<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 1999
REGISTRATION NO. 33-96668
811-09092
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER [X]
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 4 [X]
AND/OR
REGISTRATION STATEMENT UNDER [X]
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 6
(CHECK APPROPRIATE BOX OR BOXES.)
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SOGEN VARIABLE FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 278-5800
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JEAN-MARIE EVEILLARD
SOGEN VARIABLE FUNDS, INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
(NAME AND ADDRESS OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the
effective date of this Registration Statement. It is proposed that this filing
will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[X] On May 2, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On (date) pursuant to paragraph (a)(2) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered SoGen Overseas Variable Fund -- Common
Stock
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<PAGE> 2
PROSPECTUS
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SOGEN OVERSEAS VARIABLE FUND
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[SoGen LOGO]
1221 AVENUE OF THE AMERICAS, NEW YORK, NY 10020
(212) 278-5800
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Societe Generale Asset Management Corp.
Investment Adviser
SG Cowen Securities Corporation
Distributor
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SoGen Overseas Variable Fund's investment objective is long-term growth of
capital by investing primarily in securities of small and medium size non-U.S.
companies.
The Fund is a separate portfolio of SoGen Variable Funds, Inc., an open-end
management investment company that offers its shares only to separate accounts
of U.S. insurance companies to serve as an investment medium for variable life
insurance policies and variable annuity contracts issued by the insurance
companies.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PROSPECTUS
MAY 1, 1999
2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Overview of the Fund........................................ 5
Investment Objective, Principal Investment Strategies, and
Related Risks............................................. 7
Management of the Company................................... 11
Distribution Arrangements................................... 11
How to Invest............................................... 13
Financial Highlights........................................ 16
</TABLE>
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3
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[This Page Left Blank Intentionally]
4
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SOGEN OVERSEAS VARIABLE FUND
OVERVIEW OF THE FUND
INVESTMENT OBJECTIVE.
SoGen Overseas Variable Fund (the "Fund"), a portfolio of SoGen Variable
Funds, Inc. (the "Company"), seeks long-term growth of capital by investing
primarily in securities of small and medium size non-U.S. companies.
PRINCIPAL INVESTMENT STRATEGIES OF THE FUND.
The Fund invests principally in foreign equity securities, including common
and preferred stocks, warrants or other similar rights, and convertible
securities, and may invest in securities traded in mature as well as emerging
markets. The Fund particularly seeks companies that have growth potential,
financial strength and stability, strong management and fundamental value. While
there are no limits on the Fund's geographic asset distribution, the Fund
ordinarily invests in at least three countries outside the U.S. Under normal
conditions, the Fund invests at least 75% of its total assets, taken at market
value, in foreign securities.
PRINCIPAL RISKS OF INVESTING IN THE FUND.
You should note that an investment in the Fund is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
A Word About Mutual Fund Risks
Investment in any mutual fund has inherent risks. There can be no
assurance that the investment objectives of a fund will be realized or that a
fund's shares will not decline in value. Economic conditions change and stock
markets are volatile. If the investment adviser to a fund judges market
conditions incorrectly, the fund's portfolio may decline in value. You could
lose money by investing in a mutual fund. You should consider your own risk
tolerance, investment goals and investment timeline before committing any of
your money to an investment in a mutual fund.
Investing in Foreign Securities
Foreign securities involve certain inherent risks that are different from
those of domestic securities, including political or economic instability of the
issuer or the country of issue, changes in foreign currency and exchange rates,
and the possibility of adverse changes in investment or exchange control
regulations. Currency fluctuations will also affect the net asset value of the
Fund irrespective of the performance of the underlying investments in foreign
issuers. Typically, there is less publicly available information about a foreign
company than about a U.S. company, and foreign companies may be subject to less
stringent reserve, auditing and reporting requirements. Many foreign stock
markets are not as large or liquid
5
<PAGE> 6
SOGEN OVERSEAS VARIABLE FUND
as in the United States; fixed commissions on foreign stock exchanges are
generally higher than the negotiated commissions on U.S. exchanges; and there is
generally less government supervision and regulation of foreign stock exchanges,
brokers and companies than in the United States. Foreign governments can also
levy confiscatory taxes, expropriate assets and limit repatriations of assets.
As a result of these and other factors, foreign securities purchased by the Fund
may be subject to greater price fluctuation than securities of U.S. companies.
These risks may be more pronounced with respect to investments in emerging
markets.
PERFORMANCE HISTORY.
The bar chart below shows the Fund's total return, together with the best
and worst quarters since inception. None of the performance information listed
below reflects the impact of insurance-related charges or expenses. Please refer
to your subaccount's prospectus for information about those charges and
performance data reflecting those charges and expenses. How the Fund has
performed in the past is not necessarily an indication of how it will perform in
the future.
TOTAL RETURN
[PERFORMANCE BAR GRAPH]
<TABLE>
<CAPTION>
'1998' 4.21
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<S> <C>
</TABLE>
Best Quarter: 9.36% (Fourth Quarter 1998)
Worst Quarter: (11.42%) (Third Quarter 1998)
The table below provides another indication of the relative performance and
risks of the Fund by comparing the Fund's average annual total returns to that
of the MSCI EAFE Index, a widely recognized unmanaged index of stock
performance.
<TABLE>
<CAPTION>
SINCE
COMMENCEMENT
OF OPERATIONS
(FEBRUARY 3,
1 YEAR 1997)
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<S> <C> <C>
Fund.......................................... 4.21% 0.95%
MSCI EAFE Index............................... 20.00% 13.08%
</TABLE>
6
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SOGEN OVERSEAS VARIABLE FUND
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
INVESTMENT OBJECTIVE AND STRATEGIES.
The Fund seeks long-term growth of capital by investing primarily in
securities of small and medium size non-U.S. companies. The Fund particularly
seeks companies that have growth potential, financial strength and stability,
strong management and fundamental value. However, the Fund may invest in
companies that do not have all of these characteristics.
The Fund's investment objective may be changed by the Board of Directors
without shareholder approval. If there were such a change, each shareholder
would need to consider whether the Fund would remain an appropriate investment
in light of the shareholder's then current financial position and needs.
Shareholders will be notified a minimum of sixty days before any change in
investment objective.
The Fund may invest in securities traded in mature markets (for example,
Japan, Canada and the United Kingdom) and in emerging markets (Mexico and
Indonesia, for example). A list of the mature and emerging markets in which the
Fund may invest is included in the Statement of Additional Information under
"Investment Policies, Techniques and Risks -- Foreign Securities." There are no
limits on the Fund's geographic asset distribution, but the Fund ordinarily
invests in at least three countries outside the United States.
The equity securities in which the Fund may invest include common and
preferred stocks, warrants or other similar rights, and convertible securities.
The Fund may purchase foreign securities in the form of sponsored or unsponsored
American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and
European Depository Receipts (EDRs) or other securities representing underlying
shares of foreign issuers. The Fund may also invest in any other type of
security, including up to 20% of its total assets in debt securities. Such debt
securities may include lower-rated securities, commonly referred to as "junk
bonds" (i.e., securities rated BB or lower by Standard & Poor's Corporation
("S&P") or Ba or lower by Moody's Investors Service, Inc. ("Moody's")), and
securities that are not rated. There are no restrictions as to the ratings of
debt securities acquired by the Fund or the portion of the Fund's assets that
may be invested in debt securities in a particular rating category. Under normal
market conditions, the Fund invests at least 75% of its total assets, taken at
market value, in foreign securities. The Fund may also invest in "structured
securities" in which the value is linked to the price of an underlying
instrument, such as a currency, commodity, or index.
7
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SOGEN OVERSEAS VARIABLE FUND
IMPLEMENTATION OF INVESTMENT STRATEGIES AND RELATED RISKS.
In addition to the investment strategies described above (and subject to
certain restrictions described herein), the Fund may invest in some or all of
the following securities and employ some or all of the following investment
techniques, some of which may present special risks as described below. A more
complete discussion of these securities and investment techniques and their
associated risks is contained in the Fund's Statement of Additional Information.
Because the Fund's investments will be subject to the market fluctuations
and risks inherent in all investments, there can be no assurance that the Fund's
stated objectives will be realized. SGAM Corp. will seek to minimize these risks
through professional management and investment diversification. The value of
shares of the Fund when sold may be higher or lower than when purchased. SGAM
Corp. advises certain other investment companies with the same or similar
investment objectives. The Fund, however, is separately managed and the
investments made by the Fund will not necessarily be the same as those made on
behalf of the other investment companies managed by SGAM Corp.
Foreign Securities.
Under normal conditions, the Fund invests in a diversified portfolio of
foreign securities. From time to time, many foreign economies have grown faster
than the U.S. economy, and the returns on investments in these countries have
exceeded those of similar U.S. investments, although there can be no assurance
that these conditions will continue. International investing allows investors to
achieve greater diversification and to take advantage of changes in foreign
economies and market conditions.
The greater risks involved in foreign investing should be understood and
carefully considered. Investing in foreign securities and other positions which
are generally denominated in foreign currencies, and utilization of forward
foreign currency exchange contracts (see "Currency Exchange Transactions"
below), involve certain risks and opportunities not typically associated with
investing in U.S. securities. These include: fluctuations in the rates of
exchange between the U.S. dollar and foreign currencies; changes in exchange
control regulations or currency restrictions that would prevent cash from being
brought back to the United States; less public information with respect to
issuers of securities; less governmental supervision of stock exchanges,
securities brokers and issuers of securities; different accounting, auditing and
financial reporting standards; different settlement periods and trading
practices; less liquidity and frequently greater price volatility in foreign
markets than in the United States; imposition of foreign taxes; and sometimes
less advantageous legal, operational and financial protections applicable to
foreign sub-custodial arrangements.
8
<PAGE> 9
SOGEN OVERSEAS VARIABLE FUND
Investing in certain countries outside the United States entails political
risk. There exists the possibility of restrictions on foreign investors,
expropriation of assets, confiscatory taxation, seizure or nationalization of
foreign bank deposits or other assets, establishment of exchange controls, or
other adverse political or social developments that could affect investment in
these nations. Economies in individual markets may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payments positions. Many emerging
market countries have experienced extremely high rates of inflation for many
years. That has had and may continue to have very negative effects on the
economies and securities markets of those countries.
The securities markets of emerging countries are substantially smaller,
less developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States. There
also may be a lower level of monitoring and regulation in emerging markets of
traders, insiders and investors. Enforcement of existing regulations has been
extremely limited.
The cost of investing in foreign securities is higher than the cost of
investing in U.S. securities. Investing in the Fund is an efficient way for an
individual to participate in foreign markets, but its expenses, including
advisory and custody fees, are higher than the expenses of a typical domestic
mutual fund.
The Fund is subject to the following guidelines for diversification of
foreign security investments. If the Fund has less than 20% of its assets in
foreign issuers, then all of such investment may be in issuers located in one
country. If the Fund has at least 20% but less than 40% of its assets in foreign
issuers, then such investment must be allocated to issuers located in at least
two different countries. Similarly, if the Fund has at least 40% but less than
60% of its assets in foreign issuers, such investment must be allocated to at
least three different countries. Foreign investments must be allocated to at
least four different countries if at least 60% of the Fund's assets are in
foreign issuers, and to at least five different countries if at least 80% are
invested in foreign issuers. For purposes of such allocations, a company will be
considered located in the country in which it is domiciled, in which it is
primarily traded, from which it derives a significant portion of its revenues or
in which a significant portion of its goods or services are produced. In
addition, the Fund may have no more than 20% of its net assets invested in
securities of issuers located in any one country, except that the Fund may have
35% of its net assets invested in securities of issuers located in any one of
the following countries: Australia, Canada, France, Japan, the United Kingdom,
or Germany. The Fund's investment in U.S. issuers is not subject to the foreign
country diversification guidelines.
9
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SOGEN OVERSEAS VARIABLE FUND
Currency Exchange Transactions.
The Fund may engage in currency exchange transactions to hedge against
losses in the U.S. dollar value of its portfolio securities resulting from
possible variations in exchange rates and not for speculation. A currency
exchange transaction may be conducted either on a spot (i.e., cash) basis at the
spot rate for purchasing or selling currency prevailing in the foreign exchange
market or through a forward currency exchange contract ("forward contract"). A
forward contract is an agreement to purchase or sell a specified currency at a
specified future date (or within a specified time period) and price set at the
time of the contract. Forward contracts are usually entered into with banks and
broker/dealers, are not exchange-traded and are usually for less than one year,
but may be renewed. Currency exchange transactions may involve currencies of the
different countries in which the Fund may invest. Although forward contracts may
be used to protect the Fund from adverse currency movements, the use of such
hedges may reduce or eliminate potential profits from currency fluctuations that
are otherwise in the Fund's favor.
Temporary Strategies; Cash Reserves.
The Fund has the flexibility to respond promptly to changes in market and
economic conditions. In the interest of preserving shareholders' capital, SGAM
Corp. may employ a temporary defensive investment strategy if it determines such
a strategy to be warranted. Pursuant to such a defensive strategy, the Fund
temporarily may hold cash (U.S. dollars, foreign currencies, multinational
currency units) and/or invest up to 100% of its assets in high quality debt
securities or money market instruments of U.S. or foreign issuers. Most or all
of the Fund's investments may be made in the United States and denominated in
U.S. dollars. It is impossible to predict whether, when or for how long the Fund
will employ defensive strategies. To the extent that the Fund does employ a
defensive strategy, it may not achieve its investment objective.
In addition, pending investment of proceeds from new sales of shares or to
meet ordinary daily cash needs, the Fund temporarily may hold cash (U.S.
dollars, foreign currencies or multinational currency units) and may invest any
portion of its assets in money market instruments.
Year 2000.
Like other investment companies, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by SGAM Corp. or other service providers to the Fund do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." SGAM
Corp. is taking steps that it believes are reasonably designed to address the
Year 2000 Problem with respect to computer systems that it uses and is taking
10
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SOGEN OVERSEAS VARIABLE FUND
steps to obtain reasonable assurances that comparable steps are being taken by
the Fund's other service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact to the
Fund.
The Year 2000 Problem is expected to impact corporations, which may include
issuers of portfolio securities held by the Fund, to varying degrees based upon
various factors, including, but not limited to, the corporation's industry
sector and degree of technological sophistication. The Fund is unable to predict
what impact, if any, the Year 2000 Problem will have on issuers of the portfolio
securities held by the Fund.
MANAGEMENT OF THE COMPANY
INVESTMENT ADVISER.
The Company's investment portfolio is managed by SGAM Corp., 1221 Avenue of
the Americas, New York, New York 10020. SGAM Corp. is a registered investment
adviser which is indirectly owned by Societe Generale, one of France's largest
banks. SGAM Corp. also serves as investment adviser to SoGen Funds, Inc., which
is a registered open-end management investment company. Jean-Marie Eveillard,
President and a director of the Company, is primarily responsible for the
day-to-day management of the Company's investment portfolio. Mr. Eveillard has
been a director and President or Executive Vice President of SGAM Corp. since
1990.
SGAM Corp. furnishes investment advice to the Fund consistent with the
Fund's stated investment objective and policies. SGAM Corp. also furnishes the
Company with office space and certain facilities and services required for its
business and pays any expenses of the officers of the Company. For these
services and facilities, SGAM Corp. is paid by the Fund a monthly fee at the
annual rate of 0.75% of the average daily net assets of the Fund during the
Fund's most recently completed fiscal year. However, SGAM Corp. has agreed to
waive its advisory fee and, if necessary, reimburse the Fund through April 30,
2000 to the extent that the Fund's aggregate expenses exceed 1.50% of the Fund's
average net assets. Accordingly, SGAM Corp. waived its fee in its entirety and
voluntarily reimbursed the Fund for certain expenses during 1998.
DISTRIBUTION ARRANGEMENTS
The Fund's shares are distributed through SG Cowen Securities Corporation
("SGCS"), 1221 Avenue of the Americas, New York, New York 10020. SGCS is a
registered broker-dealer and an affiliate of Societe Generale.
11
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SOGEN OVERSEAS VARIABLE FUND
The Fund has adopted a Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the Investment Company Act of 1940. Under the Plan,
the Fund pays SGCS a quarterly distribution related fee at an annual rate not to
exceed 0.25% of the average daily value of the Fund's net assets. Under the
terms of the Plan, the Fund is authorized to make payments to SGCS for
remittance to an insurance company that is the issuer of a Variable Contract
invested in shares of the Fund in order to pay or reimburse such insurance
company for distribution and shareholder servicing-related expenses incurred or
paid by such insurance company. SGCS bears distribution expenses to the extent
they are not covered by payments under the Plan. Any distribution expenses
incurred by SGCS in any fiscal year of the Fund, which are not reimbursed from
payments under the Plan accrued in such fiscal year, will not be carried over
for payment under the Plan in any subsequent year.
Because these fees are paid out of the Fund's assets on an on-going basis,
over time these fees will increase the cost of an investment in the Fund and may
ultimately cost more than paying other types of sales charges.
Expenses payable pursuant to this Plan may include, but are not necessarily
limited to: (a) the printing and mailing of Fund prospectuses, statements of
additional information, any supplements thereto and shareholder reports for
existing and prospective Variable Contract owners; (b) those relating to the
development, preparation, printing and mailing of Fund advertisements, sales
literature and other promotional materials describing and/or relating to the
Fund and including materials intended for use within the insurance company, or
for broker-dealer only use or retail use; (c) holding seminars and sales
meetings designed to promote the distribution of Fund shares; (d) obtaining
information and providing explanations to Variable Contract owners regarding
Fund investment objectives and policies and other information about the Fund,
including its performance; (e) training sales personnel regarding the Fund; (f)
compensating sales personnel in connection with the allocation of cash values
and premiums of the Variable Contracts to the Fund; (g) personal service and/or
maintenance of Variable Contract accounts with respect to Fund shares
attributable to such accounts; and (h) financing any other activity that the
Fund's Board of Directors determines is primarily intended to result in the sale
of shares.
As agent, SGCS currently offers shares of the Fund continuously to the
separate accounts of insurance companies in all states in which it is registered
or where permitted by applicable law. SGCS accepts orders for shares at net
asset value. SGCS has made no firm commitment to acquire shares of the Fund.
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SOGEN OVERSEAS VARIABLE FUND
HOW TO INVEST
NET ASSET VALUE.
