FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND, 485BPOS, 2000-04-24

FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND
485BPOS, 2000-04-24

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<PAGE>
REGISTRATION NO. 33-96668
811-09092
________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [x]

PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 5 [x]
AND/OR
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 7 [x]
(CHECK APPROPRIATE BOX OR BOXES)

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

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

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

1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 698-3000

ROBERT BRUNO
FIRST EAGLE SOGEN VARIABLE FUNDS, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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

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 April 30, 2000 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:
FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND -- COMMON STOCK

________________________________________________________________________________

<PAGE>
FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

PROSPECTUS

APRIL 30, 2000

THE FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND

1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(212) 698-3000

Like all mutual funds, these securities have not been approved or disapproved by
the Securities and Exchange Commission nor has the SEC passed on the accuracy of
this prospectus. It is a criminal offense to claim otherwise.

<PAGE>
Welcome to First Eagle SoGen Variable Funds Inc. (the 'Company'), managed by
Arnhold and S. Bleichroeder Advisers, Inc., (the 'Adviser' or 'ASB Advisers'), a
wholly owned subsidiary of Arnhold and S. Bleichroeder, Inc. ('ASB'). Societe
Generale Asset Management Corp ('SGAM Corp.') was acquired by ASB on December
31, 1999 and ASB Advisers became the investment adviser to the Fund at that
time. The primary investment management team of SGAM Corp., including Jean-Marie
Eveillard and Charles de Vaulx, have joined ASB Advisers and will continue to
manage the portfolios of the Funds.

First Eagle SoGen Overseas Variable Fund (the 'Fund') is a separate
portfolio of the Company, 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.

Investment Objective.

First Eagle SoGen Overseas Variable Fund seeks long-term growth of capital
by investing primarily in securities of small and medium size non-U.S.
companies.

Before you invest in a mutual fund, you need to know that all mutual funds
have common attributes:

Shares of the mutual fund can rise or fall in value

You could make money or lose money.

There is no guarantee that a fund will achieve its investment objective.

This prospectus tells you about our Fund. We urge you to read it very
carefully before you decide to invest and ask that you keep it for future
reference.

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Fund.................................................... 1
About First Eagle SoGen Overseas Variable Fund.......... 1
Objective and Approach.............................. 1
Related Risks....................................... 1
The Fund's Performance.............................. 2
Our Management Team......................................... 3
The Adviser............................................. 3
Distribution and Shareholder Services Expenses.......... 3
About Your Investment....................................... 3
How to Purchase Shares.................................. 3
How Fund Share Prices Are Calculated.................... 4
Dividends, Distributions, and Taxes..................... 4
Information on Dividends, Distributions and Taxes........... 4
General Information..................................... 4
Financial Highlights........................................ 5
Useful Shareholder Information (Back Cover)
</TABLE>

<PAGE>

THE FUND

ABOUT FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND

OBJECTIVE AND APPROACH

The investment objective of the Fund is long-term growth of capital. To
achieve its objective, the Fund will normally invest its assets 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. The Fund
may invest up to 20% of its total assets in debt securities, including
lower-rated securities and securities that are not rated.

RELATED RISKS

Investing in the Fund involves various risks.

Foreign Investments

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 and foreign companies may be subject to less stringent reserve, auditing
and reporting requirements. Many foreign stock markets are not as large or
liquid 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 supervisions 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
a Fund may be subject to greater price fluctuation than securities of U.S.
companies. These risks may be more pronounced with respect to investment in
emerging markets.

Debt Securities

Securities with the lowest investment grade ratings are considered to be
medium grade and to have speculative characteristics. Debt securities that are
unrated are considered by the Funds to be equivalent to below investment grade
(often referred to as 'junk bonds'). On balance, debt securities that are below
investment grade are considered predominately speculative with respect to the
issuer's capacity to pay interest and repay principal according to the terms of
the obligation and, therefore, carry greater investment risk, including the
possibility of default and bankruptcy. They are likely to be less marketable and
more adversely affected by economic downturns than higher-quality debt
securities.

Market Risk

In general, a fund's share price moves up and down over the short term in
reaction to stock market movements. This means that an investor could lose money
over short periods, and perhaps over longer periods during extended market
downturns.

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 may be conducted on a spot (i.e., cash) basis or through a forward
currency exchange contract ('forward contract'). Although forward contracts may
be used to protect a

<PAGE>
Fund from adverse currency movements, the use of such hedges may reduce or
eliminate potential profits from currency fluctuations that are otherwise in a
Fund's favor.

Temporary Strategies

The Fund has the flexibility to respond promptly to changes in market and
economic conditions. Pursuant to a defensive strategy, the Fund may temporarily
hold cash 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 U.S. and denominated in U.S. dollars. In
such a case, the Fund may not be able to pursue, and may not achieve its
investment objectives. It is impossible to predict whether, when or for how long
the Fund will employ defensive strategies. In addition, pending investment of
proceeds from new sales of shares or to meet ordinary daily cash needs, the Fund
temporarily may hold cash and may invest any portion of its assets in money
market instruments.

THE FUND'S PERFORMANCE

Many factors affect a fund's performance. The following information provides
some indication of the risks of investing in the Fund by showing changes in the
Fund's performance from year to year and by showing how the Fund's average
annual returns over the periods indicated compare to those of a broad measure of
market performance.

[PERFORMANCE GRAPH]

For the periods presented in the bar chart above, here is some additional
return information.

<TABLE>
<S> <C> <C>
Best Quarter 16.42% Second Quarter 1999
Worst Quarter (11.42)% Third Quarter 1998
</TABLE>

The following table illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the Morgan Stanley Capital
International (MSCI) EAFE Index. The MSCI EAFE Index is a widely followed
unmanaged group of stocks from 20 international markets. The figures in the
table assume that you sold your shares at the end of each period.

AVERAGE ANNUAL TOTAL RETURN COMPARISONS TABLE AS OF DECEMBER 31, 1999

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION*
------ ----------
<S> <C> <C>
First Eagle SoGen Overseas
Variable Fund................. 42.15% 13.56%
MSCI EAFE Index................. 26.96% 17.81%
</TABLE>

- ---------

* For the period beginning February 3, 1997 (commencement of operations)
through December 31, 1999.

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

<PAGE>

OUR MANAGEMENT TEAM

THE ADVISER

The Adviser of the Fund is Arnhold and S. Bleichroeder Advisers, Inc. ('ASB
Advisers'), a wholly owned subsidiary of Arnhold and S. Bleichroeder, Inc.
('ASB'). ASB is the successor firm to two German banking houses -- Gebr. Arnhold
founded in Dresden in 1864 and S. Bleichroeder founded in Berlin in 1803. The
firm moved to New York City in 1937 and conducts its activities under the
current name of Arnhold and S. Bleichroeder, Inc. ASB has used its experience
and worldwide contacts to provide asset management, global securities research
and trading, and investment banking services to institutional clients throughout
the world.

Over the years, we have always pursued superior investment opportunities for
our clients. The goal in managing the Company is to provide our fellow investors
with quality long-term returns. These returns do not come easily. The Adviser
puts its energy into serving investors who desire long-term growth instead of
those who desire a quick gain. Essentially, the Adviser believes that the
results of its investment style will encourage investors to keep investing with
it through the years.

The Adviser's philosophy is quite simple. The Adviser bases its investment
decisions on a few basic principles:

The best way to manage risk is company by company. Investing in
fundamentally sound companies should reduce investment risks and should
lead to the potential for superior returns.

Valuation is only half of the story. The Adviser looks for companies that
it perceives to be undervalued and that have the potential to grow in the
future.

The Adviser thinks like a business owner. Instead of concentrating on the
price to earnings ratio of a company, the Adviser scrutinizes the whole
company and examines its cash flow as though it was actually buying the
business.

The Adviser is responsible for the management of the Fund's portfolios and
constantly reviews its holdings in the light of its own research analyses and
those of other relevant sources. In return for its services, the Fund pays the
Adviser a fee at the annual rate of the average daily value of the Fund's net
assets as follows:

First Eagle SoGen Overseas Variable Fund 0.75%

However, the Adviser has agreed to waive its advisory fee and, if necessary,
reimburse the Fund through April 30, 2001 to the extent that the Fund's
aggregate expenses exceed 1.50% of the Fund's average net assets.

DISTRIBUTION AND SHAREHOLDER SERVICES EXPENSES

The Fund's shares are offered, in states and countries in which such offer
is lawful, to investors either through selected securities dealers or directly
by ASB, the Fund's principal underwriter.

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 ASB a monthly distribution related fee at an annual rate of 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 ASB 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. ASB bears distribution expenses to the extent that they are not covered
by payments under the Plan. Any distribution expenses incurred by ASB 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.

ABOUT YOUR INVESTMENT

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.

<PAGE>

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. 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 insurance company separate accounts might
withdraw their investment in the Fund. This could force the Fund to sell
securities at disadvantageous prices.

HOW FUND SHARE PRICES ARE CALCULATED

Net asset value for each share class is determined 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 a Fund, less its liabilities, by the
total number of shares outstanding at the time of such computation. Because each
Fund may invest in securities that are listed on foreign exchanges that may
trade on weekends or other days when those Funds do not price their shares,
those Funds' share value may change on days when shareholders will not be able
to purchase or redeem those Funds' shares.

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.

INFORMATION ON DIVIDENDS, DISTRIBUTIONS AND TAXES

Tax issues can be complicated. Please consult your tax adviser about
federal, state, or local tax consequences or with any other tax questions you
may have.

GENERAL INFORMATION

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. To qualify, the Fund must meet certain income, diversification and
distribution requirements. As a regulated investment company, a Fund generally
will not be subject to federal income or excise taxes on income and capital
gains distributed to shareholders within applicable time limits, although
foreign source income received by a Fund may be subject to foreign withholding
taxes.

The Fund also intends to comply with the 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, no 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.

Shareholders normally will be taxed on the dividend and capital gains
distributions they receive from a Fund whether received in additional shares or
cash. A distribution will be treated as paid on December 31 of the current
calendar year if it is declared by a 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.

<PAGE>
FINANCIAL HIGHLIGHTS

The Financial Highlights Table is intended to help you understand the Fund's
financial performance 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 a Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, whose report, along with Fund's
financial statements, are incorporated in the Statement of Additional
Information, which is available upon request.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, FOR THE PERIOD
------------------- FEBRUARY 3, 1997'D'
1999 1998 TO DECEMBER 31, 1997
------ ------ --------------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of year..................... $10.07 $ 9.77 $10.00
------ ------ ------
Income (loss) from investment operations:
Net investment income.............................. 0.16 0.12 (0.01)
Net realized and unrealized gains (losses) on
investments...................................... 4.08 0.29 (0.22)
------ ------ ------
Total from investment operations............... 4.24 0.41 (0.23)
------ ------ ------
Less Distributions:
Dividends from net investment income............... -- (0.11) --
Distributions from capital gains................... (0.15) -- --
------ ------ ------
Total distributions............................ (0.15) (0.11) --
------ ------ ------
Net asset value, end of year........................... $14.16 $10.07 $ 9.77
------ ------ ------
------ ------ ------
Total Return................................... 42.15% 4.21% (2.30)%'D'D'

Ratios/Supplemental data
Net assets, end of year (000's)........................ $9,156 $4,213 $1,391
Ratios of operating expenses to average net assets, net
of waivers, expense reimbursement, and earnings
credits.............................................. 1.50% 1.50% 2.00%*
Ratios of operating expenses to average net assets,
before waivers, expense reimbursement, and earnings
credits.............................................. 3.32% 4.98% 16.07%*
Ratio of net investment income (loss) to average net
assets, net of waivers, expense reimbursement, and
earnings credits..................................... 1.50% 2.04% (0.14)%*
Ratio of net investment income (loss) to average net
assets, before waivers, expense reimbursement, and
earnings credits..................................... (0.32)% (1.44)% (14.20)%*
Portfolio turnover rate................................ 65.38% 21.35% 8.88%
</TABLE>

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'D' Commencement of operations.

'D'D' Total return is not annualized, and it may not be representative of the
total return for the year.

* Annualized.

<PAGE>
USEFUL SHAREHOLDER INFORMATION

HOW TO OBTAIN OUR SHAREHOLDER REPORTS

We will send you copies of our Annual and Semi-annual Reports on a regular
basis once you become a shareholder. The Annual Report contains a discussion of
the market conditions and investment strategies that significantly affected the
Fund's performance during the last fiscal year. It also contains financial
statements by the Fund's independent accountants.

HOW TO OBTAIN OUR STATEMENT OF ADDITIONAL INFORMATION

The Statement of Additional Information ('SAI'), which is referenced in this
prospectus is available to you without charge from us. You may visit the SEC's
Internet Website (htp://www.sec.gov) to view the SAI and other information.
Also, you can obtain copies of the SAI by sending your request and fee to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. You also may review
and copy information about the Fund, including the SAI, at the SEC's Public
Reference Room in Washington, D.C. To find out more about the Public Reference
Room, call the SEC at 1-800-SEC-0330.

