As filed with the Securities and Exchange Commission on December 18, 1998.
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. 1
Colonial Trust II*
(Exact name of Registrant as Specified in Charter)
One Financial Center, Boston, MA 02111
(Address of Principal Executive Offices)
(617) 426-3750
(Area Code and telephone Number)
----------
Nancy L. Conlin, Esq.
Colonial Management Associates, Inc.
One Financial Center
Boston, MA 02111
---------
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
----------
It is proposed that this filing will become effective on December 17,
1998 pursuant to Rule 488.
---------
Title of Securities Being Registered: Shares of Beneficial Interest, no par
value
----------
An indefinite amount of the Registrant's securities has been registered under
the Securities Act of 1933 pursuant to Rule 24f-2. In reliance upon such Rule,
no filing fee is being paid at this time. A Rule 24f-2 notice for the Registrant
for the year ended June 30, 1998 was filed on or about September 30, 1998.
- --------------
* On behalf of its Colonial Money Market Fund series.
<PAGE>
Colonial Trust II
(Colonial Money Market Fund)
Cross-Reference Sheet as required by Rule 481(a)
Part A
Form N-14 Item Caption in Prospectus/Proxy Statement
1 Cross-Reference Sheet; Front Cover
2 Front Cover; Back Cover
3 Cover Letter, Summary; The Fund and The Colonial
Fund; Capitalization; Matters to be Voted Upon at
the Meeting; Federal Tax Consequences
4 Cover Letter, Summary; The Fund and The Colonial
Fund; Capitalization; Matters to be Voted Upon a
at the Meeting; Federal Tax Consequences;
Exhibit A
5, 6 Summary; The Fund and The Colonial Fund;
Capitalization; Matters to be Voted Upon
at the Meeting; Federal Tax; Exhibit B; Exhibit C
7 The Fund and The Colonial Fund; Information
Relating to Voting Matters; Additiona Information
8 The Fund and The Colonial Fund; Information
Relating to Voting Matters; Additional
Information
9 Not Applicable
Part B
Form N-14 Item Caption in Statement of Additional Information
10, 11 Cover Page
12, 13 Not Applicable
14 Financial Statements
Part C
Form N-14 Item
15 Indemnification
16 Exhibits
17 Undertakings
<PAGE>
SOGEN FUNDS, INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
1-(800) 334-2143
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF SOGEN MONEY FUND
December 30, 1998
Dear Shareholder:
SoGen Money Fund (the "Fund"), a separate series of SoGen Funds, Inc.
(the "Company"), will host a Special Meeting of Shareholders on December 30,
1998 at the offices of Societe Generale Asset Management Corp. ("SGAM Corp."),
the investment adviser for the Fund, 1221 Avenue of the Americas, 8th Floor, New
York, New York 10020. The meeting is being called for the purpose of voting on a
proposal to reorganize the Fund into the Colonial Money Market Fund (the
"Colonial Fund"), a diversified portfolio of Colonial Trust II.
Societe Generale Asset Management S.A. ("SGAM S.A."), the parent
company of SGAM Corp., and I have entered into a stock purchase agreement (the
"Purchase Agreement") with Liberty Financial Companies, Inc. ("Liberty"),
providing for the sale of all of the outstanding shares of SGAM Corp. to Liberty
(the "Acquisition"). Liberty is a publicly traded, diversified asset management
organization headquartered in Boston, Massachusetts. (More information about
Liberty can be found inside the Combined Proxy Statement and Prospectus.) The
Purchase Agreement contemplates that the Fund will be reorganized into, and
become a part of, the Colonial Fund, a money market mutual fund managed and
distributed by affiliates of Liberty (the "Reorganization").
If the Reorganization is approved by shareholders of the Fund, all of
the assets of the Fund will be exchanged for shares of the Colonial Fund
described in the accompanying Notice and Combined Proxy Statement/Prospectus.
Your Fund shares would be exchanged for an equal dollar amount of Colonial Fund
shares with no tax impact to you. The investment objectives and policies of the
Colonial Fund are similar to the objectives and policies of the Fund. The Board
of Directors of the Fund has approved the Reorganization and recommends that
shareholders vote in its favor.