The price at which shares of the Fund are purchased or redeemed is equal to
the net asset value per share of the Fund as determined on the effective day of
a purchase or redemption. The Fund's net asset value per share is computed as of
the close of trading on the New York Stock Exchange ("NYSE") on each day during
which the NYSE is open for trading. The net asset value per share is computed by
dividing the total current value of the assets of the Fund, less its
liabilities, by the total number of shares outstanding at the time of such
computation. Because the Fund normally invests in securities that are listed on
foreign exchanges that may trade on weekends or other days when the Fund does
not price its shares, the Fund's share value may change on days when
shareholders will not be able to purchase or redeem the Fund's shares.
Portfolio securities are valued primarily based on market quotations where
available. Short-term investments maturing in sixty days or less are valued at
cost plus interest earned, which approximates value. Securities for which
current market quotations are not readily available are valued at fair value as
determined in good faith by the Company's Board of Directors.
HOW TO PURCHASE SHARES.
Shares of the Fund may be offered for purchase by separate accounts of
insurance companies for the purpose of serving as an investment medium for
Variable Contracts. Shares of the Fund are sold at their net asset value
(without a sales charge) next computed after a receipt of a purchase order by an
insurance company whose separate account invests in the Fund. For information on
how to purchase shares, please refer to the prospectus of the pertinent separate
account.
Shares of the Fund are sold to insurance company separate accounts funding
both variable annuity contracts and variable life insurance contracts and may be
sold to insurance companies that are not affiliated. The Company currently does
not foresee any disadvantages to Variable Contract owners arising from offering
the Fund's shares to separate accounts of unaffiliated insurers, or separate
accounts funding both life insurance policies and annuity contracts; however,
due to differences in tax treatment or other considerations, it is theoretically
possible that the interests of owners of various contracts participating in the
Fund might at some time be in conflict. However, the Company's Board of
Directors and insurance companies whose separate accounts invest in the Fund are
required to monitor events in order to identify any material conflicts between
variable annuity contract owners and variable life policy owners, and between
separate accounts of unaffiliated insurers. The Board of Directors will
determine what action, if any, should be taken in the event of such a conflict.
If such a conflict were to occur, one or more
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SOGEN OVERSEAS VARIABLE FUND
insurance company separate accounts might withdraw their investment in the Fund.
This might force the Fund to sell securities at disadvantageous prices.
HOW TO REDEEM SHARES.
Shares of the Fund may be redeemed on any business day. Redemptions are
effected at the per share net asset value next determined after receipt of the
redemption request by an insurance company whose separate account invests in the
Fund. For information on how to redeem shares, please refer to the prospectus of
the separate account that you own.
Redemption proceeds normally will be paid to the separate account within
seven days following receipt of instructions in proper form. The right of
redemption may be suspended by the Company or the payment date postponed beyond
seven days when the New York Stock Exchange is closed (other than customary
weekend and holiday closings) or for any period during which trading thereon is
restricted because an emergency exists, as determined by the Securities and
Exchange Commission, making disposal of portfolio securities or valuation of net
assets not reasonably practicable, and whenever the Securities and Exchange
Commission has by order permitted such suspension or postponement for the
protection of shareholders.
INQUIRIES.
For information about how to buy or redeem shares of the Fund, please
consult the prospectus for the pertinent separate account, or contact your
insurance company. To request additional literature about the Fund, please refer
to the back cover page of this Prospectus.
DIVIDENDS, DISTRIBUTIONS AND TAXES.
It is the policy of the Fund to make at least an annual distribution of net
investment income and net realized capital gains, if any. Unless a shareholder
otherwise elects, income dividends and capital gains distributions will be
reinvested in additional shares of the Fund at net asset value per share
calculated as of the payment date. The Fund pays both income dividends and
capital gains distributions on a per share basis. On the ex-dividend date of
such payment, the net asset value per share of the Fund will be reduced by the
amount of such payment.
The Fund intends to qualify and has elected to be treated as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). To qualify, the Fund must meet certain income,
diversification and distribution requirements. As a regulated investment
company, the Fund generally will not be subject to federal income or excise
taxes on income and capital gains distributed to shareholders within applicable
time limits, al-
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SOGEN OVERSEAS VARIABLE FUND
though foreign source income received by the Fund may be subject to foreign
withholding taxes.
The Fund also intends to comply with diversification regulations under
Section 817(h) of the Code that apply to mutual funds underlying Variable
Contracts. Generally, the Fund will be required to diversify its investments so
that on the last day of each quarter of a calendar year no more than 55% of the
value of its total assets is represented by any one investment, nor more than
70% is represented by any two investments, no more than 80% is represented by
any three investments, and no more than 90% is represented by any four
investments. For this purpose, securities of a given issuer generally are
treated as one investment, but each U.S. Government agency and instrumentality
is treated as a separate issuer.
Tax consequences to the Variable Contract owners are described in the
prospectus for the pertinent separate account. See "Tax Status" in the Fund's
Statement of Additional Information for more information on taxes.
15
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SOGEN OVERSEAS VARIABLE FUND
FINANCIAL HIGHLIGHTS
The Financial Highlights Table is intended to help you understand the
Fund's financial performance for the Fund since its inception. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP, whose report,
along with the Fund's financial statements, are included in the Statement of
Additional Information, which is available upon request.
<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 3,
YEAR ENDED 1997+ TO
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ---------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period.............. $ 9.77 $ 10.00
------ -------
Income from investment operations:
Net investment income (loss).................... 0.12 (0.01)
Net realized and unrealized gains (losses) on
investments................................... 0.29 (0.22)
------ -------
Total from investment operations.............. 0.41 (0.23)
------ -------
Less Distributions:
Dividends from net investment income............ (0.11) --
Net asset value, end of period.................... $10.07 $ 9.77
------ -------
Total Return.................................. 4.21% (2.30)%++
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000's)................. $4,213 $ 1,391
Ratio of operating expenses to average net assets,
net of waivers, expense reimbursement, and
earnings credits................................ 1.50% 2.00%*
Ratio of operating expenses to average net assets,
before waivers, expense reimbursement, and
earnings credits................................ 4.98% 16.07%*
Ratio of net investment income (loss) to average
net assets, net of waivers, expense
reimbursement, and earnings credits............. 2.04% (0.14)%*
Ratio of net investment income (loss) to average
net assets, before waivers, expense
reimbursement, and earnings credits (1.44%)..... (1.44)% (14.20)%*
Portfolio turnover rate........................... 21.35% 8.88%
</TABLE>
- ------------
+ Commencement of operations.
++ Total return is not annualized, and it may not be representative of the total
return for the year.
* Annualized.
16
<PAGE> 17
SOGEN VARIABLE FUNDS, INC.
1221 Avenue of the Americas
New York, NY 10020
INVESTMENT ADVISER
SOCIETE GENERALE ASSET MANAGEMENT CORP.
1221 Avenue of the Americas
New York, NY 10020
DISTRIBUTOR
SG COWEN SECURITIES CORPORATION
1221 Avenue of the Americas
New York, NY 10020
(212) 278-5800
LEGAL COUNSEL
DECHERT PRICE & RHOADS
30 Rockefeller Plaza
New York, NY 10112
INDEPENDENT AUDITORS
KPMG LLP
345 Park Avenue
New York, NY 10154
DOMESTIC CUSTODIAN
INVESTORS FIDUCIARY TRUST COMPANY
801 Pennsylvania
Kansas City, MO 64105
GLOBAL CUSTODIAN
THE CHASE MANHATTAN BANK
4 Chase MetroTech Center
Brooklyn, NY 11245
<PAGE> 18
SOGEN OVERSEAS VARIABLE FUND
This Prospectus includes information about the Fund that you ought to know
before investing, and should be read in conjunction with the prospectus of the
separate account of the specific insurance product that you received with this
Prospectus.
WHERE TO GO FOR ADDITIONAL INFORMATION ABOUT THE FUND.
If you would like additional information about the Fund, the following
documents are available to you:
Annual/Semi-Annual Reports -- Additional information about the Fund's
investments is available in the Fund's annual and semi-annual reports to
shareholders. In these reports, you will find a discussion of the market
conditions and investment strategies that significantly affected the Fund's
performance during the most recent fiscal year.
Statement of Additional Information -- Additional information about the
Fund's structure and operations can be found in the Statement of Additional
Information. The information presented in the Statement of Additional
Information is incorporated by reference into this Prospectus and is legally
considered to be part of this Prospectus.
To request a free copy of any of the materials described above, or to make
any other inquiries, please contact SoGen Variable Funds, Inc. at (800)
747-2008.
OBTAINING INFORMATION FROM THE SECURITIES AND EXCHANGE COMMISSION.
Reports and other information about the Fund (including the Fund's
Statement of Additional Information) may also be obtained from the Securities
and Exchange Commission:
1. By going to the Commission's Public Reference Room in Washington D.C.
where you can review and copy the information. Information on the
operation of the Public Reference Room may be obtained by calling the
Commission at 1-800-SEC-0330.
2. By accessing the Commission's Internet site at http://www.sec.gov where
you can view, download, and print the information.
3. By writing to the Public Reference Section of the Securities and
Exchange Commission, Washington, D.C. 20549-6009, where, upon payment
of a duplicating fee, copies of the information will be sent to you.
SEC file number 811-09092
<PAGE> 19
STATEMENT OF ADDITIONAL INFORMATION
SOGEN OVERSEAS VARIABLE FUND
A SERIES OF SOGEN VARIABLE FUNDS, INC.
------------------------
[SOGEN LOGO]
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
(212) 278-5800
------------------------
SOCIETE GENERALE ASSET MANAGEMENT CORP.
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
INVESTMENT ADVISER
SG COWEN SECURITIES CORPORATION
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
DISTRIBUTOR
------------------------
This Statement of Additional Information provides information about SoGen
Overseas Variable Fund (the "Fund"), a separate portfolio of SoGen Variable
Funds, Inc. (the "Company") an open-end management investment company, in
addition to the information contained in the Prospectus of the Fund dated May 1,
1999. This Statement of Additional Information is not a prospectus. It relates
to and should be read in conjunction with the Prospectus of the Company, a copy
of which can be obtained by writing or by calling the Company at (800) 747-2008.
------------------------
MAY 1, 1999
<PAGE> 20
TABLE OF CONTENTS
<TABLE>
<CAPTION>
STATEMENT OF CROSS-REFERENCED
ADDITIONAL TO CAPTIONS IN
INFORMATION THE PROSPECTUS
PAGE PAGE
------------ ----------------
<S> <C> <C>
ORGANIZATION OF THE FUND.................................... 1 5
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS............. 1 7
MANAGEMENT OF THE COMPANY................................... 8 11
INVESTMENT ADVISORY AND OTHER SERVICES...................... 10 11
DISTRIBUTION OF THE FUND'S SHARES........................... 11 11
COMPUTATION OF NET ASSET VALUE.............................. 13 13
HOW TO PURCHASE SHARES...................................... 13 13
TAX STATUS.................................................. 13 14
BROKERAGE ALLOCATION........................................ 16 11
CAPITAL STOCK............................................... 18 --
CUSTODY OF PORTFOLIO........................................ 18 --
INDEPENDENT AUDITORS........................................ 19 --
FINANCIAL STATEMENTS........................................ 19 --
APPENDIX.................................................... A-1 --
</TABLE>
i
<PAGE> 21
ORGANIZATION OF THE FUND
The Fund is a separate portfolio of the Company, which is an open-end
management investment company incorporated under the laws of Maryland in
September 1995. The Company's investment adviser is Societe Generale Asset
Management Corp. ("SGAM Corp."), a registered investment adviser. The Company's
distributor is SG Cowen Securities Corporation ("SGCS"), a registered
broker-dealer located in New York.
Pursuant to the laws of Maryland, the Company's jurisdiction of
incorporation, the Board of Directors of the Company has adopted By-Laws that do
not require annual meetings of the Fund's shareholders. The absence of a
requirement that the Company hold annual meetings of the Fund's shareholders
reduces its expenses. Meetings of shareholders will continue to be held when
required by the Investment Company Act of 1940 or Maryland law or when called by
the Chairman of the Board of Directors, the President or shareholders owning 10%
of the Fund's outstanding shares. The cost of any such notice and meeting will
be borne by the Fund.
Under the provisions of the Investment Company Act of 1940, a vacancy in
the office of director of the Company may be filled between meetings of the
shareholders of the Company by vote of the directors then in office if,
immediately after filling such vacancy, at least two-thirds of the directors
then holding office have been elected to the office of director by the
shareholders of the Company. In the event that at any time less than a majority
of the directors of the Company holding office at that time were elected by the
shareholders of the Company, the Board of Directors or the Chairman of the Board
shall, within sixty days, cause a meeting of shareholders to be held for the
purpose of electing directors to fill any vacancies in the Board of Directors.
The staff of the Securities and Exchange Commission has advised the Company
that it interprets Section 16(c) of the Investment Company Act of 1940, which
provides a means for dissident shareholders of common-law trusts to communicate
with other shareholders of such trusts and to vote upon the removal of trustees
upon the request in writing by the record holders of not less than 10 percent of
the outstanding shares of the trust, to apply to investment companies, such as
the Fund, that are incorporated under Maryland law.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVE.
The Fund, which is a diversified portfolio, seeks long-term growth of
capital by investing primarily in securities of small and medium size non-U.S.
companies. The Fund uses the techniques and invests in the types of securities
described below and in the Prospectus.
INVESTMENT POLICIES, TECHNIQUES AND RISKS.
FOREIGN SECURITIES. The Fund will invest in foreign securities, which may
entail a greater degree of risk (including risks relating to exchange rate
fluctuations, tax provisions, or expropriation of assets) than does investment
in securities of domestic issuers. The Fund may invest in securities of foreign
issuers directly or in the form of American Depository Receipts (ADRs), Global
Depository Receipts (GDRs), European Depository Receipts (EDRs), or other
securities representing underlying shares of foreign issuers. Positions in these
securities are not necessarily denominated in the same currency as the common
stocks into which they may be converted. ADRs are receipts typically issued by
an American bank or trust company evidencing ownership of the underlying
securities. EDRs are European receipts evidencing a similar arrangement. GDRs
are global offerings where two securities are issued simultaneously in two
markets, usually publicly in non-U.S. markets and privately in the U.S. market.
Generally ADRs, in registered form, are designed for use in the U.S. securities
markets, EDRs, in bearer form, are designed for use in European securities
markets. GDR's are designed for use in the U.S. and European securities markets.
The Fund may invest in both "sponsored" and "unsponsored" ADRs. In a sponsored
ADR, the issuer typically pays some or all of the expenses of the depository and
agrees to provide its regular shareholder communications to ADR holders. An
unsponsored
1
<PAGE> 22
ADR is created independently of the issuer of the underlying security. The ADR
holders generally pay the expenses of the depository and do not have an
undertaking from the issuer of the underlying security to furnish shareholder
communications. Issuers of unsponsored ADRs are not obligated to disclose
material information in the United States and, therefore, there may not be a
correlation between such information and the market value of the ADRs. The Fund
does not expect to invest 5% or more of its total assets in unsponsored ADRs.
With respect to portfolio securities that are issued by foreign issuers or
denominated in foreign currencies, the investment performance of the Fund is
affected by the strength or weakness of the U.S. dollar against these
currencies. For example, if the dollar falls in value relative to the Japanese
yen, the dollar value of a yen-denominated stock held in the portfolio will rise
even though the price of the stock remains unchanged. Conversely, if the dollar
rises in value relative to the yen, the dollar value of the yen-denominated
stock will fall. (See discussion of transaction hedging and portfolio hedging
under "Currency Exchange Transactions.")
Investors should understand and consider carefully the risks involved in
foreign investing. Investing in foreign securities, positions which are
generally denominated in foreign currencies, and utilization of forward foreign
currency exchange contracts involve certain risks and opportunities not
typically associated with investing in U.S. securities. These considerations
include: fluctuations in the rates of exchange between the U.S. dollar and
foreign currencies; possible imposition of exchange control regulations or
currency restrictions that would prevent cash from being brought back to the
United States; less public information with respect to issuers of securities;
less governmental supervision of stock exchanges, securities brokers, and
issuers of securities; different accounting, auditing and financial reporting
standards; different settlement periods and trading practices; less liquidity
and frequently greater price volatility in foreign markets than in the United
States; imposition of foreign taxes; and sometimes less advantageous legal,
operational and financial protections applicable to foreign sub-custodial
arrangements.
Although the Fund seeks to invest in companies and governments of countries
having stable political environments, there is the possibility of expropriation
or confiscatory taxation, seizure or nationalization of foreign bank deposits or
other assets, establishment of exchange controls, the adoption of foreign
government restrictions, or other adverse political, social or diplomatic
developments that could affect investment in these nations.
The countries in which the Fund invests are included in those listed below.
The Fund may not invest in all the countries listed, and it may invest in other
countries as well, when such investments are consistent with the Fund's
investment objective and policies.
<TABLE>
<CAPTION>
MATURE MARKETS EMERGING MARKETS
-------------- ----------------
<S> <C> <C> <C>
Australia Japan Argentina Nigeria
Austria Luxembourg Brazil Pakistan
Belgium Netherlands Chile People's Republic of China
Canada New Zealand Czech Republic Peru
Denmark Norway Ecuador Philippines
Finland Portugal Greece Poland
France Singapore Hungary South Africa
Germany Spain India South Korea
Hong Kong Sweden Indonesia Sri Lanka
Ireland Switzerland Israel Taiwan
Italy United Kingdom Jamaica Thailand
United States Jordan Turkey
Kenya Uruguay
Malaysia Venezuela
Mexico Vietnam
Morocco
</TABLE>
2
<PAGE> 23
It may not be feasible for the Fund currently to invest in all of these
countries due to restricted access to their securities markets or inability to
implement satisfactory custodial arrangements.
CURRENCY EXCHANGE TRANSACTIONS. A currency exchange transaction may be
conducted either on a spot (i.e., cash) basis at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market or through a forward
currency exchange contract ("Forward Contract"). A Forward Contract is an
agreement to purchase or sell a specified currency at a specified future date
(or within a specified time period) and price set at the time of the contract.
Forward Contracts are usually entered into with banks and broker/dealers, are
not exchange traded and are usually for less than one year, but may be renewed.
Currency exchange transactions may involve currencies of the different
countries in which the Fund may invest, and serve as hedges against possible
variations in the exchange rates between these currencies and the U.S. dollar.
The Fund's currency transactions are limited to transaction hedging and
portfolio hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of a Forward Contract with respect
to specific payables or receivables of the Fund accruing in connection with the
purchase or sale of portfolio securities. Portfolio hedging is the use of a
Forward Contract with respect to a portfolio security position denominated or
quoted in a particular currency. The Fund may engage in portfolio hedging with
respect to the currency of a particular country in amounts approximating actual
or anticipated positions in securities denominated in that currency.
