DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
DREYFUS STRATEGIC MUNICIPALS, INC.
---------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------------------------
To the Stockholders:
The Annual Meeting of Stockholders of each of Dreyfus Strategic Municipal
Bond Fund, Inc. and Dreyfus Strategic Municipals, Inc. (each, a "Fund" and,
collectively, the "Funds" ) will be held at the offices of The Dreyfus
Corporation, 200 Park Avenue, 7th Floor West, New York, New York, on Friday, May
16, 2003 at 10:00 a.m., for the following purposes:
1. To elect Directors to serve for a three-year term and until their
successors are duly elected and qualified.
2. To approve a change to the fundamental investment policies and
investment restrictions of the Funds to permit the Funds to engage in
swap transactions.
3. To approve a change to the fundamental investment policies and investment
restrictions of the Funds to expand the Funds' ability to invest in other
investment companies.
4. To transact such other business as may properly come before the meeting,
or any adjournment or adjournments thereof.
Stockholders of record at the close of business on March 14, 2003 will be
entitled to receive notice of and to vote at the meeting.
By Order of the Board
John Hammalian
Secretary
New York, New York
April 15, 2003
WE NEED YOUR PROXY VOTE
A STOCKHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY
LAW, THE ANNUAL MEETING OF STOCKHOLDERS OF A FUND WILL HAVE TO BE ADJOURNED
WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM IS REPRESENTED. IN THAT
EVENT, THE AFFECTED FUND WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO
ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND TO
HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD OR OTHERWISE
VOTE PROMPTLY. YOU AND ALL OTHER STOCKHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.
(Page)
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
DREYFUS STRATEGIC MUNICIPALS, INC.
COMBINED PROXY STATEMENT
------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, MAY 16, 2003
This proxy statement is furnished in connection with a solicitation of
proxies by the Board of each of Dreyfus Strategic Municipal Bond Fund, Inc.
(" DSMB" ) and Dreyfus Strategic Municipals, Inc. ("DSM") (each, a "Fund" and,
collectively, the "Funds") to be used at the Annual Meeting of Stockholders of
each Fund to be held on Friday, May 16, 2003 at 10:00 a.m., at the offices of
The Dreyfus Corporation ("Dreyfus"), 200 Park Avenue, 7th Floor West, New York,
New York, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. Stockholders of record at the close of business on
March 14, 2003 are entitled to be present and to vote at the meeting.
Stockholders are entitled to one vote for each Fund share held and fractional
votes for each fractional Fund share held. Stockholders can vote only on matters
affecting the Fund(s) in which they hold shares. If a proposal is approved by
stockholders of one Fund and not approved by stockholders of the other Fund, the
proposal will be implemented only for the Fund that approved the proposal.
Therefore, it is essential that stockholders who own shares in both Funds
complete, date, sign and return each proxy card they receive. Shares represented
by executed and unrevoked proxies will be voted in accordance with the
specifications made thereon. If any enclosed form of proxy is executed and
returned, it nevertheless may be revoked by a proxy given later. To be
effective, such revocation must be received prior to the meeting. In addition,
any stockholder who attends the meeting in person may vote by ballot at the
meeting, thereby canceling any proxy previously given. As of March 14, 2003, the
Funds had outstanding the following number of shares:
COMMON STOCK AUCTION PREFERRED STOCK
NAME OF FUND OUTSTANDING OUTSTANDING
DSMB 48,031,336 7,440
DSM 59,624,343 11,400
It is estimated that proxy materials will be mailed to stockholders of
record on or about April 15, 2003. The principal executive offices of each Fund
are located at 200 Park Avenue, New York, New York 10166. COPIES OF EACH FUND'S
MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE AVAILABLE UPON REQUEST, WITHOUT
CHARGE, BY WRITING TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW
YORK 11556-0144, OR BY CALLING TOLL-FREE 1-800-334-6899.
A quorum is constituted by the presence in person or by proxy of the holders
of a majority of the outstanding shares of the Fund entitled to vote at the
meeting. If a proposal is to be voted upon by only one class of a Fund's shares,
a quorum of that class of shares (the holders of a majority of the outstanding
shares of the class) must be present in person or by proxy at the meeting in
order for the proposal to be considered. Each Fund has two classes of capital
stock: Common Stock, par value $0.001 per share (the "Common Stock"), and
Auction Preferred Stock, par value $0.001 per share, liquidation preference
$25,000 per share (the "APS"). The APS is further divided into Series A, Series
B and Series C for DSMB and Series M, Series T, Series W, Series TH and Series F
for DSM. Currently, no proposal is expected to be presented at the meeting that
would require separate voting for each Series of APS.
PROPOSAL 1: ELECTION OF DIRECTORS
Each Fund' s Board of Directors is divided into three classes with the term
of office of one class expiring each year. It is proposed that stockholders of
each Fund consider the election of the individuals listed below (the "Nominees")
as Directors of the indicated class of such Fund, to serve for three-year terms
and until their respective successors are duly elected and qualified. With
respect to DSMB, Joseph S. DiMartino, William Hodding Carter, III and Richard C.
Leone are nominated to be elected as Class I Directors to serve for a three-year
term. With respect to DSM, David W. Burke, Hans C. Mautner and John E. Zuccotti
are nominated to be elected as Class III Directors to serve for a three-year
term. Messrs. DiMartino, Carter, and Leone also are continuing Class I Directors
of DSM and Messrs. Burke, Mautner and Zuccotti also are continuing Class III
Directors of DSMB. Each Nominee also currently serves as a Director of the Fund
for which their election is proposed. Each Nominee has consented to being named
in this proxy statement and has agreed to continue to serve as a Director of the
indicated Fund if elected. Biographical information about each Nominee is set
forth below. Biographical information about each Fund's Continuing Directors,
information on each Nominee's and Continuing Director's ownership of Fund shares
and other relevant information is set forth on Exhibit A. Unless otherwise
indicated, information set forth herein applies to both Funds.
Under the terms of each Fund' s Charter, holders of the APS voting as a
single class are entitled, to the exclusion of holders of the Common Stock, to
elect two Directors. Mr. Zuccotti currently is a Nominee for election by holders
of DSM's APS as a Class III Director. DSMB's APS holders elected Mr. Zuccotti in
2002 as a Class III Director whose term expires in 2005. Robin A. Pringle is the
other Director designated for holders of APS. Ms. Pringle was elected by APS
holders of DSMB in 2001 as a Class II Director whose term expires in 2004, and
by APS holders of DSM in 2002 as a Class II Director whose term expires in 2005
Voting with regard to the election of Directors will be as follows: for DSM,
holders of Common Stock and APS will vote together as a single class with
respect to the election of Messrs. Burke and Mautner as Class III Directors; and
for DSMB, holders of Common Stock and APS will vote together as a single class
with respect to the election of each Class I Director. APS holders of DSM will
vote separately, to the exclusion of holders of the Common Stock, with respect
to the election of Mr. Zuccotti as a Class III Director to represent the APS of
DSM.