ADVISER

ARNHOLD AND S. BLEICHROEDER ADVISERS, INC.
1345 Avenue of the Americas
New York, NY 10105

Investment Company Act File Number: 811-09092

<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND
A SERIES OF FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
(212) 698-3000

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

ARNHOLD AND S. BLEICHROEDER ADVISERS, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
INVESTMENT ADVISER

ARNHOLD AND S. BLEICHROEDER, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
DISTRIBUTOR

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

This Statement of Additional Information provides information about First
Eagle SoGen Overseas Variable Fund (the 'Fund'), a separate portfolio of First
Eagle 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 April 30, 2000. 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.

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

APRIL 30, 2000

<PAGE>
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
Investment Objective, Policies and Restrictions............. 2 7
Management of the Company................................... 8 11
Investment Advisory and Other Services...................... 11 11
Distribution of the Fund's Shares........................... 11 11
Computation of Net Asset Value.............................. 12 13
How to Purchase Shares...................................... 13 13
Tax Status.................................................. 13 14
Portfolio Transactions and Brokerage........................ 16 11
Capital Stock............................................... 18 --
Custody of Portfolio........................................ 18 --
Independent Auditors........................................ 19 --
Financial Statements........................................ 19 --
Appendix.................................................... A-1 --
</TABLE>

<PAGE>
ORGANIZATION OF THE FUND

First Eagle SoGen Overseas Variable Fund (the 'Fund') is a separate
portfolio of First Eagle SoGen Variable Funds, Inc. (the 'Company') an
open-end management investment company incorporated under the laws of Maryland
in September 1995. The Board of Directors of the Company approved changing the
name of the company from 'SoGen Variable Funds, Inc.' to 'First Eagle SoGen
Variable Funds, Inc.' effective December 31, 1999. The Company's investment
adviser is Arnhold and S. Bleichroeder Advisers, Inc. ('ASB Advisers' or the
'Adviser'), a registered investment adviser. The Company's distributor is
Arnhold and S. Bleichroeder, Inc. ('ASB'), 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.

<PAGE>
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 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.

<PAGE>
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.

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

<PAGE>
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 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

<PAGE>
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. The Adviser, under the supervision of
the Board of Directors of the Fund, will 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,
the Adviser will consider the trading markets for the specific security, taking
into account the unregistered nature of a Rule 144A security. In addition, the
Adviser could consider (1) the frequency of trades and quotes, (2) the number

<PAGE>

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;

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;

- ---------
*The Fund has no present intention of lending its portfolio securities.

<PAGE>
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, 1999 would have increased at the rate of 42.15%.

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
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.

<PAGE>
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.

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 officers of First Eagle SoGen
Funds, Inc.

POSITION HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE COMPANY DURING PAST FIVE (5) YEARS
- --------------------- ---------------- --------------------------

<S> <C> <C>
John P. Arnhold (46)* Co-President Co-President and Director, Arnhold and
1345 Avenue of the Americas and Director S. Bleichroeder, Inc.; Co-President and
New York, NY 10105 Director, Arnhold and S. Bleichroeder
Advisers, Inc.; President and Director,
Arnhold and S. Bleichroeder UK Ltd.;
Co-President and Director, ASB Securities,
Inc.; Director, Aquila International Fund,
Ltd.; President, Worldvest, Inc.; Co-President
and Trustee, First Eagle Funds.
Candace K. Beinecke (53) ......... Director Chair, Hughes Hubbard & Reed; Director,
One Battery Park Plaza Jacob's Pillow Dance Festival, Inc. Historic
New York, NY 10004 Preservation Projects, Inc. and Merce
Cunningham Dance Foundation, Inc.; Trustee,
First Eagle Funds.
Edwin J. Ehrlich (68) ............ Director President, Ehrlich Capital Management;
2976 Lonni Lane Director, Pension Fund Trusts -- ITT Corp.;
Merrick, NY 11566 Advisory Board Member, Emerging World
Investors Limited; Trustee, First Eagle
Funds.
Robert J. Gellert (69) ........... Director Manager, United Continental Corporation;
122 East 42nd Street General Partner, Windcrest Partners; Trustee
New York, NY 10168 First Eagle Funds.
James E. Jordan (54) ............. Director Private investor; Consultant to The Jordan
767 Fifth Avenue Company (private investment banking
New York, NY 10153 company); until June 1997, President and
chief investment officer of The William Penn
Company (a registered investment adviser);
Director, Leucadia National Corporation,
Empire Insurance Company and J.Z. Equity
Partners, Plc. (a British investment trust
company); Director, School of International
and Public Affairs of Columbia University;
and Vice Chairman, New York State Board of
The Nature Conservancy; Trustee, First Eagle
Funds.
William M. Kelly (55) ............ Director Senior Associate, Lingold Association;
500 Fifth Avenue -- 50th Floor Independent General Partner, ML Venture
New York, NY 10110 Partners I, L.P. and ML Venture Partners II,
L.P.; Trustee, New York Foundation;
Treasurer and Trustee, Black Rock Forest
Conservation; Trustee, First Eagle Funds.
Donald G. McCouch (57) ........... Director Prior to 1997, Senior Managing Director of
67 West Hills Road Chemical Bank.
New Canaan, CT 06840
</TABLE>

(table continued on next page)

<PAGE>

(table continued from previous page)

<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE COMPANY DURING PAST FIVE (5) YEARS
- --------------------- ---------------- --------------------------
<S> <C> <C>
Fred J. Meyer (69) ............... Director Vice Chairman of Omnicom Group, Inc. since
437 Madison Avenue 1998; and prior thereto, Chief Financial
New York, NY 10022 Officer; Director, Novartis Corporation;
Zurich-American Insurance Cos. and
Medialink, Inc.; Trustee, National Park
Trust.
Dominque Raillard (61) ........... Director Managing Director of Act 2 (Consulting)
15, Boulevard Dellessert since July 1995; and prior thereto, Group
75016 Paris France Executive Vice President of Promodes (Food
Retailing) since 1978.
Nathan Snyder (65) ............... Director Independent Consultant.
163 Parish Rd. S.
New Canaan, CT 06840
Stanford S. Warshawsky (62)* ..... Chairman of the Co-President, Secretary and Director,
1345 Avenue of the Americas Board and Arnhold and S. Bleichroeder, Inc.;
New York, NY 10105 Director Co-President and Director, Arnhold and S.
Bleichroeder Advisers, Inc.; Chairman and
Director, Arnhold and S. Bleichroeder UK
Ltd.; Co-President and Director, ASB
Securities, Inc.; Director,
German-American Chamber of Commerce;
Chairman and Trustee, First Eagle Funds.
</TABLE>

- ---------

* An 'interested person' of the Company as defined in the 1940 Act.

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
the Adviser or ASB 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.

<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION PRESENT OFFICE WITH THE COMPANY
---- -------------------- -------------------------------
<S> <C> <C>
Jean-Marie Eveillard......... Senior VP of ASB Co-President
Charles de Vaulx............. Senior VP of ASB Senior Vice President
Robert Bruno................. Senior VP of ASB Vice President, Secretary and Treasurer
Edwin S. Olsen............... Vice President of ASB Vice President
Elizabeth Tobin.............. Investment Consultant Vice President
Tracy LaPointe Saltwick...... Senior VP of ASB Vice President and Compliance Officer
Cari Levine.................. Assistant VP of ASB Assistant Treasurer
Suzan J. Afifi............... Assistant VP of ASB Assistant Secretary
</TABLE>

COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS. The following table sets
forth information regarding compensation of those individuals who were directors
of the Company during 1999 by the Company and by the fund complex of which the
Company is a part for the fiscal year ended December 31, 1999. 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.

<PAGE>

COMPENSATION TABLE
FISCAL YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM
BENEFITS ESTIMATED REGISTRATION
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>
Fred J. Meyer, Director....................... $14,000 N/A N/A $42,000
Dominique Raillard, Director.................. $15,000 N/A N/A $45,000
Nathan Snyder, Director....................... $14,000 N/A N/A $42,000
</TABLE>

- ---------

-------------------
As of April 1, 2000, 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, 2000, the following entities held of record 5% or
more of the outstanding shares of the Fund.

<TABLE>
<CAPTION>
NUMBER
PERCENTAGE OF SHARES OF SHARES
NAME AND ADDRESS HELD OF
HELD OF RECORD RECORD
-------------- ------
<S> <C>
CNA Valley Forge Variable Annuity........................... 284,528.798
IL Visionary Choice Continental Universal Life.............. 437,695.809
</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.

<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES

As described in the Company's Prospectus, ASB Advisers is the Company's
investment adviser and, as such, manages the Fund's portfolio.

Under its investment advisory contract with the Company which became
effective December 31, 1999. ASB Advisers furnishes the Company with investment
advice consistent with the Fund's stated investment objective. Prior to
December 31, 1999, the Fund had an advisory contract with Societe Generale Asset
Management Corp. ('SGAM Corp.'). ASB Advisers 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 ASB Advisers 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. ASB Advisers has agreed to waive its advisory fee and, if necessary,
reimburse the Fund through April 30, 2001 to the extent that the Fund's
aggregate expenses exceed 1.50% of the Fund's average net assets. SGAM Corp.,
the Fund's previous adviser, waived its advisory fee of $5,742 in its entirety
from February 3, 1997 (commencement of operations) through December 31, 1997
and its advisory fees of $25,717 and $46,058, respectively, in their entirety
for the years ended December 31, 1998 and 1999. In addition, SGAM Corp.
voluntarily reimbursed the Fund for expenses in the amount of $88,434
for the year ended December 31, 1998 and $65,375 for the year ended
December 31, 1999.

On December 22, 1999, the shareholders, and on October 20, 1999, the
Board of Directors of the Company approved the Advisory Agreement between the
Company and the Adviser. The Advisory Agreement will continue in effect for a
period of more than two years from the date of execution only so long as such
continuance is specifically approved at least annually in conformity with the
Investment Company Act. The Advisory Agreement provides that the Adviser will
not be liable for any error of judgment or for any loss suffered by the Funds in
connection with the matters to which the Advisory Agreement relates, except a
loss resulting from willful misfeasance, bad faith, gross negligence or reckless
disregard of duty. The Advisory Agreement provides that it will terminate
automatically if assigned, within the meaning of the Investment Company Act, and
that it may be terminated without penalty by either party upon not more than 60
days nor less than 30 days written notice.

DISTRIBUTION OF THE FUND'S SHARES

The Company and ASB, a registered broker-dealer, investment adviser and a
member of the New York Stock Exchange and the National Association of Securities
Dealers ('NASD'), have entered into a distribution contract pursuant to which
ASB offers, as agent, share of the Fund continuously to the separate accounts of
insurance companies. ASB 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 ASB a monthly 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 ASB 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. 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 fiscal years ended 1998 and 1999, the Fund incurred distribution
related fees for expenditures under the Plan in the aggregate amount of $8,540
and $15,413 respectively, 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

<PAGE>
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 ASB, 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 ASB Advisers. 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 December 31,
2001 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 -- 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 ASB Advisers, ASB 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.

<PAGE>
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 Internal Revenue Code of 1986, as amended (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 and 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) or of two or more issuers
which the Fund controls and which are determined, under Treasury regulations, to
be engaged in the same or similar trades or businesses or related trades or
businesses; 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.

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

<PAGE>
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 to shareholders.

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 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

<PAGE>
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 or determined with reference to one or more
foreign currencies 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 or determined with reference to one or more foreign currencies, 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. All gains or losses with respect to
forward contracts, futures contracts, options or similar financial instruments
which are denominated in terms of a foreign currency or determined with
reference to one or more foreign currencies are treated as ordinary gains or
ordinary losses, as the case may be. 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.

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
(other than dividends from controlled foreign corporations, section 902
corporations, and certain other corporations), interest, capital gains and
certain foreign currency gains. As a consequence, some 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

<PAGE>

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, if any, 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.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Adviser is responsible for decisions to buy and sell securities, futures
and options on securities, on indices and on futures for the Fund, the selection
of brokers, dealers and futures commission merchants to effect those
transactions and the negotiations of brokerage commissions, if any. Broker-
dealers and futures commission merchants may receive brokerage commissions on
Fund portfolio transactions, including options and the purchase and sale of
underlying securities or futures positions upon the exercise of options. Orders
may be directed to any broker or futures commission merchant including, to the
extent and in the manner permitted by applicable law.

Equity securities traded in over-the-counter market and bonds, including
convertible bonds, are generally traded on a 'net' basis with dealers acting as
principal for their own accounts without a stated commission, although the price
of the security usually includes a profit to the dealer. In underwritten
offerings, securities are purchased at a fixed price which includes an amount of
compensation to the underwriters, generally referred to as the underwriter's
concession or discount. On occasion, certain money market instruments and U.S.
government agency securities may be purchased directly from the issuer, in which
case no commissions or discounts are paid. The Fund will not deal with the
Distributor in any transaction in which the Distributor acts as principal. Thus,
it will not deal with the Distributor

<PAGE>

acting as market maker, and it will not execute a negotiated trade with the
Distributor if execution involves the Distributor acting as principal with
respect to any part of the Fund's order.