If the Fund enters into a Forward Contract, the custodian bank will, to the
extent required (i.e., to the extent that the Forward Contract is not otherwise
covered), segregate liquid assets of the Fund having a value equal to the Fund's
commitment under such Forward Contract. At the maturity of a Forward Contract to
deliver a particular currency, the Fund may either sell the portfolio security
related to such contract and make delivery of the currency, or it may retain the
security and either acquire the currency on the spot market or terminate its
contractual obligation to deliver the currency by purchasing an offsetting
contract with the same currency trader obligating it to purchase on the same
maturity date the same amount of the currency.
It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of a Forward Contract. Accordingly, it
may be necessary for the Fund to purchase additional currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of currency the Fund is obligated to deliver, and if a
decision is made to sell the security and make delivery of the currency.
Conversely, it may be necessary to sell on the spot market some of the currency
received upon the sale of the portfolio security if its market value exceeds the
amount of currency the Fund is obligated to deliver.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in Forward Contract prices. If the Fund engages in an offsetting
transaction, it may subsequently enter into a new Forward Contract to sell the
currency. Should forward prices decline during the period between the date the
Fund enters into a Forward Contract for the sale of a currency and the date it
enters into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Fund will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell. A default on the contract would deprive the Fund of unrealized
profits or force the Fund to cover its commitments for purchase or sale of
currency, if any, at the current market price.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates. The cost to the Fund of
engaging in currency exchange transactions varies with such factors as the
currency involved, the length of the contract period and prevailing market
conditions. Since currency exchange transactions are usually conducted on a
principal basis, no fees or commissions are involved.
3
<PAGE> 24
LOWER-RATED DEBT SECURITIES. The Fund may invest in debt securities,
including lower-rated securities (i.e., securities rated BB or lower by Standard
& Poor's Corporation ("S&P") or Ba or lower by Moody's Investors Service, Inc.
("Moody's"), commonly called "junk bonds") and securities that are not rated.
There are no restrictions as to the ratings of debt securities acquired by the
Fund or the portion of the Fund's assets that may be invested in debt securities
in a particular rating category, except that the Fund will not invest more than
20% of its assets in securities rated below investment grade or unrated
securities considered by the investment adviser to be of comparable credit
quality.
Securities rated BBB by S&P or Baa by Moody's (the lowest investment grade
ratings) are considered to be of medium grade and to have speculative
characteristics. Debt securities rated below investment grade are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Although lower-rated debt and comparable unrated debt securities may
offer higher yields than do higher rated securities, they generally involve
greater volatility of price and risk of principal and income, including the
possibility of default by, or bankruptcy of, the issuers of the securities. In
addition, the markets in which lower-rated and unrated debt securities are
traded are more limited than those in which higher rated securities are traded.
Adverse publicity and investors' perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of lower-rated debt
securities, especially in a thinly traded market. During periods of thin trading
in these markets, the spread between bid and asked prices is likely to increase
significantly, and the Fund may have greater difficulty selling its portfolio
securities. See "Computation of Net Asset Value." Analyses of the
creditworthiness of issuers of lower-rated debt securities may be more complex
than for issuers of higher rated securities, and the ability of the Fund to
achieve its investment objective may, to the extent of investment in lower-rated
debt securities, be more dependent upon such creditworthiness analyses than
would be the case if the Fund were investing in higher rated securities.
Lower-rated debt securities may be more susceptible to real or perceived
adverse economic and competitive industry conditions than investment grade
securities. The prices of lower-rated debt securities have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic downturns or individual corporate developments. A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in lower-rated debt securities' prices because
the advent of a recession could lessen the ability of a highly-leveraged company
to make principal and interest payments on its debt securities. If the issuer of
lower-rated debt securities defaults, the Fund may incur additional expenses
seeking recovery.
A more complete description of the characteristics of bonds in each rating
category is included in the appendix to this Statement of Additional
Information.
OTHER INVESTMENT COMPANIES. Certain markets are closed in whole or in part
to equity investments by foreigners. The Fund may be able to invest in such
markets solely or primarily through governmentally-authorized investment
companies. The Fund generally may invest up to 10% of its assets in shares of
other investment companies and up to 5% of its assets in any one investment
company (in each case measured at the time of investment), as long as no
investment represents more than 3% of the outstanding voting stock of the
acquired investment company at the time of investment. These restrictions do not
apply to certain investment companies known as private investment companies and
"qualified purchaser" investment companies.
Investment in another investment company may involve the payment of a
premium above the value of the issuer's portfolio securities, and is subject to
market availability. In the case of a purchase of shares of such a company in a
public offering, the purchase price may include an underwriting spread. The Fund
does not intend to invest in such an investment company unless, in the judgment
of the Fund's investment adviser, the potential benefits of such investment
justify the payment of any applicable premium or sales charge. As a shareholder
in an investment company, the Fund would bear its ratable share of that
investment company's expenses, including its advisory and administration fees.
At the same time, the Fund would continue to pay its own management fees and
other expenses.
"WHEN-ISSUED" OR "DELAYED DELIVERY" SECURITIES. The Fund may purchase
securities on a "when-issued" or "delayed delivery" basis. When-issued or
delayed delivery securities are securities purchased for
4
<PAGE> 25
future delivery at a stated price and yield. The Fund will generally not pay for
such securities or start earning interest on them until they are received.
Securities purchased on a when-issued or delayed delivery basis are recorded as
assets and are marked-to-market daily. Although the payment and interest terms
of these securities are established at the time the Fund enters into the
commitment, the securities may be delivered and paid for a month or more after
the date of purchase, when their value may have changed. The Fund will not
invest more than 25% of its assets in when-issued or delayed delivery
securities, does not intend to purchase such securities for speculative purposes
and will make commitments to purchase securities on a when-issued or delayed
delivery basis with the intention of actually acquiring the securities. However,
the Fund reserves the right to sell acquired when-issued or delayed delivery
securities before their settlement dates if deemed advisable. At the time the
Fund enters into a binding obligation to purchase securities on a when-issued
basis, to the extent required, liquid assets of the Fund having a value at least
as great as the purchase price of the securities to be purchased will be
segregated on the books of the Fund and held by the custodian throughout the
period of the obligation. The use of these investment strategies, as well as any
borrowing by the Fund, may increase net asset value fluctuation.
BANK OBLIGATIONS. The Fund may invest in bank obligations, which may
include bank certificates of deposit, time deposits or bankers' acceptances.
Certificates of deposit and time deposits are negotiable certificates issued
against funds deposited in a commercial bank for a definite period of time and
earning a specified return. Bankers' acceptances are negotiable drafts or bills
of exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning in effect that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Investments in these instruments are limited to obligations of domestic banks
(including their foreign branches) and U.S. and foreign branches of foreign
banks having capital surplus and undivided profits in excess of $100 million.
STRUCTURED SECURITIES. The Fund may invest in structured notes and/or
preferred stock, the value of which is linked to currencies, interest rates,
other commodities, indices or other financial indicators. Structured securities
differ from other types of securities in which the Fund may invest in several
respects. For example, the coupon dividend and/or redemption amount at maturity
may be increased or decreased depending on changes in the value of the
underlying instrument.
Investment in structured securities involves certain risks. In addition to
the credit risk of the security's issuer and the normal risks of price changes
in response to changes in interest rates, the redemption amount may decrease as
a result of changes in the price of the underlying instrument. Further, in the
case of certain structured securities, the coupon and/or dividend may be reduced
to zero, and any further declines in the value of the underlying instrument may
then reduce the redemption amount payable on maturity. Finally, structured
securities may be more volatile than the price of the underlying instrument.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its total assets in
illiquid securities, including certain securities that are subject to legal or
contractual restrictions on resale ("restricted securities").
Generally, restricted securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933 (the "1933 Act"). Where
registration is required, the Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than that which prevailed when it decided to sell. Restricted securities will be
priced at fair value as determined in good faith by the Board of Directors. If,
through the appreciation of illiquid securities or the depreciation of liquid
securities, the Fund should be in a position where more than 15% of the value of
its net assets is invested in illiquid assets, including restricted securities,
the Fund will take appropriate steps to protect liquidity.
Notwithstanding the above, the Fund may purchase securities that have been
privately placed but that are eligible for purchase and sale under Rule 144A
under the 1933 Act. That rule permits certain qualified institutional buyers,
such as the Fund, to trade in privately placed securities that have not been
registered for sale under the 1933 Act. SGAM Corp., under the supervision of the
Board of Directors of the Fund, will
5
<PAGE> 26
consider whether securities purchased under Rule 144A are illiquid and thus
subject to the Fund's restriction on investing in illiquid securities. A
determination as to whether a Rule 144A security is liquid or not is a question
of fact. In making this determination, SGAM Corp. will consider the trading
markets for the specific security, taking into account the unregistered nature
of a Rule 144A security. In addition, SGAM Corp. could consider (1) the
frequency of trades and quotes, (2) the number of dealers and potential
purchasers, (3) the dealer undertakings to make a market, and (4) the nature of
the security and of market place trades (e.g., the time needed to dispose of the
security, the method of soliciting offers and the mechanics of transfer). The
liquidity of Rule 144A securities would be monitored and if, as a result of
changed conditions, it is determined that a Rule 144A security is no longer
liquid, the Fund's holdings of illiquid securities would be reviewed to
determine what steps, if any, are required to assure that the Fund does not
invest more than the maximum percentage of its assets in illiquid securities.
Investing in Rule 144A securities could have the effect of increasing the amount
of the Fund's assets invested in illiquid securities if qualified institutional
buyers are unwilling to purchase such securities.
CHANGE OF OBJECTIVE. The investment objective of the Fund is not a
fundamental policy and, accordingly, may be changed by the Board of Directors
without shareholder approval. Shareholders will be notified a minimum of sixty
days in advance of any change in investment objective.
INVESTMENT RESTRICTIONS.
In pursuing its investment objective, the Fund will not:
1. With respect to 75% of the value of the Fund's total assets, invest
more than 5% of its total assets (valued at time of investment) in
securities of any one issuer, except securities issued or guaranteed by
the government of the United States, or any of its agencies or
instrumentalities, or acquire securities of any one issuer which, at
the time of investment, represent more than 10% of the voting
securities of the issuer;
2. Borrow money except that in exceptional circumstances the Fund may
borrow from banks for temporary purposes, provided that such borrowings
shall be unsecured and may not exceed 10% of the Fund's net assets at
the time of the borrowing (including the amount borrowed). The Fund
will not purchase securities while borrowings exceed 5% of its total
assets;
3. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry other than U.S. Government
Securities;
4. Make loans, but this restriction shall not prevent the Fund from (a)
buying a part of an issue of bonds, debentures, or other obligations
that are publicly distributed, or from investing up to an aggregate of
15% of its total assets (taken at market value at the time of each
purchase) in parts of issues of bonds, debentures or other obligations
of a type privately placed with financial institutions or (b) lending
portfolio securities, provided that the Fund may not lend securities
if, as a result, the aggregate value of all securities loaned would
exceed 33% of its total assets (taken at market value at the time of
such loan);*
5. Underwrite the distribution of securities of other issuers; however,
the Fund may acquire "restricted" securities which, in the event of a
resale, might be required to be registered under the Securities Act of
1933 (the "1933 Act") on the grounds that the Fund could be regarded as
an underwriter as defined by the 1933 Act with respect to such resale;
6. Purchase and sell real estate or interests in real estate, although it
may invest in marketable securities of enterprises that invest in real
estate or interests in real estate;
7. Make margin purchases of securities, except for the use of such
short-term credits as are needed for clearance of transactions;
- ---------------
* The Fund has no present intention of lending its portfolio securities.
6
<PAGE> 27
8. Sell securities short or maintain a short position, except short sales
against-the-box.
Restrictions 1 through 8 above (except the portions in parentheses) are
"fundamental," which means that they cannot be changed without the vote of a
majority of the outstanding voting securities of the Fund (defined by the
Investment Company Act of 1940 as the lesser of (i) 67% of the Fund's shares
present at a meeting if more than 50% of the shares outstanding are present or
(ii) more than 50% of the Fund's outstanding shares). In addition, the Fund is
subject to a number of restrictions that may be changed by the Board of
Directors without shareholder approval. Under those non-fundamental
restrictions, the Fund will not:
a. Invest in companies for the purpose of management or the exercise of
control;
b. Invest in oil, gas or other mineral leases or exploration or
development programs, although it may invest in marketable securities
of enterprises engaged in oil, gas or mineral exploration;
c. Invest more than 10% of its net assets (valued at time of investment)
in warrants, valued at the lower of cost or market; provided that
warrants acquired in units or attached to securities shall be deemed to
be without value for purposes of this restriction;
d. Pledge, mortgage or hypothecate its assets, except as may be necessary
in connection with permitted borrowings or in connection with short
sales;
e. Purchase or sell commodities or commodity contracts, except that it may
enter into forward contracts and may sell commodities received by it as
distributions on portfolio investments; and
f. Purchase or sell put and call options on securities or on futures
contracts.
Notwithstanding the foregoing investment restrictions, the Fund may
purchase securities pursuant to the exercise of subscription rights, provided
that such purchase will not result in the Fund's ceasing to be a diversified
investment company. Japanese and European corporations frequently issue
additional capital stock by means of subscription rights offerings to existing
shareholders at a price substantially below the market price of the shares. The
failure to exercise such rights would result in the Fund's interest in the
issuing company being diluted. The market for such rights is not well developed
in all cases and, accordingly, the Fund may not always realize full value on the
sale of rights. The exception applies in cases where the limits set forth in the
investment restrictions would otherwise be exceeded by exercising rights or
would have already been exceeded as a result of fluctuations in the market value
of the Fund's portfolio securities with the result that the Fund would be forced
either to sell securities at a time when it might not otherwise have done so, or
to forego exercising the rights.
TOTAL RETURN. From time to time the Fund will advertise its average annual
total return. Quotations of average annual returns for each Fund will be
expressed in terms of the average annual compounded rates of return of a
hypothetical investment in the Fund over periods of 1, 5 and 10 years (up to the
life of the Fund), calculated pursuant to the following formula: P(1+T)(n)=ERV
(where P = a hypothetical initial payment of $1000, T = the average annual
return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1000 payment made at the beginning of the period). This
calculation assumes deduction of a proportional share of Fund expenses on an
annual basis and assumes reinvestment of all income dividends and capital gains
distributions during the period. Under the assumptions utilized in the preceding
calculation, an investment in the Fund during the fiscal year ended December 31,
1998 would have increased at the rate of 4.21%.
COMPARISON OF PORTFOLIO PERFORMANCE. From time to time the Fund may
discuss in sales literature and advertisements, specific performance grades or
rankings or other information as published by recognized grades or rankings or
other information as published by recognized mutual fund statistical services,
such as Morningstar, Inc. or Lipper Analytical Services, Inc., or by
publications of general interest such as Barron's, Business Week, Financial
World, Forbes, Fortune, Kiplinger's Personal Finance, Money, Morningstar Mutual
Funds, Smart Money, The Wall Street Journal or Worth. Total return information
for the Fund will not be advertised or included in sales literature unless
accompanied by comparable performance information for a separate account to
which the Fund offers its share. Quotations of total return for the Fund will
not take into
7
<PAGE> 28
account charges and deductions against any separate accounts to which the Fund
shares are sold or charges and deductions against the pertinent variable life
insurance and variable annuity contracts ("Variable Contracts"). The Fund's
total return should not be compared with mutual funds that sell their shares
directly to the public since the figures provided do not reflect charges against
the separate accounts or the Variable Contracts.
PORTFOLIO TURNOVER. Although the Fund will not make a practice of
short-term trading, purchases and sales of securities will be made whenever
appropriate, in the investment adviser's view, to achieve the Fund's investment
objective. The rate of portfolio turnover is calculated by dividing the lesser
of the cost of purchases or the proceeds from sales of portfolio securities
(excluding short-term U.S. government obligations and other short-term
investments) for the particular fiscal year by the monthly average of the value
of the portfolio securities (excluding short-term U.S. government obligations
and short-term investments) owned by the Fund during the particular fiscal year.
The rate of portfolio turnover is not a limiting factor when management deems
portfolio changes appropriate to achieve the Fund's stated objective.
MANAGEMENT OF THE COMPANY
The business of the Company is managed by its Board of Directors which
elects officers responsible for the day to day operations of the Fund and for
the execution of the policies formulated by the Board of Directors. Several of
the directors and officers of the Fund are directors or officers of SGAM Corp.,
SGCS or Societe Generale, Paris, France, the indirect owner of one hundred
percent (100%) of the outstanding voting securities of SGAM Corp., and the owner
of fifty percent (50%) of the outstanding voting securities of SGCS. Jean-Marie
Eveillard, the President and a director of the Company, owns 100% of SGAM
Corp.'s non-voting Series B common stock which represents 19.9% of the total
capital of SGAM Corp.
The following table sets forth the principal occupation or employment of
the members of the Board of Directors and principal officers of the Company.
Each of the following persons is also a director and/or officer of SoGen Funds,
Inc.
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME (AGE) AND ADDRESS WITH THE COMPANY DURING PAST FIVE (5) YEARS
---------------------- ---------------- --------------------------
<S> <C> <C>
Philippe Collas*(49)............. Chairman of the Board Head of Asset Management at
2 Place de la Coupole and Director Societe Generale since
92078 Paris La Defense Cedex September 1995. Head of Human
France Resource Management at Societe
Generale from prior to 1994.
Jean-Marie Eveillard*(59)(1)..... President and Director and President or
1221 Avenue of the Americas Director Executive Vice President of SGAM
New York, NY 10020 Corp. from prior to 1994.
Fred J. Meyer(68)(2)............. Director Vice Chairman of Omnicom Group,
437 Madison Avenue Inc. from 1998. Chief Financial
New York, NY 10022 Officer of Omnicom Group Inc.
from prior to 1994 to 1998.
Director of Novartis
Corporation, and
Zurich-American Insurance Cos.
Dominique Raillard(60)(2)........ Director President of Act 2 International
15, boulevard Delessert (consulting) since July 1995.
75016 Paris France Group Executive Vice President
of Promodes (consumer
products) -- U.S. Companies
Division from prior to 1994 to
1995.
