SOGEN VARIABLE FUNDS INC
PRE 14A, 1999-10-26
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Preliminary Copy

                                IMPORTANT NEWS

                          SOGEN VARIABLE FUNDS, INC.

                         SOGEN OVERSEAS VARIABLE FUND



      While  we  encourage  you to read  the  full  text of the  enclosed  proxy
statement,  here's a brief  overview of some matters  affecting  SoGen  Overseas
Variable Fund (the "Fund") that require a shareholder vote.

Q & A:  QUESTIONS AND ANSWERS

Q.    WHAT IS HAPPENING?

A.    Societe Generale Asset Management,  S.A., ("SGAM S.A."), the owner of an
      80.1% equity interest in Societe Generale Asset Management Corp.  ("SGAM
      Corp."),  the  investment  adviser for SoGen Variable  Funds,  Inc., and
      Jean-Marie  Eveillard,  the president,  director and  shareholder of the
      remaining  19.9%  equity  interest  in SGAM  Corp.,  have  entered  into
      agreements with Arnhold and  S. Bleichroeder,  Inc.  ("A&SB")  providing
      for  the  sale  of  all  the   shares  of  SGAM   Corp.   to  A&SB  (the
      "Acquisition").  In order for the  Acquisition to occur, it is necessary
      for the Fund's  shareholders to approve a new advisory  agreement and to
      elect an expanded  Board of  Directors.  The Board  members of the Fund,
      including those who are not affiliated  with SGAM Corp.,  recommend that
      you vote FOR these proposals.

Q.    WILL JEAN-MARIE EVEILLARD CONTINUE TO MANAGE THE FUND?

A.    Yes,  Jean-Marie  Eveillard has entered into an  employment  contract with
      A&SB for an initial  term of five years and is selling his 19.9%  interest
      in  SGAM  Corp.  over  seven  years.  He  will  continue  to be  primarily
      responsible for the day-to-day management of the Fund.


<PAGE>


Q.    HOW  WILL  A&SB'S  ACQUISITION  OF  SGAM  CORP.  AFFECT  ME  AS  A  FUND
      SHAREHOLDER?

A.    The Fund's investment  objective and investment program will not change as
      a result of the  Acquisition.  Your  investment  in the  related  variable
      annuity  contract or variable life insurance  policy will be unchanged and
      you will still  indirectly  own the same number of shares in the Fund. The
      terms  of the  new  investment  advisory  agreement  are  the  same in all
      material respects as those in the current investment management agreement.

Q.    WILL THE INVESTMENT ADVISORY FEES BE THE SAME?

A.    Yes,  the fees paid by the Fund for  advisory  services  under the current
      contract will remain the same after the proposed Acquisition.

Q.    WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW ADVISORY AGREEMENT?

A.    The Investment  Company Act of 1940,  which regulates mutual funds such as
      the Fund,  requires  a vote  whenever  there is a change in  control  of a
      fund's  investment  manager.  The  proposed  Acquisition  will result in a
      change of control of SGAM Corp., and thus requires shareholder approval of
      a new advisory agreement between the new adviser and the Fund.

Q.    WILL THE FUND PAY FOR THE PROXY  SOLICITATION AND LEGAL COSTS ASSOCIATED
      WITH THIS TRANSACTION?

A.    No, A&SB will bear those costs.

Q.    HOW DO THE BOARD MEMBERS OF MY FUND SUGGEST THAT I VOTE?

A.    After  careful  consideration,  the Board of  Directors,  on behalf of the
      Fund,  including a majority of those directors who are not affiliated with
      SGAM Corp., unanimously recommends that you vote in favor of the proposals
      on the enclosed proxy card.

Q.    WHERE CAN I CALL FOR MORE INFORMATION ABOUT THE PROPOSED ACQUISITION?

A.    You may call  (800) [                ]  if you have any questions  about
      the proposed Acquisition.


                             ABOUT THE PROXY CARD

      If you have  more  than one  account  in the Fund in your name at the same
address,  you will receive  separate  proxy  statements and proxy cards for each
account.  Please vote all issues shown on each proxy card that you receive.  [In
addition to voting by returning  your proxy card in the enclosed  envelope,  you
may also submit your vote by telephone,  facsimile,  or over the Internet  (www.
 .com).]

                 THANK YOU FOR SUBMITTING YOUR VOTE PROMPTLY.

<PAGE>


                          SOGEN VARIABLE FUNDS, INC.

                                                   1221 Avenue of the Americas
                                                      New York, New York 10020
                                                  1-800-[                    ]

                                                        November [     ], 1999

To the Shareholders:
      A  Special  Meeting  of  Shareholders  (the  "Special  Meeting")  of Sogen
Overseas Variable Fund (the "Fund"), a series of SoGen Variable Funds, Inc. (the
"Company"),  is to be held at 3:00 p.m.,  Eastern  time, on December 22, 1999 at
the offices of Societe  Generale Asset  Management  Corp.  ("SGAM  Corp."),  the
investment  adviser for the Fund,  1221 Avenue of the Americas,  8th Floor,  New
York, New York 10020.  Shareholders who are unable to attend the Special Meeting
are  strongly  encouraged  to vote by proxy,  which is  customary  in  corporate
meetings of this kind. A Proxy Statement  regarding the Special Meeting, a proxy
card for your vote at the Special Meeting and an envelope - postage prepaid - in
which to return your proxy card are enclosed.

      As  described  in the  Questions  and Answers on the outside  cover,  both
Societe Generale Asset Management S.A. ("SGAM S.A."), the majority owner of SGAM
Corp., and I have entered into agreements with Arnhold and S. Bleichroeder, Inc.
("A&SB"),  providing for the sale of all of the outstanding shares of SGAM Corp.
to A&SB  (the  "Acquisition").  A&SB is a  privately  owned,  diversified  asset
management  organization  headquartered  in New York, New York. More information
about A&SB can be found inside the Proxy Statement.

      Important facts about the proposed Acquisition are outlined below:

o         The  proposed  Acquisition  will have no effect on the  number of Fund
          shares that you own or the value of those shares.

o         The advisory fees and expenses paid by the Fund will not increase as a
          result of the proposed Acquisition.

o         The  investment  objective of the Fund will remain the same and I will
          continue to be primarily responsible for the management of the Fund.

o         Those  Directors  of the Fund who are not  "interested  persons"  have
          carefully reviewed the proposed  Acquisition,  and have concluded that
          the  Acquisition  should cause no reduction in the quality of services
          provided to the Fund.

      At the  Special  Meeting,  you  will be asked to  approve  a new  advisory
agreement for the Fund, the details of which are described in the attached Proxy
Statement.  Shareholders  are also being asked to approve  certain other matters
that are set forth in the Fund's Notice of Meeting included herewith.

      The Board of Directors of the Company recommends that you vote in favor of
all of the proposals.

Respectfully,


Jean-Marie Eveillard
President

It is  important  to vote  whether you own few or many  shares.  Please sign the
enclosed proxy card and mail it in the postage prepaid  envelope so as to ensure
a quorum at the Special  Meeting.  You may also submit your vote on the proposal
by telephone,  facsimile, or over the internet  (www.proxyvote.com).  To vote by
telephone,  please call [(800) 690-6903]. Your proxy may be sent by facsimile by
dialing [(800) ] between the hours of 9:00 a.m. and 5:00 p.m. eastern time.



<PAGE>


                          SOGEN VARIABLE FUNDS, INC.

                  Notice of Special Meeting of Shareholders

To the Shareholders of
   SoGen Overseas Variable Fund

      Please take notice that a Special  Meeting of  Shareholders  (the "Special
Meeting")  of SoGen  Overseas  Variable  Fund  (the  "Fund"),  a series of SoGen
Variable Funds,  Inc. (the  "Company"),  is to be held at the offices of Societe
Generale Asset Management Corp. ("SGAM Corp."),  the investment  adviser for the
Fund,  1221 Avenue of the  Americas,  8th Floor,  New York,  New York 10020,  on
December 22, 1999 at 3:00 p.m., Eastern time, for the following purposes:

(1)       To approve a new advisory agreement;

(2)       To elect Directors; and

(3)       To ratify  or  reject  the  selection  of KPMG LLP as the  independent
          accountants for the Fund for the Fund's current fiscal year.

      The  appointed  proxies  may  also  vote on any  other  business  that may
properly come before the Special Meeting or any  adjournments  or  postponements
thereof.

      Holders  of record  of shares of common  stock of the Fund at the close of
business on October 29, 1999 are entitled to vote at the Special  Meeting and at
any adjournments or postponements thereof.

