreyfus Growth and Value Funds, Inc. (formerly Dreyfus Focus Funds, Inc.)
("Company"), on behalf of Dreyfus Aggressive Growth Fund, a series thereof
("Acquiring Fund"),1 have requested our opinion as to certain federal income tax
consequences of the proposed acquisition of Target by Acquiring Fund pursuant to
an Agreement and Plan of Reorganization between them. The form of such agreement
and plan ("Plan") is attached as an appendix to the Prospectus and Proxy
Statement to be furnished in connection with the solicitation of proxies by
Trust's board of trustees for use at a special meeting of Target shareholders to
be held on April 7, 1997 ("Proxy"), included in the registration statement on
Form N-14 to be filed with the Securities and Exchange Commission ("SEC") on or
about the date hereof ("Registration Statement"). Specifically, each Investment
Company has requested our opinion:
(1) that the acquisition by Acquiring Fund of all of Target's
assets in exchange solely for voting shares of common stock in
Acquiring Fund ("Acquiring Fund Shares") and the assumption by
Acquiring Fund of Target's liabilities, followed by the distribution of
those shares by Target pro rata to its shareholders of record
determined as of the close of business on the Closing Date (as herein
- --------
1 Target and Acquiring Fund are sometimes referred to herein individually as a
"Fund" and collectively as the "Funds," and the Trust and the Company are
sometimes referred to herein individually as an "Investment Company" and
collectively as the "Investment Companies."
<PAGE>
The Dreyfus/Laurel Funds Trust
Dreyfus Growth and Value Funds, Inc.
December 31, 1996
Page 2
defined) ("Shareholders"), constructively in exchange for their shares
of beneficial interest in Target ("Target Shares") (such transaction
sometimes being referred to herein as the "Reorganization"), will
constitute a "reorganization" within the meaning of section
368(a)(1)(C)2 and that each Fund will be a "party to a reorganization"
within the meaning of section 368(b),
(2) that Target, the Shareholders, and Acquiring Fund will
recognize no gain or loss on the Reorganization, and
(3) regarding the basis and holding period after the
Reorganization of the transferred assets and the Acquiring Fund Shares
issued pursuant thereto.
In rendering this opinion, we have examined (1) the Funds' currently
effective prospectuses and statements of additional information ("SAIs"), (2)
the Proxy, (3) the Plan, and (4) such other documents as we have deemed
necessary or appropriate for the purposes hereof. As to various matters of fact
material to this opinion, we have relied, exclusively and without independent
verification, on statements of responsible officers of each Investment Company
and the representations described below and made in the Plan (as contemplated in
paragraph 8.7 thereof) (collectively "Representations").
FACTS
The Trust is an unincorporated voluntary association with transferable
shares formed as a business trust under the laws of the Commonwealth of
Massachusetts; Target is a series thereof. The Company is a corporation
organized under the laws of the State of Maryland; Acquiring Fund is a series
thereof. Each Investment Company is registered with the SEC as an open-end
management investment company under the Investment Company Act of 1940, as
amended ("1940 Act").
The Target Shares are divided into two classes, designated "Investor
shares" and "Class R shares." Acquiring Fund offers for sale only one class of
Acquiring Fund Shares.
The Reorganization, together with all related acts necessary to
consummate the same ("Closing"), will take place on the first day on which the
New York Stock Exchange is open for business that occurs not less than seven
calendar days after the approval of the Plan by Target's
- --------
2 All section references are to the Internal Revenue Code of 1986, as amended
("Code"), and all "Treas. Reg. ss." references are to the regulations under the
Code ("Regulations").
<PAGE>
The Dreyfus/Laurel Funds Trust
Dreyfus Growth and Value Funds, Inc.
December 31, 1996
Page 3
shareholders, or such other date as to which the parties may mutually agree
("Closing Date"). On or immediately before the Closing Date, Target will declare
and pay to its shareholders a dividend and/or other distribution that, together
with all previous dividends and other distributions, will have the effect of
distributing to those shareholders all of its investment company taxable income
for all taxable years ending on or before the Closing Date and for its current
taxable year through the Closing Date (computed without regard to any deduction
for dividends paid) and all net capital gain realized in all such taxable years
(after reduction for any capital loss carryforward).
The Funds' investment objectives and policies, which are substantially
similar, are described in the Proxy and their respective prospectuses and SAIs.
The Funds also have the same investment adviser, primary portfolio manager,
transfer agent, custodian, and distributor.