</TABLE>
8
<PAGE> 29
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME (AGE) AND ADDRESS WITH THE COMPANY DURING PAST FIVE (5) YEARS
---------------------- ---------------- --------------------------
<S> <C> <C>
Nathan Snyder(64)(1)(2).......... Director Independent Consultant, from
163 Parish Rd. S. prior to 1994.
New Canaan, CT 06840
Philip J. Bafundo*(36)........... Vice President, Secretary and Treasurer, SGAM
1221 Avenue of the Americas Secretary and Corp. from prior to 1994.
New York, NY 10020 Treasurer Certified Public Accountant
(New York).
Edwin S. Olsen*(59).............. Vice President Vice President, SGCS from prior
1221 Avenue of the Americas to 1994.
New York, NY 10020
Elizabeth M. Tobin*(44).......... Vice President Senior Vice President, SGAM Corp.
1221 Avenue of the Americas since 1998, Associate Portfolio
New York, NY 10020 Manager from December 1996,
Securities Analyst, SGAM Corp.
from prior to 1994 to 1996.
Charles de Vaulx*(37)............ Vice President Senior Vice President, SGAM Corp.
1221 Avenue of the Americas since 1998, Associate Portfolio
New York, NY 10020 Manager from December 1996,
Securities Analyst, SGAM Corp.
from prior to 1994 to 1996.
</TABLE>
- ---------------
* An "interested person" of the Company as defined in the Investment Company
Act of 1940, as amended.
(1) Member of the Executive Committee. When the Board of Directors is not in
session, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) Member of the Audit Committee.
The Company makes no payments to any of its officers for services. However,
currently each of the Company's directors who are not officers or employees of
SGAM Corp., SGCS or Societe Generale are paid by the Company an annual fee of
$6,000 and a fee of $1,000 for each meeting of the Company's Board of Directors
and for each meeting of any Committee of the Board that they attend (other than
those held by telephone conference call). Each director is reimbursed by the
Company for any expenses he may incur by reason of attending such meetings or in
connection with services he may perform for the Company.
COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS. The following table sets
forth information regarding compensation of directors by the Company and by the
fund complex of which the Company is a part for the fiscal year ended December
31, 1998. Officers of the Company and directors who are interested persons of
the Company do not receive any compensation from the Company or any other fund
in the fund complex which is a U.S. registered investment company. In the column
headed "Total Compensation From Registrant and Fund Complex Paid to Directors,"
the number in parentheses indicates the total number of boards in the fund
complex on which the director serves.
9
<PAGE> 30
COMPENSATION TABLE
FISCAL YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM
BENEFITS ESTIMATED REGISTRANT
AGGREGATE ACCRUED ANNUAL AND FUND
COMPENSATION AS PART BENEFITS COMPLEX
FROM OF FUND UPON PAID TO
NAME OF PERSON, POSITION REGISTRANT EXPENSES RETIREMENT DIRECTORS
------------------------ ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Philippe Collas**, Director and Chairman... $ -- N/A N/A $ --
Jean-Marie Eveillard**, Director and
President................................ $ -- N/A N/A $ --
Fred J. Meyer*, Director................... $15,000 N/A N/A $45,000(2)
Dominique Raillard*, Director.............. $14,000 N/A N/A $42,000(2)
Nathan Snyder*, Director................... $15,000 N/A N/A $45,000(2)
</TABLE>
- ---------------
* Member of the Audit Committee.
** "Interested person" of the Company as defined in the Act because of the
affiliation with SGAM Corp., the Fund's investment adviser.
As of April 1, 1999, the officers and directors of the Company owned less
than 1% of the outstanding shares of capital stock of the Company. The Company
knows of no person who owns beneficially more than 5% of the capital stock of
the Company. As of April 1, 1999, the following entities held of record 5% or
more of the outstanding shares of the Fund.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF SHARES
NAME AND ADDRESS HELD OF RECORD HELD OF RECORD
- ---------------- ---------------- --------------------
<S> <C> <C>
CNA Insurance Company...................................... 219,419.797 51.84%
333 South Wabash
34 South
Chicago, IL 60685
IL Annuity and Insurance Company........................... 193,696.291 45.77%
2960 North Meridian Street
Indianapolis, IN 46208
</TABLE>
While the Company is a Maryland corporation, certain of its directors and
officers are non-residents of the United States and may have all, or a
substantial part, of their assets located outside the United States. None of the
officers or directors has authorized an agent for service of process in the
United States. As a result, it may be difficult for U.S. investors to effect
service of process upon non-U.S. directors or officers within the United States
or effectively to enforce judgments of courts of the United States predicated
upon civil liabilities of such officers or directors under the federal
securities laws of the United States.
INVESTMENT ADVISORY AND OTHER SERVICES
As described in the Company's Prospectus, SGAM Corp. is the Company's
investment adviser and, as such, manages the Fund's portfolio. SGAM Corp. was
incorporated in Delaware in February 1990, and is indirectly owned by Societe
Generale, one of France's largest banks.
The persons named below are affiliated with the Company and are also
affiliated persons of SGAM Corp., SGCS or Societe Generale. The capacity in
which such persons are affiliated with the Fund and SGAM Corp., SGCS or Societe
Generale is also indicated.
10
<PAGE> 31
<TABLE>
<CAPTION>
OFFICE HELD OFFICE HELD WITH SGAM CORP.,
NAME WITH THE COMPANY SGCS OR SOCIETE GENERALE
- ---- ---------------- ----------------------------
<S> <C> <C>
Philippe Collas.............. Chairman of the Board and Head of Asset Management,
Director Societe Generale. Chairman
of the Board and Director,
SGAM Corp.
Jean-Marie Eveillard......... President and Director President and Director, SGAM
Corp.
Philip J. Bafundo............ Vice President, Secretary and Secretary and Treasurer, SGAM
Treasurer Corp.
Edwin S. Olsen............... Vice President Vice President, SGCS
Elizabeth Tobin.............. Vice President Senior Vice President and
Associate Portfolio
Manager, SGAM Corp.
Charles de Vaulx............. Vice President Senior Vice President and
Associate Portfolio
Manager, SGAM Corp.
</TABLE>
Under its investment advisory contract with the Company dated as of August
16, 1996, SGAM Corp. furnishes the Company with investment advice consistent
with the Fund's stated investment objective. SGAM Corp. also furnishes the
Company with office space and certain facilities required for the business of
the Fund, and statistical and research data, and pays any expenses of the
Company's officers. In return, the Fund pays SGAM Corp. a monthly fee at the
annual rate of 0.75% of the average daily value of the Fund's net assets. This
annual fee rate is higher than the rate of fees paid by most U.S. mutual funds.
The Company believes, however, that the advisory fee rate is not higher than the
rate of fees paid by most other mutual funds that invest significantly in
foreign equity securities. SGAM Corp. waived its advisory fee of $5,742 in its
entirety from February 3, 1997 (commencement of operations) through December 31,
1997 and its advisory fee of $25,717 in its entirety for the year ended December
31, 1998. In addition, SGAM Corp. voluntarily reimbursed the Fund for expenses
in the amount of $88,434 for the year ended December 31, 1998.
Under the investment advisory contract between the Company and SGAM Corp.,
the investment adviser is responsible for the management of the Fund's portfolio
and constantly reviews its holdings in the light of its own research analyses
and those of other relevant sources. Reports of portfolio transactions are given
regularly to the directors of the Company, who review the Fund's portfolio at
meetings held four times a year.
Under the terms of the investment advisory agreement, the Company and each
of its series will discontinue the use of the term "SoGen" in their names or the
use of any marks or symbols owned by the investment adviser if the investment
adviser ceases to act as the Company's investment adviser or if the investment
adviser so requests.
As of the date of this Statement of Additional Information, SGAM Corp.
owned of record and beneficially 10,000 shares of the Fund.
DISTRIBUTION OF THE FUND'S SHARES
The Company and SGCS have entered into a distribution contract pursuant to
which SGCS offers, as agent, share of the Fund continuously to the separate
accounts of insurance companies. SGCS is not obligated thereunder to sell any
specific amount of Fund shares.
The Fund has adopted a Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the Investment Company Act of 1940. Under the Plan,
the Fund may pay SGCS a quarterly distribution related fee at an annual rate not
to exceed 0.25% of the average daily value of the Fund's net assets. Under the
terms of the Plan, the Fund is authorized to make payments to SGCS for
remittance to an insurance company that is
11
<PAGE> 32
the issuer of a Variable Contract invested in shares of the Fund in order to pay
or reimburse such insurance company for distribution and shareholder
servicing-related expenses incurred or paid by such insurance company.
Distribution expenses incurred in any fiscal year, which are not reimbursed from
payment under the Plan accrued in such fiscal year, will not be carried over for
payment under the Plan in any subsequent year.
During the Fund's most recently completed fiscal year, the Fund incurred
distribution related fees for expenditures under the Plan in the aggregate
amount of $8,540, which constituted 0.25% of the Fund's average daily net assets
during the period. Such amount is payable to the insurance companies which
issued the Variable Contracts invested in shares of the Fund.
Expenses payable pursuant to this Plan may include, but are not limited to,
expenses relating to the preparation, printing and distribution of prospectuses
to existing and prospective Variable Contract owners; development, preparation,
printing and mailing of Fund advertisements; expenses relating to holding
seminars and sales meetings designed to promote the distribution of Fund shares;
training sales personnel regarding the Fund; compensating sales personnel in
connection with the allocation of cash values and premiums of the Variable
Contracts to the Fund; and financing any other activity that the Fund's Board of
Directors determines is primarily intended to result in the sale of shares.
The Plan is deemed reasonably likely to benefit the Fund and the Variable
Contract owners in at least one of several ways. Specifically, it is expected
that the insurance companies that issue Variable Contracts invested in shares of
the Fund would have less incentive to educate Variable Contract owners and sales
people concerning the Fund if expenses associated with such services were not
paid by the Fund. In addition, the payment of distribution fees to insurers
should motivate them to maintain and enhance the level of services relating to
the Fund provided to Variable Contract owners, which would, of course, benefit
such Variable Contract owners. The adoption of the Plan would also likely help
to maintain and may lead to an increase in net assets given the foregoing
incentives. Further, it is anticipated that Plan fees may be used to educate
potential and existing owners of Variable Contracts concerning the Fund, the
securities markets and related risks.
The Plan provides that it will continue in effect only so long as its
continuance is approved at least annually by the directors of the Company and by
the directors who are not interested persons of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements relating to the Plan (the "Independent Directors"). In the case of an
agreement relating to the Plan, the Plan provides that such agreement may be
terminated, without penalty, by a vote of a majority of the Independent
Directors, or by a majority of the Fund's outstanding voting securities on 60
days' written notice to SGCS, and provides further that such agreement will
automatically terminate in the event of its assignment. The Plan also states
that it may not be amended to increase the maximum amount of the payments
thereunder without the approval of a majority of the outstanding voting
securities (as defined above under "Management of the Company -- Investment
Restrictions") of the Fund. No material amendment to the Plan will, in any
event, be effective unless it is approved by a vote of the directors and the
Independent Directors of the Company.
When the Company seeks an Independent Director to fill a vacancy on the
board or as an addition to the board or as a nominee for election by
stockholders, the selection or nomination of the Independent Director is, under
resolutions adopted by the directors, contemporaneously with their adoption of
the Plan, committed to the discretion of the Independent Directors.
The expenses incurred by the Company in connection with its organization,
its registration with the Securities and Exchange Commission and any states
where registered, and the public offering of its shares were advanced on behalf
of the Company by SGAM Corp. These organizational expenses will be deferred and
amortized by the Company over a period of 60 months.
The investment advisory contract will continue in effect until August 16,
1999, and thereafter from year to year so long as the continuance of the
contract is specifically approved at least annually by the Board of Directors or
by a vote of a majority of the outstanding voting securities of the Fund (and
any other series of the Company with shares then outstanding) (as defined above
under "Management of the Company --
12
<PAGE> 33
Investment Restrictions"). In addition, the terms of the contract and the
renewal thereof must be approved annually by the vote of a majority of the
directors who are not "interested persons" (as defined in the Investment Company
Act of 1940) of SGAM Corp., SGCS or the Company. The investment advisory
contract will terminate automatically in the event of its assignment (as defined
in the Investment Company Act of 1940) and may be terminated, without penalty,
on sixty days' written notice at the option of either party thereto or by a vote
of a majority of the outstanding voting securities of the Fund (or any other
series of the Company with shares then outstanding).
COMPUTATION OF NET ASSET VALUE
The Fund computes its net asset value once daily as of the close of trading
on each day the New York Stock Exchange is open for trading. The Exchange is
closed on the following days: New Year's Day, Rev. Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share is computed by
dividing the total current value of the assets of the Fund, less its
liabilities, by the total number of shares outstanding at the time of such
computation.
A portfolio security, other than a bond, which is traded on a U.S. national
securities exchange or a securities exchange abroad is normally valued at the
price of the last sale on the exchange as of the close of business on the date
on which assets are valued. If there are no sales on such date, such portfolio
securities will be valued at the mean between the closing bid and asked prices.
Securities, other than bonds, traded in the over-the-counter market are valued
at the mean between the last bid and asked prices prior to the time of
valuation, except if such unlisted security is among the NASDAQ designated "Tier
1" securities in which case it is valued at its last sale price. All bonds,
whether listed on an exchange or traded in the over-the-counter market, for
which market quotations are readily available are valued at the mean between the
last bid and asked prices received from dealers in the over-the-counter market
in the United States or abroad, except that when no asked price is available,
bonds are valued at the last bid price alone. Short-term investments maturing in
sixty days or less are valued at cost plus interest earned, which approximates
value. Securities for which current market quotations are not readily available
are valued at fair value as determined in good faith by the Company's Board of
Directors.
HOW TO PURCHASE SHARES
The methods of buying and selling shares and the sales charges applicable
to purchases of shares of the Fund are described in the prospectus of the
pertinent separate account.
TAX STATUS
The Fund intends to qualify annually as a "regulated investment company"
under the Code. In order to qualify as a regulated investment company for a
taxable year, the Fund must, among other things, (a) derive at least 90% of its
gross income from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies and other income derived with respect to the business of investing in
such stock, securities or currencies; (b) diversify its holdings so that, at the
end of each fiscal quarter, (i) at least 50% of the market value of its assets
is represented by cash, cash items, U.S. government securities, securities of
other regulated investment companies and other securities, with such other
securities of any one issuer qualifying only if the Fund's investment is limited
to an amount not greater than 5% of the Fund's assets or 10% of the voting
securities of the issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any one issuer (other than U.S. government
securities or securities of other regulated investment companies); and (c)
distribute at least 90% of its investment company taxable income (which
includes, among other items, dividends, interest and net short-term capital
gains in excess of net long-term capital losses) for the year.
13
<PAGE> 34
As a regulated investment company, the Fund generally will not be subject
to U.S. federal income tax on its investment company taxable income and net
capital gains (the excess of net long-term capital gains over net short-term
capital losses), if any, that it distributes to shareholders. The Fund intends
to distribute to its shareholders (the separate accounts and other qualified
investors), at least annually, substantially all of its investment company
taxable income and net capital gains. Amounts not distributed on a timely basis
in accordance with a calendar year distribution requirement are subject to a
non-deductible 4% excise tax. To prevent imposition of the excise tax, the Fund
must distribute during each calendar year an amount equal to the sum of (1) at
least 98% of its ordinary income (not taking into account any capital gains or
losses) for the calendar year, (2) at least 98% of its capital gains in excess
of its capital losses (adjusted for certain ordinary losses) for the one-year
period ending on October 31 of the calendar year, and (3) any ordinary income
and capital gains for previous years that were not distributed during those
years. A distribution will be treated as paid on December 31 of the current
calendar year if it is declared by the Fund in October, November or December
with a record date in such a month and paid by the Fund during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. To prevent application of
the excise tax, the Fund intends to make its distributions in accordance with
the calendar year distribution requirement. In some circumstances, the Fund may
qualify for an exception to the excise tax distribution requirements, but the
Fund has no obligation to seek to maintain that exception.
If in any taxable year the Fund fails to qualify as a regulated investment
company under the Code, the Fund would be taxed in the same manner as an
ordinary corporation and distributions to its shareholders would not be
deductible by the Fund in computing its taxable income. In addition, in the
event of a failure to qualify, the Fund's distributions, to the extent derived
from the Fund's current or accumulated earnings and profits, would constitute
dividends (eligible for the corporate dividends-received deduction) which are
taxable to shareholders as ordinary income, even though those distributions
might otherwise (at least in part) have been treated in the shareholders' hands
as long-term capital gains. If the Fund fails to qualify as a regulated
investment company in any year, it must pay out its earnings and profits
accumulated in that year in order to qualify again as a regulated investment
company.
The Treasury Department has indicated in published statements that it would
issue future regulations or rulings addressing the circumstances in which a
Variable Contract owner's control of the investments of a separate account may
cause the contract owner, rather than the insurance company, to be treated as
the owner of the assets held by the separate account. If the contract owner is
considered the owner of the securities underlying the separate account, income
and gains produced by those securities would be included currently in the
contract owner's gross income. It is not known what standards will be set forth
in the regulations or rulings.
In the event that the rules or regulations are adopted, there can be no
assurance that the Fund will be able to operate as currently described in the
Prospectus, or that the Fund will not have to change its investment objective or
investment policies.
Investments by the Fund in zero coupon securities will result in income to
the Fund equal to a portion of the excess of the face value of the securities
over their issue price (the "original issue discount") each year that the
securities are held, even though the Fund receives no interest payments. This
income is included in determining the amount of income which the Fund must
distribute in order to meet various distribution requirements. In addition, if
the Fund invests in certain high yield original issue discount securities issued
by corporations, a portion of the original issue discount accruing on any such
obligation may be eligible for the deduction for dividends received by
corporations. In such event, dividends of investment company taxable income
received from the Fund by its corporate shareholders, to the extent attributable
to such portion of accrued original issue discount, may be eligible for this
deduction for dividends received by corporations if so designated by the Fund in
a written notice.
Certain foreign currency contracts in which the Fund may invest may be
"section 1256 contracts." Gains or losses on section 1256 contracts generally
are considered 60% long-term and 40% short-term capital gains or losses;
however, foreign currency gains or losses (as discussed below) arising from
certain section 1256
14
<PAGE> 35
contracts may be treated as ordinary income or loss. Also, section 1256
contracts held by the Fund at the end of each taxable year (and, generally, for
purposes of the 4% excise tax, on October 31 of each year) are
"marked-to-market" (that is, treated as sold at fair market value), resulting in
unrealized gains or losses being treated as though they were realized.