      In the event that the  necessary  quorum to transact  business or the vote
required  to approve or reject  any  proposal  is not  obtained  at the  Special
Meeting,  the persons named as proxies may propose one or more  adjournments  of
the  Special  Meeting in  accordance  with  applicable  law,  to permit  further
solicitation of proxies. The persons named as proxies will vote in favor of such
adjournment  those  proxies  which have been voted in favor of the  proposal and
will vote  against  any such  adjournment  those  proxies  which have been voted
against the proposal.

                                    By Order of the Board of Directors,
                                Philip J. Bafundo
                                    Secretary
November [     ], 1999


- ------------------------------------------------------------------------------
IMPORTANT -- We urge you to sign and date the  enclosed  proxy card and return
it in the  enclosed  addressed  envelope  which  requires  no  postage  and is
intended for your  convenience.  You may also submit your vote on the proposal
by telephone,  facsimile,  or over the Internet  (www.proxyvote.com).  To vote
via  telephone,  please  call  [(800) 690-6903].  Your  proxy  may be  sent by
facsimile     by    dialing     [(800)     ]    between     the    hours    of
9:00 a.m. and 5:00 p.m.  Eastern Time.  If you can attend the Special  Meeting
and wish to vote your  shares in person at that  time,  you will be able to do
so.
- ------------------------------------------------------------------------------




                          SOGEN VARIABLE FUNDS, INC.


                         1221 Avenue of the Americas
                           New York, New York 10020



                               PROXY STATEMENT

                ----------------------------------------------

General

      This Proxy Statement is furnished in connection  with the  solicitation of
proxies by the Board of Directors  (the "Board") of SoGen Variable  Funds,  Inc.
(the "Company"), on behalf of SoGen Overseas Variable Fund (the "Fund"), for use
at a Special  Meeting  of  Shareholders,  to be held at the  offices  of Societe
Generale Asset Management Corp. ("SGAM Corp."),  the investment  adviser for the
Fund,  1221 Avenue of the  Americas,  8th Floor,  New York,  New York 10020,  on
December 22, 1999 at 3:00 p.m., Eastern time, and at any and all adjournments or
postponements  thereof (the  "Special  Meeting").  (In the  descriptions  of the
proposals below, the word "fund" is sometimes used to mean an investment company
or a series thereof in general, and not the Fund whose proxy statement this is.)

      This Proxy Statement, the Notice of Special Meeting and the proxy card are
first being mailed to  shareholders on or about November [ ], 1999 or as soon as
practicable  thereafter.  Any shareholder giving a proxy has the power to revoke
it by mail (addressed to the Secretary of the Company at its principal executive
offices at 1221 Avenue of the Americas,  New York,  New York 10020),  facsimile,
telephone, via the Internet, or in person at the Special Meeting, by executing a
superseding  proxy or by submitting a notice of  revocation to the Company.  All
properly executed proxies received in time for the Special Meeting will be voted
as specified in the proxy or, if no  specification is made, FOR approval of each
proposal as described in the Proxy Statement, and FOR the election of Directors.

      The presence at any shareholders'  meeting,  in person or by proxy, of the
holders of a majority  of the  shares of the Fund  entitled  to be cast shall be
necessary and sufficient to constitute a quorum for the transaction of business.
In the event that the necessary quorum to transact business or the vote required
to approve any proposal is not  obtained at the Special  Meeting with respect to
the Fund, the persons named as proxies may propose one or more  adjournments  of
the  Special  Meeting  to  permit  further  solicitation  of  proxies.  Any such
adjournment as to a matter will require the affirmative vote of the holders of a
majority  of the  Fund's  shares  present  in person or by proxy at the  Special
Meeting.  The persons named as proxies will vote in favor of  adjournment  those
proxies  which they are  entitled to vote in favor of the proposal and will vote
against the  adjournment  those proxies to be voted against the proposal.  If no
shareholder  entitled  to vote is  present  in person or by proxy,  any  officer
present to preside or act at the Special  Meeting as Secretary  may also adjourn
the Special  Meeting.  For purposes of determining  the presence of a quorum for
transacting  business at the  Special  Meeting,  abstentions  will be treated as
shares that are present but which have not been voted. Abstentions will have the
effect of a "no" vote on all proposals.

      Proposal 1 requires the affirmative vote of a "majority of the outstanding
voting  securities" of the Fund. The term  "majority of the  outstanding  voting
securities"  as defined in the  Investment  Company Act of 1940, as amended (the
"1940 Act"), and as used in this Proxy Statement, means: the affirmative vote of
the  lesser  of (1) 67% of the  voting  securities  of the Fund  present  at the
Special  Meeting  if more  than 50% of the  outstanding  shares  of the Fund are
present in person or by proxy or (2) more than 50% of the outstanding  shares of
the Fund.  Proposals 2 and 3 each  requires the approval of a majority of shares
voted at the Special Meeting subject to there being a quorum for the transaction
of business.

      Holders of record of the  shares of common  stock of the Fund at the close
of business on October 29, 1999 (the "Record  Date"),  as to any matter on which
they  are  entitled  to vote,  will be  entitled  to one  vote per  share on all
business  of  the  Special  Meeting.  As of  October  29,  1999,  the  Fund  had
_____________ shares outstanding.

      All  shares  were owned of record by  sub-accounts  of  separate  accounts
("Separate Accounts") of life insurance companies (the "Participating  Insurance
Companies")  established to fund benefits under variable  annuity  contracts and
variable  life  insurance   policies  issued  by  the  Participating   Insurance
Companies.  The  Participating  Insurance  Companies are  Continental  Assurance
Company,  Valley  Forge Life  Insurance  Company,  and IL Annuity And  Insurance
Company.

      The  Participating  Insurance  Companies are mailing  copies of this proxy
material to the holders of these  contracts and policies who, by completing  and
signing the accompanying  proxy cards,  will instruct the Separate  Accounts how
they wish the shares of the Fund to be voted.  The Separate  Accounts  will vote
shares of the Fund as instructed on the proxy cards by their  contract or policy
holders.  If no instructions  are specified on a proxy returned by a contract or
policy  holder,  the  Separate  Accounts  will  vote  the  shares  of  the  Fund
represented  thereby "FOR" the proposal.  The Separate  Accounts  intend to vote
shares for which no proxies are returned in the same  proportions  as the shares
for which instructions are received.

      [As of October 29, 1999,  the  Directors  and officers of the Company as a
group owned less than 1% of the shares of the Company.  The Company  knows of no
person who beneficially owns more than 5% of the capital stock of the Company.]

      The  information   contained  in  this  Proxy   Statement   relating  to
Arnhold and  S. Bleichroeder,  Inc.  ("A&SB") and its wholly owned subsidiary,
Arnhold  and  S.  Bleichroeder  Advisers,  Inc.  ("A&SB  Advisers")  has  been
provided by A&SB.

      The Company  provides to all  shareholders of the Fund periodic reports of
the Fund which highlight relevant information including investment results and a
review of portfolio  changes.  You may request a copy of the most recent  annual
report for the Fund and a copy of any more recent  semi-annual  report,  without
charge,  by  calling  (800) [ ] or  writing  the  Fund,  at 1221  Avenue  of the
Americas, New York, New York 10020.

                         PROPOSAL 1: APPROVAL OF NEW
                        INVESTMENT ADVISORY AGREEMENT

Introduction

      SGAM Corp.  acts as the  investment  adviser  for the Fund  pursuant to an
Investment  Advisory  Contract  dated  August 16,  1996 (the  "Current  Advisory
Agreement").

      On October 8, 1999, Societe Generale Asset Management, S.A. ("SGAM S.A."),
the holder of all the outstanding  shares of Class A common stock of SGAM Corp.,
entered into a stock purchase  agreement (the  "Purchase  Agreement")  with A&SB
providing for the sale to A&SB of all the  outstanding  shares of Class A common
stock of SGAM Corp. Jean-Marie Eveillard, the president,  director and holder of
all the  outstanding  shares of Class B common stock of SGAM Corp.  also entered
into a stock  purchase  agreement  dated October 8, 1999 with A&SB providing for
the eventual sale to A&SB in three installments over  approximately  seven years
of all of the  outstanding  shares of Class B common  stock of SGAM  Corp.  (the
"Acquisition").

      The Purchase  Agreement  contemplates  that the Fund will enter into a new
advisory  agreement  with A&SB Advisers,  which is a wholly owned  subsidiary of
A&SB,  and  will  enter  into  an  underwriting   agreement  and  a  Rule  12b-1
distribution plan with A&SB. The proposed agreements are substantially identical
to the current agreements of the Company with SGAM Corp. No increase is proposed
in the annual fee rates payable by the Fund.