In considering the Reorganization, each Investment Company's board of
trustees/directors (each a "board") made an extensive inquiry into a number of
factors (which are described in the Proxy, together with a discussion of the
reasons for the Reorganization). Pursuant thereto, each board approved the Plan,
subject to approval of Target's shareholders. In doing so, each board, including
a majority of its members who are not "interested persons" (as that term is
defined in the 1940 Act) of either Investment Company, determined that the
Reorganization is in its Fund's best interests and that its Fund's shareholders'
interests will not be diluted as a result of the Reorganization.
The Plan, which specifies that it is intended to be, and is adopted as,
a plan of a reorganization described in section 368(a)(1)(C), provides in
relevant part for the following:
(1) The acquisition by Acquiring Fund of all property,
including without limitation all cash, cash equivalents, securities,
commodities and futures interests, dividend and interest receivables,
claims and rights of action that are owned by Target, and any deferred
or prepaid expenses shown as assets on the books of Target, on the
Closing Date (collectively "Assets"), in exchange solely for
(a) the number of full and fractional Acquiring Fund
Shares determined by dividing the aggregate net asset value of
Target by the net asset value of one Acquiring Fund Share, and
(b) Acquiring Fund's assumption of all of Target's
liabilities, debts, obligations, expenses, costs, charges and
reserves reflected on an unaudited statement of assets and
liabilities of Target prepared in accordance with generally
accepted accounting
<PAGE>
The Dreyfus/Laurel Funds Trust
Dreyfus Growth and Value Funds, Inc.
December 31, 1996
Page 4
principles consistently applied from the prior audited period
(collectively "Liabilities"),
(2) The constructive distribution of such Acquiring Fund
Shares to the Shareholders, and
(3) The subsequent termination of Target.
The distribution described in (2) will be accomplished by transferring
the Acquiring Fund Shares then credited to Target's account on Acquiring Fund's
share transfer records to accounts on those records established in the
Shareholders' names, with each Shareholder's account being credited with the
respective pro rata number of full and fractional Acquiring Fund Shares due such
Shareholder.
REPRESENTATIONS
Each of the Trust, on behalf of Target, and the Company, on behalf of
Acquiring Fund, has represented and warranted to us as follows:
1. The fair market value of the Acquiring Fund Shares, when
received by the Shareholders, will be approximately equal to the fair
market value of their Target Shares constructively surrendered in
exchange therefor;
2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem or otherwise dispose of any portion of the
Acquiring Fund Shares to be received by them in the Reorganization and
(b) does not anticipate dispositions of those Acquiring Fund Shares at
the time of or soon after the Reorganization to exceed the usual rate
and frequency of dispositions of Target Shares as a series of an
open-end investment company. Consequently, its management expects that
the percentage of Shareholder interests, if any, that will be disposed
of as a result of or at the time of the Reorganization will be de
minimis. Nor does its management anticipate that there will be
extraordinary redemptions of Acquiring Fund Shares immediately
following the Reorganization;
3. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
4. Immediately following consummation of the Reorganization,
Acquiring Fund will hold substantially the same assets and be subject
to substantially the same liabilities
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December 31, 1996
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that Target held or was subject to immediately prior thereto, plus any
liabilities and expenses of the parties incurred in connection with the
Reorganization;
5. The fair market value on a going concern basis of the
Assets will equal or exceed the Liabilities to be assumed by Acquiring
Fund and those to which the Assets are subject;
6. There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount;
7. Pursuant to the Reorganization, Target will transfer to
Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the
fair market value of the net assets, and at least 70% of the fair
market value of the gross assets, held by Target immediately before the
Reorganization. For the purposes of this representation, any amounts
used by Target to pay its Reorganization expenses and redemptions and
distributions made by it immediately before the Reorganization (except
for (a) distributions made to conform to its policy of distributing all
or substantially all of its income and gains to avoid the obligation to
pay federal income tax and/or the excise tax under section 4982 and (b)
redemptions not made as part of the Reorganization) will be included as
assets thereof held immediately before the Reorganization;
8. None of the compensation received by any Shareholder who is
an employee of Target will be separate consideration for, or allocable
to, any of the Target Shares held by such Shareholder-employee; none of
the Acquiring Fund Shares received by any such Shareholder-employee
will be separate consideration for, or allocable to, any employment
agreement; and the consideration paid to any such Shareholder-employee
will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's-length for similar
services; and
9. Immediately after the Reorganization, the Shareholders will
not own shares constituting "control" of Acquiring Fund within the
meaning of section 304(c).