The persons named as proxies on the accompanying proxy card(s) intend to
vote each such proxy for the election of the Nominees, unless stockholders
specifically indicate on their proxies the desire to withhold authority to vote
for elections to office. It is not contemplated that any Nominee will be unable
to serve as a Board member for any reason, but if that should occur prior to the
meeting, the proxyholders reserve the right to substitute another person or
persons of their choice as nominee or nominees.
None of the Nominees or Continuing Directors are "interested persons" of
either Fund, as defined in the Investment Company Act of 1940, as amended (the "
1940 Act" ). As independent directors of investment companies, they play a
critical role in overseeing fund operations and policing potential conflicts of
interest between the fund and its investment adviser and other service
providers. The following tables present information about the Nominees including
their principal occupations and other board memberships and affiliations. The
address of each Nominee is 200 Park Avenue, New York, New York 10166.
2
(Page 2)
DSMB -- NOMINEES FOR CLASS I DIRECTOR WITH TERM EXPIRING IN 2006
NAME (AGE) OF NOMINEE PRINCIPAL OCCUPATION OTHER BOARD MEMBERSHIPS
POSITION WITH FUND (SINCE) DURING PAST 5 YEARS AND AFFILIATIONS
JOSEPH S. DIMARTINO (59) Corporate Director and Trustee The Muscular Dystrophy
CHAIRMAN OF THE BOARD AND Association, DIRECTOR
CLASS I DIRECTOR OF DSMB (1995) Levcor International, Inc.,
an apparel fabric processor,
DIRECTOR
Century Business Services,
Inc., a provider of outsourcing
functions for small and medium
size companies, DIRECTOR
The Newark Group, a
provider of a national market
of paper recovery facilities,
paperboard mills and paperboard
converting plants, DIRECTOR
WILLIAM HODDING CARTER, III (67) President and Chief Executive --
CLASS I DIRECTOR OF DSMB (1989) Officer of John S. and James L.
Knight Foundation
President and Chairman (from 1985
to 1998) of MainStreet TV
Knight Professor in Journalism
(from 1985 to1998) at the University
of Maryland
RICHARD C. LEONE (62) President of The Century Found- --
CLASS I DIRECTOR OF DSMB (1989) ation (formerly, The Twentieth Century
Fund, Inc.), a tax exempt research
foundation engaged in the study of
economic, foreign policy and domestic issues
--
DSM -- NOMINEES FOR CLASS III DIRECTOR WITH TERM EXPIRING IN 2006
NAME (AGE), OF NOMINEE PRINCIPAL OCCUPATION OTHER BOARD MEMBERSHIPS
POSITION WITH FUND (SINCE) DURING PAST 5 YEARS AND AFFILIATIONS
DAVID W. BURKE (66) Corporate Director and Trustee John F. Kennedy Library
CLASS III DIRECTOR Foundation, DIRECTOR
OF DSM (1994) U.S.S. Constitution
Museum, DIRECTOR
3
(PAGE 3)
DSM -- NOMINEES FOR CLASS III DIRECTOR WITH TERM EXPIRING IN 2006 (CONTINUED)
NAME (AGE) OF NOMINEE PRINCIPAL OCCUPATION OTHER BOARD MEMBERSHIPS
POSITION WITH FUND (SINCE) DURING PAST 5 YEARS AND AFFILIATIONS
HANS C. MAUTNER (65) Vice Chairman and a Director --
CLASS III DIRECTOR OF of Simon Property Group,
DSM (1989) a real estate investment company
(1998 - present)
Chairman of Simon Global Limited
(1998 - present)
Chairman, Chief Executive Officer
and a Trustee of Corporate Property
Investors,which merged into Simon
Property Group in 1998 (1997 - 1998)
JOHN E. ZUCCOTTI (65) Chairman of Brookfield Financial --
CLASS III DIRECTOR OF DSM Properties, Inc.
(1989)
APS DESIGNEE FOR DSM (2000)
Each Fund has standing audit, nominating and compensation committees, each
comprised of its Directors who are not "interested persons" of the Fund, as
defined in the 1940 Act. The function of the audit committee is to oversee the
Fund' s financial and reporting policies and certain internal control matters. A
copy of each Fund' s Audit Committee Charter, which describes the audit
committee' s purposes, duties and powers, is attached as Exhibit B to this proxy
statement. The function of the nominating committee is to select and nominate
all candidates who are not "interested persons" of the Fund for election to the
Fund' s Board. The nominating committee does not normally consider nominees
recommended by shareholders. The function of the compensation committee is to
establish the appropriate compensation for serving on the Board. Each Fund also
has a standing pricing committee, comprised of any one Director. The function of
the pricing committee is to assist in valuing the Fund's investments. Each
Fund' s audit committee met five times during the Fund's last fiscal year. Each
Fund' s pricing, nominating and compensation committees did not meet during the
Fund's last fiscal year.
Each Fund Director also serves as a director of other funds in the Dreyfus
fund complex. Effective January 27, 2003, each Fund typically pays its Directors
its allocated portion of an annual retainer of $30,000 and a fee of $4,000 per
meeting (with a minimum of $500 per meeting and per telephone meeting) attended
for each Fund and 7 other funds (comprised of 11 portfolios) in the Dreyfus
Family of Funds, and reimburses them for their expenses. The Chairman of the
Board of each Fund, Joseph S. DiMartino, receives an additional 25% in annual
retainer and per meeting fees. Emeritus Directors, if any, are entitled to
receive an annual retainer and per meeting attended fee of one-half the amount
paid to them as Board members. The Funds had no Emeritus Directors as of the
date of this proxy statement. The Funds do not pay any other remuneration to
their officers or Directors and neither Fund has a bonus, pension,
profit-sharing or retirement plan.
The aggregate amount of compensation paid to each Nominee by DSMB for its
fiscal year ended November 30, 2002, and by DSM for its fiscal year ended
September 30, 2002, and the aggregate amount of compensation paid to each such
Nominee by all funds in the Dreyfus Family of Funds for which such Nominee was a
Board member (the number of portfolios of such funds is set forth in parenthesis
next to each Nominee's total compensation) for the year ended December 31, 2002,
was as follows:
4
(Page 4)
TOTAL COMPENSATION
AGGREGATE FROM EACH FUND AND
NAME OF COMPENSATION FUND COMPLEX
NOMINEE AND FUND FROM EACH FUND* PAID TO NOMINEE (**)
William Hodding Carter, III $37,250 (7)
DSMB $4,500
DSM $6,000
Joseph S. DiMartino $815,938 (191)
DSMB $6,250
DSM $8,750
Richard C. Leone $40,750 (7)
DSMB $5,000
DSM $7,000
David W. Burke $258,250 (60)
DSMB $5,000
DSM $7,000
Hans C. Mautner $34,750 (7)
DSMB $4,000
DSM $5,500
John E. Zuccotti $33,000 (7)
DSMB $4,000
DSM $6,000
------------------------------------
*Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $2,701 for DSM and $2,338 for DSMB for all Directors as a
group.