Generally, the hedging transactions undertaken by the Fund may result in
"straddles" for U.S. federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by the Fund. In addition, losses
realized by the Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which the losses are realized.
Because only a few regulations implementing the straddle rules have been
promulgated, the tax consequences to the Fund of engaging in hedging
transactions are not entirely clear. Hedging transactions may increase the
amount of short-term capital gains realized by the Fund which is taxed as
ordinary income when distributed to shareholders.
The Fund may make one or more of the elections available under the Code
which are applicable to straddles. If the Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because the straddle rules may affect the character of gains or losses,
defer losses and/or accelerate the recognition of gain or losses from the
affected straddle positions, the amount which may be distributed to
shareholders, and which will be taxed to them as ordinary income or long-term
capital gains, may be increased or decreased as compared to a fund that did not
engage in such hedging transactions.
Newly enacted Section 1259 of the Code causes certain hedging transactions
to be treated as "constructive sales." If the Fund enters into hedging
transactions which reduce or eliminate its risk of loss with respect to
appreciated financial positions while holding substantially identical property
and the new constructive sales rules apply, the Fund will be treated as if it
had sold and immediately repurchased the property and would be taxed on any gain
(but not loss) from the constructive sale. The character of gain from a
constructive sale would depend upon the Fund's holding period in the property.
Loss from a constructive sale would be recognized when the property was
subsequently disposed of, and its character would depend on the Fund's holding
period and the application of various loss deferral provisions of the Code.
Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time the Fund accrues receivables or liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables, or pays such liabilities, generally are treated as ordinary income
or ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of certain foreign currency contracts, gains
or losses attributable to fluctuations in the value of foreign currency between
the date of acquisition of the security or contract and the date of disposition
also are treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "section 988" gains or losses, may increase or decrease the
amount of the Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
The Fund may be subject to foreign withholding taxes on income and gains
derived from their investments outside the United States. Such taxes would
reduce the yield on the Fund's investments. Tax treaties between certain
countries and the United States may reduce or eliminate such taxes. If more than
50% of the value of the Fund's total assets at the close of any taxable year
consists of stocks or securities of foreign corporations, the Fund may elect,
for U.S. federal income tax purposes, to treat any foreign country income or
withholding taxes paid by the Fund that can be treated as income taxes under
U.S. income tax principles, as paid by its shareholders. For any year that the
Fund makes such an election, each of its shareholders will be required to
include in his income (in addition to taxable dividends actually received) his
allocable share of such taxes paid by the Fund, and will be entitled, subject to
certain limitations, to credit his portion of these foreign taxes against his
U.S. federal income tax due, if any, or to deduct it (as an itemized deduction)
from his U.S. taxable income, if any.
15
<PAGE> 36
Generally, a credit for foreign taxes is subject to the limitation that it
may not exceed the shareholder's U.S. tax attributable to his foreign source
taxable income, except in the case of certain electing individual taxpayers who
have limited creditable foreign taxes and no foreign source income other than
passive investment-type income. With respect to the Fund, if the pass through
election described above is made, the source of the Fund's income flows through
to its shareholders. Certain gains from the sale of securities and certain
currency fluctuation gains will not be treated as foreign source taxable income.
In addition, this foreign tax credit limitation must be applied separately to
certain categories of foreign source income, one of which is foreign source
"passive income." For this purpose, foreign "passive income" includes dividends,
interest, capital gains and certain foreign currency gains. As a consequence,
certain shareholders may not be able to claim a foreign tax credit for the full
amount of their proportionate share of foreign taxes paid by the Fund. The
foreign tax credit can be used to offset only 90% of the alternative minimum tax
(as computed under the Code for purposes of this limitation) imposed on
corporations and individuals. Furthermore, the foreign tax credit is eliminated
with respect to foreign taxes withheld on dividends if the dividend-paying
shares or the shares of the Fund are held by the Fund or the shareholders, as
the case may be, for less than 16 days. (46 days in the case of preferred
shares) during the 30-day period (90-day period for preferred shares) beginning
15 days (45 days for preferred shares) before the shares become ex-dividend. In
addition, if the Fund fails to satisfy these holding period requirements, it
cannot elect under Section 853 to pass through to shareholders the ability to
claim a deduction for the related foreign taxes. If the Fund is not eligible to
make the pass-through election described above, the foreign taxes it pays will
reduce its income, and distributions by the Fund will be treated as U.S. source
income. Each shareholder will be notified within 60 days after the close of the
Fund's taxable year whether, pursuant to the election described above, the
foreign taxes paid by the Fund will be treated as paid by its shareholders for
that year and, if so, such notification will designate (i) such shareholder's
portion of the foreign taxes paid to such country and (ii) the portion of the
Fund's dividends and distributions that represents income derived from sources
within such country.
The Fund may invest in shares of foreign corporations that may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute investment-type assets, or 75% or more of its gross income
is investment-type income. If the Fund receives a so-called "excess
distribution" with respect to PFIC stock, the Fund itself may be subject to a
tax on a portion of the excess distribution, whether or not the corresponding
income is distributed by the Fund to shareholders. In general, under the PFIC
rules, an excess distribution is treated as having been realized ratably over
the period during which the Fund held the PFIC shares. The Fund will itself be
subject to tax on the portion, if any, of an excess distribution that is so
allocated to prior Fund taxable years and an interest factor will be added to
the tax, as if the tax had been payable in such prior taxable years. Certain
distributions from a PFIC as well as gain from the sale of PFIC shares are
treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
excess distributions might have been classified as capital gain.
The Fund may be eligible to elect alternative tax treatment with respect to
PFIC shares. Under an election that currently is available in some
circumstances, the Fund would be required to include in its gross income its
share of the earnings of a PFIC on a current basis, regardless of whether
distributions were received from the PFIC in a given year. If this election were
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, another election would involve
marking to market the Fund's PFIC shares at the end of each taxable year, with
the result that unrealized gains would be treated as though they were realized
and reported as ordinary income. Any mark-to-market losses and any loss from an
actual disposition of PFIC shares would be deductible as ordinary losses to the
extent of any net mark-to-market gains included in income in prior years.
BROKERAGE ALLOCATION
SGAM Corp. is responsible for selecting members of securities exchanges,
brokers and dealers (such members, brokers and dealers being hereinafter
referred to as "brokers") for the execution of the Fund's portfolio transactions
and, when applicable, the negotiation of commissions in connection therewith.
16
<PAGE> 37
Purchase and sale orders are usually placed with brokers who are selected
by SGAM Corp. as being able to achieve "best execution" of such orders. "Best
execution" means prompt and reliable execution at the most favorable securities
price, taking into account the other considerations as hereinafter set forth.
The determination of what may constitute best execution of a securities
transaction by a broker involves a number of considerations, including, without
limitation, the overall direct net economic result to the Fund (involving both
price paid or received and any commissions and other costs paid), the efficiency
with which the transaction is effected, the ability to effect the transaction at
all where a large block is involved, availability of the broker to stand ready
to execute possibly difficult transactions in the future, and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by SGAM Corp. in determining the overall reasonableness of brokerage
commissions. While there is no commitment or understanding to do so, subject to
its policy of obtaining best execution, the Fund may use affiliates of Societe
Generale as brokers in the purchase and sale of securities. SGCS may not, acting
as principal, sell any security or other property to, or purchase any security
or other property from, the Fund, except to the extent that such purchase or
sale may be permitted by an order, rule or regulation of the Securities and
Exchange Commission.
SGAM Corp. is authorized to allocate brokerage and principal business to
brokers other than SGCS (but not excluding other affiliates of Societe Generale)
who have provided brokerage and research services, as such services are defined
in Section 28(e) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), for the Fund and/or other accounts, if any, for which SGAM Corp.
exercises investment discretion (as defined in Section 3(a)(35) of the 1934 Act)
and, as to transactions as to which fixed minimum commission rates are not
applicable, to cause the Fund to pay a commission for effecting a securities
transaction in excess of the amount another broker would have charged for
effecting the transaction, if SGAM Corp. in making the selection in question
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker, viewed in terms of either that particular transaction or of SGAM Corp.'s
overall responsibilities with respect to the Fund and the other accounts as to
which it exercises investment discretion. In reaching such determination, SGAM
Corp. is not required to place or attempt to place a specific dollar value on
the research or execution services of a broker or on the portion of any
commission reflecting either of said services. In demonstrating that such
determinations were made in good faith, SGAM Corp. must be prepared to show that
all commissions were allocated and paid for purposes contemplated by the Fund's
brokerage policy; that the research services provide lawful and appropriate
assistance to SGAM Corp. in the performance of its investment decision-making
responsibilities; and that the commissions paid were within a reasonable range.
The determination that commissions were within a reasonable range will be based
on any available information as to the level of commissions known to be charged
by other brokers on comparable transactions, but there will be taken into
account the Fund's policies that (i) obtaining a low commission is deemed
secondary to obtaining a favorable securities price, since it is recognized that
usually it is more beneficial to the Fund to obtain a favorable price than to
pay the lowest commission, and (ii) the quality, comprehensiveness and frequency
of research studies which are provided for SGAM Corp. are useful to SGAM Corp.
in performing its services under the investment advisory contract with the Fund.
Research services provided by brokers to SGAM Corp. are considered to be in
addition to, and not in lieu of, services required to be performed by SGAM Corp.
under such investment advisory contract. Research services provided by brokers
include written reports, responses to specific inquiries and interviews with
analysts. These services also include invitations to meetings arranged by such
brokers with the management of companies in the Fund's portfolios or in which
the Fund may invest.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to obtaining prices at least as favorable
as those provided by other qualified brokers, SGAM Corp. may consider sales of
shares of the Fund as a factor in the selection of brokers to execute portfolio
transactions.
The Fund has been advised by SGAM Corp. that it may combine brokerage
orders for the Fund with orders from its other clients when placing such orders
with brokers for execution. In the event orders are placed for the Fund and one
or more other clients for the purchase or sale of the same security, the Fund
and each such other client may share in each transaction in the proportion that
each customer's order bears to the
17
<PAGE> 38
aggregate of such orders. The Fund's orders are accorded priority over those
received from SGAM Corp. for its own account or from any of its officers,
directors or employees.
While SGAM Corp. is primarily responsible for the allocation of the Fund's
portfolio transactions to brokers, its policies and practices in this regard
must be consistent with the foregoing and are periodically reviewed by the
Company's Board of Directors. In this connection, the directors periodically
review and discuss with SGAM Corp. the commissions paid by the Fund and, in
transactions where the Fund pays commissions which are in excess of the
commissions other brokers would have charged, SGAM Corp.'s determinations that
such higher commissions are reasonable in relation to the value of the brokerage
and research services.
For the periods February 3, 1997 (commencement of operations) through
December 31, 1997 and the year ended December 31, 1998, the Fund paid a total of
$3,828 and $12,704, respectively, in brokerage commissions, with respect to
portfolio transactions aggregating $867,702 and $3,294,328, respectively. All of
which was placed with brokers or dealers who provide research and investment
information. Of such amount, $329 and $928, respectively, in brokerage
commissions (8.594% and 7.305%, respectively, of the aggregate) with respect to
portfolio transactions aggregating $70,482 and $280,671, respectively, (8.1228%
and 8.520%, respectively, of the aggregate) was placed with SGCS, an affiliate
of the Company.
CAPITAL STOCK
The authorized capital stock of the Company consists of one billion shares
of common stock, par value $0.001 per share, of which 150,000,000 shares have
been designated as shares of the Fund. All shares issued and outstanding are
fully paid and non-assessable and are redeemable at net asset value at the
option of shareholders. Shares have no preemptive or conversion rights and are
freely transferable. The Board of Directors is authorized to classify,
reclassify and issue any unissued shares of the Fund without shareholder
approval. Accordingly, in the future, the Directors may create additional series
of shares with different investment objectives, policies or restrictions. Any
issuance of shares of another series or class would be governed by the
Investment Company Act of 1940, as amended, and Maryland law.
Pursuant to its By-Laws, the Company does not generally hold annual
meetings of shareholders. Shareholder meetings, however, will be held when
required by the Investment Company Act of 1940 or Maryland law, or when called
by the Chairman of the Board, the President or shareholders owning at least 10%
of the outstanding shares of the Fund. The cost of any such notice and meeting
will be borne by the Fund.
Each share of common stock of the Fund is entitled to one vote for each
dollar of net asset value and a proportionate fraction of a vote for each
fraction of a dollar of net asset value, unless a different allocation of voting
rights is required under applicable law for a mutual fund that is an investment
medium for Variable Contracts. Generally, shares of each series vote together on
any matter submitted to shareholders, except when otherwise required by the
Investment Company Act of 1940, or (if shares of more than one series are
outstanding), when a matter affects the interests of each series in a different
way, in which case the shareholders of each series vote separately by class. If
the directors determine that a matter does not affect the interests of a
particular series, then the shareholders of that series will not be entitled to
vote on that matter. An insurance company issuing a Variable Contract invested
in shares of the Fund (or any other series issued in the future) will request
voting instructions from Variable Contract owners and will vote shares in
proportion to the voting instructions received. Currently, the Company has
shares of one series outstanding (the Fund).
CUSTODY OF PORTFOLIO
Domestic portfolio securities of the Fund are held pursuant to a custodian
agreement between the Company and Investors Fiduciary Trust Company, 801
Pennsylvania, Kansas City, MO 64105. Certain of such securities may be deposited
in the book-entry system operated by the Federal Reserve System or with the
Depository Trust Company. The Company's sub-custodian, State Street Bank and
Trust, holds domestic securities issued in physical form. Pursuant to a Global
Custody Agreement between the Fund and The Chase
18
<PAGE> 39
Manhattan Bank ("Chase"), 4 Chase MetroTech Center, Brooklyn, NY 11245, foreign
securities may be held by certain foreign sub-custodians which are participants
in the Global Investor Services Division of Chase and in certain foreign
branches of Chase.
INDEPENDENT AUDITORS
The Company's independent auditors are KPMG LLP, Certified Public
Accountants, 345 Park Avenue, New York, NY 10154. KPMG LLP audits the Fund's
annual financial statements and renders its report thereon, which is included in
the Annual Report to Shareholders.
FINANCIAL STATEMENTS
The Fund's financial statements and notes thereto appearing in the December
31, 1998 Annual Report to Shareholders and the report thereon of KPMG LLP,
Certified Public Accountants, appearing therein are incorporated by reference in
this Statement of Additional Information. The Fund will furnish, without charge,
a copy of such Annual Report to Shareholders on request. All such requests
should be directed to the Secretary of the Fund, at 1221 Avenue of the Americas,
New York, NY 10020.
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<PAGE> 40
APPENDIX
RATINGS OF INVESTMENT SECURITIES
The rating of a rating service represents the service's opinion as to the
credit quality of the security being rated. However, the ratings are general and
are not absolute standards of quality or guarantees as to the creditworthiness
of an issuer. Consequently, the Company's investment adviser believes that the
quality of debt securities in which the Fund invests should be continuously
reviewed. A rating is not a recommendation to purchase, sell or hold a security,
because it does not take into account market value or suitability for a
particular investor. When a security has received a rating from more than one
service, each rating should be evaluated independently. Ratings are based on
current information furnished by the issuer or obtained by the ratings services
from other sources which they consider reliable. Ratings may be changed,
suspended or withdrawn as a result of changes in or unavailability of such
information, or for other reasons.
The following is a description of the characteristics of ratings used by
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").
MOODY'S RATINGS.
Aaa -- Bonds rated Aaa are judged to be the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt-edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. Although the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such bonds.
Aa -- Bonds rated Aa are judged to be high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa bonds or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than in Aaa bonds.
A -- Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B -- Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds rated Caa are of poor standing. Such bonds may be in default
or there may be present elements of danger with respect to principal or
interest.
Ca -- Bonds rated Ca represent obligations which are speculative in a high
degree. Such bonds are often in default or have other marked shortcomings.
A-1
<PAGE> 41
S&P RATINGS.
AAA -- Bonds rated AAA have the highest rating. Capacity to pay principal
and interest is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay principal and
interest and differ from AAA bonds only in small degree.
A -- Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this capacity
than for bonds in higher rated categories.
BB -- B -- CCC -- CC -- Bonds rated BB, B, CCC and CC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation among such bonds and CC the
highest degree of speculation. Although such bonds will likely have some quality
and protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.
A-2
<PAGE> 42
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <C> <C>
(a) -- Articles of Incorporation of the Registrant.*
(b) -- By-Laws of the Registrant.*
(c) -- Not Applicable.
(d) -- Investment Advisory Contract between the Registrant and
Societe Generale Asset Management Corp. ("SGAM Corp.").*
(e)(1) -- Distribution Agreement between the Registrant and SG Cowen
Securities Corporation ("SGCS").*
(e)(2) -- Form of 12b-1 Servicing Agreement Between SGCS and A Life
Insurance Company.*
(f) -- Not applicable.
(g)(1) -- Custody, Investment Accounting and Transfer Agency Agreement
between the Registrant and Investors Fiduciary Trust
Company.*
(g)(2) -- Global Custody Agreement between the Registrant and The
Chase Manhattan Bank.*
(g)(3) -- Form of Subcustodial Agreement.*
(h) -- Participation Agreement among the Registrant, A Life
Insurance Company and SGCS.*
(i) -- Opinion and Consent of Dechert Price & Rhoads.*
(j) -- Consent of KPMG LLP.
(k) -- Not applicable.
(l) -- Investment Representation letter of SGAM. Corp.*
(m) -- Rule 12b-1 Distribution Plan and Agreement Between the
Registrant and SGCS.*
(n) -- Financial Data Schedule.
(o) -- Power of Attorney of Messrs. Eveillard*, Collas*, Meyer*,
Raillard,* Snyder.*
</TABLE>
- ---------------
* Previously filed as an Exhibit to the Registration Statement
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 25. INDEMNIFICATION
Registrant is incorporated under the laws of the State of Maryland and is
subject to Section 2-418 of the Corporations and Associations Article of the
General Corporation Law of the State of Maryland controlling the indemnification
of directors and officers. Since Registrant has its executive offices in the
State of New York, and is qualified as a foreign corporation doing business in
such State, the persons covered by the foregoing statute may also be entitled to
and subject to the limitations of the indemnification provisions of Section
721-726 of the New York Business Corporation Law.