The Trust also has represented and warranted to us on behalf of Target
as follows:
1. Target is a "fund" as defined in section 851(h)(2); for
each taxable year of its operation ended on or prior to the Closing
Date, it met all the requirements of Subchapter M of the Code
("Subchapter M") for qualification and treatment as a regulated
investment company ("RIC"); it will continue to meet all such
requirements for its taxable year that includes the Closing Date; and
it has no earnings and profits accumulated in any taxable year in which
the provisions of Subchapter M did not apply to it;
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2. The Liabilities were incurred by Target in the ordinary
course of its business;
3. Target is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case
within the meaning of section 368(a)(3)(A);
4. Not more than 25% of the value of Target's total assets
(excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not more
than 50% of the value of such assets is invested in the stock and
securities of five or fewer issuers; and
5. Target will be terminated as soon as reasonably practicable
after the Reorganization, but in all events within six months after the
Closing Date.
The Company also has represented and warranted to us on behalf of
Acquiring Fund as follows:
1. Acquiring Fund is a "fund" as defined in section 851(h)(2);
for its taxable year ended August 31, 1996 (its first taxable year), it
met all the requirements of Subchapter M for qualification and
treatment as a RIC; it will continue to meet all such requirements for
its taxable year that includes the Closing Date; and it has no earnings
and profits accumulated in any taxable year in which the provisions of
Subchapter M did not apply to it;
2. No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in
exchange for the Assets in the Reorganiza- tion;
3. Acquiring Fund has no plan or intention to issue additional
Acquiring Fund Shares following the Reorganization except for shares
issued in the ordinary course of its business as a series of an
open-end investment company; nor does it have any plan or intention to
redeem or otherwise reacquire any Acquiring Fund Shares issued to the
Shareholders pursuant to the Reorganization, other than through
redemptions arising in the ordinary course of that business;
4. Acquiring Fund (a) will, after the Reorganization, actively
continue Target's historic business in substantially the same manner
that Target conducted that business before the Reorganization, (b) has
no plan or intention to sell or otherwise dispose of any of the Assets,
except for dispositions made in the ordinary course of that business
and dispositions necessary to maintain its status as a RIC, and (c)
expects to retain substantially all the Assets in the same form as it
receives them in the Reorganization, unless and
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until subsequent investment circumstances suggest the desirability of
change or it becomes necessary to make dispositions thereof to maintain
such status;
5. There is no plan or intention for Acquiring Fund to be
dissolved or merged into another corporation or business trust or any
"fund" thereof (within the meaning of section 851(h)(2)) following the
Reorganization;
6. Immediately after the Reorganization, (a) not more than 25%
of the value of Acquiring Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the stock
and securities of any one issuer and (b) not more than 50% of the value
of such assets will be invested in the stock and securities of five or
fewer issuers; and
7. Acquiring Fund does not own, directly or indirectly, nor at
the Closing Date will it own, directly or indirectly, nor has it owned,
directly or indirectly, at any time during the past five years, any
shares of Target.
OPINION
Based solely on the facts set forth above, and conditioned on (1) the
Representations being true at the time of Closing and (2) the Reorganization
being consummated in accordance with the Plan, our opinion (as explained more
fully in the next section of this letter) is as follows:
1. Acquiring Fund's acquisition of the Assets in exchange
solely for Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities, followed by Target's distribution of those shares pro rata
to the Shareholders constructively in exchange for their Target Shares,
will constitute a reorganization within the meaning of section
368(a)(1)(C), and each Fund will be "a party to a reorganization"
within the meaning of section 368(b);
2. No gain or loss will be recognized to Target on the
transfer of the Assets to Acquiring Fund in exchange solely for
Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities or on the subsequent distribution of those shares to the
Shareholders in constructive exchange for their Target Shares (sections
361 and 357(a));
3. No gain or loss will be recognized to Acquiring Fund on its
receipt of the Assets in exchange solely for Acquiring Fund Shares and
its assumption of the Liabilities (section 1032(a));
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December 31, 1996
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4. Acquiring Fund's basis for the Assets will be the same as
the basis thereof in Target's hands immediately before the
Reorganization (section 362(b)), and Acquiring Fund's holding period
for the Assets will include Target's holding period therefor (section
1223(2));
5. No gain or loss will be recognized to a Shareholder on the
constructive ex- change of all its Target Shares solely for Acquiring
Fund Shares pursuant to the Reorgan- ization (section 354(a)); and
6. A Shareholder's basis for the Acquiring Fund Shares to be
received by it in the Reorganization will be the same as the basis for
its Target Shares to be constructively surrendered in exchange for
those Acquiring Fund Shares (section 358(a)), and its holding period
for those Acquiring Fund Shares will include its holding period for
those Target Shares, provided they are held as capital assets by the
Shareholder on the Closing Date (section 1223(1)).