**Represents the number of separate portfolios comprising the investment
companies in the fund complex, including the Funds, for which the Nominee serves
as a Board member.
For each Fund's most recent fiscal year, the number of Board meetings held
and aggregate amount of compensation paid to each Continuing Director who is not
a Nominee by the Fund and by all funds in the Dreyfus Family of Funds for which
such person is a Board member are set forth on Exhibit A. Certain other
information concerning each Fund's Directors and officers also is set forth on
Exhibit A.
REQUIRED VOTE
The election of a Nominee for each Fund requires the affirmative vote of a
plurality of votes cast at the Fund's meeting for the election of Directors.
PROSPOSAL 2: TO PERMIT THE FUNDS TO ENGAGE IN SWAP TRANSACTIONS
Each Fund seeks to achieve its investment goal by investing at least 80% of
its assets (except when maintaining a temporary defensive position) in municipal
bonds that provide income exempt from federal income taxes ("Municipal Bonds").
From time to time, on a temporary basis other than for temporary defensive
purposes (but not to exceed 20% of the Fund's assets) or for temporary defensive
purposes, each Fund may invest in taxable short-term instruments ("Taxable
Investments" ). As a fundamental policy, each Fund may invest only in Municipal
Bonds and Taxable Investments as described in the Fund's prospectus. Each Fund
is permitted to engage in futures and options transactions to the extent
described in its prospectus.
Management believes that in a rapidly changing market it is important for
each Fund to have greater flexibility in the types of investment techniques in
which the Fund is permitted to engage. Accordingly, this proposal seeks approval
to expand the Funds' investment techniques to permit the Funds to engage in swap
transactions, including interest rate swaps, interest rate locks, caps, collars
and floors (collectively, "swap transactions"), which are forms of derivatives.
By expanding the universe of investment techniques in which the Funds may engage
specifically to include swap transactions, management
5
will be given the opportunity to adjust the Funds' portfolio from time to time
to obtain a particular return when it is considered desirable to do so, possibly
at a lower cost than if a Fund had invested directly in the securities that
yielded the desired return. Morever, having the ability to engage in swap
transactions would provide a Fund with an additional means to manage interest
rate risk. MANAGEMENT INTENDS TO USE SWAP TRANSACTIONS TO MITIGATE RISK, MANAGE
DURATION AND REDUCE PORTFOLIO TURNOVER. MANAGEMENT DOES NOT INTEND TO INCREASE
EITHER FUND'S RISK PROFILE BY USING THESE DERIVATIVES.
To enable each Fund to broaden its permissible investment techniques as
described above, the Fund' s Board approved eliminating the restrictive
fundamental policy and investment restriction of the Fund and directed that this
Proposal be submitted to stockholders for their approval. The recommended change
also will provide flexibility to respond to future legal, regulatory, market or
technical changes.
Specifically, this Proposal involves eliminating the restriction limiting a
Fund's investments to Municipal Bonds and Taxable Investments, making conforming
changes to certain other restrictions, and changing the Fund's investment
techniques to permit the Funds to engage in swap transactions. This Proposal
does NOT involve any change to a Fund's investment objective, the requirement
that, as a fundamental policy, the Fund invest at least 80% of its assets in
Municipal Bonds or the limitations on purchasing Taxable Investments. Swap
transactions will be subject to the Fund's limits on investments in Taxable
Investments.
If approved by the relevant Fund' s stockholders, the Fund would be
permitted, but not required, to enter into swap transactions. Swap agreements
are two-party contracts entered into primarily by institutional investors for
periods ranging from a few weeks to more than a year. In a standard swap
transaction, two parties agree to exchange the returns (or differentials in
rates of return) earned or realized on particular predetermined investments or
instruments, which may be adjusted for an interest factor. The gross returns to
be exchanged or "swapped" between the parties generally are calculated with
respect to a "notional amount" (i.e., the return on or increase in value of a
particular dollar amount invested at a particular interest rate). Under the
commonest form of interest rate swap, a series of payments calculated by
applying a fixed rate of interest to a notional principal amount is exchanged
for a stream of payments similarly calculated but using a floating rate of
interest. This is a fixed-for-floating interest rate swap. Alternatively, both
series of cashflows to be exchanged could be calculated using floating rates of
interest but floating rates that are based upon different underlying indices.
Depending on their structure, swap agreements may increase or decrease a Fund's
exposure to changes in long- or short-term interest rates. Forms of swap
agreements include interest rate caps, under which, in return for a premium, one
party agrees to make payments to the other to the extent interest rates exceed a
specified rate or "cap" ; interest rate floors, under which, in return for a
premium, one party agrees to make payments to the other to the extent interest
rates fall below a specified level or "floor"; and interest rate collars, under
which a party sells a cap and purchases a floor or vice versa in an attempt to
protect itself against interest rate movements exceeding given minimum or
maximum levels. The use of these types of derivatives involves risks different
from or possibly greater than, the risks associated with investing directly in
the underlying assets. Derivatives can be highly volatile, illiquid and
difficult to value, and there is the risk that changes in the value of a
derivative held by the fund will not correlate with the Fund' s other
investments. A small investment in derivatives could have a potentially large
impact on the Fund' s performance. Accordingly, it is anticipated that a Fund
would enter into swap transactions only when Dreyfus believes it would be in the
best interests of the Fund' s stockholders to do so.For a more detailed
discussion of these investment techniques and their related risks, see Exhibit B
to this proxy statement.
Each Fund' s Board has determined to recommend that the Fund's current
investment restriction which prohibits the Fund from purchasing securities other
than Municipal Bonds and Taxable Investments, as set forth below, be deleted
[" Purchase securities other than municipal obligations and Taxable
Investments or as provided in Investment Restriction (No. 6 with respect to DSM;
Nos. 7 and 12 with respect to DSMB) or otherwise in the Fund's Prospectus."]
* * *
VOTE REQUIRED AND THE BOARD'S RECOMMENDATION
With respect to each Fund, approval of this Proposal requires the
affirmative vote of (a) 67% of the Fund's outstanding voting securities present
at the meeting, if the holders of more than 50% of the Fund's outstanding voting
securities are present or represented by proxy, or (b) more than 50% of the
Fund's outstanding voting securities, whichever is less.
6
(Page 6)
THE BOARD OF EACH FUND RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING
PROPOSAL.
PROPOSAL 3: TO EXPAND THE FUNDS' ABILITY TO INVEST IN OTHER INVESTMENT
COMPANIES
Most of the funds in the Dreyfus Family of Funds, including the Funds, have
the ability to invest in securities issued by other investment companies. The
Funds, however, are limited by their fundamental policies in the amount and
circumstances under which such investments may be made. Each Fund's Board
recommends that stockholders approve a change to the Fund's fundamental policies
to permit the Fund to invest in the securities of other investment companies to
the extent permitted under the 1940 Act, as described below, and make such
policy non-fundamental. Non-fundamental policies may be changed by the Fund's
Board at any time without stockholder approval.