Portfolio securities may not be purchased from any underwriting or selling
group of which the Distributor, during the existence of the group, is a member,
except in accordance with rules of the Securities and Exchange Commission. This
limitation, in the opinion of the Company, will not significantly affect a
Fund's ability to pursue its present investment objective.

In placing orders for portfolio securities or futures, the Adviser is
required to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, the Adviser will
consider the research and investment services provided by brokers, dealers or
futures commission merchants who effect or are parties to portfolio transactions
of the Fund, the Adviser or the Adviser's other clients. Such research and
investment services are those which brokerage houses customarily provide to
institutional investors and include statistical and economic data and research
reports on particular companies and industries. Such services are used by the
Adviser in connection with all of its investment activities, and some of such
services obtain in connection with the execution of transactions for the Fund
may be used in managing other investment accounts. Conversely, brokers, dealers
or futures commission merchants furnishing such services may be selected for the
execution of transactions of such other accounts, whose aggregate assets are far
larger than the Funds, and the services furnished by such brokers, dealers or
futures commission merchants may be used by the Adviser in providing investment
management for the Fund. Commission rates are established pursuant to
negotiations with the broker, dealer or futures commission merchant based on the
quality and quantity of execution services provided by the executing party in
the light of generally prevailing rates. In addition, the Adviser is authorized
to pay higher commissions on brokerage transactions for the Fund to brokers
other than the Distributor in order to secure the research and investment
services described above, subject to review by the Board of Directors from time
to time as to the extent and continuation of this practice. The allocation of
orders among brokers and the commission rates paid are reviewed periodically by
the Board of Directors.

Subject to the above considerations, the Distributor may act as a securities
broker for the Fund. In order for the Distributor to effect any portfolio
transactions for the Fund, the commissions, fees or other remuneration received
by the Distributor must be reasonable and fair compared to the commissions, fees
or other remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold on an Exchange
during a comparable period of time. This standard would allow the Distributor to
receive no more than the remuneration which would be expected to be received by
an unaffiliated broker in a commensurate arms-length transaction.

Furthermore, the Board of Directors, including a majority of the Directors
who are not 'interested' directors, has adopted procedures which are reasonably
designed to provide that any commissions, fees or other remuneration paid to the
Distributor is consistent with the foregoing standard. Brokerage transactions
with the Distriburor also are subject to such fiduciary standards as may be
imposed by applicable law. From time to time the Fund may engage in agency cross
transactions with respect to securities that meet its investment objective and
policies. An agency cross transaction occurs when a broker sells securities from
one client's account to another client's account. Cross transactions are
executed with written permission from the Fund. This authorization permits cross
transactions only between the Fund on one side and clients for which the
Distributor acts as broker, but does not act as investment adviser, on the other
side. The authorization can be terminated at any time by written notice to the
Distributor.

The Fund may from time to time sell or purchase securities to or from
companies or persons who are considered to be affiliated with the Fund solely
because they are investment advisory clients of the Distributor, the Adviser.
No consideration other than cash payment against prompt delivery at the then
current market price of the securities will be paid to any person involved
in those transactions. Additionally, all such transactions will be consistent
with procedures adopted by the Board of Trustees.

In accordance with Section 11(a) under the Securities Exchange Act of 1934,
the Distributor may not retain compensation for effecting transactions on a
national securities exchange for the Fund unless

<PAGE>

the Fund has expressly authorized the retention of such compensation in a
written agreement executed by the Fund and the Distributor. The Fund has
provided the Distributor with such authorization. Section 11(a) provides that
the Distributor must furnish to each Fund at least annually a statement
disclosing the aggregate compensation received by the exchange member in
effecting such transactions.

For the periods February 3, 1997 (commencement of operations) through
December 31, 1997, the year ended December 31, 1998 and the year ended
December 31, 1999, the Fund paid a total of $3,828, $12,704 and $35,041,
respectively, in brokerage commissions, with respect to portfolio transactions
aggregating $867,702, $3,294,328 and $9,888,354, respectively. All of which
was placed with brokers or dealers who provide research and investment
information. Of such amount, $329, $928 and $3,192, respectively, in brokerage
commissions (8.594%, 7.305% and 2.857%, respectively, of the aggregate) with
respect to portfolio transactions aggregating $70,482, $280,671 and $931,236,
respectively, (8.1228%, 8.520% and 9.420%, respectively, of the aggregate)
was placed with SG Cowen Securities Corporation, an affiliate of the SGAM Corp.

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 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.

<PAGE>
INDEPENDENT AUDITORS

The Company's independent auditors are KPMG LLP, Certified Public
Accountants, 757 Third Avenue, New York, NY 10017. 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, 1999 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 1345 Avenue of
the Americas, New York, NY 10105.

<PAGE>
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.

S&P RATINGS.

AAA -- Bonds rated AAA have the highest rating. Capacity to pay principal
and interest is extremely strong.

A-1

<PAGE>
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>

First Eagle SoGen Overseas Variable Fund

SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999

<TABLE>
<CAPTION>
Number Cost Value
of Shares (Note 1) (Note 1)
--------- -------- --------
<C> <S> <C> <C>

Common and Preferred Stocks
United Kingdom (8.60%)
75,000 IMI plc (5)................................. $ 310,931 $ 342,228
25,000 Antofagasta plc (17)........................ 79,897 175,362
70,000 Royal Doulton plc (a)(9).................... 96,213 137,619
100,000 Aggregate Industries plc (4)................ 107,580 107,604
50,000 Lonrho Africa plc (17)...................... 58,435 25,081
---------- ----------
653,056 787,894
---------- ----------
Sweden (2.39%)
20,000 IRO AB (5).................................. 210,585 218,569
---------- ----------
Denmark (1.03%)
2,500 Carlsberg International A/S "B' (9)......... 114,645 94,700
---------- ----------
Netherlands (8.48%)
20,000 Koninklijke Ahrend NV (9)................... 265,998 281,093
12,000 Holdingmaatschappij de Telegraaf NV (12).... 240,763 265,980
10,500 Apothekers Cooperatie OPG U.A. (11)......... 251,879 229,559
---------- ----------
758,640 776,632
---------- ----------
Belgium (0.86%)
350 Deceuninck Plastics Industries SA (4)....... 84,934 78,671
---------- ----------
Germany (8.82%)
25,000 Buderus AG (5).............................. 397,747 420,631
5,000 Hornbach Holding AG Pfd. (10)............... 228,220 241,800
700 Bertelsmann AG D.R.C. (12).................. 83,569 74,426
5,000 Sudzucker AG Pfd. (9)....................... 78,422 70,273
---------- ----------
787,958 807,130
---------- ----------
France (11.52%)
1,000 Sagem ADP (8)............................... 135,558 372,775
70 Societe Immobiliere Marseillaise (16)....... 113,324 192,110
1,150 Legrand ADP (5)............................. 140,951 163,366
250 Societe Sucriere de Pithiviers-le-Vieil (3). 106,362 86,015
500 Robertet SA (9)............................. 77,460 84,630
1,500 Crometal (5)................................ 77,307 68,006
1,000 Aventis SA (11)............................. 49,745 58,133
476 Didot-Bottin (16)........................... 32,545 29,350
---------- ----------
733,252 1,054,385
---------- ----------
Switzerland (3.67%)
400 Edipresse SA (12)........................... 104,978 221,286
150 Kuehne & Nagel International AG (7)......... 102,325 114,572
---------- ----------
207,303 335,858
---------- ----------
Spain and Portugal (4.65%)
35,000 Energia e Industrias Aragonesas SA (6)...... 192,195 161,855
8,500 Espirito Santo Financial Group SA ADR (14).. 136,662 133,875
10,000 Companhia de Celulose do Caima SA (2)....... 107,987 130,371
---------- ----------
436,844 426,101
---------- ----------
<CAPTION>
Turkey (1.00%)
<C> <S> <C> <C>
55,000 Usas Ucak Servisi A.S. (13) 55,569 91,261
---------- ----------
</TABLE>

F-1

<PAGE>

First Eagle SoGen Overseas Variable Fund

SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999

<TABLE>
<CAPTION>
Number Cost Value
of Shares (Note 1) (Note 1)
--------- -------- --------
<C> <S> <C> <C>

Common and Preferred Stocks (continued)
Japan (20.05%)
12,000 Shimano Inc. (9)............................ $ 252,078 $ 211,226
50,000 The Dai-Tokyo Fire & Marine Insurance Co.,
Ltd. (14).................................. 177,815 203,892
30,000 Mitsui Marine and Fire Insurance Company,
Limited (14)............................... 200,109 177,782
45,000 Aida Engineering, Ltd. (5).................. 175,838 147,418
35,000 Tachi-S Co., Ltd. (5)....................... 181,756 147,174
7,000 T. Hasegawa Co., Ltd. (9)................... 137,837 136,906
40,000 Okumura Corporation (13).................... 152,050 134,950
3,000 Fuji Photo Film Co., Ltd. ADR (9)........... 100,881 114,750
25,000 Nisshinbo Industries, Inc. (9).............. 105,742 112,947
12,000 Makita Corporation (9)...................... 116,474 107,960
10,000 Shoei Co., Ltd. (16)........................ 60,948 75,201
500 Toho Co., Ltd. (12)......................... 53,535 73,049
10,000 The Nichido Fire & Marine Insurance Co.,
Ltd. (14).................................. 50,162 57,501
12,000 Sotoh Co., Ltd. (9)......................... 74,846 55,975
3,000 Chofu Seisakusho Co., Ltd. (9).............. 44,358 46,352
5,000 Yomeishu Seizo Co., Ltd. (9)................ 27,457 32,760
---------- ----------
1,911,886 1,835,843
---------- ----------

Hong Kong (6.44%)
998,178 CDL Hotels International Limited (15)....... 318,627 398,064
100,000 Shaw Brothers (Hong Kong) Limited (12)...... 45,018 116,421
150,000 Jardine International Motors Holdings
Limited (7)................................ 67,459 75,256
---------- ----------
431,104 589,741
---------- ----------

Singapore and Malaysia (1.02%)
45,000 Clipsal Industries Ltd. (4)................. 29,110 49,715
20,000 Times Publishing Limited (12)............... 26,114 43,470
---------- ----------
55,224 93,185
---------- ----------

Thailand (0.19%)
3,500 The Oriental Hotel Public Company Limited
(15)....................................... 18,321 17,080
---------- ----------

Australia and New Zealand (5.01%)
29,200 Wilson & Horton Limited 5% exchangeable
preference shares (12)..................... 134,380 141,451
115,000 Spotless Services Limited (13).............. 89,325 109,496
70,000 Carter Holt Harvey Limited (2).............. 69,284 91,647
175,000 Tasman Agriculture Limited (3).............. 76,003 73,318
105,000 Capital Properties New Zealand Limited 8.5%
exchangeable preference shares (15)........ 38,968 42,502
---------- ----------
407,960 458,414
---------- ----------

Canada (2.41%)
7,000 Canadian Pacific Limited (17)............... 172,432 150,938
6,000 Fletcher Challenge Limited, Class "A' (2)... 65,704 69,550
---------- ----------
238,136 220,488
---------- ----------

Mexico (2.35%)
75,000 Industrias Penoles, S.A. de C.V. (1)........ 243,865 215,424
---------- ----------

Chile (1.21%)
10,000 Quinenco S.A. ADR (16)...................... 93,333 111,250
---------- ----------

Miscellaneous (4.02%)
10,500 Freeport McMoRan Copper & Gold Inc.,
Preferred Series "B' (b)(18)............... 193,564 207,375
25,000 Harmony Gold Mining Company Ltd. (18)....... 120,606 160,634
---------- ----------
314,170 368,009
---------- ----------
<CAPTION>
Total Common and Preferred Stocks 7,756,785 8,580,635
<C> <S> <C> <C>
---------- ----------
</TABLE>

F-2

<PAGE>

First Eagle SoGen Overseas Variable Fund

SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999

<TABLE>
<CAPTION>
Principal Cost Value
Amount (Note 1) (Note 1)
--------- -------- --------
<C> <S> <C> <C>
Bonds and Convertible Bonds
U.S. Dollar Convertible Bonds (1.47%)

$125,000 International Container Terminal Services, Inc.
1 3/4% due 3/13/2004 (7)...................... $ 117,406 $ 130,625
20,000 P.T. Inti Indorayon Utama 7% due 5/02/2006
(c)(2)........................................ 14,721 4,000
---------- ----------
132,127 134,625
---------- ----------
Non U.S. Dollar Convertible Bond (0.47%)
GBP 20,000 Berisford plc 5% due 1/31/2015 (9)............. 26,806 43,446
---------- ----------
Non U.S. Dollar Bond (1.36%)
NZD 212,100 Evergreen Forest Limited 0% due 3/19/2009
(a)(2)........................................ 119,275 124,406
---------- ----------
Total Bonds and Convertible Bonds.............. 278,208 302,477
---------- ----------
Total Investments (97.02%)..................... $8,034,993* 8,883,112**
==========
Other assets in excess of liabilities (2.98%) . 272,630
----------
Net assets (100.00%) .......................... $9,155,742
==========
</TABLE>
- - --------
(a) Non-income producing security.
(b) Commodity-linked security whereby the coupon, dividend and/or redemption
amount is linked to the price of an underlying commodity.
(c) In default as to principal and interest.
* At December 31, 1999 cost is substantially identical for both book and
federal income tax purposes.
** Gross unrealized appreciation and depreciation of securities at December
31, 1999 were $1,249,442 and $401,323, respectively. (Net appreciation was
$848,119.)