The foregoing opinion (1) is based on, and is conditioned on the
continued applicability of, the provisions of the Code and the Regulations,
judicial decisions, and rulings and other pronouncements of the Internal Revenue
Service ("Service") in existence on the date hereof and (2) is applicable only
to the extent each Fund is solvent. We express no opinion about the tax
treatment of the transactions described herein if either Fund is insolvent.
ANALYSIS
I. The Reorganization Will Be a Reorganization under Section 368(a)(1)(C),
and Each Fund Will Be a Party to a Reorganization.
A. Each Fund Is a Separate Corporation.
A reorganization under section 368(a)(1)(C) (a "C reorganization")
involves the acquisition by one corporation, in exchange solely for all or a
part of its voting stock, of substantially all of the properties of another
corporation. For the transaction to qualify under that section, therefore, both
entities involved therein must be corporations (or associations taxable as
corporations). The Trust, however, is a Massachusetts business trust, not a
corporation, and each Fund is a separate series of an Investment Company.
Treasury Regulation section 301.7701-4(b) provides that certain
arrangements known as trusts (because legal title is conveyed to trustees for
the benefit of beneficiaries) will not be classified as trusts for purposes of
the Code because they are not simply arrangements to protect or conserve the
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December 31, 1996
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property for the beneficiaries. These "business or commercial trusts" are
created simply as devices to carry on profit-making businesses that normally
would have been carried on through corporations or partnerships. Treasury
Regulation section 301.7701-4(c) further provides that an "`investment' trust
will not be classified as a trust if there is a power under the trust agreement
to vary the investment of the certificate holders." See Commissioner v. North
American Bond Trust, 122 F.2d 545 (2d Cir. 1941), cert. denied, 314 U.S. 701
(1942).
Based on these criteria, the Trust does not qualify as a trust for
federal income tax purposes. While the Trust is an "investment trust," it does
not have a fixed pool of assets -- Target (as well as each other series thereof)
has been a managed portfolio of securities, and its investment adviser has had
the authority to buy and sell securities for it. The Trust is not simply an
arrangement to protect or conserve property for the beneficiaries, but it is
designed to carry on a profit-making business. In addition, the word
"association" has long been held to include a Massachusetts business trust, such
as the Trust. See Hecht v. Malley, 265 U.S. 144 (1924). Accordingly, we believe
that the Trust will be treated as a corporation for federal income tax purposes.
Neither Investment Company as such, however, is participating in the
Reorganization, but rather series of each of them are the participants.
Ordinarily, a transaction involving segregated pools of assets (such as the
Funds) could not qualify as a reorganization, because the pools would not be
corporations. Under section 851(h), however, each Fund is treated as a separate
corporation for all purposes of the Code save the definitional requirement of
section 851(a) (which is satisfied by each Investment Company). Thus, we believe
that each Fund will be a separate corporation, and each Fund's shares will be
treated as shares of corporate stock, for purposes of section 368(a)(1).
B. Satisfaction of Section 368(a)(2)(F).
Under section 368(a)(2)(F), if two or more parties to a transaction
described in section 368(a)(1) (other than subparagraph (E) thereof) are
"investment companies," the transaction will not be considered a reorganization
with respect to any such investment company or its shareholders unless, among
other things, the investment company is a RIC or --
(1) not more than 25% of the value of its total assets is invested
in the stock and securities of any one issuer and
(2) not more than 50% of the value of its total assets is invested
in the stock and securities of five or fewer issuers.
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Dreyfus Growth and Value Funds, Inc.
December 31, 1996
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Each Fund will meet the requirements for qualification and treatment as a RIC
for its respective current taxable year, and the foregoing percentage tests will
be satisfied by each Fund. Accordingly, we believe that section 368(a)(2)(F)
will not cause the Reorganization to fail to qualify as a C reorganization with
respect to either Fund.
C. Transfer of "Substantially All" of the Properties.
For an acquisition to qualify as a C reorganization, the acquiring
corporation must acquire "substantially all of the properties" of the transferor
corporation in exchange solely for all or part of the acquiring corporation's
stock. For purposes of issuing private letter rulings, the Service considers the
transfer of at least 70% of the transferor's gross assets, and at least 90% of
its net assets, held immediately before the reorganization to satisfy the
"substantially all" requirement. Rev. Proc. 77-37, 1977-2 C.B. 568. The
Reorganization will involve such a transfer. Accordingly, we believe that the
Reorganization will involve the transfer to Acquiring Fund of substantially all
of Target's properties.