Generally, if the changes are approved by stockholders, the Fund would be
able to invest its uninvested cash or, if it participated in a securities
lending program operated by Mellon Bank, N.A., Dreyfus' parent company, cash
collateral received from borrowers of the Fund's portfolio securities, in shares
of one or more money market funds advised by Dreyfus as described below
Under the 1940 Act, a Fund' s investment in the securities of other
investment companies, subject to certain exceptions, currently is limited to (i)
3% of the total voting stock of any one investment company, (ii) 5% of the
Fund' s total assets with respect to any one investment company and (iii) 10% of
the Fund's total assets in the aggregate. The Securities and Exchange Commission
(the "SEC" ) has granted an Exemptive Order to the Funds and Dreyfus which
generally permits each Dreyfus-managed fund to use cash collateral received from
borrowers of the fund's portfolio securities, and any other uninvested cash held
by the fund, to purchase shares of one or more institutional money market funds
advised by Dreyfus in excess of the percentage limitations imposed by the 1940
Act on investments in other investment companies. While granting relief from
such limitations for both the investment of cash collateral and other uninvested
cash, the Exemptive Order does require that a fund not invest its uninvested
cash (monies totally separate and apart from any cash collateral received in
connection with the securities lending program) in other investment companies in
excess of 25% of its total assets. To obtain a copy of the SEC notice of the
request for the Exemptive Order (Investment Company Act Release No. IC-25099
(August 9, 2001) ) or the Exemptive Order (Investment Company Act Release No.
25141 (August 28, 2001)), please e-mail your request to publicinfo@sec.gov, or
write to the SEC's Public Reference Section, Washington, DC 20549-0102.
Investments in the securities of other investment companies may involve
duplication of advisory fees and other expenses. With respect to the management
fees to be earned by Dreyfus in connection with the investment of one fund's
uninvested cash, totally separate and apart from the securities lending program,
in another Dreyfus fund, Dreyfus will reduce the management fee charged the
first fund by the amount of the fee it earns in the second fund. For example, if
uninvested cash from a fund where Dreyfus is earning a 0.75% management fee were
to be invested in a money market fund where Dreyfus is earning a 0.20%
management fee, Dreyfus would reduce its fee charged to the fund on those assets
by 0.20%.
Currently, the Funds may not purchase securities of other investment
companies except (a) in the open market where no commissions except the ordinary
broker's commissions are paid, which purchases are limted to a maximum of (i) 3%
of the total voting stock of any one investment company, (ii) 5% of the Fund's
net assets with respect to any one investment company and (iii) 10% of the
Fund' s net assets in the aggregate, or (b) those received as part of a merger,
sale of assets or consolidation.
If approved by the respective Fund' s stockholders, each Fund's current
fundamental policy with respect to investing in the securities of other
investment companies would be replaced in its entirety with a non-fundamental
policy that could be changed by the Fund's Board members at any time without
stockholder approval. The non-fundamental policy would read as follows:
" The Fund may not purchase securities of other investment companies, except
to the extent permitted under the 1940 Act."
7
(Page 7)
VOTE REQUIRED AND THE BOARD'S RECOMMENDATION
With respect to each Fund, approval of this Proposal requires the
affirmative vote of (a) 67% of the Fund's outstanding voting securities present
at the meeting, if the holders of more than 50% of the Fund's outstanding voting
securities are present or represented by proxy, or (b) more than 50% of the
Fund's outstanding voting securities, whichever is less.
THE BOARD OF EACH FUND RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING
PROPOSAL.
ADDITIONAL INFORMATION
SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that each Fund's independent auditors be selected by a
majority of those Directors who are not "interested persons" (as defined in the
1940 Act) of the Fund. One of the purposes of the audit committee is to
recommend to the Fund' s Board the selection, retention or termination of
independent auditors for the Fund. At a meeting held on October 21, 2002 for
DSMB and July 22, 2002 for DSM, each Fund's audit committee recommended and each
Fund' s Board, including a majority of those Directors who are not "interested
persons" of the Fund, approved the selection of Ernst & Young LLP as the
independent auditors for the respective Fund's fiscal year ending in 2003. Ernst
& Young LLP, a major international accounting firm, has acted as auditors of
each Fund since the Fund' s organization. After reviewing the Fund's audited
financial statements for the fiscal year ended September 30, 2002 for DSM, and
November 30, 2002 for DSMB, each Fund's audit committee recommended to the
Fund' s Board that such statements be included in the Fund's annual report to
stockholders. Copies of the audit committee' s report for DSM and DSMB are
attached as Exhibits D and E, respectively, to this proxy statement.
AUDIT FEES. For the fiscal year ended September 30, 2002 for DSM and
November 30, 2002 for DSMB, Ernst & Young LLP billed DSM $28,900 and DSMB
$28,900 for services rendered in connection with the annual audit of each Fund's
financial statements. No audit fees were paid directly by Dreyfus or its
affiliates to Ernst & Young LLP during such periods.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. For the fiscal
year ended September 30, 2002 for DSM and November 30, 2002 for DSMB, no
professional services were rendered by Ernst & Young LLP to the Funds relating
to financial systems design and implementation services. Ernst & Young LLP did
not provide any management consulting services to Dreyfus or its affiliates
during such periods.
AUDIT-RELATED FEES. For the fiscal year ended September 30, 2002 for DSM and
November 30, 2002 for DSMB, the aggregate fees for audit-related services
rendered by Ernst & Young LLP to the Funds amounted to $20,500 for DSM and
$20,500 for DSMB. Such services provided were security counts required by the
SEC and agreed upon procedures relating to the Funds' APS.
ALL OTHER FEES. For the fiscal year ended September 30, 2002 for DSM and
November 30, 2002 for DSMB, the aggregate fees for professional services
rendered by Ernst & Young LLP for all other services provided to the Funds
amounted to $2,500 for each Fund relating to the review of each Fund's income
tax returns.
For the fiscal years ended September 30, 2002 and November 30, 2002, Dreyfus
paid Ernst & Young LLP approximately $75,000 for tax consulting services
The audit committee for each Fund considered the compatibility of any
non-audit services with Ernst & Young LLP's independence.
A representative of Ernst & Young LLP is expected to be present at the
meeting, will have the opportunity to make a statement, and will be available to
respond to appropriate questions.
8
(Page 8)
SERVICE PROVIDERS
Dreyfus, located at 200 Park Avenue, New York, New York 10166, serves as
each Fund's investment adviser.
Mellon Bank, N.A., Dreyfus' parent, located at One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, acts as Custodian for the assets of each Fund.
Mellon Bank, N.A., located at 85 Challenger Road, Ridgefield Park, New Jersey
07660, acts as each Fund's Transfer Agent, Dividend-Paying Agent and Registrar.