<TABLE>
<CAPTION>
Industry Classifications
Foreign Currencies (unaudited)
- - ------------------ ------------------------
<S> <C> <C>
GBP-- Pound Sterling (1) Metals and Minerals (10) Distribution
NZD-- New Zealand Dollar (2) Forest Products (11) Health Care
(3) Agriculture (12) Media
(4) Building Materials (13) Services
(5) Capital Goods (14) Financial Services
(6) Chemicals (15) Real Estate
(7) Transportation (16) Holding Companies
(8) Electronics (17) Conglomerates
(9) Consumer Products (18) Gold Related
</TABLE>
- - --------
See Notes to Financial Statements.

F-3

<PAGE>

First Eagle SoGen Overseas Variable Fund

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999

<TABLE>
<S> <C>
Assets:
Investments, at value (Note 1):
Common and preferred stock (identified cost, $7,756,785)....... $8,580,635
Bonds, notes, and convertible bonds (identified cost,
$278,208)..................................................... 302,477
----------
Total investments (cost $8,034,993).......................... 8,883,112
Cash............................................................. 206,753
Receivable for investment securities sold........................ 95,800
Receivable for forward currency contracts held, at value (Notes 1
and 6).......................................................... 58,731
Accrued interest and dividends receivable........................ 18,866
Deferred organization costs (Note 1)............................. 36,605
Receivable from SGAM Corp. (Note 2).............................. 65,375
Prepaid expenses (Note 1)........................................ 323
----------
Total Assets................................................. 9,365,565
----------
Liabilities:
Payable for Fund shares redeemed................................. 21,703
Payable for investment securities purchased...................... 81,770
Payable for forward currency contracts held, at value (Notes 1
and 6).......................................................... 47,883
Distribution fees payable (Note 3)............................... 25,867
Accrued expenses and other liabilities........................... 32,600
----------
Total Liabilities............................................ 209,823
----------
Net Assets:
Capital stock (par value, $0.001 per share)...................... 647
Capital surplus.................................................. 7,236,716
Net unrealized appreciation (depreciation) on:
Investments.................................................... 848,119
Forward currency contracts..................................... 10,848
Foreign currency related transactions.......................... (1,064)
Undistributed net realized gains on investments.................. 888,446
Undistributed net investment income.............................. 172,030
----------
Net Assets (Note 1).......................................... $9,155,742
==========
Net Asset Value per Share (NAV) (based on 646,522 shares
outstanding; 1,000,000,000 shares authorized) (Note 5).......... $ 14.16
==========
Maximum Offering Price per Share................................... $ 14.16
==========
</TABLE>
- - --------
See Notes to Financial Statements.

F-4

<PAGE>

First Eagle SoGen Overseas Variable Fund

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<S> <C>
Investment Income:
Income:
Dividends (net of $12,731 foreign taxes withheld)............. $ 157,125
Interest...................................................... 28,176
----------
Total income from operations................................ 185,301
----------
Expenses:
Investment advisory fees (Note 2)............................. 46,058
Directors' fees (Note 2)...................................... 43,000
Custodian fees................................................ 42,168
Printing...................................................... 19,200
Amortization of deferred organization costs (Note 1).......... 17,571
Distribution fees (Note 3).................................... 15,413
Audit fees.................................................... 14,200
Legal fees.................................................... 4,500
Registration and filing fees.................................. 1,000
Insurance..................................................... 815
Miscellaneous................................................. 1,050
----------
Total expenses from operations.............................. 204,975
Advisory fees waived (Note 2)................................... (46,058)
Expense reimbursement (Note 2).................................. (65,375)
Expense reduction due to earnings credits (Note 1).............. (968)
----------
Net expenses from operations................................ 92,574
----------
Net investment income (Note 1).................................. 92,727
----------
Realized and Unrealized Gains on Investments and Foreign Currency
Related Transactions (Notes 1 and 6):
Net realized gains from:
Investment transactions....................................... 928,392
Foreign currency related transactions......................... 32,081
----------
960,473
----------
Change in unrealized appreciation of:
Investments................................................... 1,010,299
Foreign currency related transactions......................... 66,645
----------
1,076,944
----------
Net gain on investments and foreign currency related
transactions................................................... 2,037,417
----------
Net Increase in Net Assets Resulting from Operations.............. $2,130,144
==========
</TABLE>
- - --------
See Notes to Financial Statements.

F-5

<PAGE>

First Eagle SoGen Overseas Variable Fund

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Operations:
Net investment income.................... $ 92,727 $ 69,719
Net realized gains from investments and
foreign currency related transactions... 960,473 34,863
Increase (decrease) in unrealized
appreciation (depreciation) of
investments and foreign currency related
transactions............................ 1,076,944 (151,773)
----------- -----------
Net increase (decrease) in assets
resulting from operations.............. 2,130,144 (47,191)
----------- -----------
Distributions to Shareholders:
Dividends paid from net investment
income.................................. -- (45,275)
Distributions paid from net realized
gains from investment transactions...... (95,465) --
----------- -----------
Decrease in net assets resulting from
distributions.......................... (95,465) (45,275)
----------- -----------
Fund Share Transactions (Note 5):
Net proceeds from shares sold............ 8,783,013 4,199,368
Net asset value of shares issued for
reinvested dividends and distributions.. 95,465 45,275
Cost of shares redeemed.................. (5,970,044) (1,330,085)
----------- -----------
Increase in net assets from Fund share
transactions........................... 2,908,434 2,914,558
----------- -----------
Net increase in net assets.............. 4,943,113 2,822,092
Net Assets (Note 1):
Beginning of year........................ 4,212,629 1,390,537
----------- -----------
End of year (including undistributed net
investment income of $172,030 and
$36,075, respectively.)................. $ 9,155,742 $ 4,212,629
=========== ===========
</TABLE>
- - --------
See Notes to Financial Statements.

F-6

<PAGE>

First Eagle SoGen Overseas Variable Fund

NOTES TO FINANCIAL STATEMENTS

Note 1--Significant Accounting Policies

First Eagle SoGen Variable Funds, Inc. (the "Company") is an open-end,
diversified management investment company registered under the Investment
Company Act of 1940, as amended. The Company consists of one portfolio, First
Eagle SoGen Overseas Variable Fund (the "Fund"). The Fund, formerly SoGen
Overseas Variable Fund, changed its' name to First Eagle SoGen Overseas
Variable Fund effective December 31, 1999. The following is a summary of
significant accounting policies adhered to by the Fund.

a) Security valuation--Portfolio securities held in the Fund are valued 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, and
any restricted securities, are valued at fair value as determined in good faith
by the Board of Directors.

b) Deferred organization costs--Costs incurred in connection with the
organization of the Fund were amortized on a straight-line basis over a sixty-
month period from the date the Fund commenced investment operations.

c) Security transactions and income--Security transactions are accounted for
on a trade date basis. The specific identification method is used in
determining realized gains and losses from security transactions. Dividend
income is recorded on the ex-dividend date. Interest income is recorded daily
on the accrual basis. In computing investment income, the Fund amortizes
discounts on debt obligations; however, premiums are not amortized.

d) Expenses--Earnings credits reduce custodian fees by the amount of interest
earned on balances with such service providers.

e) Foreign currency translation--The market values of securities which are
not traded in U.S. currency are recorded in the financial statements after
translation to U.S. dollars based on the applicable exchange rates at the end
of the period. The costs of such securities are translated at exchange rates
prevailing when acquired. Related dividends, interest and withholding taxes are
accrued at the rates of exchange prevailing on the respective dates of such
transactions.

The net assets of the Fund are presented at the foreign exchange rates and
market values at the close of the period. The Fund does not isolate that
portion of gains and losses on investments, which is due to changes in foreign
exchange rates from that which is due to changes in market prices of the equity
securities. However, for federal income tax purposes the Fund does isolate the
effect of changes in foreign exchange rates from the changes in market prices
for realized gains and losses on debt obligations.

f) Forward currency contracts--In connection with portfolio purchases and
sales of securities denominated in foreign currencies, the Fund may enter into
forward currency contracts. Additionally, the Fund may enter into such
contracts to hedge certain other foreign currency denominated investments.
These contracts are valued at current market, and the related realized and
unrealized foreign exchange gains and losses are included in the statement of
operations. In the event that counterparties fail to settle these currency
contracts or the related foreign security trades, the Fund could be exposed to
foreign currency fluctuations.

g) United States income taxes--No provision has been made for U.S. federal
income taxes since it is the intention of the Fund to distribute to
shareholders all taxable net investment income and net realized gains on
investments, if any, within the allowable time limit, and to comply with the
provisions of the Internal Revenue Code for a regulated investment company.
Such income dividends and capital gains distributions are declared and paid by
the Fund on an annual basis.

F-7

<PAGE>

First Eagle SoGen Overseas Variable Fund

NOTES TO FINANCIAL STATEMENTS--(continued)

h) Reclassification of capital accounts--On the statement of assets and
liabilities, as a result of certain differences in the computation of net
investment income and net realized capital gains under federal income tax rules
and regulations versus generally accepted accounting principles, a
reclassification has been made to decrease undistributed net realized gains on
investments by $38,677, decrease paid in capital by $4,551 and increase
undistributed net investment income by $43,228.

i) Use of estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

Note 2--Investment Advisory Agreement and Transactions with Related Persons

Under the terms of an investment advisory agreement dated August 16, 1996,
the Fund pays Societe Generale Asset Management Corp. ("SGAM Corp.") an
advisory fee for advisory services and facilities furnished, at an annual rate
of 0.75% of the average daily net assets of the Fund. 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 daily net assets. For the year ended December 31, 1999, the
Fund's investment advisory fees of $46,058 were waived in their entirety by
SGAM Corp. Additionally, SGAM Corp. voluntarily reimbursed the Fund for
expenses in the amount of $65,375. Effective January 1, 2000, Arnhold and S.
Bleichroeder Advisers, Inc. ("ASB Advisers") succeeded SGAM Corp. as investment
adviser to the Fund. The terms of the new agreement are substantially the same
as those of the old agreement between the Fund and SGAM Corp.

For the six months ended June 30, 1999, SG Cowen Securities Corporation
("SGCS"), the principal underwriter or its affiliates received $1,001 in
broker's commissions for portfolio transactions executed on behalf of the Fund.
Effective July 1, 1999 Funds Distributor, Inc. ("FDI") succeeded SGCS as
principal underwriter to the Fund. In acting as a selected broker after June
30, 1999, SGCS or its affiliates received $2,191 in broker's commissions for
portfolio transactions executed on behalf of the Fund. Effective March 1, 2000,
Arnhold and S. Bleichroeder, Inc. ("ASB") will become the principal underwriter
to the Fund.

Each director who is not an officer of the Company or an employee of SGAM
Corp., SGCS or its corporate affiliates is paid an annual fee of $6,000 plus
$1,000 for each meeting attended. For the year ended December 31, 1999 such
fees amounted to $43,000.

Note 3--Distribution Plan and Agreement

Under the terms of the Distribution Plans and Agreements (the "Plans"), with
SGCS through June 30, 1999 and with FDI thereafter, pursuant to the provisions
of Rule 12b-1 under the Investment Company Act of 1940, the Fund may pay
quarterly, a distribution related fee at an annual rate of up to 0.25% of the
Fund's average daily net assets. Under the Plans, the principal underwriter
will use amounts payable by the Fund in their entirety for payments to
insurance companies which are the issuers of variable contracts invested in
shares of the Fund, in order to pay or reimburse such insurance companies for
distribution and shareholder servicing-related expenses incurred or paid by
such insurance companies. For the year ended December 31, 1999, the
distribution fees paid or payable to the principal underwriter by the Fund were
$15,413. Effective March 1, 2000, ASB will assume FDI's obligations under the
Plan, pursuant to a new Rule 12b-1 Distribution Plan and Agreement, which
contains substantially similar terms and conditions as the Plan.

Note 4--Purchases and Sales of Securities

During the year ended December 31, 1999, the aggregate cost of purchases of
investments and proceeds from sales of investments totaled $6,867,963 and
$3,818,467, respectively.