      A&SB traces its  history to the  founding  of S.  Bleichroeder  in 1803 in
Berlin and the founding of Gebr. Arnhold in 1864 in Dresden. In 1937, the firm's
activities were moved to New York City. A&SB offers asset  management  services,
trading  in  U.S.  and  international   securities,   institutional   brokerage,
institutional and retail research,  advice on mergers and acquisitions and other
corporate  finance  matters,  global  securities  clearance  services  and  fund
administration. The firm manages over $4.1 billion of domestic and international
equity assets.  A&SB Advisers is a wholly owned subsidiary of A&SB and serves as
the  investment  adviser  to the First  Eagle  Funds,  a  registered  investment
company,   which   includes   First  Eagle  Fund  of  America  and  First  Eagle
International Fund.

      Consummation of the Acquisition  would constitute an "assignment," as that
term is defined in the 1940 Act, of the Fund's Current  Advisory  Agreement with
SGAM Corp. As required by the 1940 Act, the Current Advisory  Agreement provides
for its automatic termination in the event of its assignment. In anticipation of
the Acquisition, a new advisory agreement (the "New Advisory Agreement") between
A&SB  Advisers and the  Company,  on behalf of the Fund,  is being  proposed for
approval by  shareholders  of the Fund.  A copy of the form of the New  Advisory
Agreement is attached  hereto as Exhibit A. THE NEW ADVISORY  AGREEMENT  FOR THE
FUND IS IN ALL MATERIAL  RESPECTS  IDENTICAL TO THE CURRENT ADVISORY  AGREEMENT.
The  material  terms of the  Current  Advisory  Agreement  are  described  under
"Description of the Current and New Advisory Agreements," below.

      After the  Acquisition,  SGAM Corp.  will be a wholly owned  subsidiary of
A&SB. To permit A&SB to realize certain operational  efficiencies,  the Board of
Directors  of the Fund has agreed  that A&SB  Advisers  should  serve as the new
investment  adviser for the Fund.  Messrs.  Jean-Marie  Eveillard and Charles de
Vaulx  will  serve as  portfolio  managers  for the Fund and have  entered  into
employment agreements with A&SB for an initial term of five years,  effective as
of the closing date of the  proposed  Acquisition,  and will become  officers of
A&SB. Mr. Jean-Marie Eveillard will continue to be primarily responsible for the
day-to-day management of the Fund.

The Acquisition

      SGAM S.A.  began  discussions  in  mid-1999  regarding  the sale of SGAM
Corp. to A&SB.  SGAM S.A.'s  principal goal in  considering  the proposed sale
of SGAM  Corp.  was to shift its  focus  and  resources  to  providing  global
institutional  asset  management  services.   Discussions  culminated  in  the
execution of the Purchase Agreement on October 8, 1999.

      SGAM S.A., the holder of all of the  outstanding  shares of Class A common
stock of SGAM  Corp.,  the  investment  adviser for the Fund,  entered  into the
Purchase  Agreement  with  A&SB  providing  for a  sale  to  A&SB  of all of the
outstanding shares of Class A common stock of SGAM Corp.  Jean-Marie  Eveillard,
the  president,  director  and holder of all the  outstanding  shares of Class B
common stock of SGAM Corp.,  also entered into a stock  purchase  agreement with
A&SB  providing  for  the  eventual  sale to A&SB  in  three  installments  over
approximately  seven  years of all of the  outstanding  shares of Class B common
stock of SGAM  Corp.  The Class A shares  represent  80.1% of the equity of SGAM
Corp. and the Class B shares represent the remaining 19.9% of the equity of SGAM
Corp.

      The obligation of A&SB to close the  Acquisition  pursuant to the Purchase
Agreement is subject to various conditions and requirements, including obtaining
certain  approvals by the Board of Directors and  Shareholders  of the Fund. The
Board of Directors  has approved the New  Advisory  Agreement,  an  underwriting
agreement  and a new Rule  12b-1  Plan  with  A&SB,  and has also  nominated  an
expanded  Board of  Directors  and approved  changing the name of the Fund.  The
Shareholders  are now being asked to approve the New Advisory  Agreement  and to
elect  the  expanded  Board  of  Directors.  Approval  of  these  items  by  the
shareholders is necessary for the Acquisition to take place.

      In addition,  Jean-Marie  Eveillard and Charles de Vaulx have entered into
employment  agreements  with  A&SB  for  initial  terms of five  years  that are
effective upon the closing of the Acquisition.  The agreements each provide that
the  employee's  responsibilities  shall be  commensurate  with  his  respective
responsibilities  prior to the closing of the  Acquisition and that he will hold
such  positions to which he may be elected or appointed  during the terms of the
agreement.  Each  agreement  also  provides  for  salary  and  annual  incentive
compensation, certain benefits and covenants not to compete.

      A&SB  has  agreed  to bear  the  costs  to the  Fund  of the  Acquisition,
including,  but not limited to, the cost of preparing,  printing and mailing the
proxy materials for the meeting of the Shareholders.

The SoGen Name

      The Purchase Agreement provides that A&SB and the Fund can continue to use
the "SoGen" name only in  connection  with the name of the Fund for a period not
to exceed eighteen months after the closing of the Acquisition. A&SB proposed to
the  Board of  Directors  that the Fund  incorporate  the  "First  Eagle"  name.
Pursuant to Maryland  law, the Board of  Directors  may change the name of SoGen
Variable Funds,  Inc. The Board of Directors  agreed that if the Shareholders of
the Company approve the New Advisory Agreement with A&SB Advisers, then the name
of "SoGen Variable  Funds,  Inc." will be changed to "First Eagle SoGen Variable
Funds,  Inc.,"  effective upon the closing of the  Acquisition.  The name change
would serve to  associate  the Fund more  closely  with A&SB and A&SB  Advisers,
which manage and distribute  investment  companies under the "First Eagle" name.
Subject to the restrictions  contained in the Purchase  Agreement,  A&SB and the
Board of  Directors  agreed that the "SoGen"  name should be used for as long as
possible and to provide a smooth  transition to the "First Eagle" name.  The new
name of "SoGen  Overseas  Variable  Fund" will be "First  Eagle  Sogen  Overseas
Variable  Fund." The name changes are not intended to reflect any changes in the
investment  objective  or  policies  of the Fund,  which will remain the same as
before the Acquisition.

Description of the Current and New Advisory Agreements

      Except for the  effective  date,  the terms of New Advisory  Agreement are
largely  identical in all material respects to the terms of the Current Advisory
Agreement. The Current Advisory Agreement for the Fund is dated August 16, 1996.
The  following is a summary of the Current  Advisory  Agreement and New Advisory
Agreement for the Fund.

      The Current  Advisory  Agreement for the Fund provides that the investment
adviser is  required to provide the Fund with  investment  research,  advice and
supervision,  to  provide  an  investment  program  consistent  with the  Fund's
prospectus and statement of additional information and to assist the officers of
the Fund in the general  conduct of the  investment  business  of the Fund.  The
investment  adviser  is also  required  to  provide  office  space and  clerical
assistance to the Fund.  The Fund is  responsible  for paying its own brokerage,
legal and auditing expenses,  taxes or governmental fees, costs of underwriting,
distributing,  redeeming  and  repurchasing  its shares,  costs of preparing and
distributing reports and notices to shareholders,  fees and expenses relating to
distributions and dividends, and transfer agent and custodian expenses.

      The Current Advisory Agreement anticipates that the investment adviser may
provide similar services to other accounts and may aggregate  similar trades for
the Fund and other clients of the investment adviser.  The investment adviser is
not liable under the  Agreement for errors of judgment or mistakes of law or for
any loss  suffered  by the Fund  related  to the  Agreement,  except  for losses
resulting from the adviser's willful misfeasance,  bad faith or gross negligence
or reckless disregard for its duties under the Agreement.

      The Current Advisory Agreement is subject to annual review and continuance
in accordance with the 1940 Act, and may be terminated by the investment adviser
or the Fund without  penalty on 60 days' written  notice.  The Current  Advisory
Agreement automatically terminates upon "assignment" as defined in the 1940 Act.
Unless sooner terminated,  the New Advisory  Agreement  continues in effect with
regard to the Fund for an  initial  term  ending  two years from the date of the
consummation of the Acquisition,  and may continue  thereafter from year to year
if  specifically  approved  at  least  annually  by vote of "a  majority  of the
outstanding voting securities" of the Fund, as defined under the 1940 Act, or by
the Board,  and, in either  event,  by a vote of a majority of the Directors who
are not  "interested  persons,"  cast in  person at a  meeting  called  for such
purpose.

      As  compensation  for its services,  the  investment  adviser  receives an
investment  management  fee payable  monthly from the Fund at the annual rate of
0.75% of the average daily value of the Fund's net assets during the month.

      The proposed New Advisory Agreement between SoGen Variable Funds, Inc. and
A&SB Advisers  contains  basically the same  provisions as the Current  Advisory
Agreement.  The fee payable to A&SB  Advisers is at the same annual rate. A copy
of the New Advisory Agreement is attached hereto as Exhibit A.