D. Qualifying Consideration.
For an acquisition to qualify as a C reorganization, the acquiring
corporation must acquire at least 80% (by fair market value) of the transferor's
property solely for voting stock. Section 368(a)(2)(B)(iii). The assumption of
liabilities by the acquiring corporation or its acquisition of property subject
to liabilities normally are disregarded (section 368(a)(1)(C)), but the amount
of any such liabilities will be treated as money paid for the transferor's
property if the acquiring corporation exchanges any money or property (other
than its voting stock) therefor. Section 368(a)(2)(B). Because Acquiring Fund
will exchange only Acquiring Fund Shares, and solely- for-voting-stock
requirement to qualify as a C reorganization.
E. Requirements of Continuity.
Treasury Regulation section 1.368-1(b) sets forth two prerequisites to
a valid reorganization: (1) a continuity of the business enterprise under the
modified corporate form ("continuity of business") and (2) a continuity of
interest therein on the part of those persons who, directly or indirectly, were
the owners of the enterprise prior to the reorganization ("continuity of
interest").
1. Continuity of Business.
The continuity of business enterprise test as set forth in Treas. Reg.
ss. 1.368-1(d)(2) requires that the acquiring corporation must either (i)
continue the acquired corporation's historic business ("business continuity") or
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December 31, 1996
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(ii) use a significant portion of the acquired corporation's historic business
assets in a business ("asset continuity").
While there is no authority that deals directly with the requirement of
continuity of business in the context of a transaction such as the
Reorganization, Rev. Rul. 87-76, 1987-2 C.B. 84, deals with a somewhat similar
situation. In that ruling, P was a RIC that invested exclusively in municipal
securities. P acquired the assets of T in exchange for P common stock in a
transaction that was intended to qualify as a C reorganization. Prior to the
exchange, T sold its entire portfolio of corporate securities and purchased a
portfolio of municipal securities. The Service held that this transaction did
not qualify as a reorganization for the following reasons: (1) because T had
sold its historic assets prior to the exchange, there was no asset continuity;
and (2) the failure of P to engage in the business of investing in corporate
securities after the exchange caused the transaction to lack business continuity
as well.
The Funds' investment objectives and policies are substantially
similar, and they have the same investment adviser and primary portfolio
manager. Moreover, after the Reorganization Acquiring Fund will actively
continue Target's historic business in substantially the same manner that Target
conducted that business before the Reorganization. Accordingly, there will be
business continuity.
Acquiring Fund not only will continue Target's historic business, but
Acquiring Fund also (1) has no plan or intention to sell or otherwise dispose of
any of the Assets, except for dispositions made in the ordinary course of its
business and dispositions necessary to maintain its status as a RIC, and (2)
expects to retain substantially all the Assets in the same form as it receives
them in the Reorganization, unless and until subsequent investment circumstances
suggest the desirability of change or it becomes necessary to make dispositions
thereof to maintain such status. Accordingly, there will be asset continuity as
well.
For all the foregoing reasons, we believe that the Reorganization will
meet the continuity of business requirement.
2. Continuity of Interest.
For purposes of issuing private letter rulings, the Service considers
the continuity of interest requirement of Treas. Reg. ss. 1.368-1(b) satisfied
if ownership in an acquiring corpora- tion on the part of a transferor
corporation's former shareholders is equal in value to at least 50% of the value
of all the formerly outstanding shares of the transferor corporation. Rev. Proc.
77- 37, supra; but see Rev. Rul. 56-345, 1956-2 C.B. 206 (continuity of interest
was held to exist in a reorganization of two RICs where immediately after the
reorganization 26% of the shares were redeemed in order to allow investment in a
third RIC); also see Reef Corp. v. Commissioner, 368 F.2d 125 (5th Cir. 1966),
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December 31, 1996
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cert. denied, 386 U.S. 1018 (1967) (a redemption of 48% of a transferor
corporation's stock was not a sufficient shift in proprietary interest to
disqualify a transaction as a reorganization under section 368(a)(2)(F) ("F
Reorganization"), even though only 52% of the transferor's shareholders would
hold all the transferee's stock); Aetna Casualty and Surety Co. v. U.S., 568
F.2d 811, 822-23 (2d Cir. 1976) (redemption of a 38.39% minority interest did
not prevent a transaction from qualifying as an F Reorganization); Rev. Rul.