F-8

<PAGE>

First Eagle SoGen Overseas Variable Fund

NOTES TO FINANCIAL STATEMENTS--(continued)

Note 5--Capital Stock

Transactions in shares of capital stock were as follows:

<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Shares sold................................ 708,435 403,890
Shares issued for reinvested dividends and
distributions............................. 6,948 4,602
Shares redeemed............................ (487,237) (132,494)
-------- --------
Net increase............................. 228,146 275,998
======== ========
</TABLE>

Note 6--Commitments

As of December 31, 1999, the Fund had entered into forward currency
contracts, as summarized below, resulting in net unrealized appreciation of
$10,848.

Transaction Hedges:

Foreign Currency Purchases

<TABLE>
<CAPTION>
Unrealized Unrealized
Settlement U.S. $ Value at Appreciation at Depreciation at
Dates Foreign Currency December 31, U.S. $ To Be December 31, December 31,
Through To Be Received 1999 Delivered 1999 1999
- - ---------- ------------------------------ --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1/05/00 52,038 Euro $ 52,428 $ 52,296 $ 132 --
1/06/00 56,029 New Zealand Dollar 29,342 29,010 332 --
---------- ---------- ------- --------
81,770 81,306 464 --
---------- ---------- ------- --------

Foreign Currency Sales

<CAPTION>
Unrealized Unrealized
Settlement U.S. $ Value at Appreciation at Depreciation at
Dates Foreign Currency U.S. $ To Be December 31, December 31, December 31,
Through To Be Delivered Received 1999 1999 1999
- - ---------- ------------------------------ --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1/31/00 95,087 Euro 95,834 95,800 34 --
---------- ---------- ------- --------

Portfolio Hedges:

<CAPTION>
Unrealized Unrealized
Settlement U.S. $ Value at Appreciation at Depreciation at
Dates Net Foreign Currency U.S. $ To Be December 31, December 31, December 31,
Through To Be Delivered Received 1999 1999 1999
- - ---------- ------------------------------ --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1/12/00 40,000 Australian Dollar 69,832 68,974 858 --
4/05/00 142,000 Swiss Franc 181,763 173,232 8,531 --
5/03/00 793,000 Euro 1,002,411 953,567 48,844 --
5/10/00 112,438,000 Japanese Yen 1,078,346 1,121,892 -- $(43,546)
10/05/01 441,500 New Zealand Dollar 226,810 231,147 -- (4,337)
---------- ---------- ------- --------
2,559,162 2,548,812 58,233 (47,883)
---------- ---------- ------- --------
$2,736,766 $2,725,918 $58,731 $(47,883)
========== ========== ======= ========
</TABLE>

F-9

<PAGE>

First Eagle SoGen Overseas Variable Fund

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
For the Period
Year Ended Year Ended February 3, 1997++ to
December 31, 1999 December 31, 1998 December 31, 1997
----------------- ----------------- ---------------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value,
beginning of period.... $10.07 $ 9.77 $10.00
------ ------ ------
Income from investment
operations:
Net investment income
(loss)............... 0.16 0.12 (0.01)
Net realized and
unrealized gains
(losses) on
investments.......... 4.08 0.29 (0.22)
------ ------ ------
Total from
investment
operations......... 4.24 0.41 (0.23)
------ ------ ------
Less distributions:
Dividends from net
investment income.... -- (0.11) --
Dividends from capital
gains................ (0.15) -- --
------ ------ ------
Total distributions. (0.15) (0.11) --
------ ------ ------
Net asset value, end of
period................. $14.16 $10.07 $ 9.77
====== ====== ======
Total Return............ 42.15% 4.21% (2.30%)**
Ratios and Supplemental
Data
Net assets, end of
period (000's)......... $9,156 $4,213 $1,391
Ratio of operating
expenses to average net
assets................. 1.50%+ 1.50%+ 2.00%*+
Ratio of net investment
income to average net
assets................. 1.50%# 2.04%# (0.14%)*#
Portfolio turnover rate. 65.38% 21.35% 8.88%
</TABLE>
- - --------
++ Commencement of operations.
* Annualized.
** Total return is not annualized, as it may not be representative of the total
return for the year.
+ The annualized ratios of operating expenses to average net assets for the
years ended December 31, 1999, 1998 and the period from February 3, 1997 to
December 31, 1997 would have been 3.32%, 4.98% and 16.07% respectively,
without the effect of the earnings credits, and the investment advisory fee
waiver and expense reimbursement provided by SGAM Corp.
# The annualized ratios of net investment income to average net assets for the
years ended December 31, 1999, 1998 and the period from February 3, 1997 to
December 31, 1997 would have been (0.32%), (1.44%) and (14.20%)
respectively, without the effect of earnings credits, and the investment
advisory fee waiver and expense reimbursement provided by SGAM Corp.
- - ---------
See Notes to Financial Statements.

F-10

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders of
First Eagle SoGen Variable Funds, Inc.:

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of First Eagle SoGen Overseas Variable Fund, a
portfolio of First Eagle SoGen Variable Funds, Inc., as of December 31, 1999,
the related statement of operations for the year then ended, and statements of
changes in net assets for each of the years in the two year period then ended,
and the financial highlights for each of the years in the two year period then
ended and for the period from February 3, 1997 (commencement of operations) to
December 31, 1997. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the custodians. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of First
Eagle SoGen Overseas Variable Fund, a portfolio of First Eagle SoGen Variable
Funds, Inc. as of December 31, 1999, and the results of its operations for the
year then ended, and the changes in its net assets for each of the years in the
two year period then ended and the financial highlights for each of the years
in the two year period then ended and for the period from February 3, 1997 to
December 31, 1997, in conformity with generally accepted accounting principles.

/s/ KPMG LLP

New York, New York
February 18, 2000

F-11

<PAGE>
PART C
OTHER INFORMATION

ITEM 23. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <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
Arnhold and S. Bleichroeder Advisers, Inc. ('ASB
Advisers')
(e)(1) -- Distribution Agreement between the Registrant and Arnhold
and S. Bleichroeder, Inc. ('ASB')
(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.*
(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.
(p) -- Code of Ethics
</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, 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

C-1

<PAGE>
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

ASB Advisers is the Registrant's investment adviser. In addition to the
Registrant, ASB Advisers acts as investment adviser to SoGen Funds, Inc. and
pension funds and sub-adviser to other affiliated and non-affiliated investment
funds.

ASB Advisers is a wholly owned subsidiary of ASB which has a substantial
amount of assets under management in the form of pension funds and individual
and fund accounts. ASB is a registered broker-dealer and maintains a substantial
involvement in the securities brokerage and underwriting businesses. The
business and other connections of the Adviser's directors and officers are as
follows:

<TABLE>
<CAPTION>
POSITION WITH THE BUSINESS AND OTHER
NAME ADVISER CONNECTIONS
---- ------- -----------
<S> <C> <C>
Henry H. Arnhold....... Director Co-Chairman of the Board of Arnold and
S. Bleichroeder, Inc.; Director, Aquila
International Fund Limited; Trustee,
The New School for Social Research;
Director, Conservation International
</TABLE>

(table continued on next page)

C-2

<PAGE>

(table continued from previous page)

<TABLE>
<CAPTION>
POSITION WITH THE BUSINESS AND OTHER
NAME ADVISER CONNECTIONS
---- ------- -----------
<S> <C> <C>
John P. Arnhold....... Co-President and Director Co-President and Director Arnhold and S.
Bleichroeder, Inc.; President and Director,
Arnhold and S. Bleichroeder, UK Ltd.;
Co-President and Director, ASB Securities,
Inc.; Director, Aquila International Fund
Limited; President, WorldVest, Inc.;
Co-President and Trustee, First Eagle Funds;
Co-President and Director, First Eagle SoGen
Funds, Inc. and First Eagle SoGen Variable
Funds, Inc.
Stanford S. Co-President and Director Co-President, Secretary and Director, Arnhold
Warshawsky.......... and S. Bleichroeder, Inc./Co-President and
Director, ASB Securities, Inc.; Director,
German-American Chamber of Commerce; Chairman
and Director, Arnhold and S. Bleichroeder, UK
Ltd.; Chairman of the Board and Trustee, First
Eagle Trust; Trustee, First Eagle Funds,
Director, First Eagle SoGen Funds, Inc. and
First Eagle SoGen Variable Funds, Inc.
Stephen M. Kellen..... Director Co-Chairman of the Board of Arnhold and
S. Bleichroeder Inc.; Trustee, The Carnegie
Society and WNET/Thirteen; Trustees Council of
The National Gallery of Art;
Robert Miller......... Vice President, Secretary Senior Vice President, and Director, Arnhold
and Treasurer and S. Bleichroeder, Inc.; Director, Arnhold
and S. Bleichroeder, UK Ltd.; Treasurer, First
Eagle Funds
Gary Lee Fuhrman...... Director Senior Vice President and Director, Arnhold
and S. Bleichroeder, Inc.; Director, Medical
Resources, Inc.
Ronald A. Bendelius... Vice President Senior Vice President and Chief Financial
Officer, Arnhold and S. Bleichroeder, Inc.
Robert Bruno.......... Vice President Senior Vice President, Arnhold and
S. Bleichroeder, Inc.; Vice President and
Secretary, First Eagle Funds; Vice President,
Secretary and Treasurer, First Eagle SoGen
Funds, Inc. and First Eagle SoGen Variable
Funds, Inc.
William P. Casciani... Vice President Senior Vice President and Compliance Officer,
Arnhold and S. Bleichroeder, Inc.
Michael G. Vice President Senior Vice President and Comptroller, Arnhold
Klemballa........... and S. Bleichroeder, Inc.
Allan Langman......... Vice President Senior Vice President, Treasurer and Director,
Arnhold and S. Bleichroeder, Inc.
Vincent S. Viglione... Vice President Senior Vice President and Assistant Treasurer,
Arnhold and S. Bleichroeder, Inc.
</TABLE>

C-3

<PAGE>

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Arnhold and S. Bleichroeder, Inc. acts as an investment advisor to First
Eagle Fund, N.V., Aquila International Fund Limited, Aetos Corporation, DEF
Associates, N.V., Eagle Select Fund Limited, Oceanus Global Fund Ltd. and the
Global Beverage Fund Limited.

(b) The positions and offices of the Distributor's directors and officers
who serve the Registrant are as follows:

<TABLE>
<CAPTION>
NAME AND POSITION AND OFFICES POSITION AND OFFICES WITH
BUSINESS ADDRESS* WITH UNDERWRITER REGISTRANT
----------------- ---------------- ----------
<S> <C> <C>
Stanford S. Warshawsky............... Co-President, Director and Chairman of the Board
Secretary
John P. Arnhold...................... Co-President and Director Co-President
Jean-Marie Eveillard................. Senior Vice President Co-President
Charles de Vaulx..................... Senior Vice President Senior Vice President
Tracey LaPointe Saltwick............. Senior Vice President Vice President and Compliance
Officer
Robert Bruno......................... Senior Vice President Vice President, Secretary and
Treasurer
Edwin Olsen.......................... Vice President Vice President
Cari Levine.......................... Assistant Vice President Assistant Treasurer
Suzan Afifi.......................... Assistant Vice President Assistant Secretary
</TABLE>

- ---------

* The address of each person named above is 1345 Avenue of the Americas, New
York, New York 10105.

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, 1345 Avenue of the
Americas, New York, NY 10105 with the exception of certain accounts, books and
other documents which are kept by the Registrant's custodian, State Street, 801
Pennsylvania, 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 a 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-4

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registration has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York, as of the 20th day of April, 2000.

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

By: /S/ JOHN P. ARNHOLD
..................................
JOHN P. ARNHOLD,
CO-PRESIDENT

By: /S/ JEAN-MARIE EVEILLARD
..................................
JEAN-MARIE EVEILLARD,
CO-PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ JOHN P. ARNHOLD Director April 20, 2000
.........................................
(JOHN P. ARNHOLD)

/s/ CANDACE K. BEINECKE* Director April 20, 2000
.........................................
(CANDACE K. BEINECKE)

/s/ EDWIN J. EHRLICH* Director April 20, 2000
.........................................
(EDWIN J. EHRLICH)

/s/ ROBERT J. GELLERT* Director April 20, 2000
.........................................
(ROBERT J. GELLERT)

/s/ JAMES E. JORDAN* Director April 20, 2000
.........................................
(JAMES E. JORDAN)

/s/ WILLIAM M. KELLY* Director April 20, 2000
.........................................
(WILLIAM M. KELLY)

/s/ DONALD G. MCCOUCH* Director April 20, 2000
.........................................
(DONALD G. MCCOUCH)

Director April 20, 2000
.........................................
(FRED J. MEYER)

/s/ DOMINIQUE RAILLARD* Director April 20, 2000
.........................................
(DOMINIQUE RAILLARD)

/s/ NATHAN SNYDER* Director April 20, 2000
.........................................
(NATHAN SNYDER)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ STANFORD S. WARSHAWSKY* Director April 20, 2000
.........................................
(STANFORD S. WARSHAWSKY)

/s/ ROBERT BRUNO* Vice President, Secretary, Treasurer April 20, 2000
......................................... (Principal Financial and
(ROBERT BRUNO) Accounting Officer)

*By: /S/ JOHN P. ARNHOLD
.........................................
JOHN P. ARNHOLD
POWER-OF-ATTORNEY
</TABLE>

<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
(d) --Investment Advisory Contract between the Registrant and
Arnhold and S. Bleichroeder Advisers Inc. ("ASB Advisers")
(e)(1) --Distribution Agreement between the Registrant and Arnhold and
S. Bleichroeder Inc. ("ASB")
(j) --Consent of KPMG LLP
(n) --Financial Data Schedule
(p) --Code of Ethics
</TABLE>

<PAGE>

Exhibit 99(d)

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.
1221 AVENUE OF THE AMERICAS, 8TH FLOOR
NEW YORK, NEW YORK 10020

December , 1999

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

INVESTMENT ADVISORY CONTRACT

Dear Sirs:

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

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

(a) Articles of Incorporation of the Company.