      For the  fiscal  year  ended  March 31,  1999,  the Fund  paid  investment
advisory fees in the amount of $_____________.  For the fiscal year ending March
31,  1998,   the  Fund  paid   investment   advisory   fees  in  the  amount  of
$________________.  For the fiscal year  ending  March 31,  1997,  the Fund paid
investment advisory fees to SGAM Corp. in the amount of $______________.

Information Concerning A&SB Advisers

      A&SB Advisers is registered  with the SEC as an investment  adviser.  A&SB
Advisers  currently serves as the investment  adviser to the First Eagle Fund of
America and the First Eagle  International  Fund,  each a separate Series of the
First Eagle Funds,  a Delaware  business trust that is registered as an open-end
investment company with the SEC. The investment  management fees for First Eagle
Fund of America  and the First  Eagle  International  Fund are paid on a monthly
basis at the annual rate of 1% on the  average  daily value of the net assets of
First  Eagle  Fund of  America  and the First  Eagle  International  Fund.  A&SB
Advisers  is a  wholly  owned  subsidiary  of  A&SB  which  is  registered  as a
broker-dealer and an investment  adviser with the SEC. The address of A&SB, A&SB
Advisers  and the officers of A&SB  Advisers  listed below is 1345 Avenue of the
Americas,  New  York,  NY  10105.  The  following  is a list of the names of the
directors and executive  officers of A&SB  Advisers.  None of these  individuals
currently holds any positions with the Fund.

Name and Position with A&SB Advisers         Other Principal Positions

Henry H. Arnhold                      Co-Chairman  of the Board,  Arnhold  and
Director                              S.   Bleichroeder,    Inc.;    Director,
                                      Arnhold  and  S.   Bleichroeder  UK  Ltd.;
                                      Director, ASB Securities,  Inc.; Director,
                                      Aquila  International Fund Ltd.;  Trustee,
                                      The New School for  Social  Research;  and
                                      Director, Conservation International.

John P. Arnhold                       Co-President  and Director,  Arnhold and
Co-President and Director             S. Bleichroeder,  Inc.; President, Chief
                                      Executive  Officer and  Director,  Arnhold
                                      and S. Bleichroeder UK Ltd.;  Co-President
                                      and  Director,   ASB   Securities,   Inc.;
                                      Co-President  and  Trustee,   First  Eagle
                                      Funds; Director, Aquila International Fund
                                      Ltd.; and President, Worldvest, Inc.

Stanford S. Warshawsky                Co-President,  Secretary  and  Director,
Co-President and Director             Arnhold  and  S.   Bleichroeder,   Inc.;
                                      Chairman  and  Director,  Arnhold and S.
                                      Bleichroeder UK Ltd.;  Co-President  and
                                      Director,    ASB    Securities,    Inc.;
                                      Chairman   and   Trustee,   First  Eagle
                                      Funds;     Director,     German-American
                                      Chamber of Commerce.

Stephen M. Kellen                     Co-Chairman  of the Board,  Arnhold  and
Director                              S.   Bleichroeder,    Inc.;    Director,
                                      Arnhold  and S.  Bleichroeder  UK  Ltd.;
                                      Director    ASB    Securities,     Inc.;
                                      Director,  The  Carnegie  Hall  Society;
                                      Trustees   Council   of   The   National
                                      Gallery    of    Art;    and    Trustee,
                                      WNET/Thirteen.

Gary L. Fuhrman                       Senior  Vice   President  and  Director,
Director                              Arnhold  and  S.   Bleichroeder,   Inc.;
                                      Director,  Arnhold  and S.  Bleichroeder
                                      UK Ltd.; Director, ASB Securities, Inc.

Robert Miller                         Senior  Vice  President,  Arnhold and S.
Secretary and Treasurer               Bleichroeder,  Inc.;  Director,  Arnhold
                                      and  S.   Bleichroeder   UK  Ltd.;   and
                                      Treasurer and Chief Accounting  Officer,
                                      First Eagle Funds.

Robert Bruno                          Senior  Vice  President,  Arnhold and S.
Vice President                        Bleichroeder,  Inc.;  Vice President and
                                      Secretary, First Eagle Funds; and prior to
                                      1997,   President   and  Chief   Operating
                                      Officer,  Coelho Associates LLC and Senior
                                      Vice  President  and Chief  Administrative
                                      Officer,   Schroeder  Wertheim  Investment
                                      Services, Inc.

Ronald A. Bendelius                   Senior  Vice  President,  Arnhold and S.
Vice President                        Bleichroeder, Inc.

William P. Casciani                   Senior  Vice  President,  Arnhold and S.
Vice President                        Bleichroeder,  Inc.;  Vice President and
                                      Secretary,  ASB  Securities,  Inc.;  and
                                      Senior  Executive  Officer,  Arnhold and
                                      S. Bleichroeder UK Ltd.

Michael Klemballa                     Senior  Vice  President,  Arnhold and S.
Vice President                        Bleichroeder,  Inc.; and Vice President,
                                      ASB Securities, Inc.

Allan Langmam                         Senior  Vice  President,  Treasurer  and
Vice President                        Director,  Arnhold and S.  Bleichroeder,
                                      Inc.;  and Vice President and Treasurer,
                                      ASB Securities, Inc.

Vincent Viglione                      Senior  Vice  President,  Arnhold and S.
Vice President                        Bleichroeder, Inc.

      A&SB owns all the shares of A&SB  Advisers,  Inc. On October 20, 1999, the
Board of Directors  approved an underwriting  agreement  between the Company and
A&SB to be  effective  with the closing of the  Acquisition,  so that A&SB could
serve as the distributor for the Fund shares and agreed that A&SB could act from
time  to  time  as  the  broker-dealer  for  the  Fund  in  executing  portfolio
transactions, subject to the requirements of Rule 17e-1 under the 1940 Act.

Board of Directors Recommendation

      On October 20, 1999,  the Board of  Directors of the Company,  including a
majority of the  Directors  who are not  parties to the  proposed  agreement  or
"interested  persons"  (as  defined  under the 1940 Act) of any such  party (the
"Independent Directors"),  voted to approve the New Advisory Agreement on behalf
of the Fund and to  recommend  approval  of the New  Advisory  Agreement  to the
shareholders.  The Board's  deliberations and the reasons for its recommendation
are discussed below.

      The Board of Directors of the Company  recommends that the shareholders of
the Fund vote in favor of the approval of the New Advisory Agreement.

Board of Directors Evaluation

      Prior to the  execution of the Purchase  Agreement,  representatives  of
SGAM Corp.  advised the  Independent  Directors of the Fund and their counsel,
by means of a telephone  conference  call,  that SGAM S.A.  was  contemplating
selling  its  interest  in SGAM Corp.  to A&SB.  At that time,  and in several
subsequent  calls, SGAM Corp.  representatives  described the general proposed
terms of the Acquisition and provided preliminary information regarding A&SB.

      On  September  24,  1999,  at a  regularly  scheduled  Board of  Directors
meeting, representatives of SGAM Corp. again discussed the proposed Acquisition.
In addition,  at the behest of SGAM Corp.,  representatives of A&SB attended the
meeting and were introduced to the Board. At that meeting,  A&SB representatives
presented  to the  Board a  detailed  description  of the  business  of A&SB and
outlined the perceived  benefits of the proposed  Acquisition  to SGAM Corp. and
its investment advisory clients, including the Fund.

      On  October  8,  1999,   representatives   of  SGAM  Corp.  advised  the
Independent  Directors  of the  Fund  that  SGAM  S.A.  had  entered  into the
Purchase  Agreement.  At that time,  representatives  of SGAM Corp.  described
the terms of the Purchase  Agreement and reiterated the perceived benefits for
SGAM Corp. and for the Fund.

      SGAM Corp. and A&SB  subsequently  furnished to the Independent  Directors
additional  information regarding the proposed Acquisition,  including a copy of
the Purchase  Agreement in the form executed and information  regarding A&SB. In
addition,  the Independent Directors specifically requested detailed information
from SGAM Corp. and A&SB about the proposed Acquisition,  the anticipated impact
of the  transaction  on the Fund  and its  shareholders,  and the  plans of A&SB
regarding the future of the Fund. In a series of conference  calls and in-person
meetings,  the  Independent  Directors  discussed  the  information  provided in
response to their questions among  themselves and with  representatives  of SGAM
Corp. and A&SB. They were assisted in their review of this  information by their
independent legal counsel.