61-156, 1961-2 C.B. 62 (a transaction qualified as an F Reorganization even
though the transferor's shareholders acquired only 45% of the transferee's
stock, while the remaining 55% of that stock was issued to new shareholders in a
public underwriting immediately after the transfer).
No minimum holding period for shares of an acquiring corporation is
imposed under the Code on the acquired corporation's shareholders. Rev. Rul.
66-23, 1966-1 C.B. 67, provides generally that "unrestricted rights of ownership
for a period of time sufficient to warrant the conclusion that such ownership is
definite and substantial" will suffice and that "ordinarily, the Service will
treat five years of unrestricted . . . ownership as a sufficient period" for
continuity of interest purposes.
A preconceived plan or arrangement by or among an acquired
corporation's shareholders to dispose of more than 50% of an acquiring
corporation's shares could be problematic. Shareholders with no such
preconceived plan or arrangement, however, are basically free to sell any part
of the shares received by them in the reorganization without fear of breaking
continuity of interest, because the subsequent sale will be treated as an
independent transaction from the reorganization.
Neither Fund (1) is aware of any plan or intention of Shareholders to
dispose of any portion of the Acquiring Fund Shares to be received by them in
the Reorganization or (2) anticipates dispositions thereof at the time of or
soon after the Reorganization to exceed the usual rate and frequency of
dispositions of shares of Target as a series of an open-end investment company.
Consequently, each Fund expects that the percentage of Shareholder interests, if
any, that will be disposed of as a result of or at the time of the
Reorganization will be de minimis. Accordingly, we believe that the
Reorganization will meet the continuity of interest requirement of Treas. Reg.
ss. 1.368-1(b).
F. Distribution by Target.
Section 368(a)(2)(G)(i) provides that a transaction will not qualify as
a C reorganization unless the corporation whose properties are acquired
distributes the stock it receives and its other property in pursuance of the
plan of reorganization. Under the Plan -- which we believe constitutes a "plan
of reorganization" within the meaning of Treas. Reg. ss. 1.368-2(g) -- Target
will distribute all the Acquiring Fund Shares it receives to its shareholders in
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December 31, 1996
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constructive exchange for their Target Shares; as soon as is reasonably
practicable thereafter, Target will be terminated. Accordingly, we believe that
the requirements of section 368(a)(2)(G)(i) will be satisfied.
G. Business Purpose.
All reorganizations must meet the judicially imposed requirements of
the "business purpose doctrine," which was established in Gregory v. Helvering,
293 U.S. 465 (1935), and is now set forth in Treas. Reg. ss.ss. 1.368-1(b),
- -1(c), and -2(g) (the last of which provides that, to qualify as a
reorganization, a transaction must be "undertaken for reasons germane to the
continuance of the business of a corporation a party to the reorganization").
Under that doctrine, a transaction must have a bona fide business purpose (and
not a purpose to avoid federal income tax) to constitute a valid reorganization.
The substantial business purposes of the Reorganization are described in the
Proxy. Accordingly, we believe that the Reorganization is being undertaken for
bona fide business purposes (and not a purpose to avoid federal income tax) and
therefore meets the requirements of the business purpose doctrine.
For all the foregoing reasons, we believe that the Reorganization will
constitute a reorganization within the meaning of section 368(a)(1)(C).
H. Both Funds are Parties to the Reorganization.
Section 368(b)(2) and Treas. Reg. ss. 1.368-1(f) provide that if one
corporation transfers substantially all of its properties to a second
corporation in exchange for all or a part of the voting stock of the second
corporation, then both corporations are parties to a reorganization. Target is
transferring all its properties to Acquiring Fund in exchange for Acquiring Fund
Shares. Accordingly, we believe that each Fund will be "a party to a
reorganization."
II. No Gain or Loss Will Be Recognized to Target.
Under sections 361(a) and (c), no gain or loss will be recognized to a
corporation that is a party to a reorganization (1) on the exchange of property,
pursuant to the plan of reorganization, solely for stock or securities in
another corporate party to the reorganization or (2) on the distribution to its
shareholders, pursuant to that plan, of stock in such other corporation that was
received by the distributing corporation in the exchange. (Such a distribution
is required by section 368(a)(2)(G)(i) for a reorganization to qualify as a C
reorganization.) Section 361(c)(4) provides that specified provisions requiring
recognition of gain on certain distributions shall not apply to a distribution
described in (2) above.