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

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

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

2. Advisory Services. You will regularly provide the Company with
investment research, advice and supervision and will furnish continuously an
investment program for the Company's Portfolio consistent with the Fund's
investment objective, policies and restrictions set forth in the Company's
Registration Statement under the Securities Act of 1933, as amended (the
"Registration Statement") and the current prospectus and statement of additional
information included therein (the "Prospectus"). You will recommend what
securities shall be purchased for the Fund, what portfolio securities shall be
sold by the Fund, and what portion of the Fund's assets shall be held
uninvested,

<PAGE>

subject always to such investment objectives, policies and restrictions and to
the provisions of the Company's Articles of Incorporation, By-Laws and the
requirements of the Investment Company Act of 1940, as amended (the "1940 Act"),
as each of the same shall be from time to time in effect. You shall advise and
assist the officers of the Company in taking such steps as are necessary or
appropriate to carry out the decisions of its Board of Directors and any
appropriate committees of such Board regarding the foregoing matters and
general conduct of the investment business of the Company.

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

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

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

<PAGE>

days in such month. The average daily value of the net assets of the Fund shall
in all cases be based only on business days for the period or month and shall be
computed in accordance with applicable provisions of the Articles of
Incorporation of the Company.

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

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

6. Services to Other Accounts. The Company understands that you and your
affiliates now act, will continue to act, and may in the future act as
investment adviser to fiduciary and other managed accounts, and the Company has
no objection to you and your affiliates so acting, provided that whenever the
Fund and one or more other accounts advised by you (the "Managed Accounts") are
prepared to purchase, or desire to sell, the same security, available
investments or opportunities for sales will be allocated in a manner that is
equitable to each entity. In such situations, you may place orders for a Fund
and each Managed Account simultaneously, and if all such orders are not filled
at the same price, you may cause the Fund and each Managed Account to pay or
receive the average of the prices at which the orders were filled for the Fund
and all Managed Accounts. If all such orders cannot be executed fully under
prevailing market conditions, you may allocate the traded securities between the
Fund and the Managed Accounts in a manner you consider appropriate, taking into
account the size of the order placed for the Fund and each such Managed Account
and, in the event of a sale, the size of the pre-sale position of the Fund and
each such Managed Account, as well as any other factors you deem relevant. The
Company recognizes that in some cases this procedure may affect adversely the
price paid or received by the Fund or the size of the position

<PAGE>

purchased or sold by the Fund. In addition, the Company understands that the
persons employed by you to provide service to the Company in connection with the
performance of your duties under this Agreement will not devote their full time
to that service. Moreover, nothing contained in this Agreement will be deemed to
limit or restrict your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature including serving as investment adviser to, or employee,
officer, director or trustee of, other investment companies.

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

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

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

10. Duration and Termination of this Agreement. This Agreement shall remain
in force until December , 2001, and from year to year thereafter with respect
to the Fund, but only so long as such continuance is specifically approved at
least annually by the Board of Directors of the Company with respect to the Fund
or by vote of a majority of the outstanding voting securities of the Fund. In
addition, the Company may not renew or perform this Agreement unless the terms
thereof and any renewal thereof have been approved with respect to the Fund by
the vote of a majority of directors of the Company who are not interested
persons of you or of the Company cast in person at a meeting called for the
purpose of voting on such approval. This Agreement may, on 60

<PAGE>

days' written notice, be terminated with respect to the Fund at any time without
the payment of any penalty, by the Board of Directors of the Company, by vote of
a majority of the outstanding voting securities of the Company, or by you. This
Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this paragraph, the definitions contained in
Section 2(a) of the 1940 Act, as amended, and any Rules thereunder (particularly
the definitions of "interested person", "assignment", "voting security" and
"vote of a majority of the outstanding voting securities") shall be applied.

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

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

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

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

<PAGE>

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

Yours very truly,

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

By:...................................
Name:
Title:

The foregoing Agreement is hereby accepted.

ARNHOLD AND S. BLEICHROEDER ADVISERS, INC.

By: ...........................
Name:
Title:

<PAGE>

SCHEDULE A

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

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

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

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

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

By: ..................................
Name:
Title:

ARNHOLD AND S. BLEICHROEDER
ADVISERS, INC.

By: ..................................
Name:
Title:

<PAGE>

Exhibit 99(e)(1)

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.
1345 Avenue of the Americas
New York, New York 10105

February 18, 2000

Arnhold and S. Bleichroeder, Inc.
1345 Avenue of the Americas, 44th Floor
New York, New York 10105

Distribution Contract

Dear Sirs:

First Eagle SoGen Variable Funds, Inc. (the "Company"), a Maryland
corporation currently consisting of the portfolios listed on Schedule A,
attached hereto, together with all other portfolios subsequently established and
made subject to this Agreement, is engaged in the business of an investment
company. Its Board of Directors has selected you to act as principal underwriter
(as such term is defined in Section 2(a)(29) of the Investment Company Act of
1940, as amended) of the shares of Capital Stock of the Company and you are
willing to act as such principal underwriter and to perform the duties and
functions of underwriter in the manner and on the conditions hereinafter set
forth. Accordingly, the Company hereby agrees with you as follows:

1 . Copies of Corporate Documents. The Company will furnish you promptly
with copies of any registration statements filed by it with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, together with any financial
statements and exhibits included therein, and all amendments or supplements
thereto hereafter filed.

2. Registration and Sale of Additional Shares. The Company will from time
to time use its best efforts to register under the Securities Act of 1933, as
amended, such authorized shares of

<PAGE>

Capital Stock not already so registered as you may reasonably be expected to
sell as agent on behalf of the Company. To the end that there will be available
for sale such number of shares as you may reasonably be expected to sell, the
Company, subject to the necessary approval of its shareholders, will, from time
to time as may be necessary, increase the number of authorized shares. This
agreement relates to the issue and sale of shares that are duly authorized and
registered and available for sale by the Company, including repurchased and
redeemed shares if and to the extent that they may be legally sold and if, but
only if, the Company sees fit to sell them. You and the Company will cooperate
in taking such action as may be necessary from time to time to qualify shares of
the Company for sale in New York and in any other states mutually agreeable to
you and the Company, and to maintain such qualification, provided that such
shares are duly registered under the Securities Act of 1933, as amended.

The Company represents to you that all registration statements and
prospectuses filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933 and under the Investment Company Act of 1940
with respect to the shares have been prepared in conformity with the
requirements of said Acts and rules and regulations of the Securities and
Exchange Commission thereunder. As used in this Agreement the terms
"registration statement" and "prospectus" shall mean any registration statement
and prospectus, including the statement of additional information incorporated
by reference therein, filed with the Securities and Exchange Commission and any
amendments and supplements thereto which at any time shall have been filed with
said Commission. The Company represents and warrants to you that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of said

<PAGE>

Commission; that all statements of fact contained in any such registration
statement and prospectus will be true and correct when such registration
statement becomes effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Company may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement or
supplements to any prospectus as, in the light of future developments, may, in
the opinion of the Company's counsel, be necessary or advisable. If the Company
shall not propose such amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Company of a written request from you
to do so with respect to a material change, you may, at your option, terminate
this Agreement or decline to make offers of the Company's securities until such
amendments are made. The Company shall not file any amendment to any
registration statement or supplement to any prospectus without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Company's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Company may deem advisable, such right
being in all respects absolute and unconditional.

3. Solicitation of Orders. You will use your best efforts (but only in
states in which you may lawfully do so) to obtain orders for shares of the
Capital Stock of the Company authorized for issue by the Company and registered
under the Securities Act of 1933, as amended, from life insurance companies that
have entered into a participation agreement with you and the Company providing
for such shares of the Company to serve as funding vehicles for separate
accounts

<PAGE>

underlying variable annuity contracts and/or variable life insurance contracts
("Participating Insurance Companies"), provided that you may in your discretion
refuse to accept orders for shares from any particular applicant.

4. Sale of Shares. Subject to the provisions of paragraph 5 hereof and to
such minimum purchase requirements as may from time to time be currently
indicated in the Company's prospectus, you are authorized tic) sell as agent on
behalf of the Company authorized and unissued shares of the Capital Stock of the
Company registered under the Securities Act of 1933, as amended, to
Participating Insurance Companies, provided that each such sale is made in
accordance with the terms of the applicable participation agreement. The sales
price of such shares shall be their net asset value provided that each such sale
is made as defined in paragraph 6 hereof.

Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind
deemed by the parties hereto to render sales of the Company's shares not in the
best interest of the Company, the parties hereto may decline to accept any
orders for, or make any sales of, any shares until such time as those parties
deem it advisable to accept such orders and to make such sales and both parties
shall mutually agree to any such determination.

5. Sale of Shares to Participating, Insurance Companies by the Company. Any
right granted to you to accept orders for shares or make sales on behalf of the
Company will not apply to shares issued in connection with the merger or
consolidation of any other investment company with the Company or its
acquisition, by purchase or otherwise, of all or substantially all the assets of
any investment company or substantially all the outstanding shares of any such
company,, and such right shall not apply to shares that may be offered by the
Company to shareholders by virtue of their being

<PAGE>

shareholders of the Company, including shares issued in payment of any dividend
or distribution by the Company-

6. Net Asset Value. All shares of the Company sold to Participating
Insurance Companies by you as agent for the Company will be sold at their net
asset value per share next computed after receipt of a purchase order by a
Participating Insurance Company in accordance with the ten-ns of the applicable
participation agreement. Net asset value per share shall be computed in the
manner provided in the Company's Articles of Incorporation, as now in effect or
as it may be amended.

7. Suspension of Sales and Purchases. If and whenever the determination of
asset value is suspended pursuant to the Company's Articles of Incorporation,
and such suspension has become effective, until such suspension is terminated,
no further orders for the sale or purchase of shares shall be accepted by you
except such orders placed with you (or with a Participating Insurance Company)
before you (or such Participating Insurance Company) had knowledge of the
suspension. In addition, the Company reserves the right to suspend sales and
purchases and your authority to accept orders for sales and purchases of shares
on behalf of the Company if, in the judgment of a majority of its Board of
Directors or a majority of the Executive Committee of its Board of Directors, if
such Committee exists, it is in the best interests of the Company to do so, such
suspension to continue for such period as may be determined by such majority;
and in that event, no shares will be sold or purchased by the Company or by you
on behalf of the Company while such suspension remains in effect except for
shares necessary to cover orders accepted by you (or by a Participating
Insurance Company) before you (or such Participating Insurance Company) had
knowledge of the

<PAGE>

suspension. The Company will notify you promptly of any such suspension of the
determination of net asset value or of any such suspension of sales and
purchases of shares.

The Company agrees to advise you immediately in writing:

(a) of any request by the Securities and Exchange Commission for amendments
to the registration statement or prospectus then in effect or for additional
information;

(b) in the event of the issuance by the Securities and Exchange Commission
of any stop order suspending the effectiveness of the registration statement or
prospectus then in effect or the initiation of any proceeding for that purpose;

(c) of the happening of any event, to the best of its knowledge, which
makes untrue any statement of a material fact made in the registration statement
or prospectus then in effect or which requires the making of a change in such
registration statement or prospectus in order to make the statements therein not
misleading; and

(d) of all actions of the Securities and Exchange Commission with respect
to any amendments to any registration statement or prospectus which may from
time to time be filed with the Securities and Exchange Commission that
materially affect the performance of your services under this Agreement.

8. Expenses. The Company will pay all fees and expenses in connection with
the preparation and filing of any registration statement and prospectus or
amendments thereto under the Securities Act of 1933, as amended, covering the
issue and sale of its shares and in connection with the qualification of shares
for sale in the various states and countries in which the Company shall
determine it advisable to qualify such shares for sale, the costs of all stock
certificates and the fees and expenses of its transfer agent or shareholders'
servicing agent or registrar. It will also pay any

<PAGE>

issue taxes. You will pay all expenses of printing prospectuses and other sales
literature (except copies of prospectuses and other sales literature which may
from time to time be sent to existing shareholders of the Fund), all fees and
expenses in connection with your qualification as a dealer in the various states
and countries, and all other expenses in connection with the sale and offering
for sale of the shares of the Company which are not payable by the Company
pursuant to the provisions of this paragraph 8.