In light of the added diversification and economies of scale that a
larger fund can provide, the Fund's Board has determined that the Reorganization
is in the best interests of the Fund's shareholders. Moreover, Liberty is an
integrated financial services company that offers investors a wide array of
brand-name financial products, many of which would become immediately available
to you as a Colonial Fund shareholder. I encourage you to review the enclosed
materials for all the details. You should know that, if approved, the proposed
Reorganization will not affect the value of your account or result in your
paying any sales charge.
<PAGE>
The Fund's Board of Directors urges you to vote FOR the proposed
Reorganization. Please complete the enclosed proxy and return it as soon as
possible in the envelope provided. To ensure that your votes are counted, you
must vote, sign and return the enclosed proxy card. By promptly returning the
proxy, you help avoid the necessity and expenses of follow-up mailings and
telephone solicitations to assure a quorum. If you later decide to attend the
meeting, you may revoke your proxy and vote your shares in person. If you have
any questions, please call us at (800) 334-2143.
Respectfully,
Jean-Marie Eveillard
President
SHAREHOLDERS ARE URGED TO SIGN THE PROXY CARD AND MAIL IT IN THE POSTAGE PREPAID
ENVELOPE SO AS TO ENSURE A QUORUM AT THE SPECIAL MEETING. YOU MAY ALSO SUBMIT
YOUR VOTE ON THE PROPOSAL BY TELEPHONE, FACSIMILE, OR OVER THE INTERNET
(www.proxyvote.com). TO VOTE BY TELEPHONE, PLEASE CALL (800) 690-6903. YOUR
PROXY MAY BE SENT BY FACSIMILE BY DIALING (800) 733-1885 BETWEEN THE HOURS OF
9:00 A.M. AND 5:00 P.M., EASTERN TIME. IT IS IMPORTANT TO VOTE WHETHER YOU OWN
FEW OR MANY SHARES.
<PAGE>
6
COLONIAL MONEY MARKET FUND
(a diversified open-end management company)
One Financial Center, Boston, MA 02111
617-426-3750
PROSPECTUS
This Prospectus relates to the proposed issuance of shares of Colonial Money
Market Fund (Colonial Fund) to SoGen Money Fund (SoGen Fund), 1221 Avenue of the
Americas, New York, NY 10020, in connection with the proposed tax-free
combination (Combination) of SoGen Fund into Colonial Fund. Colonial Fund seeks
to obtain maximum current income, consistent with preservation of capital and
maintenance of liquidity, while SoGen Fund seeks as high a level of current
income as is considered consistent with the preservation of capital and
liquidity by investing exclusively in U.S. dollar-denominated money market
instruments which mature in 397 days or less.
This Prospectus explains concisely the information that shareholders of SoGen
Fund should know before voting on the Combination. Read it carefully and retain
it for future reference. The Colonial Fund's October 30, 1998 Prospectus is
enclosed. Such Prospectus is incorporated herein by reference. SoGen Fund's July
31, 1998 Prospectus and July 31, 1998 Statement of Additional Information (SAI)
and Colonial Fund's October 30, 1998 SAI, all of which have been filed with the
Securities and Exchange Commission (SEC), are incorporated herein by reference
and are available without charge from Liberty Funds Distributor, Inc. (Colonial
Distributor), One Financial Center, Boston, MA 02111, 1-800-426-3750, the
distributor for Colonial Fund, and from SG Cowan (SoGen Distributor), 1221
Avenue of the Americas, New York, NY 10020, 1-800-334-2143, the distributor for
SoGen Fund. The Prospectuses and SAIs referred to above are also available on
the SEC's Web site (http:\\www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Prospectus dated December 18, 1998
<PAGE>
SOGEN FUNDS, INC
1221 Avenue of the Americas
New York, New York 10020
1-(800) 334-2143
- --------------------------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
December 30, 1998
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Special Meeting") of SoGen Money Fund (the "Fund"), a separate series of SoGen
Funds, Inc., will be held at 1221 Avenue of the Americas, 8th Floor, New York,
New York 10020, on Wednesday, December 30, 1998 at 2:00 p.m., for the following
purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization by
and between SoGen Funds, Inc., on behalf of the Fund, and the Colonial Trust II,
on behalf of the Colonial Money Market Fund (the "Plan"), and the transactions
contemplated thereby. By approving the Plan, shareholders will also be approving
an interim investment management agreement between the Fund and the successor to
SGAM Corp.