The general effect of these statutes is to protect directors, officers,
employees and agents of the Registrant against legal liability and expenses
incurred by reason of their positions with the Registrant. The statutes provide
for indemnification for liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the corporation, and in each case
place conditions under which indemnification will be permitted, including
requirements that the indemnified person acted in good faith. Under certain
conditions,
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<PAGE> 43
payment of expenses in advance of final disposition may be permitted. The
By-Laws of the Registrant make the indemnification of its directors, officers,
employees and agents mandatory subject only to the conditions and limitations
imposed by the above-mentioned Section 2-418 of Maryland Law and by the
provisions of Section 17(h) of the Investment Company Act of 1940 as interpreted
and required to be implemented by SEC Release No. IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of directors
subject to the conditions and limitations of, both Section 2-418 of the Maryland
Law and Section 17(h) of the Investment Company Act of 1940 (the "1940 Act"),
the Registrant intends that conditions and limitations on the extent of the
indemnification of directors and officers imposed by the provisions of either
Section 2-418 or Section 17(h) shall apply and that any inconsistency between
the two will be resolved by applying the provisions of said Section 17(h) if the
condition or limitation imposed by Section 17(h) is the more stringent. In
referring in its By-Laws to SEC Release No. IC-11330 as the source for
interpretation and implementation of said Section 17(h), the Registrant
understands that it would be required under its By-Laws to use reasonable and
fair means in determining whether indemnification of a director or officer
should be made and undertakes to use either (1) a final decision on the merits
by a court or other body before whom the proceeding was brought that the person
to be indemnified ("indemnitee") was not liable to the Registrant or to its
security holders by reason of willful malfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of his or her office
("disabling conduct") or (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of such disabling conduct, by (a) the vote of a majority of a
quorum of directors who are neither "interested persons" (as defined in the 1940
Act) of the Registrant nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Also, the Registrant will make advances of
attorney's fees or other expenses incurred by a director or officer in his or
her defense only if (in addition to his or her undertaking to repay the advance
if he or she is not ultimately entitled to indemnification) (1) the indemnitee
provides a security for his or her undertaking, (2) the Registrant shall be
insured against losses arising by reason of any lawful advances, or (3) a
majority of a quorum of the non-interested, non-party directors of the
Registrant, or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that there is reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.
In addition, the Registrant will maintain a directors' and officers' errors
and omissions liability insurance policy protecting directors and officers
against liability for claims made by reason of any acts, errors or omissions
committed in their capacity as directors of officers. The policy will contain
certain exclusions, among which is exclusion from coverage for active or
deliberate dishonest or fraudulent acts and exclusion for fines or penalties
imposed by law or other matters deemed uninsurable.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
SGAM Corp. is the Registrant's investment adviser. In addition to the
Registrant, SGAM Corp. acts as investment adviser to SoGen Funds, Inc. and
pension funds and sub-adviser to other affiliated and non-affiliated investment
funds.
Reference is made to "Management of the Fund" in the Statement of
Additional Information constituting Part B of this Registration Statement for a
description of the business activities and employment of certain directors and
officers of SGAM Corp. within the last two fiscal years of the Registrant. The
directors of SGAM Corp. not disclosed in Part B are as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
<S> <C>
Christian d'Allest.......................... Director of Foreign Affiliates,
2 Place de la Coupole Societe Generale Asset Management S.A.
92078 Paris La Defense Cedex
France
Jean Roger Huet............................. President, New York Branch, Societe Generale
1221 Avenue of the Americas
New York, NY 10020
</TABLE>
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<PAGE> 44
ITEM 27. PRINCIPAL UNDERWRITERS
(a) SGCS, the Registrant's distributor, acts as principal underwriter for
SoGen Funds, Inc., a registered investment company.
(b) The directors and officers of SGCS are as follows:
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Jacques Bouhet......................... Director
2 Place de la Coupole
92078 Paris La Defense Cedex
France
Joseph M. Cohen........................ Director and Chairman --
1221 Avenue of the Americas
New York, NY 10020
Jean-Bernard Guillebert................ Director --
2 Place de la Coupole
92078 Paris La Defense Cedex
France
Jean Huet.............................. Director --
1221 Avenue of the Americas
New York, NY 10020
Alain Joyet............................ Director --
1221 Avenue of the Americas
New York, NY 10020
Robert LeRoux.......................... Director --
2 Place de la Coupole
92078 Paris La Defense Cedex
France
Gerald Lacaze.......................... Director --
2 Place de la Coupole
92078 Paris La Defense Cedex
France
Jean-Paul Oudet........................ Director --
23 Rue De D'Abeville
75009, Paris
France
Yves Tuloup............................ Director --
43, rue Taitbout
75009, Paris
France
Curtis R. Welling...................... Director, President and CEO --
1221 Avenue of the Americas
New York, NY 10020
James Walsh............................ Director --
1221 Avenue of the Americas
New York, NY 10020
</TABLE>
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<PAGE> 45
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
John L Kelly........................... Chief Operating Officer --
1221 Avenue of the Americas
New York, NY 10020
Charles T. Peterson.................... Chief Financial Officer and Treasurer --
1221 Avenue of the Americas
New York, NY 10020
John J. Polanin, Jr. .................. Chief Compliance Officer --
1221 Avenue of the Americas
New York, NY 10020
William P. Bowden, Jr. ................ General Counsel and Secretary --
1221 Avenue of the Americas
New York, NY 10020
Elisabeth Q. Duncan.................... Assistant Secretary --
1221 Avenue of the Americas
New York, NY 10020
Veronica M. Iuliano.................... Assistant Secretary --
1221 Avenue of the Americas
New York, NY 10020
</TABLE>
The following officers have their principal business address at one of the
following locations as indicated:
NEW YORK
1221 Avenue of the Americas
New York, NY 10020
Tel: (212) 278-6000
Fax: (212) 278-6789
Reception areas: 6th, 9th, 10th, 12th Floors
DAYTON
Courthouse Plaza NE
Dayton, OH 45402
Tel: (937) 226-4800
Fax: (937) 226-4851
Reception area: 5th Floor
Check in at Lobby
NEW YORK
Financial Square
New York, NY 10005
Tel: (212) 495-6000
(800) 221-5616
Fax: (212) 380-8212
Reception area: 30th Floor
Security desk: 25th Floor
Sign in at Lobby
HOUSTON
1111 Bagby Street, Suite 2350
Houston, TX 77002
Tel: (713) 652-7100
(800) 231-7811
Fax: (713) 652-7199
Reception area: 23rd Floor
ALBANY
80 State Street
Albany, NY 12207
Tel: (518) 463-5244
Fax: (518) 434-3288
Reception area: 11th Floor
NEW YORK
545 Madison Avenue, 10th Floor
New York, NY 10022
Tel: (212) 339-7070
Fax: (212) 339-7077
Reception area: 10th Floor
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<PAGE> 46
BOSTON
Two International Place
Boston, MA 02110
Tel: (617) 346-3700
(800) 343-7068
Fax: (617) 428-4656
Reception area: 28th Floor
NEW YORK
280 Park Avenue, West Building -- 31st Floor
New York, NY 10017
Tel: (212) 681-2700
(800) 221-7083
Fax: (212) 681-4923
Reception area: 31st Floor
CHICAGO
190 South LaSalle Street, Suite 2200
Chicago, IL 60603
Tel: (312) 704-7400
(800) 621-0363
Fax: (312) 704-7445
Reception area: 22nd Floor
Check in at Lobby
PHOENIX
4350 East Camelback Road, Suite 135C
Phoenix, AZ 85018
Tel: (602) 840-0951
(800) 528-0469
Fax: (602) 840-7117
Reception area: 1st Floor
CLEVELAND
1375 East Ninth Street, Suite 2300
Cleveland, OH 44114
Tel: (216) 621-8300
(800) 321-3861
Fax: (216) 623-7785
Reception area: 23rd Floor
SAN FRANCISCO
Four Embarcadero Center, Suite 1200
San Francisco, CA 94111
Tel: (415) 646-7200
(800) 858-9316
Fax: (415) 434-7365
Reception area: 12th Floor
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Curtis R. Welling (Avenue of the Americas).......... Sr. Managing Director --
Georges Azzam (Avenue of the Americas).............. Managing Director --
Stephen K. Bannon (Avenue of the Americas).......... Managing Director --
John William Barr (Avenue of the Americas).......... Managing Director --
Francois Barthelemy (Avenue of the Americas)........ Managing Director --
Antoine Marc Aurele Bostsarron (Avenue of the
Americas)......................................... Managing Director --
Richard Greg Brounstein (Avenue of the Americas).... Managing Director --
John Joseph Brown (Avenue of the Americas).......... Managing Director --
William Barclay Buchanan, Jr. (Avenue of the
Americas)......................................... Managing Director --
Eric Cohen (Avenue of the Americas)................. Managing Director --
Nicholas Davide (Avenue of the Americas)............ Managing Director --
Stephen Richard Day (Avenue of the Americas)........ Managing Director --
Patrick J. Dealy (Avenue of the Americas)........... Managing Director --
J. Hugh Devlin (Avenue of the Americas)............. Managing Director --
Steven Leo Ezzes (Avenue of the Americas)........... Managing Director --
David Michael Feinman (Avenue of the Americas)...... Managing Director --
Kim Samuel Fennebresque (Avenue of the Americas).... Managing Director --
Dominic Freud (Avenue of the Americas).............. Managing Director --
Charles Iver Frumberg (Avenue of the Americas)...... Managing Director --
Ian J. Hardington (Avenue of the Americas).......... Managing Director --
Edward Thomas Hatch (Avenue of the Americas)........ Managing Director --
Roy Donald Henriksson (Avenue of the Americas)...... Managing Director --
Cynthia Ann Jay (Avenue of the Americas)............ Managing Director --
John L. Kelly (Avenue of the Americas).............. Managing Director --
Germain Louis Krecke (Avenue of the Americas)....... Managing Director --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Donald Brian Kyle (Avenue of the Americas).......... Managing Director --
Migdalia Lagoa (Avenue of the Americas)............. Managing Director --
Odell Lambroza (Avenue of the Americas)............. Managing Director --
James N. Lane (Avenue of the Americas).............. Managing Director --
Christophe LeBlanc (Avenue of the Americas)......... Managing Director --
Meriwether F. Lewis, Jr. (Avenue of the Americas)... Managing Director --
Jan B. Lochtenberg (Avenue of the Americas)......... Managing Director --
David M. Malcolm (Avenue of the Americas)........... Managing Director --
Pierre Laurent Mina (Avenue of the Americas)........ Managing Director --
John E. Mosler (Avenue of the Americas)............. Managing Director --
Christopher M. Neenan (Avenue of the Americas)...... Managing Director --
Rolando E. Pantoja (Avenue of the Americas)......... Managing Director --
Nimil Rajnikant Parekh (Avenue of the Americas)..... Managing Director --
Michael Penfield (Avenue of the Americas)........... Managing Director --
Benedicto Santiago Perez (Avenue of the Americas)... Managing Director --
Robert S. Pirie (Avenue of the Americas)............ Managing Director --
Marc Poirier (Avenue of the Americas)............... Managing Director --
Cilluame Pollet (Avenue of the Americas)............ Managing Director --
Leslie M. Richardson (Avenue of the Americas)....... Managing Director --
Vinod Sehgal (Avenue of the Americas)............... Managing Director --
Stefan Michael Selig (Avenue of the Americas)....... Managing Director --
Frank Jeffrey Setian (Avenue of the Americas)....... Managing Director --
Paul Wesley Shaum (Avenue of the Americas).......... Managing Director --
James J. Stewart, Jr. (Avenue of the Americas)...... Managing Director --
Bradley P. Summers (Avenue of the Americas)......... Managing Director --
Christopher Charles Thompson (Avenue of the
Americas)......................................... Managing Director --
Scot K. Vorse (Avenue of the Americas).............. Managing Director --
James Michael Walsh (Avenue of the Americas)........ Managing Director --
Barry W. Wood (Avenue of the Americas).............. Managing Director --
Bradford Carver Yates (Avenue of the Americas)...... Managing Director --
Richard B. Amoils (Avenue of the Americas).......... Director --
David J. Atkinson (Avenue of the Americas).......... Director --
Jean Marie Barreau (Avenue of the Americas)......... Director --
Larry Allen Bowman (Avenue of the Americas)......... Director --
Jeff Charne (Avenue of the Americas)................ Director --
Mary Chen (Avenue of the Americas).................. Director --
Jean-Louis Daniel Chicha (Avenue of the Americas)... Director --
John William Churchill (Avenue of the Americas)..... Director --
James Joseph Connelly (Avenue of the Americas)...... Director --
Richard W. Crannell, Jr. (Avenue of the Americas)... Director --
Robert H. Despirito (Avenue of the Americas)........ Director --
Martin J. Finan (Avenue of the Americas)............ Director --
Thomas G. Fischetti (Avenue of the Americas)........ Director --
Katharine Hazard Flynn (Avenue of the Americas)..... Director --
William Court Frauen (Avenue of the Americas)....... Director --
Michael Gelblat (Avenue of the Americas)............ Director --
John Michael Geremia (Avenue of the Americas)....... Director --
David Getzler (Avenue of the Americas).............. Director --
Geoffrey Alexander Gimber (Avenue of the
Americas)......................................... Director --
Stuart Victor Goldberg (Avenue of the Americas)..... Director --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Adam Harold Goodfriend (Avenue of the Americas)..... Director --
Charles Gushee (Avenue of the Americas)............. Director --
Justin A. E. Hall-Tipping (Avenue of the
Americas)......................................... Director --
Michael Han (Avenue of the Americas)................ Director --
Munir Hasan (Avenue of the Americas)................ Director --
Richard Hunter Haywood, Jr. (Avenue of the
Americas)......................................... Director --
Edward Nelson Heumann (Avenue of the Americas)...... Director --
Glori Holzman (Avenue of the Americas).............. Director --
Duncan Charles Hunter (Avenue of the Americas)...... Director --
McLloyd K. Jensen (Avenue of the Americas).......... Director --
Steve Keddell (Avenue of the Americas).............. Director --
Christopher Owen Kelly (Avenue of the Americas)..... Director --
Philippe Kerdoncuff (Avenue of the Americas)........ Director --
M. Robin Krasny (Avenue of the Americas)............ Director --
Philippe Marie L'Equilbec (Avenue of the
Americas)......................................... Director --
Robert J. Lambert (Avenue of the Americas).......... Director --
Edward Anthony LaScala (Avenue of the Americas)..... Director --
Meredith Ress Levy (Avenue of the Americas)......... Director --
Jose Maria Linares-Perou (Avenue of the Americas)... Director --
Catherine Andree Loiseau (Avenue of the Americas)... Director --
May Mallouh (Avenue of the Americas)................ Director --
Richard S. Margolin (Avenue of the Americas)........ Director --
Charles E. Mather IV (Avenue of the Americas)....... Director --
John T. Maxwell, Jr. (Avenue of the Americas)....... Director --
Patrick Joseph Memmi (Avenue of the Americas)....... Director --
Richard M. Messina (Avenue of the Americas)......... Director --
Paul Meyer (Avenue of the Americas)................. Director --
Daniel Patrick Molloy (Avenue of the Americas)...... Director --
John Monck (Avenue of the Americas)................. Director --
John Anthony Montgomery, Jr. (Avenue of the
Americas)......................................... Director --
Thomas Moyna (Avenue of the Americas)............... Director --
Sonia M. Nieves (Avenue of the Americas)............ Director --
Cheng-Choo Celicia Ong (Avenue of the Americas)..... Director --
Avi Robert Oster (Avenue of the Americas)........... Director --
Howard Chin Ho Park (Avenue of the Americas)........ Director --
Scott W. Phillips (Avenue of the Americas).......... Director --
Theodore James Podest (Avenue of the Americas)...... Director --
Victor F. Pottow (Avenue of the Americas)........... Director --
Graham A. Powis (Avenue of the Americas)............ Director --
Ronald C. Ratcliffe (Avenue of the Americas)........ Director --
Powell Robinson III (Avenue of the Americas)........ Director --
Benoit Ruaudel (Avenue of the Americas)............. Director --
Pekka J. Salo (Avenue of the Americas).............. Director --
John F. Santoro (Avenue of the Americas)............ Director --
Peter Saulnier (Avenue of the Americas)............. Director --
Andrew John Schoenfeld (Avenue of the Americas)..... Director --
Elan Adiel Schultz (Avenue of the Americas)......... Director --
Frederick Wright Searby (Avenue of the Americas).... Director --
Mark Fletcher Secrest (Avenue of the Americas)...... Director --
Paul M. Solomon (Avenue of the Americas)............ Director --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
John Stack (Avenue of the Americas)................. Director --
Anthony B. Swanwick (Avenue of the Americas)........ Director --
Dimitri Serrano Villard (Avenue of the Americas).... Director --
Yan Ian Wang (Avenue of the Americas)............... Director --
David P. Wells (Avenue of the Americas)............. Director --
Matthew C. Zolin (Avenue of the Americas)........... Director --
Michael P. Ahrens (Avenue of the Americas).......... Vice President --
Ian Allport (Avenue of the Americas)................ Vice President --
Gerardo E. Ancalmo (Avenue of the Americas)......... Vice President --
David French Apple III (Avenue of the Americas)..... Vice President --
Julia M. Arnold (Avenue of the Americas)............ Vice President --
Antoine Oliver Auboyneau (Avenue of the Americas)... Vice President --
Jennifer Ann Banks (Avenue of the Americas)......... Vice President --
John Bianco (Avenue of the Americas)................ Vice President --
Martino Boffa (Avenue of the Americas).............. Vice President --
Andrew Clark Brummer (Avenue of the Americas)....... Vice President --
Gerald Scott Cantini (Avenue of the Americas)....... Vice President --
Timothy John Carey (Avenue of the Americas)......... Vice President --
Robert Chao (Avenue of the Americas)................ Vice President --
Rajshekar Chatterjea (Avenue of the Americas)....... Vice President --
Dennis J. Ciocon (Avenue of the Americas)........... Vice President --
Stephen M. Clifford (Avenue of the Americas)........ Vice President --
D. K. Cockrell II (Avenue of the Americas).......... Vice President --
Charles S. Coffman (Avenue of the Americas)......... Vice President --
Ross M. Cohen (Avenue of the Americas).............. Vice President --
Arthur G. Condodina (Avenue of the Americas)........ Vice President --
Yolanda Cristina Courtines (Avenue of the
Americas)......................................... Vice President --
Suzanna Lucy D'Oyly (Avenue of the Americas)........ Vice President --
Walter J. DeCanio, Jr. (Avenue of the Americas)..... Vice President --
Gerard C. Dentinger (Avenue of the Americas)........ Vice President --
Arnaud Marc DeSombre (Avenue of the Americas)....... Vice President --
Chin-Eav Eap (Avenue of the Americas)............... Vice President --
Sarah Z. Emamy (Avenue of the Americas)............. Vice President --
John Enderle (Avenue of the Americas)............... Vice President --
Nathan Engelhard (Avenue of the Americas)........... Vice President --
Stephen Joseph Fantozzi (Avenue of the Americas).... Vice President --
Brian Lawrence Feit (Avenue of the Americas)........ Vice President --
Daniel Fields (Avenue of the Americas).............. Vice President --
Robert Florio (Avenue of the Americas).............. Vice President --
Thomas Edward Fox (Avenue of the Americas).......... Vice President --
Gordes Frobenius (Avenue of the Americas)........... Vice President --
Jose Manuel Garcia (Avenue of the Americas)......... Vice President --
Steven Bennett Goode (Avenue of the Americas)....... Vice President --