VOTING INFORMATION
Each Fund will bear its pro rata share of the cost of soliciting proxies
based on the net assets of the Fund. In addition to the use of the mails,
proxies may be solicited personally or by telephone, and each Fund may pay
persons holding shares of the Fund in their names or those of their nominees for
their expenses in sending soliciting materials to their principals. Each Fund
has retained Georgeson Shareholder Communications, Inc. ("Georgeson"), 17 State
Street, New York, NY 10004, to assist in the solicitation of proxies primarily
by contacting stockholders by telephone, which will cost approximately $80,000,
such cost to be borne pro rata between the Funds based on the net assets of the
Funds. As the meeting date approaches, certain stockholders may receive
telephone calls from representatives of Georgeson if their votes have not been
received. Authorization to permit Georgeson to execute proxies may be obtained
by telephonic instructions from stockholders of the Fund. For additional
information regarding the proxy or to obtain a replacement proxy card, please
contact Georgeson toll-free at (866)801-3357. Authorizations to execute proxies
may be obtained by fax, or by telephonic instructions in accordance with
procedures designed to authenticate the stockholder's identity. In all cases
where a telephonic proxy is solicited, the stockholder will be asked to provide
his or her address and social security number (in the case of an individual) or
taxpayer identification number (in the case of a non-individual) and to confirm
that the stockholder has received the Fund's proxy statement and proxy card in
the mail. Within 72 hours of receiving a stockholder's solicited telephonic
voting instructions, a confirmation will be sent to the stockholder to ensure
that the vote has been taken in accordance with the stockholder's instructions
and to provide a telephone number to call immediately if the stockholder's
instructions are not correctly reflected in the confirmation. Shares represented
by executed and unrevoked proxies will be voted in accordance with the
specifications made thereon, and if no voting instructions are given, shares
will be voted "FOR" the Proposals.
If a proxy is properly executed and returned accompanied by instructions to
withhold authority to vote, represents a broker "non-vote" (that is, a proxy
from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote shares
of the Fund on a particular matter with respect to which the broker or nominee
does not have discretionary power) or marked with an abstention (collectively,
" abstentions" ), the Fund's shares represented thereby will be considered to be
present at the meeting for purposes of determining the existence of a quorum for
the transaction of business. Under Maryland law, abstentions do not constitute a
vote "for" or "against" a matter and will be disregarded in determining "votes
cast" on an issue. For this reason, abstentions will have the effect of a "no"
vote for the purpose of obtaining requisite approval for Proposal 2 or Proposal
3.
If a quorum is not present at the meeting, or if a quorum is present but
sufficient votes to approve Proposal 2 or Proposal 3 are not received, the
persons named as proxies may propose one or more adjournments of the meeting to
permit further solicitation of proxies with respect to such Proposal. In
determining whether to adjourn the meeting, the following factors may be
considered: the nature of the Proposal, the percentage of favorable votes
actually cast, the percentage of negative votes actually cast, and the nature of
any further solicitation. Any adjournment will require the affirmative vote of a
majority of those shares affected by the adjournment that are represented at the
meeting in person or by proxy. If a quorum is present, the persons named as
proxies will vote those proxies which they are entitled to vote "FOR" the
Proposal in favor of such adjournment, and will vote those proxies required to
be voted "AGAINST" the Proposal against any adjournment.
OTHER MATTERS
Neither Fund's Board is aware of any other matter which may come before the
meeting. However, should any such matter with respect to one or both Funds
properly come before the meeting, it is the intention of the persons named in
the accompanying form of proxy to vote the proxy in accordance with their
judgment on such matter.
9
(Page 9)
Proposals that stockholders wish to include in a Fund's proxy statement for
the Fund' s next Annual Meeting of Stockholders must be sent to and received by
such Fund no later than December 12, 2003 at the principal executive offices of
the Fund at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel. The date after which notice of a stockholder proposal is considered
untimely, except as otherwise permitted under applicable law, is February 25,
2004.
NOTICE TO BANKS, BROKER/DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise, as appropriate, Dreyfus Strategic Municipals, Inc., in care
of The Bank of New York, Proxy Department, 101 Barclay Street, New York, New
York 10286, or Dreyfus Strategic Municipal Bond Fund, Inc., in care of Bank of
Boston, Shareholder Services Division, Proxy Department, P.O. Box 17191/M/S:
45-01-02, Boston, Massachusetts 02105, whether other persons are the beneficial
owners of the shares for which proxies are being solicited, and if so, the
number of copies of the proxy statement and other soliciting material you wish
to receive in order to supply copies to the beneficial owners of shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS WHO
DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN, DATE
AND RETURN EACH ENCLOSED PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
Dated: April 15, 2003
10
(Page 10)
EXHIBIT A
PART I
Part I sets forth information relevant to the Continuing Directors who are
not Nominees for election at this meeting, Board and committee meetings, and
share ownership. Unless otherwise indicated, the information set forth herein
applies to both Funds.
CONTINUING CLASS II DIRECTORS WITH TERMS EXPIRING IN 2004 FOR DSMB AND 2005 FOR
DSM
The following table presents information about the Continuing Directors of
the Funds, including their principal occupations and other board memberships and
affiliations. In addition to the Continuing Directors listed below, Messrs.
DiMartino, Carter and Leone are Class I Continuing Directors of DSM and Messrs.
Burke, Mautner and Zuccotti are Class III Continuing Directors of DSMB. The
address of each Continuing Director is 200 Park Avenue, New York, New York
10166. Each of the Fund' s Continuing Directors will continue to serve as a
Director of the Funds after the meeting.
NAME (AGE) OF CONTINUING DIRECTOR PRINCIPAL OCCUPATION OTHER BOARD MEMBERSHIPS
POSITION WITH FUND (SINCE) DURING PAST 5 YEARS AND AFFILIATIONS
EHUD HOUMINER (61) Professor and Executive-in-Residence Avnet Inc., an electronics
CLASS II DIRECTOR OF EACH FUND (1994) at the Columbia Business School, distributor, DIRECTOR
Columbia University Super Sol Limited, an
Principal of Lear, Yavitz and Israeli supermarket chain,
Associates, a management consulting DIRECTOR
firm
ROBIN A. PRINGLE (39) Senior Vice President of Mentor/ --
CLASS II DIRECTOR OF EACH FUND (1995) National Mentoring Partnership,
APS DESIGNEE FOR DSM (2000) a national non-profit organization,
APS DESIGNEE FOR DSMB (1999) that is leading the movement to
Connect America's young people with
Caring adult mentors
The table below indicates the dollar range of each Continuing Director's and
Nominee' s ownership of shares of each Fund's Common Stock and shares of other
funds in the Dreyfus Family of Funds for which he or she is a Board member, in
each case as of December 31, 2002.
DSM DSMB AGGREGATE HOLDING OF
NAME OF CONTINUING COMMON COMMON FUNDS IN THE
DIRECTOR OR NOMINEE STOCK STOCK DREYFUS FAMILY OF FUNDS
Ehud Houminer None None Over $100,000
Robin A. Pringle None None $1 - $10,000
Joseph S. DiMartino* None None Over $100,000
Hodding Carter, III* None None None
Richard C. Leone* $10,001 - $50,000 $1 - $10,000 Over $100,000
David W. Burke* None None Over $100,000
Hans C. Mautner* None None Over $100,000
John E. Zuccotti* None None None
--------------------
* Nominee
As of December 31, 2002, none of the Nominees or Continuing Directors or
their immediate family members owned securities of Dreyfus or any person (other
than a registered investment company) directly or indirectly controlling,
controlled by or under common control with Dreyfus.