2. To transact any other business that may properly come before the
Meeting or any adjournment or postponement of the Special Meeting.
The directors have fixed the close of business on October 30, 1998 as the
record date for the determination of shareholders entitled to notice of and
to vote at the Meeting or any adjournment or postponement thereof. The
enclosed proxy is being solicited on behalf of the directors.
By Order of the Board of Directors,
Philip J. Bafundo
Secretary
New York, New York
December 18, 1998
- --------------------------------------------------------------------------------
IMPORTANT -- We urge you to sign and date the enclosed proxy card and
return it in the enclosed addressed envelope which requires no postage and
is intended for your convenience. You may also submit your vote on the
proposal by telephone, facsimile, or over the Internet (www.proxyvote.com).
To vote via telephone, please call (800) 690-6903. Your proxy may be sent by
facsimile by dialing (800) 733-1885 between the hours of 9:00 a.m. and
5:00 p.m. Eastern Time. If you can attend the Special Meeting and wish to vote
your shares in person at that time, you will be able to do so.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
Notice of Special Meeting of Shareholders
Combined Proxy Statement and Prospectus
Summary
Purchase Agreement
Proposed Reorganization and Plan
Reasons for the Reorganization
Federal Income Tax Consequences of the Reorganization
Overview of the Fund and the Colonial Fund
The Fund and The Colonial Fund
The Fund
The Colonial Fund
Other Policies
Operations of the Colonial Fund Following the Reorganization
Comparative Fee Table
Comparison of Principal Risk Factors
Fundamental Versus Nonfundamental Investment Limitations
Purchase and Redemption Information, Exchange Privileges,
Distributions and Pricing
Forms of Organization
Liability of Shareholders
Shareholder Meetings; Election of Members of the Board
Terms of Board Members
Removal of Board Members
Special Meetings of Shareholders
Liability of Board Members and Officers; Indemnification
Voting Rights of Shareholders
Certain Service Provider Arrangements
Matters to be Voted Upon at the Meeting
Description of the Plan
Approval of Interim Investment Management Agreement
Board Consideration
Capitalization
Federal Income Tax Consequences
Information Relating to Voting Matters
General Information
Shareholder and Board Approvals
Quorum
Additional Information
Board Members and Officers
Financial Information of the Fund
Financial Information for the Colonial Fund
Financial Statements
Other Business
Shareholder Inquiries
Proposals of Shareholders
<PAGE>
SOGEN FUNDS, INC. COLONIAL TRUST II
1221 AVENUE OF THE AMERICAS ONE FINANCIAL CENTER
NEW YORK, NEW YORK 10020 BOSTON, MASSACHUSETTS 02111
(800) 334-2143 (800) 426-3750
COMBINED PROXY STATEMENT AND PROSPECTUS
Dated December 18, 1998
This Combined Proxy Statement and Prospectus (the "Statement") is
furnished in connection with the solicitation of proxies on behalf of the Board
of Directors of SoGen Funds, Inc. (the "Company"), a Maryland corporation, in
connection with the Special Meeting of Shareholders of SoGen Money Fund (the
"Fund") to be held at the offices of SoGen Funds, Inc., 1221 Avenue of the
Americas, 8th Floor, New York, New York 10020, on Wednesday, December 30, 1998
at 2:00 p.m., and at any adjournments and postponements thereof (collectively,
the "Special Meeting"). At the Special Meeting, the shareholders of the Fund
will be asked to approve the following proposal:
1. To approve or disapprove an Agreement and Plan of Reorganization by
and between the Company on behalf of the Fund and the Colonial Trust II (the
"Trust") on behalf of Colonial Money Market Fund (the "Colonial Fund"), and the
transactions contemplated thereby. By approving the Agreement and Plan of
Reorganization, shareholders will also be approving an interim investment
management agreement between the Fund and the successor to Societe Generale
Asset Management Corp. ("SGAM Corp.").
The Agreement and Plan of Reorganization is referred to herein as the
"Plan" and the transactions contemplated thereby are referred to herein as the
"Reorganization".
The Company and the Trust are open-end management investment companies.