      The Board was advised that SGAM S.A. and  Jean-Marie  Eveillard  intend to
rely on  Section  15(f) of the 1940 Act,  which  provides a  non-exclusive  safe
harbor for an investment  adviser to a fund or any of the  investment  adviser's
affiliated  persons  (as  defined  under the 1940 Act) to  receive  an amount or
benefit in connection with a change in control of the investment adviser as long
as two  conditions  are met.  First,  for a  period  of three  years  after  the
transaction,  at  least  75% of  the  board  members  of the  fund  must  not be
"interested  persons"  of the  fund's  investment  adviser  or  its  predecessor
adviser. Upon consummation of the Acquisition,  the Board, assuming the election
of the nominees  that you are being asked to elect in  "Proposal 2:  Election of
Directors,"  would be in  compliance  with this  condition.  Second,  an "unfair
burden"  must not be imposed upon the fund as a result of the  transaction.  The
term "unfair burden" means any arrangement  during the two-year period after the
transaction whereby the investment adviser, or any interested person of any such
adviser,  receives  or is  entitled  to receive  any  compensation,  directly or
indirectly,  from the fund or its  shareholders  (other  than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of  securities  or other  property to, from or on behalf of the
fund (other than bona fide ordinary  compensation  as principal  underwriter for
the fund). No such compensation arrangements are contemplated in connection with
the  Acquisition.  A&SB  has  undertaken  to pay  the  costs  of  preparing  and
distributing  proxy  materials  to, and of holding  the  meeting  of, the Fund's
shareholders  as  well as  other  fees  and  expenses  in  connection  with  the
Acquisition,  including  the fees and expenses of legal  counsel to the Fund and
the Independent Directors.

      The Independent  Directors sought assurances from A&SB that there would be
no  diminution  in the  level  of  services  provided  to  the  Fund  after  the
Acquisition.  A&SB  responded  that the level of  services  provided to the Fund
after the  Acquisition  would in no way be diminished  and, as evidence of this,
noted that (i) each of  Jean-Marie  Eveillard  and  Charles  de Vaulx,  who hold
senior  positions  in the  management  of the  Fund,  had  each  entered  into a
long-term  employment  contract  with A&SB  effective  with the  closing  of the
Acquisition,  (ii) there will be  substantial  continuity  of  employment of the
other key  persons on the current  portfolio  management  team of the Fund,  and
(iii) in managing and  administering the Fund, these persons will have access to
the resources of A&SB and its affiliates.

      In addition to these areas of inquiry, the Board reviewed the terms of the
New Advisory Agreement.  After discussion, the Board concluded that the services
to be provided and the  obligations  of the Company and A&SB Advisers  under the
New  Advisory  Agreement  were not  materially  different  than those  under the
Current Advisory Agreement.

      The Board, including the Independent Directors,  approved the New Advisory
Agreement at a meeting held on October 20, 1999.

The Board believes that the Acquisition is consistent with the best interests of
the  shareholders of the Fund and recommends  that the  shareholders of the Fund
vote "FOR" the approval of the New Advisory Agreement.

Required Vote

      Approval of this Proposal  requires the affirmative vote of a "majority of
the outstanding  voting  securities" of the Fund, as described  above. The Board
recommends that the shareholders vote in favor of Proposal 1.

                      PROPOSAL 2: ELECTION OF DIRECTORS

      Persons  named in the  accompanying  proxy card intend,  in the absence of
contrary  instructions,  to vote all proxies in favor of the  election of the 10
nominees listed below as Nominees for Director of the Company. All nominees have
agreed to stand for election and to serve if elected. If any such nominee should
be unable to serve (an event not now anticipated), the proxies will be voted for
such person, if any, as shall be designated by the Board of Directors to replace
any such nominee.  In the event that the proposed  Acquisition does not, for any
reason,  occur,  the current  Directors of the Company will continue to serve in
such capacity and constitute the complete Board.

      Pursuant to the  requirements  of the Purchase  Agreement  and in reliance
upon  Section  15(f) of the 1940 Act, at least 75% of the Board must  consist of
persons who are not interested persons of either SGAM Corp. or A&SB Advisers for
at least  three years after the  Acquisition.  At a meeting  held on October 20,
1999, the  Independent  Directors,  acting as the Fund's  nominating  committee,
determined that Mr. John P. Arnhold and Mr. Stanford  Warshawsky,  Co-Presidents
and Directors of A&SB and of A&SB Advisers,  should be nominated as "interested"
Directors of the Company.  In addition,  the Independent  Directors met with the
Independent  Trustees of the First Eagle Funds, a registered  investment company
with two series that is managed by A&SB Advisers. The Independent Directors have
proposed and nominated for election by the  Shareholders  those  individuals who
are currently serving as Independent  Trustees of the First Eagle Funds. [Insert
language  regarding  nomination of additional 2  disinterested  directors by the
Independent Directors.]

Information Concerning Nominees

      The following table sets forth certain information  concerning each of the
nominees  for  Director of the  Company.  Unless  otherwise  noted,  each of the
nominees has engaged in the principal  occupation  listed in the following table
for more than five years, but not necessarily in the same capacity.

<TABLE>
<CAPTION>
Name (Age)                     Principal Occupation or Employment and Directorships

<S>                            <C>

*John P. Arnhold (45)          Co-President and Director, Arnhold and S.
1345   Avenue  of  the         Bleichroeder Advisers, Inc.; Co-President and
Americas,   New  York,         Director, Arnhold and S. Bleichroeder, Inc.;
NY 10105                       President and Director, Arnhold and S. Bleichroeder
                               UK Ltd.;   Co-President and Director, ASB Securities,
                               Inc.; Director, Aquila International Fund, Ltd.;
                               President, Worldvest, Inc.; Co-President and Trustee,
                               First Eagle Funds.

Candace  K.   Beinecke         Managing Partner, Hughes Hubbard & Reed; Director,
(52)                           Jacob's Pillow Dance Festival, Inc., Historic
One    Battery    Park         Preservation Projects, Inc. and Merce Cunningham
Plaza,  New  York,  NY         Dance Foundation, Inc.; Trustee, First Eagle Funds.
10004

Edwin J. Ehrlich (68)          President, Ehrlich Capital Management; Director,
2976    Lonni    Lane,         Pension Fund Trusts--ITT Corp.; Advisory Board Member,
Merrick, NY 11566              Emerging World Investors Limited; Trustee, First
                               Eagle Funds.

Robert J. Gellert (68)         Manager, United Continental Corporation; General
122 East 42nd  Street,         Partner, Windcrest Partners; Trustee, First Eagle
New York, NY 10168             Funds.

James E. Jordan (54)           Private  investor;  Consultant  to The Jordan  Company
767 Fifth Avenue,              (private  investment  banking  company);  until June
New York, NY 10153             1997, President and chief investment officer of The
                               William Penn Company (a registered investment
                               adviser); Director, Leucadia National Corporation,
                               Empire Insurance Company and J.Z. Equity Partners,
                               Plc.  (a British investment trust company); Director,
                               School of International and Public Affairs of
                               Columbia University; and Vice Chairman, New York
                               State Board of The Nature Conservancy; Trustee, First
                               Eagle Funds.

William M. Kelly (55)          Manager, Lingold Association; Independent General
40 Wall Street,  Suite         Partner, ML Venture Partners I, L.P. and ML Venture
4201,   New  York,  NY         Partners II, L.P.; Trustee, New York Foundation;
10005                          Treasurer and Trustee, Black Rock Forest
                               Conservation; Trustee, First Eagle Funds.

Fred J. Meyer (68)             Vice Chairman of Omnicom Group, Inc. since 1998; and
437  Madison   Avenue,         prior thereto, Chief Financial Officer; Director,
New York, NY 10022             Novartis Corporation; Zurich-American Insurance Cos
                               and Medialink, Inc.; Trustee, National Park Trust;
                               Director, SoGen Funds, Inc. since [     ] and of
                               SoGen Variable Funds, Inc. since [      ].

Dominique     Raillard         President of Act 2 International (consulting) since
(60)                           July 1995.  Executive Vice President of Promodes
15,          boulevard         (consumer products) - U.S. Companies Division from
Delessert                      prior to 1994 to 1995; Director of SoGen Funds, Inc.
75016 Paris France             since [      ] and of SoGen Variable Funds, Inc.
                               since [      ].

Nathan Snyder (64)             Independent Consultant; Director of SoGen Funds, Inc.
163    Parish     Road         since [      ] and of SoGen Variable Funds, Inc.
South, New Cannan,  CT         since [      ].
06840

*Stanford S.                   Co-President, Secretary and Director, Arnhold and S.
Warshawsky (62)                Bleichroeder, Inc.; Co-President and Director,
1345   Avenue  of  the         Arnhold and S. Bleichroeder Advisers, Inc.; Chairman
Americas,   New  York,         and Director, Arnhold and S. Bleichroeder UK Ltd.;
NY 10105                       Co-President and Director, ASB Securities, Inc.;
                               Director, German-American Chamber of Commerce;
                               Chairman and Trustee, First Eagle Funds.
</TABLE>

- ----------------------------
*Interested  person  of the Fund as  defined  in the 1940 Act  because  of their
positions with A&SB or A&SB Advisers.