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December 31, 1996
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Section 357(a) provides in pertinent part that, except as provided in
section 357(b), if a taxpayer receives property that would be permitted to be
received under section 361 without recognition of gain if it were the sole
consideration and, as part of the consideration, another party to the exchange
assumes a liability of the taxpayer or acquires from the taxpayer property
subject to a liability, then that assumption or acquisition shall not be treated
as money or other property and shall not prevent the exchange from being within
section 361. Section 357(b) applies where the principal purpose of the
assumption or acquisition was a tax avoidance purpose or not a bona fide
business purpose.
As noted above, the Reorganization will constitute a C reorganization,
each Fund will be a party to a reorganization, and the Plan constitutes a plan
of reorganization. Target will exchange the Assets solely for Acquiring Fund
Shares and Acquiring Fund's assumption of the Liabilities and then will be
terminated pursuant to the Plan, distributing those shares to its shareholders
in constructive exchange for their Target Shares. As also noted above, we
believe that the Reorganization is being undertaken for bona fide business
purposes (and not a purpose to avoid federal income tax); we also do not believe
that the principal purpose of Acquiring Fund's assumption of the Liabilities is
avoidance of federal income tax on the proposed transaction. Accordingly, we
believe that no gain or loss will be recognized to Target on the Reorganiza-
tion.3
III. No Gain or Loss Will Be Recognized to Acquiring Fund.
Section 1032(a) provides that no gain or loss will be recognized to a
corporation on the receipt by it of money or other property in exchange for its
shares. Acquiring Fund will issue Acquiring Fund Shares to Target in exchange
for the Assets, which consist of money and securities. Accordingly, we believe
that no gain or loss will be recognized to Acquiring Fund on the Reorganization.
- --------
3 Notwithstanding anything herein to the contrary, we express no opinion as to
the effect of the Reorganization on either Fund or any Shareholder with respect
to any asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year (or on
the termination or transfer thereof) under a mark-to-market system of
accounting.
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December 31, 1996
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IV. Acquiring Fund's Basis for the Assets Will Be a Carryover Basis, and
Its Holding Period Will Include Target's Holding Period.
Section 362(b) provides that property acquired by a corporation in
connection with a reorganization will have the same basis in that corporation's
hands as the basis of the property in the transferor corporation's hands
immediately before the exchange, increased by any gain recognized to the
transferor on the transfer (a "carryover basis"). As noted above, the
Reorganization will constitute a C reorganization and Target will recognize no
gain on the Reorganization. Accordingly, we believe that Acquiring Fund's basis
for the Assets will be the same as the basis thereof in Target's hands
immediately before the Reorganization.
Section 1223(2) provides that where acquired property has a carryover
basis, it will have a holding period in the acquiror's hands that includes the
property's holding period in the transferor's hands. As noted above, Acquiring
Fund's basis for the Assets will be a carryover basis. Accordingly, we believe
that Acquiring Fund's holding period for the Assets will include Target's
holding period therefor.
V. No Gain or Loss Will Be Recognized to a Shareholder.
Under section 354(a), no gain or loss is recognized to a shareholder
who exchanges shares for other shares pursuant to a plan of reorganization,
where the shares exchanged, as well as the shares received, are those of a
corporation that is a party to the reorganization. As noted above, the
Reorganization will constitute a C reorganization, the Plan constitutes a plan
of reorganization, and each Fund will be a party to a reorganization.
Accordingly, we believe that under section 354 a Shareholder will recognize no
gain or loss on the constructive exchange of all its Target Shares solely for
Acquiring Fund Shares pursuant to the Reorganization.
VI. A Shareholder's Basis for Acquiring Fund Shares Will Be a Substituted
Basis, and its Holding Period therefor Will Include its Holding Period
for its Target Shares.
Section 358(a)(1) provides, in part, that in the case of an exchange to
which section 354 applies, the basis of any shares received in the transaction
without the recognition of gain is the same as the basis of the property
transferred in exchange therefor, decreased by, among other things, the fair
market value of any other property and the amount of any money received in the
transaction and increased by the amount of any gain recognized on the exchange
by the shareholder( a "substituted basis").
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December 31, 1996
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As noted above, the Reorganization will constitute a C reorganization
and under section 354 no gain or loss will be recognized to a Shareholder on the
constructive exchange of its Target Shares for Acquiring Fund Shares in the
Reorganization. No property will be distributed to the Shareholders other than
Acquiring Fund Shares, and no money will be distributed to them pursuant to the
Reorganization. Accordingly, we believe that a Shareholder's basis for the
Acquiring Fund Shares to be received by it in the Reorganization will be the
same as the basis for its Target Shares to be constructively surrendered in
exchange for those Acquiring Fund Shares.