The Board of Directors of the Company, including a majority of the
non-interested Directors (the "disinterested Directors"), has determined that it
is in the best interests of the Fund and its shareholders to be reorganized into
the Colonial Fund. In reaching that determination, the Board of Directors
considered the relatively small asset size of the Fund, the lack of expected
asset growth of the Fund, the problems related to these issues, and the
resulting lack of economies of scale. The Board of Directors concluded that
these disadvantages would be addressed by the Reorganization, which would
combine the assets of the Fund with the assets of the Colonial Fund. Further,
the Board of Directors concluded that, among other advantages, the
Reorganization would provide Fund shareholders with an investment vehicle that
has substantially identical investment objectives as the Fund, while offering a
lower expense ratio than that of the Fund.
The Plan provides that on February 12, 1999 (the "Closing Date") all of
the portfolio securities and other assets of the Fund will be transferred to the
Colonial Fund, and the Colonial Fund will assume all of the liabilities of the
Fund. The Colonial Fund will issue to the Fund full and fractional Class A
shares of beneficial interest in the Colonial Fund having a net asset value
equal to the net asset value of the Fund. The Fund then will distribute to its
shareholders the Colonial Fund shares received, on a pro rata basis.
This Statement sets forth concisely the information that shareholders
of the Fund should know before voting on the Plan (and the Reorganization
contemplated thereby) and should be retained for future reference. The Plan is
attached to this Statement as Exhibit A and is incorporated herein by reference.
A Prospectus for the Colonial Fund dated October 30, 1998, which
describes the investment objectives, program, policies and risks of investing in
the Colonial Fund, accompanies this Statement. A Prospectus for the Fund, dated
July 31, 1998, was previously provided to the shareholders of the Fund.
Additional information concerning the Colonial Fund is set forth in its
Statement of Additional Information dated October 30 , 1998, and additional
information concerning the Fund is set forth in its Statement of Additional
Information dated July 31, 1998. Moreover, further information concerning the
matters considered in this Statement is set forth in the Statement of Additional
Information to this Statement, dated December 17, 1998. Each of these documents
is on file with the Securities and Exchange Commission (the "SEC"), and is
available without charge upon oral or written request by writing or calling the
Company or the Trust at the address and telephone numbers shown above. The
information contained in each of the Prospectuses and Statements of Additional
Information referred to above is incorporated into this Statement by reference.
The SEC maintains a website at http:\\www.sec.gov that contains the
Prospectuses, Statements of Additional Information, material incorporated by
reference and other information regarding the Company, the Trust and other
registrants that file electronically with the SEC.
This Statement constitutes (i) the proxy statement of the Fund for the
Special Meeting of Shareholders and (ii) the Prospectus for the Colonial Fund
shares, which have been registered with the SEC and are to be issued in
connection with the Reorganization.
The Notice, this Statement, and the accompanying proxy are expected to
first be sent to shareholders of the Fund on or about December 18, 1998.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS STATEMENT AND IN THE
MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR TRUST, OR THEIR RESPECTIVE INVESTMENT ADVISERS OR
DISTRIBUTORS.
VOTE REQUIRED: THE PROPOSAL FOR THE FUND MUST BE APPROVED BY THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE FUND.
Both the Colonial Fund and the Fund are money market funds that seek to
maintain a stable net asset value of $1.00 per share. Colonial Fund is a
diversified fund with an investment objective to achieve maximum current income,
consistent with safety of capital and maintenance of liquidity. Colonial Fund
seeks to achieve its investment objective by investing all of its assets in the
SR&F Cash Reserves Portfolio (the "Master Portfolio"), a money market master
fund which has the same investment objective as the Colonial Fund. The Master
Portfolio seeks to attain its objective by investing all of its assets in
high-quality money market instruments maturing in 397 days or less.
An investment in either the Colonial Fund or the Fund is not insured or
guaranteed by the U.S. Government. While each fund seeks to maintain a stable
net asset value of $1.00 per share, there can be no assurance that it will be
able to do so.