      The table below sets forth the number of shares of the Fund owned directly
or  beneficially  by the  nominees  to the  Board of  Directors  (as well as any
existing  Directors) as of October 29, 1999.(1) Nominees or Directors who do not
own any shares have been omitted from the table.

                         Shares   Shares owned by all current
Name         Position    owned    Directors and Officers as a
                                  Group






(1)   The  information  as  to  beneficial  ownership  is  based  on  statements
      furnished to the Company by each  Director and nominee.  Unless  otherwise
      noted,  beneficial ownership is based on sole voting and investment power.
      Each  Director's  and  nominee's  individual  share  holdings  of the Fund
      constitutes less than 1/4 of 1% of the shares outstanding of the Fund.

Responsibilities of the Board - Board and Committee Meetings

      The Board is responsible for the general  oversight of the business of the
Fund. A majority of the members of both the current and proposed  Boards are not
"interested"  persons  of the Fund,  within the  meaning of the 1940 Act.  These
Independent Directors have primary  responsibility for assuring that the Fund is
managed in a manner consistent with the best interests of its shareholders.

      The Board of Directors  meets at least  quarterly to review the investment
performance of the Fund and other operational  matters,  including  policies and
procedures   designed   to  assure   compliance   with   applicable   regulatory
requirements.  At least annually, the Independent Directors review the fees paid
to the Fund's  investment  adviser and its affiliates  for  investment  advisory
services and other administrative and shareholder  services.  In connection with
this review,  the  Directors  evaluate the Fund's  investment  performance,  the
quality and efficiency of the various other services provided, costs incurred by
SGAM Corp. and its affiliates,  and comparative  information  regarding fees and
expenses of competitive  funds (among other  things).  They are assisted in this
process by the Fund's  independent public accountants (see Proposal 3 below) and
by independent legal counsel selected by the Independent Directors.

      During the calendar year ended  December 31, 1998,  the Board of Directors
met [ ] times.

      Audit Committee

      The  Board has an Audit  Committee  consisting  solely of the  Independent
Directors.  The Audit  Committee  reviews with  management  and the  independent
accountants  for the Fund,  among other  things,  the scope of the audit and the
controls of the Fund and its agents, reviews and approves in advance the type of
services to be rendered by the independent accountants, recommends the selection
of independent accountants for the Fund to the Board and, in general,  considers
and  reports  to the  Board on  matters  regarding  the  Fund's  accounting  and
bookkeeping practices.

      During the calendar year ended December 31, 1998, the Audit  Committee met
[four] times.

Executive Officers

      The following persons are currently Executive Officers of the Company:

                                       Present Office with the Company
Name (Age)          Principal              (year first became an officer)
                    Occupation

Jean-Marie          [Executive Vice    President and Director ([           ])
Eveillard (59)      President] of
                    SGAM Corp.

Philip J. Bafundo   Secretary and      Vice President, Secretary, and Treasurer
(36)                Treasurer of SGAM  ([          ])
                    Corp.

Edwin S. Olsen (59) Vice President of  Vice President ([          ])
                    [SGAM Corp.]

Elizabeth Tobin     Senior Vice        Vice President ([          ])
(45)                President, SGAM
                    Corp.
                                       Vice President ([          ])
Charles de Vaulx    Senior Vice
(37)                President, SGAM
                    Corp.


Compensation of Directors and Officers

      The Company pays each of its  Independent  Directors an annual  Director's
fee of $6,000 plus a fee of $1,000 for each Board and committee meeting attended
and compensates him or her for expenses related to Company business.  During the
fiscal year ended March 31, 1999,  the Board met more  frequently  than normally
due to  organizational  issues  not in  the  ordinary  course  of  business  and
accordingly  the fees paid to the  Directors for the year were higher that those
typically paid.

      SGAM Corp.  supervises the Fund's  investments,  pays the compensation and
certain  expenses of its  personnel  who serve as Directors  and officers of the
Company and receives a management fee for its services. Several of the Company's
officers and Directors are also officers,  directors,  employees or shareholders
of SGAM Corp.  and  participate  in the fees paid to that  firm[,  although  the
Company makes no direct payments to them other than for  reimbursement of travel
expenses  in  connection  with their  attendance  at  Directors'  and  committee
meetings].  The Company does not provide any compensation in the form of pension
or retirement benefits to any of the Directors.

      The following  Compensation  Table  provides in tabular form the following
data:

      Column (1) All Directors who receive compensation from the Company.

      Column (2) Aggregate  compensation  received by each  Director  during the
fiscal year ended March 31, 1999. The number in parentheses  indicates the total
number of boards in the fund  complex on which the  Director  served as of March
31, 1999.

                                                      Total Compensation
                              Aggregate Compensation  from the Company
Name of Person, Position            from the Company        and Fund Complex

Fred J. Meyer, Director       [$          ]           [$          ](2)
Dominique Raillard, Director        [$          ]           [$          ](2)
Nathan Snyder, Director       [$          ]           [$          ](2)

Required Vote

      Election  of  each  of the  listed  nominees  for  Director  requires  the
affirmative  vote of a  majority  of the votes  cast at the  Special  Meeting in
person or by proxy. The Board recommends that the shareholders  vote in favor of
each of the nominees listed in this Proposal 2.

                    PROPOSAL 3: RATIFICATION OR REJECTION
                 OF THE SELECTION OF INDEPENDENT ACCOUNTANTS

      The  Board  of  Directors  of  the  Fund,  including  a  majority  of  the
Independent Directors,  has selected KPMG LLP to act as independent  accountants
for the Company for the  Company's  current  fiscal year ending  March 31, 2000.
KPMG LLP are independent accountants and have advised the Company that they have
no direct  financial  interest or material  indirect  financial  interest in the
Company.  One or more  representatives of KPMG LLP are expected to be present at
the Special  Meeting and will have an opportunity to make a statement if they so
desire.  Such  representatives  are  expected  to be  available  to  respond  to
appropriate questions posed by shareholders or management.

Required Vote

      Ratification  of the  selection of  independent  accountants  requires the
affirmative  vote of a  majority  of the votes  cast at the  Special  Meeting in
person or by proxy. The Board recommends that the shareholders  vote in favor of
this Proposal 3.

                            ADDITIONAL INFORMATION

General

      The  cost  of  preparing,   printing  and  mailing  the  enclosed   proxy,
accompanying  notice and proxy  statement and all other costs in connection with
the  solicitation of proxies will be paid by A&SB (and not by the Company or the
Fund),  including  any  additional  solicitation  made by letter,  telephone  or
telegraph.   [In  addition  to  solicitation  by  mail,   certain  officers  and
representatives of the Company, officers and employees of SGAM Corp. and certain
financial  services firms and their  representatives,  who will receive no extra
compensation for their services,  may solicit proxies by telephone,  telegram or
personally.]

      MacKenzie Partners,  Incorporated ("MacKenzie") has been engaged to assist
in the solicitation of proxies. As the Special Meeting date approaches,  certain
shareholders of the Fund may receive a telephone call from a  representative  of
MacKenzie  if their  vote has not yet been  received.  Authorization  to  permit
MacKenzie to execute  proxies may be obtained by  telephonic  or  electronically
transmitted  instructions  from  shareholders  of the  Fund.  Proxies  that  are
obtained  telephonically  will be recorded in accordance with the procedures set
forth below. The Directors believe that these procedures are reasonably designed
to ensure that the identity of the  shareholder  casting the vote is  accurately
determined and that the voting  instructions  of the  shareholder are accurately
determined.  The cost of this  assistance is expected to be  approximately  $[ ]
and, as stated above, will not be borne by the Fund or the Company.

      In all  cases  where  a  telephonic  proxy  is  solicited,  the  MacKenzie
representative  is required to ask for each  shareholder's  full name,  address,
social security or employer  identification number, title (if the shareholder is
authorized to act on behalf of an entity, such as a corporation), and the number
of shares  owned and to confirm  that the  shareholder  has  received  the proxy
statement  card in the  mail.  If the  information  solicited  agrees  with  the
information  provided to MacKenzie,  then the MacKenzie  representative  has the
responsibility  to explain the process,  read the proposals  listed on the proxy
card, and ask for the shareholder's instructions on each proposal. The MacKenzie
representative,  although he or she is permitted to answer  questions  about the
process,  is not permitted to recommend to the  shareholder  how to vote,  other
than to read any recommendation set forth in the proxy statement. MacKenzie will
record the shareholder's  instructions on the card.  Within 72 hours,  MacKenzie
will send the  shareholder  a letter or  mailgram to confirm his or her vote and
asking the shareholder to call MacKenzie  immediately if his or her instructions
are not correctly reflected in the confirmation.