Michael Troy Grendi (Avenue of the Americas)........ Vice President --
Edward J. Grimm (Avenue of the Americas)............ Vice President --
Michael J. Grippo (Avenue of the Americas).......... Vice President --
Jose L. Gutierrez (Avenue of the Americas).......... Vice President --
Christopher Hagstrom (Avenue of the Americas)....... Vice President --
Sheikh U. Hameed (Avenue of the Americas)........... Vice President --
Markus Sebastian Hansen (Avenue of the Americas).... Vice President --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Glenn Randal Harris (Avenue of the Americas)........ Vice President --
Robert Paul Hinchcliffe (Avenue of the Americas).... Vice President --
James Christopher Hopkins (Avenue of the
Americas)......................................... Vice President --
Mark Edmond Jackson (Avenue of the Americas)........ Vice President --
Richard D. Jacobson (Avenue of the Americas)........ Vice President --
Kenton Leroy Jernigan (Avenue of the Americas)...... Vice President --
Andrew Kennedy Joseph Pernambuco (Avenue of the
Americas)......................................... Vice President --
Patricia Jouan (Avenue of the Americas)............. Vice President --
Vanessa Kefaifi (Avenue of the Americas)............ Vice President --
Ali Kettani (Avenue of the Americas)................ Vice President --
Geraldine Nicole Kilgore (Avenue of the Americas)... Vice President --
Beomsu Kim (Avenue of the Americas)................. Vice President --
Michael Sangkook Kim (Avenue of the Americas)....... Vice President --
Elizabeth Anne Kullman (Avenue of the Americas)..... Vice President --
Hiroki Michael Kurita (Avenue of the Americas)...... Vice President --
Kenneth Lampert (Avenue of the Americas)............ Vice President --
Linda Langley (Avenue of the Americas).............. Vice President --
Steven A. Levy (Avenue of the Americas)............. Vice President --
Keke Li (Avenue of the Americas).................... Vice President --
Norval Vincent Loftus II (Avenue of the Americas)... Vice President --
Lester Samuel Long (Avenue of the Americas)......... Vice President --
James Joseph Lyons III (Avenue of the Americas)..... Vice President --
John Madden (Avenue of the Americas)................ Vice President --
Iris C. Mak (Avenue of the Americas)................ Vice President --
John Joseph Mandy, Jr. (Avenue of the Americas)..... Vice President --
Vincent Stanley Marchewka (Avenue of the
Americas)......................................... Vice President --
Joseph Marino (Avenue of the Americas).............. Vice President --
Peter Joseph Marquis (Avenue of the Americas)....... Vice President --
Robert Marx (Avenue of the Americas)................ Vice President --
Gregory Vincent Matthews (Avenue of the Americas)... Vice President --
James V. McCloskey (Avenue of the Americas)......... Vice President --
Sean McNulty (Avenue of the Americas)............... Vice President --
Sharyanne Joy McSwain (Avenue of the Americas)...... Vice President --
Michelle Sybil Melendez (Avenue of the Americas).... Vice President --
Luis E. Mendoza (Avenue of the Americas)............ Vice President --
Xavier Mimaud (Avenue of the Americas).............. Vice President --
Louis William Mitchell (Avenue of the Americas)..... Vice President --
John P. Mueller (Avenue of the Americas)............ Vice President --
Terek Nakhla (Avenue of the Americas)............... Vice President --
Harlan Nebenhaus (Avenue of the Americas)........... Vice President --
Edwin S. Olsen (Avenue of the Americas)............. Vice President Vice President
John H. Padwater (Avenue of the Americas)........... Vice President --
David Andrew Philbin (Avenue of the Americas)....... Vice President --
Steven J. Pischel (Avenue of the Americas).......... Vice President --
Efstathia Pylarinou (Avenue of the Americas)........ Vice President --
David Paul Ricciardi (Avenue of the Americas)....... Vice President --
Daniel Joseph Roche (Avenue of the Americas)........ Vice President --
JonPaul Rorech (Avenue of the Americas)............. Vice President --
Samuel Alexander Rosenberg (Avenue of the
Americas)......................................... Vice President --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Patrick A. Russo (Avenue of the Americas)........... Vice President --
Vera Mihailova Sevrouk (Avenue of the Americas)..... Vice President --
Gregory Daniel Shinnick (Avenue of the Americas).... Vice President --
Mansoor Siddiqui (Avenue of the Americas)........... Vice President --
Erica D. Skala (Avenue of the Americas)............. Vice President --
Robert James Smock (Avenue of the Americas)......... Vice President --
John A. Spettell (Avenue of the Americas)........... Vice President --
Christopher Stala (Avenue of the Americas).......... Vice President --
Nathalie Trexier (Avenue of the Americas)........... Vice President --
Richard Tramutola (Avenue of the Americas).......... Vice President --
Alexander Turkenich (Avenue of the Americas)........ Vice President --
Ruth Anne Upton (Avenue of the Americas)............ Vice President --
Robert W. Vandervalk (Avenue of the Americas)....... Vice President --
Ralph D. Varriale (Avenue of the Americas).......... Vice President --
Carmine A. Venezia (Avenue of the Americas)......... Vice President --
Nicholas Viscuglia (Avenue of the Americas)......... Vice President --
Paul Weimer (Avenue of the Americas)................ Vice President --
Michael Weir (Avenue of the Americas)............... Vice President --
Rony Ben Weissman (Avenue of the Americas).......... Vice President --
Christopher J. Wood (Avenue of the Americas)........ Vice President --
Martin B. Yallop (Avenue of the Americas)........... Vice President --
Mary Ching Yu (Avenue of the Americas).............. Vice President --
Michael J. Zilik (Avenue of the Americas)........... Vice President --
Robert D. Clore (Albany)............................ Director --
Norbert A. Considine (Albany)....................... Director --
Francis H. Trombly (Albany)......................... Managing Director --
George C. Danes (Albany)............................ Vice President --
Alan V. Iselin (Albany)............................. Vice President --
Edwin S. Myers (Albany)............................. Vice President --
Kenneth Nirenberg (Albany).......................... Vice President --
Brian A. Woodland (Albany).......................... Vice President --
Susan Ahern-Wiercinsk (Boston)...................... Director --
Amy L. Burns (Boston)............................... Director --
Thomas M. Chilton (Boston).......................... Director --
Michael B. Donohue (Boston)......................... Director --
Jamie Fagan (Boston)................................ Director --
John T. Fitzsimons (Boston)......................... Director --
Thomas E. Caffney (Boston).......................... Director --
Herbert H. Gross (Boston)........................... Director --
Robert W. Kilcoyne (Boston)......................... Director --
Neal F. Maclean (Boston)............................ Director --
Robert F. Miller (Boston)........................... Director --
Roy F. Northrop (Boston)............................ Director --
John J. O'Connor (Boston)........................... Director --
Ian C. Sanderson (Boston)........................... Director --
Dale A. Spencer (Boston)............................ Director --
William D. Vanech (Boston).......................... Director --
Richard A. Altschuler (Boston)...................... Managing Director --
Alice C. Avanian (Boston)........................... Managing Director --
Andrew Caulfi Brosseau (Boston)..................... Managing Director --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Richard Chu (Boston)................................ Managing Director --
John C. Donahue (Boston)............................ Managing Director --
Guy E. Heald (Boston)............................... Managing Director --
William F. Herbert (Boston)......................... Managing Director --
James C. Kedersha (Boston).......................... Managing Director --
Edmund E. Kroll (Boston)............................ Managing Director --
Joseph A. Majike (Boston)........................... Managing Director --
Malcolm G. McDonald (Boston)........................ Managing Director --
Michael G. Mullen (Boston).......................... Managing Director --
Michael J. Neuberger (Boston)....................... Managing Director --
Susan M. Passoni (Boston)........................... Managing Director --
Drew D. Peck (Boston)............................... Managing Director --
Stephen Reilly (Boston)............................. Managing Director --
Henrik Rhenman (Boston)............................. Managing Director --
Stephen M. Scala (Boston)........................... Managing Director --
Hugh T. Shytle (Boston)............................. Managing Director --
Arthur J. Stavaridis (Boston)....................... Managing Director --
Christopher T. Stix (Boston)........................ Managing Director --
Robert W. Stone (Boston)............................ Managing Director --
Satish K. Tyagi (Boston)............................ Managing Director --
Hans C. Vitzthum (Boston)........................... Managing Director --
Cai Vonrumohr (Boston).............................. Managing Director --
James P. Ward (Boston).............................. Managing Director --
Stephen Weber (Boston).............................. Managing Director --
Raymond Moran (Boston).............................. Sr. Managing Director --
Richard E. Byrd (Boston)............................ Vice President --
Ronald R. Desbois (Boston).......................... Vice President --
Donna L. Dion (Boston).............................. Vice President --
Brian K. Dolliver (Boston).......................... Vice President --
Warren M. Dowd (Boston)............................. Vice President --
William F. Durkin (Boston).......................... Vice President --
William A. Essley (Boston).......................... Vice President --
Henry B. Gill (Boston).............................. Vice President --
Chandler R. Grinnell (Boston)....................... Vice President --
Camille E. Humphries (Boston)....................... Vice President --
Eric A. Laub (Boston)............................... Vice President --
Melinda A. Mann (Boston)............................ Vice President --
John R. Mitchell (Boston)........................... Vice President --
George J. Mutrie (Boston)........................... Vice President --
James O'Hare (Boston)............................... Vice President --
Ralph Reilly (Boston)............................... Vice President --
Robert T. Schwartz (Boston)......................... Vice President --
Rau K. Seth (Boston)................................ Vice President --
Robert C. Swanson (Boston).......................... Vice President --
Rehan A. Syed (Boston).............................. Vice President --
Arthur D. Traub (Boston)............................ Vice President --
Wojciech Uzdelewicz (Boston)........................ Vice President --
Steven B. Worth (Boston)............................ Vice President --
Stephen Y. Yamane (Boston).......................... Vice President --
Lesli L. Babbs (Chicago)............................ Director --
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Raymond P. Dempsey (Chicago)........................ Director --
Stuart L. Marcus (Chicago).......................... Director --
William H. Metz (Chicago)........................... Director --
James P. Meyer (Chicago)............................ Director --
Bernard B. Neuman (Chicago)......................... Director --
Thomas J. Parkins (Chicago)......................... Director --
Kurt B. Karmin (Chicago)............................ Managing Director --
Franklyn B. Theis (Chicago)......................... Managing Director --
Jay Brahin (Chicago)................................ Vice President --
Thomas A. Cantwell (Chicago)........................ Vice President --
Michael P. Dry (Chicago)............................ Vice President --
Phillip Falk (Chicago).............................. Vice President --
Stanley M. Freehling (Chicago)...................... Vice President --
Michael S. Gordon (Chicago)......................... Vice President --
Philip J. Karmin (Chicago).......................... Vice President --
John M. Leonard (Chicago)........................... Vice President --
Patti R. Levin (Chicago)............................ Vice President --
Robert J. Mison (Chicago)........................... Vice President --
Phillip R. Peterson (Chicago)....................... Vice President --
Scott M. Weiss (Chicago)............................ Vice President --
James G. Zastrow (Chicago).......................... Vice President --
Frank A. Cercone (Cleveland)........................ Director --
Allen W. Gerard (Cleveland)......................... Director --
William M. Gerard (Cleveland)....................... Director --
John V. Goodman (Cleveland)......................... Director --
Frank D. Gruttadauria (Cleveland)................... Managing Director --
Bennett Adler (Cleveland)........................... Vice President --
Kim Almendinger (Cleveland)......................... Vice President --
Timothy C. Hayes (Cleveland)........................ Vice President --
Louis B. Korosec (Cleveland)........................ Vice President --
Dennis M. Marin (Cleveland)......................... Vice President --
David A. Tissue (Cleveland)......................... Vice President --
Laszlo B. Torzsok (Cleveland)....................... Vice President --
Thomas Watterson (Cleveland)........................ Vice President --
Ralph P. Hamberg (Dayton)........................... Director --
William McCormick (Dayton).......................... Managing Director --
Bernard Rabinowitz (Dayton)......................... Managing Director --
Timothy J. Brown (Dayton)........................... Vice President --
Nicholas G. Michael (Dayton)........................ Vice President --
W. Robert Waltersheide (Dayton)..................... Vice President --
Carl V. Whitener (Dayton)........................... Vice President --
Joseph Cohen (Fifth Avenue)......................... Chairman and CEO --
Eratch Samuel Arukian (Financial Square)............ Director --
Kevin A. Augustus (Financial Square)................ Director --
Vincent A. Aversano (Financial Square).............. Director --
James G. Ballentyne (Financial Square).............. Director --
John S. Barker (Financial Square)................... Director --
John P. Barton (Financial Square)................... Director --
Rodd M. Baxter (Financial Square)................... Director --
Robert Beach (Financial Square)..................... Director --
</TABLE>
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<PAGE> 54
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Peter C. Beh (Financial Square)..................... Director --
Bradley T. Berk (Financial Square).................. Director --
Alan S. Bernstein (Financial Square)................ Director --
Robert B. Bull (Financial Square)................... Director --
Peter Byer (Financial Square)....................... Director --
Edward J. Byrne (Financial Square).................. Director --
Anthony C. Cacioppo (Financial Square).............. Director --
Frank A. Calcutta (Financial Square)................ Director --
Robert Caruso (Financial Square).................... Director --
Valentine J. Cassotta (Financial Square)............ Director --
David A. Chilvers (Financial Square)................ Director --
Michael H. Cohen (Financial Square)................. Director --
Thomas K. Conner (Financial Square)................. Director --
William J. Cutrone (Financial Square)............... Director --
Angelo Degaeta (Financial Square)................... Director --
Matthew J. Duemesi (Financial Square)............... Director --
Paul Elliott (Financial Square)..................... Director --
John P. Farrell (Financial Square).................. Director --
Laurence T. Fell (Financial Square)................. Director --
John Ferri (Financial Square)....................... Director --
Brian J. Finn (Financial Square).................... Director --
Daniel R. Fitzpatrick (Financial Square)............ Director --
Jeffrey E. Fox (Financial Square)................... Director --
Timothy J. Gianfreda (Financial Square)............. Director --
Annette C. Grimaldi (Financial Square).............. Director --
Ted Gutierrez (Financial Square).................... Director --
Thomas E. Heinz (Financial Square).................. Director --
Paul D. Houk (Financial Square)..................... Director --
Neil A. Hyman (Financial Square).................... Director --
Gordon G. Ifill (Financial Square).................. Director --
Diane E. Jaffee (Financial Square).................. Director --
Daniel S. Johnson (Financial Square)................ Director --
Kevin M. Killian (Financial Square)................. Director --
Leslie Kirkpatrick (Financial Square)............... Director --
Alan E. Koepplin (Financial Square)................. Director --
Alexander P. Krasutsky (Financial Square)........... Director --
David C. Laub (Financial Square).................... Director --
Todd V. Leone (Financial Square).................... Director --
Edward H. Levin (Financial Square).................. Director --
David R. MacFarlane (Financial Square).............. Director --
James Maheras (Financial Square).................... Director --
Robert M. Manning (Financial Square)................ Director --
Eric C. Martin (Financial Square)................... Director --
Alistair C. McDougall (Financial Square)............ Director --
Michael McGorry (Financial Square).................. Director --
Cale W. Moser (Financial Square).................... Director --
Julie L. Neumann (Financial Square)................. Director --
Michele Nowak (Financial Square).................... Director --
Robert Anthon O'Connor (Financial Square)........... Director --
Thomas J. Papa (Financial Square)................... Director --
</TABLE>
C-13
<PAGE> 55
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Jorge Pedreira (Financial Square)................... Director --
James K. Pryor (Financial Square)................... Director --
Clifford Rand (Financial Square).................... Director --
John Ratkoski (Financial Square).................... Director --
Alexander C. Reamer (Financial Square).............. Director --
Fady Rizk (Financial Square)........................ Director --
Russel D. Rogers (Financial Square)................. Director --
Ronald J. Russell (Financial Square)................ Director --
William M. Ryan (Financial Square).................. Director --
Carlos R. Salmon (Financial Square)................. Director --
Linda M. Shields (Financial Square)................. Director --
James R. Simmons (Financial Square)................. Director --
Dean G. Stamos (Financial Square)................... Director --
Mark R. Stanton (Financial Square).................. Director --
Terrance M. Stephenson (Financial Square)........... Director --
Andrew G. Stillman (Financial Square)............... Director --
Andrew J. Turchin (Financial Square)................ Director --
Laurence D. Udell (Financial Square)................ Director --
Angelo R. Vasiento (Financial Square)............... Director --
Edward M. Vetri (Financial Square).................. Director --
John J. Walsh (Financial Square).................... Director --
Robert M. Greenberger (Financial Square)............ Director of Tax --
Mir S. Ali (Financial Square)....................... Managing Director --
Anthony J. Aliberti (Financial Square).............. Managing Director --
Domingo Alonso (Financial Square)................... Managing Director --
Joseph A. Augustine (Financial Square).............. Managing Director --
William A. Belfiore (Financial Square).............. Managing Director --
Robert Benjamin Jr. (Financial Square).............. Managing Director --
Anthony Bergamaschi (Financial Square).............. Managing Director --
Christopher A. Beyer (Financial Square)............. Managing Director --
Benedict E. Capaldi (Financial Square).............. Managing Director --
Hanjin M. Chung (Financial Square).................. Managing Director --
William Church (Financial Square)................... Managing Director --
Peter E. Cohen (Financial Square)................... Managing Director --
Phil Conti (Financial Square)....................... Managing Director --
Arthur Cowen (Financial Square)..................... Managing Director --
Beth Dorfman (Financial Square)..................... Managing Director --
John P. Dunphy (Financial Square)................... Managing Director --
Richard B. Frackman (Financial Square).............. Managing Director --
Edwin H. Gordon (Financial Square).................. Managing Director --
Jeremiah J. Harrington (Financial Square)........... Managing Director --