SUMMARY
The following is a summary of certain background information relating
to the proposed Reorganization, the parties thereto and the transactions
contemplated thereby, and is qualified by reference to the more complete
information contained elsewhere in this Statement and the Statement of
Additional Information with respect to this Statement, the Prospectuses and
Statements of Additional Information of the Fund and the Colonial Fund, and the
Plan dated January 15, 1999 attached to this Statement as Exhibit A, all of
which have been incorporated by reference into this Statement.
Purchase Agreement
Societe Generale Asset Management Corp. ("SGAM Corp."), the investment
adviser to the Fund, and each of its shareholders, Societe Generale Asset
Management, S.A. ("SGAM S.A.") and Jean-Marie Eveillard, have entered into a
stock purchase agreement (the "Purchase Agreement") with Liberty Financial
Companies, Inc. ("Liberty") dated as of August 13, 1998. Under the terms of the
agreement, Liberty will purchase all of the outstanding common stock of SGAM
Corp. The agreement contemplates that the Fund will be reorganized into the
Colonial Fund, a money market fund managed and distributed by affiliates of
Liberty.
The Purchase Agreement provides that, upon the closing of the
Acquisition, SGAM S.A. will transfer to Liberty all of the outstanding shares of
SGAM Corp. owned by SGAM S.A. At the closing, SGAM S.A. will also provide
Liberty with all stock certificates, stock books, stock transfer ledgers,
minute books and corporate seals of SGAM Corp., together with the
resignations of those directors and officers of SGAM Corp. specified by
Liberty. In return, Liberty will pay SGAM S.A. a purchase price of $170
million. Under the Purchase Agreement, Mr. Eveillard will receive $35
million in exchange for his holdings in SGAM Corp.
(20% of which is to be paid in shares of Liberty common stock). He will also be
eligible to receive an additional amount up to a maximum of $11 million (20% of
which is to be payable in shares of Liberty common stock) over six years if SGAM
Corp.'s earnings before interest, taxes, depreciation, and amortization
("EBITDA") during that period exceed certain levels. The amounts payable to SGAM
S.A. and Mr. Eveillard are subject to adjustment in the event of certain changes
in SGAM Corp.'s annualized advisory fee revenues between August 10, 1998 and the
closing. As of October 30, 1998, such annualized advisory fee revenues may have
decreased sufficiently to cause the amounts payable under the Purchase Agreement
to be readjusted to lower figures. Liberty has also agreed in the Purchase
Agreement to cause SGAM Corp. to adopt an incentive compensation plan providing
for bonuses to SGAM Corp. employees other than Mr. Eveillard of up to a maximum
of $25 million over five years based on SGAM Corp.'s EBITDA over that period.
Mr. Eveillard has signed a four year employment contract with SGAM Corp. and
Charles de Vaulx and Elizabeth Tobin have indicated an intention to sign five
year employment contracts with SGAM Corp., all effective on the closing date of
the Acquisition.
The Purchase Agreement prohibits Liberty or any of its affiliates from
using "SoGen" and certain derivations of "SoGen" in the name of the Fund.
Liberty has agreed to use its best efforts to cause the Fund to change its name
before the first anniversary of the closing date of the Acquisition. Following
this name change and for a period of one year thereafter, the Fund will be
permitted to disclose its prior name in its prospectus and advertising material.
The closing of the Acquisition is presently scheduled for January 15,
1999 subject to satisfaction of conditions to closing. The Purchase Agreement
may be terminated at any time prior to the closing by the mutual written consent
of the parties, or by any party if the closing has not occurred on or before
March 31, 1999.
Liberty has agreed to bear certain costs in connection with the
Reorganization, including, but not limited to, the cost of preparing, printing
and mailing the proxy materials for the meeting of the shareholders of the Fund.
Proposed Reorganization and Plan
Based on their evaluation of the relevant information presented to
them, and in light of their fiduciary duties under federal and state law, the
Board of Directors of the Company, including a majority of the non-interested
directors, has concluded that the proposed Reorganization is consistent with the
best interests of the shareholders of the Fund. The Board of Directors of the
Company recommends the approval of the Plan and related transactions by the
shareholders of the Fund at the Special Meeting.