      If the shareholder wishes to participate in the Special Meeting,  but does
not wish to give his or her proxy by telephone, the shareholder may still submit
the proxy card  originally  sent with the proxy  statement  or attend in person.
Should  shareholders  require  additional  information  regarding  the  proxy or
replacement proxy cards, they may contact MacKenzie  toll-free at (800) [ ]. Any
proxy given by a shareholder, whether in writing or by telephone, is revocable.

Proposals of Shareholders

      Shareholders  wishing  to  submit  proposals  for  inclusion  in  a  proxy
statement for a shareholder  meeting subsequent to the Special Meeting,  if any,
should send their written proposals to the Secretary of the Company, 1221 Avenue
of the Americas,  New York, New York 10020,  within a reasonable time before the
solicitation  of proxies for such meeting.  Pursuant to its bylaws,  the Company
does not  generally,  and has no present  intention to, hold annual  meetings of
shareholders.  The  timely  submission  of a  proposal  does not  guarantee  its
inclusion.

Other Matters to Come Before the Special Meeting

      The Board of  Directors is not aware of any matters that will be presented
for action at the  Special  Meeting  other than the  matters  set forth  herein.
Should any other matters  requiring a vote of shareholders  arise,  the proxy in
the  accompanying  form will confer upon the person or persons  entitled to vote
the shares  represented  by such proxy the  discretionary  authority to vote the
shares as to any such other  matters in  accordance  with their best judgment in
the interest of the Fund.

PLEASE  COMPLETE,  SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.  NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.

By order of the Board of Directors,

Philip J. Bafundo
Secretary



<PAGE>


                                                                   Exhibit A

                    FIRST EAGLE SOGEN VARIABLE FUNDS, INC.
                    1221 Avenue of the Americas, 8th Floor
                           New York, New York 10020


                                                             December __, 1999

Arnhold and S. Bleichroeder Advisers, Inc.
1345 Avenue of the Americas
New York, New York 10105

                         Investment Advisory Contract

Dear Sirs:

      First  Eagle SoGen  Variable  Funds,  Inc.,  (the  "Company"),  a Maryland
corporation  consisting of one portfolio,  First Eagle SoGen  Overseas  Variable
Fund (the  "Fund"),  is engaged in the business of an  investment  company.  The
Company's  Board of Directors has selected you to act as the investment  adviser
of the  Company,  as more fully set forth  below,  and you are willing to act as
such  investment  adviser  and to  perform  such  services  under  the terms and
conditions  hereinafter set forth.  Accordingly,  the Company agrees with you as
follows:

      1.  Delivery of Corporate  Documents.  The Company has  furnished you with
copies properly certified or authenticated of each of the following:

      (a)   Articles of Incorporation of the Company.

      (b) By-Laws of the Company as in effect on the date hereof.

      (c)   Resolutions  of the Board of Directors of the Company  selecting you
            as investment adviser and approving the form of this Agreement.

The Company will furnish you from time to time with copies properly certified or
authenticated, of any amendments of or supplements to the foregoing, if any.

      2.  Advisory  Services.  You  will  regularly  provide  the  Company  with
investment  research,  advice and supervision  and will furnish  continuously an
investment  program  for the  Company's  Portfolio  consistent  with the  Fund's
investment  objective,  policies  and  restrictions  set forth in the  Company's
Registration  Statement  under  the  Securities  Act of 1933,  as  amended  (the
"Registration  Statement")  ,  and  the  current  prospectus  and  statement  of
additional  information included therein (the "Prospectus").  You will recommend
what securities shall be purchased for the Fund, what portfolio securities shall
be sold by the  Fund,  and  what  portion  of the  Fund's  assets  shall be held
uninvested,   subject  always  to  such  investment  objectives,   policies  and
restrictions and to the provisions of the Company's  Articles of  Incorporation,
By-Laws,  Statement of Rules, and the requirements of the Investment Company Act
of 1940, as amended (the " 1940 Act"), as each of the same shall be from time to
time in effect.  You shall  advise and assist  the  officers  of the  Company in
taking such steps as are necessary or  appropriate to carry out the decisions of
its Board of Directors and any  appropriate  committees of such Board  regarding
the  foregoing  matters and general  conduct of the  investment  business of the
Company.

      3. Allocation of Charges and Expenses.  You will pay the  compensation and
expenses of all officers of the Company and will furnish, without expense to the
Company,  the  services of such of your  officers  and  employees as may duly be
elected  officers  or  directors  of the  Company,  subject to their  individual
consent  to  serve  and to any  limitations  imposed  by law.  You  will pay the
Company's office rent and ordinary office expenses and will provide  investment,
advisory, research and statistical facilities and all clerical services relating
to  research,  statistical  and  investment  work.  (It is  understood  that the
foregoing  provision  does not  obligate you to pay for the  maintenance  of the
Company's  general ledger and securities cost ledger or for daily pricing of the
Company's  securities,  but that it does  obligate you,  without  expense to the
Company,  to oversee the provision of such services by the Company's agent.) You
will not be required  hereunder  to pay any  expenses of the Company  other than
those above enumerated in this paragraph 3. In particular,  but without limiting
the  generality  of the  foregoing,  you will not be required to pay  hereunder:
brokers'  commissions;  legal or auditing expenses;  taxes or governmental fees;
any direct expenses of issue, sale,  underwriting,  distribution,  redemption or
repurchase of the Company's  shares;  the expenses of  registering or qualifying
securities for sale; the cost of preparing and distributing  reports and notices
to stockholders; the fees or disbursements of dividend, disbursing, shareholder,
transfer or other  agent;  or the fees or  disbursements  of  custodians  of the
Company's assets.

      4.  Compensation  of the  Adviser.  For all  services to be  rendered  and
payments  made as  provided in  paragraphs  2 and 3 hereof,  you will  receive a
monthly  fee after the last day of each month,  in  accordance  with  Schedule A
attached hereto.

      If this Agreement is terminated with respect to the Fund as of any day not
the last day of a month,  the Fund's fee shall be paid as  promptly  as possible
after such date of  termination.  If this Agreement  shall be effective for less
than the whole of any month,  such fee shall be based on the average daily value
of the net assets of the Fund in the part of the month for which this  Agreement
shall be  effective  and shall be that  proportion  of such fee as the number of
business days (days on which the New York Stock  Exchange is open all or part of
the day for unrestricted trading) in such period bears to the number of business
days in such month.  The average daily value of the net assets of the Fund shall
in all cases be based only on business days for the period or month and shall be
computed  in  accordance   with   applicable   provisions  of  the  Articles  of
Incorporation of the Company.

      5. Purchase and Sale of Securities.  You shall purchase securities from or
through  and sell  securities  to or through  such  persons,  brokers or dealers
(including  any of your  affiliates)  as you shall deem  appropriate in order to
carry out the Company's  brokerage  policy as set forth from time to time in the
Registration  Statement  and  Prospectus,  or as the Board of  Directors  of the
Company may require from time to time. You acknowledge that you will comply with
all applicable  provisions of the 1940 Act,  Investment Advisers Act of 1940, as
amended (the "Investment Advisers Act") and the Securities Exchange Act of 1934,
as  amended,  including  without  limitation  the  provisions  of Section  28(e)
thereof,  with  respect  to  the  allocation  of  portfolio  transactions.  When
purchasing securities from or through, and selling securities to or through, any
such  persons,  brokers or dealers  that may be  affiliated  with you, you shall
comply  with all  applicable  provisions  of the  1940  Act,  including  without
limitation  Section 17 thereof  and the rules and  regulations  thereunder,  and
Section  206 of the  Investment  Advisers  Act and  the  rules  and  regulations
thereunder.

      Nothing  herein shall  prohibit the Board of Directors of the Company from
approving  the payment by the Company of additional  compensation  to others for
consulting services, supplemental research and security and economic analysis.

            6. Services to Other Accounts.  The Company understands that you and
your  affiliates  now act,  will  continue to act,  and may in the future act as
investment adviser to fiduciary and other managed accounts,  and the Company has
no objection to you and your  affiliates  so acting,  provided that whenever the
Fund and one or more other accounts advised by you (the "Managed  Accounts") are
prepared  to  purchase,  or  desire  to  sell,  the  same  security,   available
investments  or  opportunities  for sales will be  allocated in a manner that is
equitable to each entity.  In such  situations,  you may place orders for a Fund
and each Managed Account  simultaneously,  and if all such orders are not filled
at the same  price,  you may cause the Fund and each  Managed  Account to pay or
receive  the  average of the prices at which the orders were filled for the Fund
and all  Managed  Accounts.  If all such orders  cannot be executed  fully under
prevailing market conditions, you may allocate the traded securities between the
Fund and the Managed Accounts in a manner you consider appropriate,  taking into
account the size of the order placed for the Fund and each such Managed  Account
and, in the event of a sale,  the size of the pre-sale  position of the Fund and
each such Managed Account,  as well as any other factors you deem relevant.  The
Company  recognizes  that in some cases this procedure may affect  adversely the
price paid or received by the Fund or the size of the position purchased or sold
by the Fund. In addition,  the Company  understands that the persons employed by
you to provide service to the Company in connection with the performance of your
duties under this  Agreement  will not devote  their full time to that  service.
Moreover,  nothing  contained  in this  Agreement  will be  deemed  to  limit or
restrict  your  right or the  right of any of your  affiliates  to engage in and
devote time and attention to other  businesses or to render services of whatever
kind or nature including serving as investment adviser to, or employee, officer,
director or trustee of, other investment companies.