A-1
(Page A-1)
PERTAINING TO THE BOARD OF EACH FUND
* DSM held six Board meetings, DSMB held five Board meetings and each Fund
held five audit committee meetings during its last fiscal year.
* All Continuing Directors and Nominees attended at least 75% of all Board
and committee meetings, as applicable, held in the last fiscal year.
COMPENSATION TABLE. The aggregate amount of compensation paid to each
Continuing Director by DSMB for its fiscal year ended November 30, 2002, and by
DSM for its fiscal year ended September 30, 2002, and by all funds in the
Dreyfus Family of Funds for which such Director was a Board member (the number
of portfolios of such funds is set forth in parenthesis next to each Director's
total compensation) for the year ended December 31, 2002, was as follows:
TOTAL
COMPENSATION
FROM EACH FUND AND
AGGREGATE FUND COMPLEX
NAME OF CONTINUING COMPENSATION PAID TO
DIRECTOR AND FUND FROM EACH FUND* CONTINUING DIRECTOR (**)
Ehud Houminer $84,000 (25)
DSMB $5,000
DSM $7,000
Robin A. Pringle $40,750 (7)
DSMB $5,000
DSM $7,000
----------------------
*Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $2,701 for DSM and $2,338 for DSMB for all Directors as a
group.
**Represents the number of separate portfolios comprising the investment
companies in the fund complex, including the Funds, for which the Director
serves as a Board member.
A-2
(Page A-2)
PART II
Part II sets forth information relevant to the officers of each Fund.
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUNDS (SINCE) AGE EXPERIENCE FOR PAST FIVE YEARS
STEPHEN E. CANTER
President (2000) 57 Chairman of the Board, Chief
Executive Officer and Chief
Operating Officer of Dreyfus,
and an officer of 94 investment
companies (comprised of 186
portfolios) managed by Dreyfus.
Mr. Canter also is a Board
Member and, where applicable, and
Executive Committee Member of
the other investment management
subsidiaries of Mellon Financial
Corporation, each of which is an
affiliate of Dreyfus.
STEPHEN R. BYERS
Executive Vice President (2002) 49 Chief Investment Officer, Vice
Chairman and a Director
of Dreyfus, and an officer of
94 investment companies
(comprised of 188 portfolios)
managed by Dreyfus. Mr. Byers
also is an Officer, Director or
an Executive Committee Member
of certain other investment
management subsidiaries of
Mellon Financial Corporation,
each of which is an affiliate of
Dreyfus.
A. PAUL DISDIER
Executive Vice President (2000) 47 Director of Dreyfus Municipal
Securities and an officer of 3
investment companies (comprised
of 3 portfolios) managed by Dreyfus.
MARK N. JACOBS
Vice President (2000) 57 Executive Vice President,
Secretary and General Counsel
of Dreyfus, and an officer of
95 investment companies (comprised
of 202 portfolios) managed by Dreyfus.
JAMES WINDELS
Treasurer (2001) 45 Director -- Mutual Fund
Accounting of Dreyfus, and an
officer of 95 investment companies
(comprised of 202 portfolios) managed
by Dreyfus.
JOHN B. HAMMALIAN
Secretary (2000) 39 Associate General Counsel of
Dreyfus, and an officer of 36 investment
companies (comprised of 43 portfolios)
managed by Dreyfus.
STEVEN F. NEWMAN
Assistant Secretary (2000) 53 Associate General Counsel and
Assistant Secretary of Dreyfus, and
an officer of 95 investment companies
(comprised of 202 portfolios) managed by
Dreyfus.
A-3
(Page A-3)
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUNDS (SINCE) AGE EXPERIENCE FOR PAST FIVE YEARS
MICHAEL A. ROSENBERG
Assistant Secretary (2000) 42 Associate General Counsel of
Dreyfus, and an officer of 93 investment
companies (comprised of 198 portfolios)
managed by Dreyfus.
GREGORY S. GRUBER
Assistant Treasurer (2000) 44 Senior Accounting Manager --
Municipal Bond Funds of Dreyfus, and
an officer of 30 investment companies
(comprised of 59 portfolios) managed by
Dreyfus.
KENNETH J. SANDGREN
Assistant Treasurer (2001) 48 Mutual Funds Tax Director of
Dreyfus, and officer of 95 investment
Companies (comprised of 201 portfolios)
managed by Dreyfus.
WILLIAM GERMENIS
Anti-Money Laundering Compliance 32 Vice President and Anti-Money Laundering
Officer (2002) Compliance Officer of Dreyfus Service
Corporation, a wholly-owned subsidiary of
Dreyfus, and the Anti-Money Laundering
Compliance Office of 90 investment
companies (comprised of 197 portfolios)
managed by Dreyfus. He has been an
employee of Dreyfus Service Corporation
since October 1998; prior to joing Dreyfus
Service Corporation, he was a Vice President
of Compliance Data Center, Inc.
The address of each officer of the Funds is 200 Park Avenue, New York, New
York 10166.
A-4
(Page A-4)
PART III
Part III sets forth information for each Fund regarding the beneficial
ownership of its shares as of March 14, 2003 by Nominees, Continuing Directors
and officers of the Fund owning shares on such date and by any shareholders
owning 5% or more of the Fund's outstanding shares.
As of March 14, 2003 each Fund's Directors and officers, as a group, owned
less than 1% of the Fund's outstanding shares.
As of March 14, 2003, the following Directors and officers owned shares of
Common Stocks of the Funds as indicated below:
DSM DSMB
SHARES OF COMMON SHARES OF COMMON
DIRECTORS STOCK OWNED STOCK OWNED
Joseph S. DiMartino 2,000 16,500
Richard C. Leone 2,800 700
OFFICERS
Mark N. Jacobs 48,730 - 0 -
A. Paul Disdier 14,000 4,500
To each Fund's knowledge, no person owned beneficially 5% or more of the
outstanding shares of Common Stock or the outstanding shares of APS of a Fund on
March 14, 2003. Cede & Co. held of record approximately 88% and 90% of the
outstanding Common Stock for DSM and DSMB, respectively, and 100% of the
outstanding shares of APS of each of DSM and DSMB.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCES
To each Fund's knowledge, all of its officers, Directors and holders of more
than 10% of its Common Stock or APS complied with all filing requirements under
Section 16(a) of the Securities Exchange Act of 1934, as amended, during the
fiscal year ended September 30, 2002 for DSM and November 30, 2002 for DSMB. In
making this disclosure, each Fund has relied solely on written representations
of such persons and on copies of reports that have been filed with the
Securities and Exchange Commission.