The Plan provides that at the Closing Date all of the portfolio
securities and other assets of the Fund will be transferred to the Colonial
Fund, and the Colonial Fund will assume all the liabilities of the Fund. The
Colonial Fund will issue to the Fund full and fractional Class A shares of
beneficial interest in the Colonial Fund having a net asset value equal to the
net asset value of the Fund. As a result of the Reorganization, each shareholder
of the Fund will become a shareholder of the Colonial Fund and will hold,
immediately after the Closing Date, shares of the Colonial Fund having a net
asset value equal to the net asset value of the Fund shares held by the
shareholder immediately before the Closing Date. The Reorganization is
expected to be a tax-free reorganization, and if the Reorganization is
consummated as a tax-free reorganization, there will be no tax effect on
shareholders of the Fund. If the Reorganization is not consummated as a tax-
free reorganization, such transactions are not expected to result in a
significant amount of gain. For further information, see the discussion
below of the Reorganization, which includes a description of the Plan.
Reasons for the Reorganization
The Board of Directors of the Company believes that the Reorganization
of the Fund will: (a) provide Fund shareholders with an investment in a larger
money market fund that has similar investment objectives as the Fund; (b)
provide Fund shareholders with an overall expense ratio that is more favorable
than that of the Fund; and (c) permit Fund shareholders to achieve economies of
scale in their investment that are not possible through their investment in the
Fund. In addition, the Board noted that, (a) as a result of the Reorganization,
shareholders of the Fund will have access to exchange privileges, without
initial or deferred sales charges, into 38 other mutual funds distributed by
affiliates of Liberty covering a broad range of investment objectives and
policies, and (b) each Fund shareholder will receive shares of the Colonial Fund
having an equal aggregate net asset value to their Fund shares and will not
directly or indirectly bear any costs of the Reorganization.
For these reasons, the Board of Directors of the Fund, including a
majority of the disinterested Directors, has determined that the Reorganization
is consistent with the best interests of the Fund and its shareholders, that the
terms of the Plan are fair and reasonable and that the interests of Fund
shareholders will not be diluted as a result of the Reorganization.
Federal Income Tax Consequences of the Reorganization
Counsel for this transaction is expected to issue an opinion as of
the Closing Date to the effect that the Reorganization will not give rise to the
recognition of income, gain, or loss for federal income tax purposes to
the Fund, the Colonial Fund, or their respective shareholders.
Overview of the Fund and the Colonial Fund
Shares of the Fund are sold on a 100% no-load basis, meaning that such
shares may be purchased, redeemed, or exchanged at their net asset value without
payment of a sales charge. In addition, the Fund does not charge any redemption
fees or Rule 12b-1 fees. The Colonial Fund offers three classes of shares. Class
A shares are offered at net asset value. Class B shares are offered at net asset
value, and are subject to an annual asset-based service fee pursuant to Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act") of 0.25%, a
distribution fee of 0.75% and a contingent deferred sales charge upon
redemptions made within four years of purchase, not to exceed 5.00% (as a
percentage of the redemption price). Class C shares are offered at net asset
value, and are subject to an annual asset-based service fee pursuant to Rule
12b-1 under the 1940 Act of 0.25%, a distribution fee of 0.15% and a contingent
deferred sales charge upon redemptions made within one year of purchase, not to
exceed 1.00% (as a percentage of the redemption price).
In the Reorganization, Fund shareholders will receive Class A shares.
Accordingly, the shares received by shareholders of the Fund as a result of the
Reorganization, and any additional purchases of Colonial Fund shares by Fund
shareholders, will not be subject to any sales charge or service fee. Dividends
and distributions payable on Class A shares to those shareholders of the Fund
who elect to have such dividends and distributions reinvested would be
reinvested without sales charge in additional Class A shares.
As shareholders of the Colonial Fund, shareholders of the Fund will
also have exchange privileges with most of the mutual funds distributed by
Liberty Funds Distributor, Inc. These exchange privileges are described in
detail in the enclosed prospectus of the Colonial Fund. The Colonial Fund's
policies, procedures, and restrictions concerning share redemption and exchange,
dividend payment, and the determination of net asset value are substantially
similar to those of the Fund, as set forth in the Prospectus for the Company.