      7. Avoidance of  Inconsistent  Position.  If any occasion  should arise in
which you give any  advice to  clients  of yours  concerning  the  shares of the
Company,  you will act solely as investment  counsel for such clients and not in
any way on behalf of the  Company.  In  connection  with  purchases  or sales of
portfolio  securities  for the account of the Fund,  neither you nor any of your
directors, officers or employees will act as a principal.

      8.  Limitation  of Liability  of Adviser.  You shall not be liable for any
error of judgment  or mistake of law or for any loss  suffered by the Company in
connection  with the  matters to which  this  Agreement  relates,  except a loss
resulting from willful  misfeasance,  bad faith or gross negligence on your part
in the  performance  of your duties or from  reckless  disregard  by you of your
obligations and duties under this Agreement.

      9. Use of Name. If you cease to act as the Company's  investment  adviser,
or, in any event,  if you so request in writing,  the Company agrees to take all
necessary  action to change the name of the  Company  and the Fund to a name not
including  the term  "First  Eagle".  You may from time to time  make  available
without  charge to the  Company  for its use such marks or symbols  not owned by
you,  including  the logo in the form of a  stylized  globe or marks or  symbols
containing the term "First Eagle" or any variation thereof,  as you may consider
appropriate.  Any such marks or  symbols  so made  available  will  remain  your
property  and you shall have the right,  upon notice in writing,  to require the
Company to cease the use of such mark or symbol at any time.

      10.  Duration and  Termination of this  Agreement.  This  Agreement  shall
remain in force until December __, 2001, and from year to year  thereafter  with
respect  to the  Fund,  but  only so long as such  continuance  is  specifically
approved at least annually by the Board of Directors of the Company with respect
to the Fund or by vote of a majority of the outstanding voting securities of the
Fund. In addition,  the Company may not renew or perform this  Agreement  unless
the terms thereof and any renewal thereof have been approved with respect to the
Fund  by the  vote  of a  majority  of  directors  of the  Company  who  are not
interested  persons of you or of the Company cast in person at a meeting  called
for the  purpose of voting on such  approval.  This  Agreement  may, on 60 days'
written  notice,  be terminated with respect to the Fund at any time without the
payment of any penalty,  by the Board of Directors of the Company,  by vote of a
majority of the outstanding  voting  securities of the Company,  or by you. This
Agreement  shall  automatically  terminate  in the event of its  assignment.  In
interpreting  the provisions of this  paragraph,  the  definitions  contained in
Section 2(a) of the 1940 Act, as amended, and any Rules thereunder (particularly
the  definitions of "interested  person",  "assignment",  "voting  security" and
"vote of a majority of the outstanding voting securities") shall be applied.

      11.  Amendment of this  Agreement.  No provision of this  Agreement may be
changed,  waived,  discharged or terminated orally, but only by an instrument in
writing signed by the "party" against which  enforcement of the change,  waiver,
discharge or termination is sought.

      12.  Notices.  Any  notice  or other  communication  required  to be given
pursuant to this Agreement  shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, to you or to the Company at 1221 Avenue of the
Americas, 8th Floor, New York, New York 10020.

      13.  Governing Law. This  Agreement  shall be governed by and construed in
accordance  with  the laws of the  State of New  York.  Anything  herein  to the
contrary  notwithstanding,  this Agreement shall not be construed to require, or
to impose any duty upon,  either of the parties to do anything in  violation  of
any applicable laws or regulations.

      14.  Captions;  Counterparts.  The captions in this Agreement are included
for  convenience  of  reference  only and in no way define or delimit any of the
provisions  hereof or  otherwise  affect  their  construction  or  effect.  This
Agreement may be executed  simultaneously in two or more  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same instrument.

      If you are in  agreement  with  the  foregoing,  please  sign  the form of
acceptance  on the  accompanying  counterpart  of this  letter and  return  such
counterpart  to the  Company,  whereupon  this  letter  shall  become a  binding
contract.


                              Yours very truly,

                              FIRST EAGLE SOGEN VARIABLE FUNDS, INC.


                              By:
                                    Name:
                                    Title:

The foregoing Agreement is hereby accepted.

ARNHOLD AND S. BLEICHROEDER ADVISERS, INC.


By:
Name:
Title:



<PAGE>


                                  SCHEDULE A

                    FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

Pursuant to Section 4 of the investment  advisory  agreement between the First
Eagle SoGen Variable Funds, Inc. and Arnhold and S. Bleichroeder,  Inc. ("A&SB
Advisers"),  the parties agree that A&SB  Advisers  shall be paid on a monthly
basis an investment  advisory fee at the annual rate for the Fund as set forth
below:

First Eagle SoGen Overseas Variable Fund:       0.75  of  1%  of  the  average
daily value of the
                                          First  Eagle SoGen  Overseas  Fund's
net
                                          assets


IN WITNESS WHEREOF,  the undersigned have approved this schedule effective as of
the ___ day of ____________, 1999.

                     FIRST EAGLE SOGEN VARIABLE FUNDS, INC.


                        By:
                        Name:
                        Title:



                        ARNHOLD AND S. BLEICHROEDER ADVISERS, INC.


                        By:
                        Name:
                        Title:




<PAGE>




                          SOGEN VARIABLE FUNDS, INC.

                                 PROXY PROXY

         THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

             Special Meeting of Shareholders - December 22, 1999

      The  undersigned  hereby  appoints  Jean-Marie  Eveillard  and  Philip  J.
Bafundo,  and each of them,  the proxies of the  undersigned,  with the power of
substitution to each of them, to vote all shares of Sogen Overseas Variable Fund
(the "Fund"),  a series of SoGen Variable Funds,  Inc. (the "Company") which the
undersigned is entitled to vote at the Special  Meeting of  Shareholders  of the
Company to be held at the offices of the Company,  1221 Avenue of the  Americas,
8th Floor, New York, New York 10020, on Friday,  December 22, 1999 at 3:00 p.m.,
and at any adjournments and postponements thereof (the "Special Meeting").

  Unless          otherwise specified in the squares provided, the undersigned's
                  vote will be cast FOR each numbered item below.

      The Directors of the Company  recommend that you vote FOR the proposal set
forth below.

1.    To approve a new advisory agreement between Arnhold and S. Bleichroeder
      Advisers, Inc. and the Company on behalf of the Fund.

             [  ] FOR              [  ] AGAINST        [   ] ABSTAIN

2.    To elect Directors.

      John P. Arnhold         Candace K. Beinecke     Edwin J. Ehrlich
      Robert J. Gellert       James. E. Jordan        William M. Kelly
      Fred J. Meyer           Dominique Raillard      Nathan Snyder
      Stanford S. Warshawsky

      To withhold authority to vote for any individual  nominee,  strike through
      that nominee's name as listed above.

         [   ] FOR all nominees  [   ] WITHHOLD   [   ] ABSTAIN
               listed in the proxy     AUTHORITY to
               statement (except as    vote for all
               marked to the contrary  nominees listed in
               above).                 the Proxy Statement.

3.    To ratify the selection of KPMG LLP as the independent accountants for the
      Fund for the Fund's current fiscal year.

           [   ] FOR              [   ] AGAINST   [   ] ABSTAIN

4.    In their  discretion,  the proxies are  authorized to vote upon such other
      business as may properly be presented at the Special Meeting.

          [   ] FOR               [   ] AGAINST  [   ] ABSTAIN

               (Continued and to be signed on the other side.)



<PAGE>


(Continued from other side.)

Every properly signed proxy will be voted in the manner specified hereon and, in
the absence of specification,  will be treated as GRANTING authority to vote FOR
the Proposal.



                                    Please  sign  exactly  as you  name or names
                                    appear. When signing as attorney,  executor,
                                    administrator,  trustee or guardian,  please
                                    give your full title as such.


                           -----------------------------------------------
                                       (Signature of Shareholder)


                           -----------------------------------------------
                                     (Signature of joint owner, if any)

                                    Dated, ______________________________,
                                    1999

             PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
                            NO POSTAGE IS REQUIRED




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