A-5
(Page A-5)
EXHIBIT B
If Proposal 2 is approved, each Fund would be permitted to enter into swap
transactions, as described below.
Swaps, Interest Rate Locks, Caps, Collars and Floors. Each Fund proposes to
enter into interest rate swaps and interest rate locks and purchase and sell
interest rate caps, collars and floors. Swap transactions, including interest
rate swaps, interest rate locks, caps, collars and floors, may be individually
negotiated and include exposure to a variety of different interest rates. Swaps
involve two parties exchanging a series of cash flows at specified intervals. In
the case of an interest rate swap, the parties exchange interest payments based
upon an agreed upon principal amount (referred to as the "notional principal
amount" ). Under the most basic scenario, Party A would pay a fixed rate on the
notional principal amount to Party B, which would pay a floating rate on the
same notional principal amount to Party A. Swap agreements can take many forms
and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.
In a typical interest rate lock transaction, if Party A desires to lock in a
particular interest rate on a given date it may enter into an agreement to pay,
or receive a payment from, Party B based on the yield of a reference index or
security, such as a Treasury Bond. At the maturity of the term of the agreement,
one party makes a payment to the other party as determined by the relative
change in the yield of the reference security or index. An interest rate lock
transaction may be terminated prior to its stated maturity date by calculating
the payment due as of the termination date, which generally differs from the
make-whole provisions for an early termination of an interest rate swap
transaction in which the party terminating the swap early is required to give
its counterparty the economic benefit of the transaction.
Each Fund would set aside cash or permissible liquid assets to cover its
current obligations under swap transactions. If a Fund enters into a swap
agreement on a net basis (that is, the two payment streams are netted out, with
the Fund receiving or paying, as the case may be, only the net amount of the two
payments) , the Fund would maintain cash or permissible liquid assets with a
daily value at least equal to the excess, if any, of the Fund's accrued
obligations under the swap agreement over the accrued amount the Fund is
entitled to receive under the agreement. If a Fund were to enter into a swap
agreement on other than a net basis, enter into an interest rate lock agreement
or write a cap, collar or floor, it would maintain cash or permissible liquid
assets with a value equal to the full amount of the Fund's accrued obligations
under the agreement.
The most important factor in the performance of a swap agreement would be
the change in the specific interest rate or other factor(s) that determine the
amounts of payments due to and from a Fund. If a swap agreement called for
payments by a Fund, the Fund would have to be prepared to make such payments
when due. In addition, if the counterparty's creditworthiness declines, the
value of a swap agreement would likely decline, potentially resulting in losses
The Funds would enter into interest rate swaps, interest rate locks, caps,
collars and floors only with banks and recognized securities dealers believed by
Dreyfus to present minimal credit risks. If there were a default by the other
party to such transaction the Fund would have to rely on its contractual
remedies (which may be limited by bankruptcy, insolvency or similar laws)
pursuant to the agreement relating to the transaction.
Depending on the circumstances, gains from a swap transaction will be
treated either as ordinary income or as short- or long-term capital gains. The
Fund currently intends to enter into swap transactions on a "forward settlement"
basis (settlement set out several months) and to close-out such transactions
before the settlement date. This methodology should result in there being no
exchange of income and, therefore, no taxable income to report. Any principal
gain or loss at settlement would be a capital gain or loss.
B-1
(Page B-1)
EXHIBIT C
AUDIT COMMITTEE CHARTER
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
DREYFUS STRATEGIC MUNICIPALS, INC.
(each, a "Fund")
1. The Audit Committee shall consist of at least three members and shall be
composed entirely of independent directors, all of whom shall be
financially literate as determined by the Fund's Board in its business
judgment, with at least one member having accounting or related financial
management expertise as determined by the Fund's Board in its business
judgment.
2. The purposes of the Audit Committee are:
(a) to oversee the Fund's accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal
controls of certain service providers;
(b) to oversee the quality and objectivity of the Fund's financial
statements and the independent audit thereof; and
(c) to act as a liaison between the Fund's independent auditors and the
full Board of Directors.
The function of the Audit Committee is oversight. The Fund's management
is responsible for (i) the preparation, presentation and integrity of the
Fund's financial statements, (ii) the maintenance of appropriate
accounting and financial reporting principles and policies and (iii) the
maintenance of internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and regulations.
The outside auditors are responsible for planning and carrying out a
proper audit and reviews. In fulfilling their responsibilities hereunder,
it is recognized that members of the Audit Committee are not full-time
employees of the Fund and are not, and do not represent themselves to be,
accountants or auditors by profession or experts in the fields of
accounting or auditing. As such, it is not the duty or responsibility of
the Audit Committee or its members to conduct "field work" or other types
of auditing or accounting reviews or procedures. Each member of the Audit
Committee shall be entitled to rely on (i) the integrity of those persons
and organizations within and outside the Fund from which it receives
information and (ii) the accuracy of the financial and other information
provided to the Audit Committee by such persons and organizations absent
actual knowledge to the contrary (which shall be promptly reported to the
Fund's Board). In addition, the evaluation of the Fund's financial
statements by the Audit Committee is not of the same scope as, and does
not involve the extent of detail as, audits performed by the independent
accountants, nor does the Audit Committee's evaluation substitute for the
responsibilities of the Fund's management for preparing, or the
independent accountants for auditing, the financial statements.
3. To carry out its purposes, the Audit Committee shall have the following
duties and powers:
(a) to recommend the selection, retention or termination of outside
auditors and, in connection therewith, to evaluate the independence
of the auditors, including whether the auditors provide any
consulting services to the Fund's investment adviser (it being
understood that the auditors are ultimately accountable to the Audit
Committee and the Fund's Board and that the Audit Committee and the
Fund's Board shall have the ultimate authority and responsibility to
select, evaluate, retain and terminate auditors, subject to any
required stockholder vote);
(b) to ensure receipt of a formal written statement from the outside
auditors on a periodic basis specifically delineating all
relationships between the auditors and the Fund; to discuss with the
auditors any disclosed relationships or services that may impact the
auditors' objectivity and independence; and to recommend that the
Fund's Board take appropriate action in response to the auditors'
report to satisfy itself of the auditors' independence;
C-1
(Page C-1)
(c) to meet with the Fund's outside auditors, including private meetings,
as necessary (i) to review the arrangements for and scope of the
annual audit and any special audits; (ii) to discuss any matters of
concern relating to the Fund's financial statements, including any
adjustments to such statements recommended by the auditors, or other
results of said audit(s); and (iii) to consider the auditors'
comments with respect to the Fund's financial policies, procedures
and internal accounting controls and management's responses thereto
(d) to consider the effect upon the Fund of any changes in accounting
principles or practices proposed by management or the outside
auditors;
(e) to review the fees charged by the outside auditors for audit and
non-audit services; and
(f) to report its activities to the full Board on a periodic basis and to
make such recommendations with respect to the above and other
matters as the Committee may deem necessary or appropriate.
4. The Committee shall meet at least once annually and is empowered to hold
special meetings as circumstances require.