9. Conformity with Law. You agree that in selling and purchasing the shares
of the Company you will duly conform in all respects with the laws of the United
States and any state or country in which such shares may be offered for sale by
you pursuant to this agreement.

10. Indemnification. You agree to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act of 1933, as
amended, against any and all losses, claims, damages, liabilities or litigation
expenses (including legal and other expenses) to which the Company or such
directors, officers or controlling person may become subject under such Act,
under any other statute, at common law or otherwise, arising out of the
acquisition of any shares by any person or the sale of any shares by any person
to the Company through you which (i) may be based upon any wrongful act by you
or any of your employees or representatives, or (ii) may be based upon any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering shares of the Company or any
amendment thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such statement or omission was made in
reliance upon information furnished or confirmed in writing to the Company by
you, provided, however, that

<PAGE>

in no case is your indemnity in favor of a director or officer or any other
person deemed to protect such director or officer or other person against
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligations and duties under
this agreement.

The Company agrees to indemnify and hold harmless you and each of your
directors and officers and each person, if any, who controls you within the
meaning of Section 15 of the Securities Act of 1933, as amended, against any and
all losses, claims, damages, liabilities or litigation expenses (including legal
and other expenses) to which you or such directors, officers or controlling
person may become subject under such Act, under any other statute, at common law
or otherwise, arising out of the acquisition of any shares by any person or the
sale of any shares by any person to the Company through you which (i) may be
based upon any wrongful act by the Company or any of its employees or
representatives, or (ii) except as described in clause (ii) of the preceding
paragraph, may be based upon any untrue statement or alleged untrue statement of
a material fact contained in a registration statement or prospectus covering
shares of the Company or any amendment thereof or supplement thereto or omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided,
however, that in no case is the Company's indemnity in favor of a director or
officer or any other person deemed to protect such director or officer or other
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement. You hereby waive any rights to indemnification
concerning your obligations and duties hereunder to which you might be entitled
under the Company's By-Laws.

<PAGE>

You are not authorized to give any information or to make any
representations on behalf of the Company in connection with the sale or purchase
of shares of the Company other than the information and representations
contained in a registration statement or prospectus covering shares of the
Company, as such registration statement and prospectus may be amended or
supplemented from time to time. No person other than you is authorized to act as
agent for the Company in connection with the offering or sale of shares of the
Company to the public or otherwise.

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

<PAGE>

12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. If the Company should at any time deem it
necessary or advisable in the best interests of the Company that any amendment
of this agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under state or federal tax laws and should
notify you of the form of such amendment, and the reasons therefor, and if you
should decline to assent to such amendment, the Company may terminate this
agreement forthwith. If vou should at any time request that a change be made in
the Company's Articles of Incorporation or By-Laws, or in its methods of doing
business, in order to comply with any requirements of federal law or regulations
of the Securities and Exchange Commission or of a national securities
association of which you are or may be a member, relating to the sale of the
shares of the Company, and the Company should not make such necessary change
within a reasonable time, you may terminate this agreement forthwith.

13. Miscellaneous.

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

(b) The Company recognizes that, except to the extent otherwise agreed to
by the parties hereto, your directors, officers and employees may from time to
time serve as directors, trustees, officers and employees of corporations and
business trusts (including other investment companies),

<PAGE>

and that you or your affiliates may enter into distribution or other agreements
with other corporations and trusts.

(c) In the event that the Board of Directors of any additional portfolios
indicate by vote that such portfolios are to be made parties to this Agreement,
whether such portfolios were in existence at the time of the effective date of
this Agreement or subsequently formed, Schedule A hereto shall be amended to
reflect the addition of such new portfolios and such new portfolios shall
thereafter become parties hereto. In the event that any of the portfolios on
Schedule A terminates its registration as a management investment company, or
otherwise ceases operations, Schedule A shall be amended to reflect the deletion
of such portfolio and its various classes.

(d) This Agreement shall be governed by the internal laws of the State of
New York without giving effect to principles of conflicts of laws.

(e) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.

<PAGE>

Yours very truly,

FIRST EAGLE SOGEN VARIABLE FUNDS, INC.

By:
-------------------------------------
Co-President

The foregoing agreement is
hereby accepted as of the
date thereof.

ARNHOLD AND S. BLEICHROEDER, INC.

By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------

<PAGE>

SCHEDULE A

SOGEN VARIABLE FUNDS, INC.

SoGen Overseas Variable Fund

<PAGE>

INDEPENDENT AUDITORS' CONSENT

To the Shareholders and Board of Directors of
First Eagle SoGen Variable Funds, Inc.:

We consent to the incorporation by reference, in this Prospectus and Statement
of Additional Information, of our report dated February 18, 2000, on the
statement of assets and liabilities for the First Eagle SoGen Overseas Variable
Fund as of December 31, 1999 and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the years
in the two-year period then ended and the financial highlights for each of the
years in the two-year period then ended, and for the period from February 3,
1997 (commencement of operations) to December 31, 1997. These financial
statements and financial highlights and our report thereon are included in the
Annual Report of the Fund as filed on Form N-30D.

We also consent 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

New York, New York
April 20, 2000

[ARTICLE] 6
[CIK] 0001000249
[NAME] FIRST EAGLE SOGEN OVERSEAS VARIABLE FUND
<TABLE>
<S> <C>
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[INVESTMENTS-AT-COST] 8,034,993
[INVESTMENTS-AT-VALUE] 8,883,112
[RECEIVABLES] 238,772
[ASSETS-OTHER] 207,076
[OTHER-ITEMS-ASSETS] 36,605
[TOTAL-ASSETS] 9,365,565
[PAYABLE-FOR-SECURITIES] 81,770
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 128,053
[TOTAL-LIABILITIES] 209,823
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 7,237,363
<SHARE-COMMON-STOCK> 646,522
[SHARES-COMMON-PRIOR] 418,376
[ACCUMULATED-NII-CURRENT] 172,030
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 888,446
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 857,903
[NET-ASSETS] 9,155,742
[DIVIDEND-INCOME] 157,125
[INTEREST-INCOME] 28,176
[OTHER-INCOME] 0
[EXPENSES-NET] 92,574
[NET-INVESTMENT-INCOME] 92,727
[REALIZED-GAINS-CURRENT] 960,473
[APPREC-INCREASE-CURRENT] 1,076,944
[NET-CHANGE-FROM-OPS] 2,130,144
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 95,465
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 708,435
[NUMBER-OF-SHARES-REDEEMED] (487,237)
[SHARES-REINVESTED] 6,948
[NET-CHANGE-IN-ASSETS] 4,943,113
[ACCUMULATED-NII-PRIOR] 36,075
[ACCUMULATED-GAINS-PRIOR] 62,115
<OVERDISTRIBUTION-NII-PRIOR> 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 46,058
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 204,975
[AVERAGE-NET-ASSETS] 6,684,686
[PER-SHARE-NAV-BEGIN] 10.07
[PER-SHARE-NII] .16
[PER-SHARE-GAIN-APPREC] 4.08
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] (.15)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 14.16
[EXPENSE-RATIO] 1.50%
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>

<PAGE>

CODE OF ETHICS

1. Statement of General Principles

This Code of Ethics ("Code") expresses the policy and procedures of
Arnhold and S. Bleichroeder, Inc. ("A&SB") and Arnhold and S. Bleichroeder
Advisers, Inc. ("A&SB Advisers") (collectively, the "Adviser"), First Eagle
Funds, First Eagle SoGen Funds, Inc. and First Eagle Sogen Variable Funds, Inc.
and any other registered investment company for which the Adviser may act as
adviser or subadviser (the "Funds"). The Code is enforced to insure that no one
is taking advantage of his or her position, or even giving the appearance of
placing his or her own interests above those of the Funds. Investment company
personnel must at all levels act as fiduciaries, and as such must place the
interests of the shareholders of the Funds before their own.

Rule 17j-1 under the Investment Company Act of 1940, as amended (the
"Act"), makes it unlawful for certain persons, in connection with the purchase
or sale of securities, to, among other things, engage in any act, practice or
course of business which operates or would operate as a fraud or deceit upon a
registered investment company. In compliance with Rule 17jl, this Code contains
provisions that are reasonably necessary to eliminate the possibility of any
such conduct.

2. Definitions

"Access Person" shall mean any director, trustee, officer, general
partner, or Advisory Person of the Funds or of the Adviser, who in the ordinary
course of his or her business makes, participates in or obtains information
regarding the purchase or sale of securities for the Funds or whose functions or
duties as part of the ordinary course of his or her business relate to the
making of any recommendation to the Funds regarding the purchase or sale of
securities.

"Advisory Person" of the Funds means any employee of the Funds or the
Adviser who, in connection with his regular functions or duties, makes,
participates in, or obtains information regarding the purchase or sale of a
security by the Funds, or whose functions relate to the making of any
recommendations with respect to such purchases or sales, and shall include any
natural person in a control relationship with the Funds or the Adviser who
obtains information concerning recommendations made to the Funds with regard to
the purchase or sale of a security.

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The term "beneficial ownership" " shall mean any person who has or
shares, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise, a direct or indirect pecuniary
interest in a Security. "Pecuniary interest" means the opportunity, directly or
indirectly, to profit or share in any profit derived from a transaction in the
Security. "Indirect pecuniary interest" includes, but is not limited to, an
interest in a Security held by members of your immediate family who share your
household, including your spouse, children and stepchildren, parents,
grandparents, brothers and sisters, and in-laws.

"Board" shall mean the board of directors or board of trustees of the
Funds.

"Compliance Officer" shall mean the compliance officer appointed by the
Board of the Funds.

"Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Act.

The term "Covered Security" shall mean a security defined in Section
2(a)(36) of the Act and shall include options, but shall not include direct
obligations of the United States, bankers' acceptances, bank certificates of
deposit, commercial paper, other money market instruments including repurchase
agreements, and shares of registered open-end investment companies.

"Disinterested Director" of the Funds shall mean a director or trustee
thereof who is not an "interested person" of the Funds within the meaning of
Section 2(a)(19) of the Act.

"Fund" shall mean the Funds or any other registered investment company
to which the Adviser acts as adviser or subadviser.

"Initial Public Offering" means an offering of securities registered
under the Securities Act of 1933, as amended, by or for an issuer of such
securities which, immediately before the registration, was not subject to the
reporting requirements of Section 13 or 15d of the 1934 Act.

"Investment Compliance Committee" shall mean the committee appointed by
the management of A&SB.

"Investment Personnel" of the Funds or the Adviser includes Portfolio
Managers and those persons who provide information and advice to the Portfolio
Managers or who help execute the Portfolio Managers' decisions (e.g. securities
analysts and traders).

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"Portfolio Managers" shall mean those persons who have direct
responsibility and authority to make investment decisions for a Fund.

"Principal Underwriter" shall mean A&SB.

The "purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security.

3. Prohibited Securities Transactions

The prohibitions described below will only apply to a transaction in a
Covered Security in which the designated person has, or by reason of such
transaction acquires or disposes, any direct or indirect beneficial ownership in
such Covered Security ("Securities Transaction").

A. Blackout Trading Periods - Access Persons

No Access Person shall execute a Securities Transaction on a day during
which the Funds have a pending buy or sell order in that same Covered Security
until that order is executed or withdrawn. Any profits realized on trades within
the proscribed periods are required to be disgorged to a charity selected by the
Adviser.

B. Blackout Trading Periods - Portfolio Managers

No Portfolio Manager shall buy or sell a Covered Security within seven
calendar days before and after the Fund that he or she manages trades in that
Covered Security. Any profits realized on trades within the proscribed periods
are required to be disgorged to a charity selected by the Adviser.

C. Ban on Short-Term Trading Profits - Investment Personnel

Investment Personnel may not profit in the purchase and sale, or sale
and purchase, of the same (or equivalent) securities within 60 calendar days.
Any profits realized on such short-term trades are required to be disgorged to a
charity selected by the Adviser.

D. Ban on Securities Purchases of an Initial Public Offering - Investment
Personnel

Investment Personnel may not acquire any securities in an Initial Public
Offering.

E. Securities Offered in a Private Offering - Investment Personnel

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Investment Personnel may not acquire any securities in a private
offering without the prior written consent of the Compliance Officer.
Furthermore, should written consent be given, Investment Personnel are required
to disclose such investment when participating in the Fund's subsequent
consideration of an investment in such issuer. In such circumstances, the Fund's
decision to purchase securities of such issuer should be subject to an
independent review by the Investment Compliance Committee.

4. Exempted Transactions

A. Subject to compliance with preclearance procedures in accordance with
Section 5 below, the prohibitions of Sections 3A, 3B and 3C of this Code shall
not apply to:

(i) Purchases or sales effected in any account over which the Access Person
has no direct or indirect influence or control, or in any account of the
Access Person which is managed on a discretionary basis by a person other
than such Access Person and with respect to which such Access Person does
not in fact influence or control such transactions.

(ii) Purchases or sales of securities which are not eligible for purchase
or sale by the Funds.