Edward Herbst (Financial Square).................... Managing Director --
James M. Hesburgh (Financial Square)................ Managing Director --
Gary J. Kaminsky (Financial Square)................. Managing Director --
Gerald Kaminsky (Financial Square).................. Managing Director --
Jeffrey B. Kiley (Financial Square)................. Managing Director --
Catherine M. Klema (Financial Square)............... Managing Director --
Stuart S. Lovejoy (Financial Square)................ Managing Director --
Stephen Malfitano (Financial Square)................ Managing Director --
Joseph M. Marinaro (Financial Square)............... Managing Director --
</TABLE>
C-14
<PAGE> 56
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Paul C. Marsh (Financial Square).................... Managing Director --
William Matthews (Financial Square)................. Managing Director --
James K. McGowan (Financial Square)................. Managing Director --
Carl A. Merz (Financial Square)..................... Managing Director --
Donald F. Novell (Financial Square)................. Managing Director --
Creighton H. Peet (Financial Square)................ Managing Director --
John Polanin (Financial Square)..................... Managing Director --
Charles J. Pradilla (Financial Square).............. Managing Director --
Paul S. Raniolo (Financial Square).................. Managing Director --
James B. Raphalian (Financial Square)............... Managing Director --
William Rechter (Financial Square).................. Managing Director --
Richard L. Rugani (Financial Square)................ Managing Director --
Thomas R. Schwartz (Financial Square)............... Managing Director --
Kenneth M. Sheinberg (Financial Square)............. Managing Director --
Alan L. Streeter (Financial Square)................. Managing Director --
Richard S. Striefler (Financial Square)............. Managing Director --
Timothy J. Walsh (Financial Square)................. Managing Director --
Stephanie S. Young (Financial Square)............... Managing Director --
Jonathen H. Zauderer (Financial Square)............. Managing Director --
Charles T. Peterson (Financial Square).............. Managing Director -- CFO --
David R. Sarns (Financial Square)................... Managing Director & CAO --
Sanjiv L. Agashe (Financial Square)................. Vice President --
Duane R. Aliah (Financial Square)................... Vice President --
Robert W. Aloisi (Financial Square)................. Vice President --
Charles V. Baltic (Financial Square)................ Vice President --
Rebecca L. Barker (Financial Square)................ Vice President --
Hugh Bellingreri (Financial Square)................. Vice President --
Roberta Bernardi (Financial Square)................. Vice President --
Gregory J. Boettle (Financial Square)............... Vice President --
William J. Bonde (Financial Square)................. Vice President --
Peter M. Borzi (Financial Square)................... Vice President --
Chester C. Burley (Financial Square)................ Vice President --
Christopher E. Burt (Financial Square).............. Vice President --
Sam N. Bushrui (Financial Square)................... Vice President --
William D. Byrne (Financial Square)................. Vice President --
Michael S. Cannizzaro (Financial Square)............ Vice President --
William A. Cantor (Financial Square)................ Vice President --
Harold E. Chaize (Financial Square)................. Vice President --
Michael J. Chell (Financial Square)................. Vice President --
Hong Y. Cheng (Financial Square).................... Vice President --
Lorie M. Clarke (Financial Square).................. Vice President --
Edgard E. Coen (Financial Square)................... Vice President --
Perry Cooper (Financial Square)..................... Vice President --
Philip P. Cushman (Financial Square)................ Vice President --
Joseph P. Cusumano (Financial Square)............... Vice President --
Russ M. Davidson (Financial Square)................. Vice President --
Scott S. Davis (Financial Square)................... Vice President --
Stephen J. Davis (Financial Square)................. Vice President --
</TABLE>
C-15
<PAGE> 57
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
John M. Delbalso (Financial Square)................. Vice President --
James Denning (Financial Square).................... Vice President --
Alfonso R. Depippo (Financial Square)............... Vice President --
Mary J. Digeronimo (Financial Square)............... Vice President --
Brendan M. Dooley (Financial Square)................ Vice President --
Patrick S. Dote (Financial Square).................. Vice President --
Raymond Dowling (Financial Square).................. Vice President --
Bebe Doyle (Financial Square)....................... Vice President --
Deborah A. Drachman (Financial Square).............. Vice President --
Karen C. Duffy (Financial Square)................... Vice President --
Thomas B. Evans (Financial Square).................. Vice President --
Frank A. Fanelli (Financial Square)................. Vice President --
Gary Farber (Financial Square)...................... Vice President --
Michael E. Ferraro (Financial Square)............... Vice President --
Leonard Finkelstein (Financial Square).............. Vice President --
Stephen L. Fochtman (Financial Square).............. Vice President --
William J. Follis (Financial Square)................ Vice President --
Vincent J. Formato (Financial Square)............... Vice President --
Vincent C. Fulco (Financial Square)................. Vice President --
Michael Galante (Financial Square).................. Vice President --
John P. Gantly (Financial Square)................... Vice President --
Anthony R. Giardina (Financial Square).............. Vice President --
Steven J. Gracyalny (Financial Square).............. Vice President --
Arthur N. Gravanis (Financial Square)............... Vice President --
Steven E. Grunblatt (Financial Square).............. Vice President --
Perry A. Guarracino (Financial Square).............. Vice President --
Barbara Ann Heuwetter (Financial Square)............ Vice President --
Daniel Hufnagel (Financial Square).................. Vice President --
Thomas L. Hyde (Financial Square)................... Vice President --
Gregg T. Iezza (Financial Square)................... Vice President --
Janet D. Johns (Financial Square)................... Vice President --
Richard C. Jordan (Financial Square)................ Vice President --
Pack A. Knowles (Financial Square).................. Vice President --
Matthew Lambert (Financial Square).................. Vice President --
Joseph H. Langley (Financial Square)................ Vice President --
Jason A. Lanzetta (Financial Square)................ Vice President --
Linda J. Laub (Financial Square).................... Vice President --
Richard D. Lynch (Financial Square)................. Vice President --
Kaz W. Madry (Financial Square)..................... Vice President --
John Makris (Financial Square)...................... Vice President --
Thomas Manetta (Financial Square)................... Vice President --
Maurice M. Marcott (Financial Square)............... Vice President --
Delia M. Marshall (Financial Square)................ Vice President --
Sean M. McAuley (Financial Square).................. Vice President --
Thomas J. McKay (Financial Square).................. Vice President --
Robert Minion, Jr. (Financial Square)............... Vice President --
Paul N. Mitsakos (Financial Square)................. Vice President --
Edward P. Moore (Financial Square).................. Vice President --
John P. Mottes (Financial Square)................... Vice President --
Daniel J. Murphy (Financial Square)................. Vice President --
</TABLE>
C-16
<PAGE> 58
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Jeanne Muscarella (Financial Square)................ Vice President --
Robert H. Neumann (Financial Square)................ Vice President --
Marjorie M. Newell (Financial Square)............... Vice President --
James J. Oliver (Financial Square).................. Vice President --
Augustine J. Ortiz (Financial Square)............... Vice President --
Saverio J. Palazzolo (Financial Square)............. Vice President --
Vincent A. Palmese (Financial Square)............... Vice President --
Marylou Panza (Financial Square).................... Vice President --
Vincent W. Porcelli (Financial Square).............. Vice President --
Kevin J. Pryor (Financial Square)................... Vice President --
Luis A. Rangel (Financial Square)................... Vice President --
Gerard Rasulo (Financial Square).................... Vice President --
Scott E. Reamer (Financial Square).................. Vice President --
Joseph J. Rice (Financial Square)................... Vice President --
Mark E. Robinson (Financial Square)................. Vice President --
Alvin Rodolfo (Financial Square).................... Vice President --
Robert J. Romano (Financial Square)................. Vice President --
William J. Romer (Financial Square)................. Vice President --
Ranana S. Rosoff (Financial Square)................. Vice President --
William Ryan (Financial Square)..................... Vice President --
Peter D. Saganski (Financial Square)................ Vice President --
Irwood Schlackman (Financial Square)................ Vice President --
Eric T. Schmidt (Financial Square).................. Vice President --
Peter J. Schmole (Financial Square)................. Vice President --
David B. Seaburg (Financial Square)................. Vice President --
Doran T. Seaquist (Financial Square)................ Vice President --
Gary J. Semeraro (Financial Square)................. Vice President --
Daniel I. Small (Financial Square).................. Vice President --
Raymond K. Smith (Financial Square)................. Vice President --
Jonathan Sopher (Financial Square).................. Vice President --
John J. Sperring (Financial Square)................. Vice President --
Eugenie M. Sullivan (Financial Square).............. Vice President --
Gary E. Taelman (Financial Square).................. Vice President --
Deborah E. Virella (Financial Square)............... Vice President --
Kenneth R. Ward (Financial Square).................. Vice President --
Peter Webb (Financial Square)....................... Vice President --
David J. Weinstein (Financial Square)............... Vice President --
John Wolf (Financial Square)........................ Vice President --
Louis K. Yung (Financial Square).................... Vice President --
Howard N. Schrage (Financial Square)................ Vice President/ --
Sales Trader
Gerri L. Seigel (Financial Square).................. VP Assist. General Counsel --
Robert Baker, Sr. (Houston)......................... Director --
David Beveridge (Houston)........................... Director --
James Kearney (Houston)............................. Director --
David C. Morris (Houston)........................... Director --
Richard J. Roeder (Houston)......................... Director --
Roger G. Stotler (Houston).......................... Director --
Robert Baker, Jr. (Houston)......................... Vice President --
</TABLE>
C-17
<PAGE> 59
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
James T. Bennett (Houston).......................... Vice President --
John W. Gilbert (Houston)........................... Vice President --
Harry P. Gould (Houston)............................ Vice President --
Joyce Z. Greenberg (Houston)........................ Vice President --
William Hughes (Houston)............................ Vice President --
Jordan R. Larimore (Houston)........................ Vice President --
Stanley J. Taylor (Houston)......................... Vice President --
Charles Wood (Houston).............................. Vice President --
Samuel D. Williams (Madison Avenue)................. Director --
Arthur Gray, Jr. (Madison Avenue)................... Managing Director --
Stephen R. Bartholow (Madison Avenue)............... Vice President --
Richard B. Buckley (New Haven)...................... Director --
Matthew J. Donofrio (New Haven)..................... Director --
Robert Constant (Park Avenue)....................... Director --
Mitchell H. Fillet (Park Avenue).................... Director --
Ronald D. Glickman (Park Avenue).................... Director --
Richard J. Gusick (Park Avenue)..................... Director --
Raymond H. Levesque (Park Avenue)................... Director --
Scott B. Livingston (Park Avenue)................... Director --
Lawrence S. Loughlin (Park Avenue).................. Director --
Christopher Namize (Park Avenue).................... Director --
Steven P. Southworth (Park Avenue).................. Director --
Alan C. Wolman (Park Avenue)........................ Director --
Robert S. Walterman (Park Avenue)................... Managing Director -- --
Branch Manager
Gregory Delmonte (Park Avenue)...................... Vice President --
Alan Ertel (Park Avenue)............................ Vice President --
Eveline R. Hunt (Park Avenue)....................... Vice President --
William O. Kimberly (Park Avenue)................... Vice President --
Leonard C. Kline (Park Avenue)...................... Vice President --
Michael T. Little (Park Avenue)..................... Vice President --
Michael P. Maher (Park Avenue)...................... Vice President --
Ondine L.M. McBurney (Park Avenue).................. Vice President --
Frederick Moscowitch (Park Avenue).................. Vice President --
Donald N. Murray (Park Avenue)...................... Vice President --
Cynthia M. Nelson (Park Avenue)..................... Vice President --
Jeryl L. Paris (Park Avenue)........................ Vice President --
Alvin J. Smith (Park Avenue)........................ Vice President --
Ned R. Somers (Park Avenue)......................... Vice President --
Alfred S. Thurber (Park Avenue)..................... Vice President --
Harold Wegbreit (Park Avenue)....................... Vice President --
Howard R. Emden (Phoenix)........................... Director --
Bruce A. Blockley (San Francisco)................... Director --
William T. Cook (San Francisco)..................... Director --
George Eberle (San Francisco)....................... Director --
Adam N. Green (San Francisco)....................... Director --
Henry Lim (San Francisco)........................... Director --
Timothy J. Ng (San Francisco)....................... Director --
Dewey L. Shepherd (San Francisco)................... Director --
Duncan T. Weaver (San Francisco).................... Director --
</TABLE>
C-18
<PAGE> 60
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- -------------------------- ---------------------
<S> <C> <C>
Nancy M. Crowell (San Francisco).................... Managing Director --
Jeffrey P. Harmon (San Francisco)................... Managing Director --
George G. Montgomery (San Francisco)................ Managing Director --
Jerrold B. Newman (San Francisco)................... Managing Director --
Joseph P. O'Connor (San Francisco).................. Managing Director --
Richard T. Pang (San Francisco)..................... Managing Director --
Robert D. Valdez (San Francisco).................... Managing Director --
Michael J. Zolezzi (San Francisco).................. Managing Director --
Patricia D. Allbee (San Francisco).................. Vice President --
Sandra L. Asch (San Francisco)...................... Vice President --
John B. Batdorf (San Francisco)..................... Vice President --
Matthew G. Casey (San Francisco).................... Vice President --
Alexander S. Cushner (San Francisco)................ Vice President --
Thomas L. Elzner (San Francisco).................... Vice President --
Richard J. Hart (San Francisco)..................... Vice President --
Stephen W. Kurad (San Francisco).................... Vice President --
Scott A. Levaggi (San Francisco).................... Vice President --
Alan R. Marcum (San Francisco)...................... Vice President --
Veronica H. McCarthy (San Francisco)................ Vice President --
Mary K. McCullough (San Francisco).................. Vice President --
Benjamin H. Miller (San Francisco).................. Vice President --
Ann S. Shammas (San Francisco)...................... Vice President --
Fabio Simi (San Francisco).......................... Vice President --
Timothy M. Smith (San Francisco).................... Vice President --
Michael T. Staiger (San Francisco).................. Vice President --
</TABLE>
(c) None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are maintained at the offices of the Registrant, 1221 Avenue of the
Americas, New York, NY 10020 with the exception of certain accounts, books and
other documents which are kept by the Registrant's custodian, Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, MO 64105.
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
The Registrant undertakes to call a meeting of shareholders for the purpose
of voting upon the question of removal of a director, if requested to do so by
the holders of at least 10% of the Fund's outstanding shares, and that it will
assist communication with other shareholders as required by Section 16(c) of the
Investment Company Act of 1940.
C-19
<PAGE> 61
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, THE REGISTRANT, SOGEN VARIABLE
FUNDS, INC., CERTIFIES THAT THIS POST-EFFECTIVE AMENDMENT NO. 4 TO ITS
REGISTRATION STATEMENT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS PURSUANT
TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS
POST-EFFECTIVE AMENDMENT NO. 4 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK, ON THE
26TH DAY OF APRIL, 1999.
SOGEN VARIABLE FUNDS, INC.
By: /s/ JEAN-MARIE EVEILLARD
------------------------------------
(Jean-Marie Eveillard, President)
PURSUANT TO THE REQUIREMENTS OF THE 1933 ACT, THIS POST-EFFECTIVE AMENDMENT
NO. 4 HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON
THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JEAN-MARIE EVEILLARD President and Director (principal April 26, 1999
- --------------------------------------------------- executive officer)
(Jean-Marie Eveillard)
/s/ PHILIP J. BAFUNDO Vice President and Treasurer April 26, 1999
- --------------------------------------------------- (principal financial and
(Philip J. Bafundo) accounting officer)
* Chairman of the Board April 26, 1999
- ---------------------------------------------------
(Philippe Collas)
* Director April 26, 1999
- ---------------------------------------------------
(Fred J. Meyer)
* Director April 26, 1999
- ---------------------------------------------------
(Dominique Raillard)
* Director April 26, 1999
- ---------------------------------------------------
(Nathan Snyder)
*By: /s/ JEAN-MARIE EVEILLARD April 26, 1999
---------------------------------------------
(Jean-Marie Eveillard, Attorney-in-Fact)
</TABLE>
C-20
<PAGE> 62
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
(j) -- Consent of KPMG LLP.
(n) -- Financial Data Schedule.
</TABLE>
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Shareholders of
SoGen Variable Fund, Inc.:
We consent to the use of our report dated February 12, 1999, for SoGen
Variable Fund, Inc., and to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Independent Auditors" and
"Financial Statements" in the Statement of Additional Information.
KPMG LLP LOGO
New York, New York
April 21, 1999
<PAGE> 1
[ARTICLE] 6
[CIK] 0001000249
[NAME] SoGen VARIABLE FUNDS, INC.
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[INVESTMENTS-AT-COST] 4,290,360
[INVESTMENTS-AT-VALUE] 4,128,180
[RECEIVABLES] 42,913
[ASSETS-OTHER] 149,240
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,320,333
[PAYABLE-FOR-SECURITIES] 11,267
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 96,437
[TOTAL-LIABILITIES] 107,704
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 4,333,062
[SHARES-COMMON-STOCK] 418
[SHARES-COMMON-PRIOR] 142
[ACCUMULATED-NII-CURRENT] 36,075
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 62,115
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (219,041)
[NET-ASSETS] 4,212,629
[DIVIDEND-INCOME] 70,828
[INTEREST-INCOME] 50,151
[OTHER-INCOME] 0
[EXPENSES-NET] 51,260
[NET-INVESTMENT-INCOME] 69,719
[REALIZED-GAINS-CURRENT] 34,863
[APPREC-INCREASE-CURRENT] (151,773)
[NET-CHANGE-FROM-OPS] (47,191)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 45,275
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 403,890
[NUMBER-OF-SHARES-REDEEMED] 132,494
[SHARES-REINVESTED] 4,602
[NET-CHANGE-IN-ASSETS] 2,822,092
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 25,717
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 170,300
[AVERAGE-NET-ASSETS] 3,418,666
[PER-SHARE-NAV-BEGIN] 9.77
[PER-SHARE-NII] 0.12
[PER-SHARE-GAIN-APPREC] 0.29
[PER-SHARE-DIVIDEND] (0.11)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.07
[EXPENSE-RATIO] 1.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