5. The Committee shall regularly meet (typically, concurrently with the regular
Committee meetings) with the Fund's management.
6. The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including the authority to retain special counsel
and other experts or consultants at the expense of the Fund.
7. The Committee shall review the adequacy of this Charter at least annually and
recommend any changes to the full Board. The Board shall also review and
approve this Charter at least annually.
8. With respect to any subsequent changes to the composition of the Committee,
and otherwise approximately once each year, the Fund shall provide the New
York Stock Exchange written confirmation regarding:
(1) any determination that the Fund's Board has made regarding the
independence of directors
pursuant to the New York Stock Exchange's governance standards or
applicable law;
(2) the financial literacy of the Committee members;
(3) the determination that at least one of the Committee members has
accounting or related financial management expertise; and
(4) the annual review and reassessment of the adequacy of the Committee
charter
Effective: June 1, 2000
As Amended, July 22, 2002
C-2
(Page c-2)
EXHIBIT D
Dreyfus Strategic Municipals, Inc.
November 22, 2002
REPORT OF THE AUDIT COMMITTEE
The audit committee oversees the Fund's financial reporting process on behalf of
the board of directors. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the committee reviewed
the audited financial statements in the Annual Report with management including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with accounting principles generally accepted in the United States, their
judgments as to the quality, not just the acceptability, of the Fund's
accounting principles and such other matters as are required to be discussed
with the committee under generally accepted auditing standards. In addition, the
committee has discussed with the independent auditors the auditors' independence
from management and the Fund including the auditor's letter and the matters in
the written disclosures required by the Independence Standards Board and
considered the compatibility of non-audit services with the auditors'
independence.
The committee discussed with the Fund's independent auditors the overall scope
and plans for the audit. The committee meets with the independent auditors, with
and without management present, to discuss the results of their examinations,
their evaluations of the Fund's internal controls, and the overall quality of
the Fund's financial reporting.
In reliance on the reviews and discussions referred to above, the committee
recommended to the board of directors (and the board has approved) that the
audited financial statements be included in the Annual Report to Shareholders
for the year ended September 30, 2002. The committee and the board also have
approved the selection of Ernst & Young LLP as the Fund's independent auditors
for the fiscal year ending September 30, 2003.
Richard C. Leone, Audit Committee Chair Ehud Houminer, Audit Committee Member
David W. Burke, Audit Committee Member Hans C. Mautner, Audit Committee Member
Hodding Carter, III, Audit Committee Member Robin A. Pringle, Audit Committee Member
Joseph S. DiMartino, Audit Committee Member John E. Zuccotti, Audit Committee Member
D-1
(Page D-1)
EXHIBIT E
Dreyfus Strategic Municipal Bond Fund, Inc.
January 21, 2003
REPORT OF THE AUDIT COMMITTEE
The audit committee oversees the Fund's financial reporting process on behalf of
the board of directors. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the committee reviewed
the audited financial statements in the Annual Report with management including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with accounting principles generally accepted in the United States, their
judgments as to the quality, not just the acceptability, of the Fundy's
accounting principles and such other matters as are required to be discussed
with the committee under generally accepted auditing standards. In addition, the
committee has discussed with the independent auditors the auditors' independence
from management and the Fund including the auditor's letter and the matters in
the written disclosures required by the Independence Standards Board and
considered the compatibility of non-audit services with the auditors'
independence.
The committee discussed with the Fund's independent auditors the overall scope
and plans for the audit. The committee meets with the independent auditors, with
and without management present, to discuss the results of their examinations,
their evaluations of the Fund's internal controls, and the overall quality of
the Fund's financial reporting.
In reliance on the reviews and discussions referred to above, the committee
recommended to the board of directors (and the board has approved) that the
audited financial statements be included in the Annual Report to Shareholders
for the year ended November 30, 2002. The committee and the board also have
approved the selection of Ernst & Young LLP as the Fund's independent auditors
for the fiscal year ending November 30, 2003.
Richard C. Leone, Audit Committee Chair Ehud Houminer, Audit Committee Member
David W. Burke, Audit Committee Member Hans C. Mautner, Audit Committee Member
Hodding Carter, III, Audit Committee Member Robin A. Pringle, Audit Committee Member
Joseph S. DiMartino, Audit Committee Member John E. Zuccotti, Audit Committee Member
E-1
(Page E-1)
IMPORTANT
Please Act Promptly
Sign, Date and Mail your Proxy Card(s) Today.
No matter how many shares you own, your vote is important. Voting can
also help the Fund save money. To hold a meeting, a quorum must be
represented. Voting today can save the fund the expense of another
solicitation for proxies required to achieve a quorum.
Please note that if you hold more than one account in the Fund, a proxy
card will be sent to you for each of your accounts. You should sign and
return each proxy card in order for all votes to be counted.
Thank you for your interest in the Fund.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
COMMON STOCKHOLDERS
AND
AUCTION PREFERRED STOCKHOLDERS
The undersigned stockholder of Dreyfus Strategic Municipal Bond Fund, Inc. (the
"Fund") hereby appoints Robert R. Mullery and Emile R. Molineaux, and each of
them, the attorneys and proxies of the undersigned, with full power of
substitution, to vote, as indicated herein, all of the shares of the Fund
standing in the name of the undersigned at the close of business on March 14,
2003 at the Annual Meeting of Stockholders to be held at the offices of The
Dreyfus Corporation, 200 Park Avenue, 7th Floor West, New York, New York,
commencing at 10:00 a.m. on Friday, May 16, 2003; and at any and all
adjournments thereof, with all of the powers the undersigned would possess if
then and there personally present and especially (but without limiting the
general authorization and power hereby given) to vote as indicated on the
proposals, as more fully described in the Proxy Statement for the meeting.
................................................................................
FOLD AND DETACH HERE
Please mark Boxes in blue or black ink.
1. Election of Directors
___ FOR ALL Nominees listed below (except as marked to the contrary)
___ WITHHOLD Authority For All Nominees listed below
Nominees are:
Class I - Joseph S. DiMartino, William Hodding Carter, III and Richard C. Leone
WITHHELD FOR (write name of nominee(s) in space provided below)
------------------------------------------------------------------------
2. To approve a change to the fundamental investment policies and investment
restrictions of the Fund to permit the Fund to engage in additional
investment techniques:
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To approve a change to the fundamental investment policies and investment
restrictions of the Fund to expand the Fund's ability to invest in other
investment companies:
FOR AGAINST ABSTAIN
[_] [_] [_]
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment(s)
thereof.
THIS PROXY IS SOLICITED BY THE FUND'S BOARD OF DIRECTORS AND WILL BE VOTED FOR
THE ABOVE PROPOSALS UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or names appearing on this proxy. If
shares are held jointly, each holder should sign. If signing is by attorney,
executor, administrator, trustee or guardian, please give full title.
Dated:
---------------------------, 2003
---------------------------------
Signature(s)
---------------------------------
Signature(s)
Sign, Date and return the Proxy Card Promptly using the Enclosed Envelope