(iii) Purchases or sales which are non-volitional on the part of either the
Access Person or the Funds.

(iv) Purchases which are part of an automatic dividend reinvestment plan.

(v) Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such rights
were acquired from such issuer, and sales of such rights so acquired.

(vi) Any equity securities transaction, or series of related transactions,
involving 500 shares or less or amounting to $10,000 or less, in the
aggregate if i) the Access Person has no prior knowledge of transactions in
such Covered Security by the Funds and (ii) if the issuer has a market
capitalization (outstanding shares multiplied by the current price per
share) greater than $1 billion.

(vii) Any fixed income securities transaction involving $50,000 principal
amount or less if the Access Person has no prior knowledge of transactions
in such securities by the Funds.

(viii) All other transactions contemplated by an Access Person which
receive the prior approval of the Investment Compliance Committee in
accordance with the preclearance procedures described in Section 5 below.
Purchases or sales of a specific Covered

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Security may receive the prior approval of the Investment Compliance
Committee because the Committee has determined that no abuse is involved
and that such purchases and sales would be very unlikely to have any
economic impact on the Funds or on the Fund's ability to purchase or sell
such Covered Securities.

B. The prohibition in Section 3A shall not apply to Disinterested Directors
of the Funds, unless a Disinterested Director, at the time of a transaction,
knew or, in the ordinary course of fulfilling his or her official duties as a
Disinterested Director of the Funds, should have known that the Funds had a
pending buy or sell order in that same Covered Security, which order had not yet
been executed or withdrawn.

C. A transaction by Access Persons (other than Investment Personnel)
inadvertently effected during the period proscribed in Section 3A will not be
considered a violation of the Code and disgorgement will not be required so long
as the transaction was effected in accordance with the preclearance procedures
described in Section 5 and without prior knowledge of any Securities Transaction
by the Funds.

D. The prohibition in Section 3C shall not apply to profits earned from a
Securities Transaction in which securities are not the same (or equivalent) to
those owned, shorted or in any way traded by the Funds during the 60 day period;
provided, however, that if the Investment Compliance Committee determines that a
review of the Access Person's reported personal securities transactions
indicates an abusive pattern of short-term trading, the Committee may prohibit
such Access Person from profiting in the purchase and sale, or sale and
purchase, of the same (or equivalent) securities within 60 calendar days whether
or not such Covered Security is the same (or equivalent) to that owned, shorted
or in any way traded by the Funds.

5. Preclearance

Access Persons (other than Disinterested Directors) must preclear all
Securities Transactions. All requests for preclearance must be submitted to the
Investment Compliance Committee. Such requests shall be made by submitting a
Personal Investment Request Form, in the form annexed hereto as Appendix A. All
approved orders must be executed by the close of business on the day
preclearance is granted. If any order is not timely executed, a request for
preclearance must be resubmitted.

Disinterested Directors need not preclear their personal investments in
securities unless a Disinterested Director knows, or in the course of fulfilling
his or her official duties as a Disinterested Director should know, that, within
the most recent 15 days, any of the Funds have purchased or sold, or considered
for purchase or sale, such Covered Security or is proposing to purchase or sell,
directly or indirectly, any Covered Security in which the Disinterested Director
has, or by reason of such Securities Transaction would acquire, any direct or
indirect beneficial ownership.

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6. Reporting

A. The Compliance Officer shall periodically identify all Access Persons
and Inform such Access Persons of their reporting and compliance obligations
under this Code of Ethics.

B. Access Persons (other than Disinterested Directors) are required to
direct their broker(s) to supply to the Compliance Officer on a timely basis
duplicate copies of confirmations of all personal Securities Transactions and
copies of periodic statements for all securities accounts, whether existing
currently or to be established in the future. A sample letter for this purpose
is attached as Appendix B. The Securities Transaction reports and/or duplicates
should be addressed "Personal and Confidential." Compliance with this Code
requirement will be deemed to satisfy the reporting requirements imposed on
Access Persons under Rule 17j-1.

C. A Disinterested Director shall report to the Compliance Officer, no
later than ten days after the end of the calendar quarter in which the
transaction to which the report relates was effected, the information required
in Appendix C hereto with respect to any Securities Transaction in which such
Disinterested Director has, or by reason of such transaction acquires, any
direct or indirect beneficial ownership in a Covered Security that such
Disinterested Director knew, or in the course of fulfilling his or her official
duties as a director should have known, during the 15-day period immediately
preceding or after the date of the Securities Transaction by the Disinterested
Director, to have been purchased or sold by the Funds or considered for purchase
or sale by the Funds. With respect to those transactions executed through a
broker, a Disinterested Director of the Funds may fulfill this requirement by
directing the broker(s) to transmit to the Legal Compliance Officer a duplicate
of confirmations of such transactions, and copies of the statements of such
brokerage accounts, whether existing currently or to be established in the
future. The transaction reports and/or duplicates should be addressed "Personal
and Confidential" and submitted to the Compliance Officer and may contain a
statement that the report shall not be construed as an admission by the person
making such report that he or she has any direct or indirect beneficial
ownership in the Covered Security to which the report relates. Securities
Transactions effected for any account over which a Disinterested Director does
not have any direct or indirect influence or control, or which is managed on a
discretionary basis by a person other than the Disinterested Director and with
respect to which such Disinterested Director does not in fact influence or
control such transactions, need not be reported.

D. Whenever a person designated as Investment Personnel recommends that the
Funds purchase or sell a Covered Security, he or she shall disclose to the
person to whom the recommendation is made, as well as to the Compliance Officer,
whether he or she presently owns such Covered Security, or whether he or she is
considering the purchase or sale of such Covered Security.

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E. Not later than ten days after a person becomes an Access Person, and
thereafter on an annual basis Access Persons (other than Disinterested
Directors) will disclose all personal securities holdings and all their accounts
with any broker or dealer. On an annual basis Access Persons (other than
Disinterested Directors) will be sent a copy of the list of such Access Person's
securities accounts in which he or she has a beneficial ownership interest to
verify its accuracy and make any necessary additions or deletions. The Access
Person shall immediately notify the Compliance Officer upon establishing any
account with a securities or derivatives broker or dealer.

F. All personal matters discussed with the Compliance Officer, or members
of the Investment Compliance Committee, and all confirmations, account
statements and personal investment reports shall be kept in confidence, but will
be available for inspection by the Boards of the Funds and the Adviser and by
the appropriate regulatory agencies.

7. Annual Certification

On an annual basis Access Persons will be sent a copy of this Code for
their review. Access Persons will be asked to certify that they have read and
understand this Code and recognize that they are subject hereto. Access Persons
will be further asked to certify annually that they have complied with the
requirements of this Code and that they have disclosed or reported all personal
securities transactions required to be disclosed or reported pursuant to this
Code. A sample of the certification is attached as Appendix D.

8. Confidential Status of the Fund's Portfolio

The current portfolio positions of the Funds managed, advised and/or
administered by the Adviser and current portfolio transactions, programs and
analyses must be kept confidential.

If non-public information regarding the Fund's portfolio should become
known to any Access Person, whether in the line of duty or otherwise, he or she
should not reveal it to anyone unless it is properly part of his or her work to
do so.

9. Non-Public Material Information

No Access Person may purchase or sell any Covered Security, or be
involved in any way in the purchase or sale of a Covered Security, while in
possession of material nonpublic information about the Covered Security or its
issuer, regardless of the manner in which such information was obtained. This
prohibition covers transactions for clients, as well as transactions for
personal accounts.

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Furthermore, no Access Person possessing material non-public information
may disclose such information to any person other than the Compliance Officer,
except to the extent authorized by the Compliance Officer. Disclosing non-public
material information to others is known as "tipping" and is prohibited.

Non-public information includes corporate information, such as
undisclosed financial information about a corporation, and market information,
such as a soon-to-be-published article about a corporation. Material information
is information which an investor would consider important in making an
investment decision and which would substantially affect the market price of a
security if disclosed.

10. Gifts - Investment Personnel

Investment Personnel shall not receive any gift or other thing of more
than de minimis value from any person or entity that does business with or on
behalf of the Funds. For purposes of this Code, "more than de minimis value"
shall mean any gift in excess of a value of $100 per year.

11. Services as a Director in a Publicly Traded Company - Investment
Personnel

Investment Personnel shall not serve on the boards of directors of
publicly traded companies, absent prior authorization by the Board of the Funds,
based upon a determination that the board service would be consistent with the
interests of the Funds and its shareholders. When such authorization is
provided, the Investment Personnel serving as a director will be isolated from
making investment decisions with respect to the pertinent company through
"Chinese Wall" or other procedures.

12. Outside Employment

No Access Person may render investment advice to persons other than the
Adviser's clients, unless the advisory relationship, including the identity of
those involved and any fee arrangements, has been disclosed to and approved by
the Adviser. All transactions for such outside advisory clients of the Access
Person are subject to the reporting requirements of Section 6 above.

13. Compliance Review

The Compliance Officer shall compare the reported personal Securities
Transactions with completed and contemplated portfolio transactions of the Funds
to determine whether a violation of this Code may have occurred. The Compliance
Officer shall bring any questionable transactions to the attention of the
Investment Compliance Committee. Before

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making any determination that a violation has been committed by any person, the
Investment Compliance Committee shall give such person an opportunity to supply
additional information regarding the Securities Transaction in question.

14. Sanctions

The Board of the Funds and the Board of Directors of the Adviser will be
informed of Code violations of this Code on a quarterly basis and the relevant
Board may impose such sanctions as they deem appropriate, including inter alia,
a letter of censure or suspension or termination of employment of the Access
Person or a request for disgorgement of any profits received from a Securities
Transaction done in violation of this Code.

15. Board Review

The Board of the Funds shall annually receive a copy of the existing
Code, along with a list of recommendations, if any, to change the existing Code
based upon experience, evolving industry practices or developments in applicable
laws or regulations. No less frequently than annually, the Compliance Officer
shall submit to the Board of the Funds a written report that:

(A) Describes any issues arising under this Code or its procedures since
the last report to the Board, including, but not limited to, information about
material violations of this Code or its procedures and sanctions imposed in
response to the material violations; and,

(B) Certifies that the Funds, and the Adviser have adopted procedures
reasonably necessary to prevent Access Persons from violating this Code.

16. Recordkeeping

The Compliance Officer shall maintain, at the Funds' and the Adviser's
principal place of business, the following record and shall make these records
available to the Securities and Exchange Commission and its representatives:

A. A copy of each Code in effect during the past five years.
B. A record of any violation and the action taken during the
past five years.
C. A copy of each Access Person's reports.
D. A record of all Access Persons.
E. A copy of the written reports to the Board.
F. A record of the reasons for preapproving Initial Public Offerings
or Private Offerings of Covered Securities.

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Appendix A

This trade approval request is the form used on A&SB's intranet website.
All Securities Transactions should receive preclearance through the
intranet site.

TRADE APPROVAL REQUEST

To: Investment Compliance Committee

From: _____________________________

Date: _____________________________

Permission is requested to (BUY)/(SELL) _____________________ shares

of ____________________________________________________________ .

The trade is to be executed at (ASB) / (Other Firm: ____________________)

I HAVE NO MATERIAL, NON-PUBLIC INFORMATION REGARDING THE ABOVE REFERENCED
SECURITY. I HAVE CHECKED OUR TRADING DESK TO ENSURE THAT THERE ARE NO
PENDING CUSTOMER ORDERS.

EMPLOYEE SIGNATURE: _____________________________

Note: This form WILL NOT BE APPROVED without the employee first signing.
Filling out this form is the responsibility of the person requesting
approval, not the person granting approval!

Approved By: _______________________________ Date: ____________________

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Appendix B

Date

XYZ Broker Dealer

Re:

Dear Sir/Madam:

Please accept this letter as permission, pursuant to NYSE Rule 407, to allow
_________ , an employee of our firm, to maintain an account(s) with your firm.

In regards to the above, please send duplicate confirmations and statements on
all transactions to the following:

Arnhold and S. Bleichroeder, Inc.
Ms. Tracy L. Saltwick
Senior Vice President
1345 Avenue of the Americas
New York, New York 10105-4300

Thank you for your prompt attention to this matter.

Sincerely,

ARNHOLD AND S. BLEICHROEDER, INC.

By:

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Appendix C

Information required to be reported:

(1) The date of the transaction, the title, the interest rate and maturity date
(if applicable), the number of shares and the principal amount of each Covered
Security involved;

(2) The nature of the transaction (i.e., purchase, sale or any other type of
acquisition or disposition);

(3) The price of the Covered Security at which the transaction was effected;

(4) The name of the broker, dealer or bank with or through which the transaction
was effected; and

(5) The date that the report is submitted by the Access Person.

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Appendix D

Certification

I hereby certify that:

I have received a current copy of the Code of Ethics, and have read and
understand the Code.

I recognize that I am subject to the Code and certify that I have complied with
the requirements of the Code.

I have disclosed or reported all my personal securities transactions required to
be disclosed or reported pursuant to this Code.

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Name

Date:
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