Under section 1223(1), a taxpayer's holding period for property
received in an exchange includes the taxpayer's holding period for the property
that was exchanged therefor if the acquired property has a substituted basis
and, at the time of the exchange, was a capital asset. As noted above, a
Shareholder will have a substituted basis for the Acquiring Fund Shares it
receives in the Reorganization; accordingly, provided that a Shareholder held
its Target Shares as capital assets on the Closing Date, we believe that its
holding period for those Acquiring Fund Shares will include its holding period
for those Target Shares.
We hereby consent to this opinion accompanying the Registration
Statement and to the references to our firm under the captions "Summary -- Tax
Consequences" and "Information about the Reorganization -- Federal Income Tax
Consequences" in the Proxy.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
By: /s/ Theodore L. Press
-------------------------------
Theodore L. Press
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Financial Statements
and Experts" in this Registration Statement on Form N-14 of Dreyfus Aggressive
Growth Fund, a series of Dreyfus Growth and Value Funds, Inc.
We also consent to the references to our Firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors" and to the use of our report dated September
27, 1996 for Dreyfus Aggressive Growth Fund, which is incorporated by reference
in this Registration Statement of Dreyfus Growth and Value Funds, Inc.
/s/ Ernst & Young LLP
--------------------------
ERNST & YOUNG LLP
New York, New York
January 7, 1997
Independent Auditors' Consent
To the Shareholders and Board of Trustees
The Dreyfus/Laurel Funds Trust
We consent to the use of our report dated February 6, 1996 with respect
to the Dreyfus Special Growth Fund (one of the funds comprising the
Dreyfus/Laurel Funds Trust), incorporated by reference in the Registration
Statement on Form N-14 of Dreyfus Growth and Value Funds, Inc., on behalf of
Dreyfus Aggressive Growth Fund, and to the reference to our Firm under the
heading "Financial Statements and Experts" in such Registration Statement.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
New York, New York
January 7, 1997
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
...............................................................................
THE DREYFUS/LAUREL FUNDS TRUST
SPECIAL MEETING OF SHAREHOLDERS - APRIL 7, 1997
The undersigned hereby appoints Steven F. Newman and Jeff S. Prusnofsky, and
each of them, attorneys and proxies for the undersigned, with full powers of
substitution and revocation, to represent the undersigned and to vote on behalf
of the undersigned all shares of beneficial interest in Dreyfus Special Growth
Fund (the "Fund"), a series of The Dreyfus/Laurel Funds Trust, that the
undersigned is entitled to vote at a Special Meeting of Shareholders of the Fund
to be held at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor
West, New York, New York 10166 on April 7, 1997, at 10:00 a.m. (Eastern time)
and at any adjournment(s) thereof. The undersigned hereby acknowledges receipt
of the Notice of Special Meeting and Proxy Statement, and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In their
discretion, the proxies are authorized to vote upon such other matters as may
properly come before the Meeting. The undersigned hereby revokes any proxy
previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
NOTE: Please sign exactly as your name or names appear on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give your full
title as such.
DATE: _____________________,1997 ________________________
________________________
Signature(s)
_______________________
Title(s), if applicable
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES PLEASE INDICATE YOUR
VOTE BY MARKING AN "X" IN THE APPROPRIATE BOX BELOW, USING BLUE OR BLACK INK OR
DARK PENCIL. DO NOT USE RED INK.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY
WILL BE VOTED IN FAVOR OF THE PROPOSAL.
Investor and Class R shareholders of the Fund are requested to vote on the
following Proposal:
To approve the proposed Agreement and Plan of Reorganization between The
Dreyfus/Laurel Funds Trust, on behalf of Dreyfus Special Growth Fund (the
"Acquired Fund"), and Dreyfus Growth and Value Funds, Inc., on behalf of Dreyfus
Aggressive Growth Fund (the "Acquiring Fund"), whereby (a) the Acquired Fund
will transfer all of its assets to the Acquiring Fund in exchange solely for
shares of the Acquiring Fund and the assumption by the Acquiring Fund of
liabilities of the Acquired Fund, (b) the distribution of those shares of the
Acquiring Fund to the holders of Investor and Class R shares of the Acquired
Fund, in each case in an amount equal in net asset value to the holders of
Investor and Class R shares of the Acquired Fund, and (c) the subsequent
termination of the Acquired Fund.
___ ___ ___
/__/ YES /__/ NO /__/ ABSTAIN
In their discretion, the proxies are, and each of them is, authorized to vote
upon any other business that may properly come before the Meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain the
requisite quorums and for approvals.