THE FUND AND THE COLONIAL FUND
The investment objective and policies of each fund are similar and are
set forth below. The discussion is qualified in its entirety by the disclosure
that appears elsewhere in this Statement, and in the Prospectus and Statement of
Additional Information of the Fund and the Colonial Fund, which are incorporated
into this Statement by reference. There can be no assurance that either fund
will achieve its investment objective. An investment in either fund is not
insured or guaranteed by the U.S. Government. While each fund seeks to maintain
a stable net asset value of $1.00 per share, there can be no assurance that it
will be able to do so.
The Fund
The Fund seeks as high a level of current income as is considered
consistent with the preservation of capital and liquidity. The Fund pursues its
objective by investing exclusively in U.S. dollar-denominated money market
instruments which mature in 397 days or less and which the Fund's investment
adviser has determined to present minimal credit risks. These securities
include: (1) bank certificates of deposit, time deposits or bankers' acceptances
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; (2) commercial paper rated Prime-1 or Prime-2 by Moody's
Investors Service, Inc. ("Moody's"), A-1 or A-2 by Standard & Poor's ("S&P"),
Duff 2 or higher by Duff & Phelps, Inc. ("Duff"), or F-2 or higher by Fitch
Investors Services, Inc. ("Fitch"); (3) commercial paper or notes of issuers
with an unsecured debt issue outstanding currently rated Aa or higher by
Moody's, AA or higher by S&P, AA or higher by Duff, or AA or higher by Fitch
where the obligation is on the same or a higher level of priority and
collateralized to the same extent as the rated issue; (4) investments in other
corporate obligations such as publicly traded bonds, debentures and notes rated
Aa by Moody's, AA by S&P, Duff or Fitch and other similar securities which, if
unrated by Moody's, S&P, Duff or Fitch, are determined by SGAM Corp., using
guidelines approved by the Board of Directors, to be at least equal in quality
to one or more of the above referenced securities (notwithstanding the
foregoing, the Fund may invest no more than 5% of its total assets in securities
that are accorded the second highest rating by the requisite number of NRSROs);
(5) obligations of, or guaranteed by, the U.S. or Canadian governments, their
agencies or instrumentalities; and (6) repurchase agreements involving
obligations that are suitable for investment listed in clauses 1 through 5
above.
The Fund may also purchase Eurodollar certificates of deposit. SGAM
Corp. gives consideration to the marketability of Eurodollar CDs and possible
restrictions on international currency transactions and to regulations imposed
by the domicile country of the foreign issuer.
The Fund may invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933, as amended, and resold to qualified
institutional buyers under Securities Act Rule 144A. The investment adviser will
carefully monitor the Fund's investment in these securities, focusing on such
factors, among others, as valuation, liquidity and availability of information.
The Fund also may invest in asset-backed securities, which will be
subject to the same quality requirements as other securities purchased by the
Fund.
The Colonial Fund
The Colonial Fund seeks to obtain maximum current income, consistent
with preservation of capital and maintenance of liquidity. The Colonial Fund
seeks to achieve its investment objective by investing all of its assets in the
Master Portfolio, a money market master fund which has the same investment
objectives and policies as the Colonial Fund. The Master Portfolio is a series
of the SR&F Base Trust, an open-end diversified management investment company
which was organized as a trust under the laws of The Commonwealth of
Massachusetts on August 23, 1993. Except for certain separate expenses, the
Colonial Fund's investment experience will correspond to that of the Master
Portfolio. The Master Portfolio is managed by Stein Roe & Farnham Incorporated
("SR&F"), an affiliate of Liberty.
The Master Portfolio seeks its investment objective by investing in a
portfolio of high quality U.S. dollar denominated money market instruments
maturing in 397 days or less from the time of investment, including (1)
securities issued or guaranteed by the U.S. Government or by its agencies or
instrumentalities ("US. Government Securities"), (2) securities issued or
guaranteed by the government of any foreign country that are rated at the time
of purchase A or better (or equivalent rating) by at least one nationally
recognized statistical rating organization ("NRSRO"), (3) certificates of
deposit, bankers' acceptances and time deposits of any bank (U.S. or foreign)
having total assets in excess of $1 billion, or the equivalent in other
currencies (as of the date of the most recently available financial statements)
or of any branches, agencies or subsidiaries (U.S. or foreign) of any such bank,
(4) commercial paper of U.S. or foreign issuers; (5) notes, bonds and debentures
rated at the time of purchase A or better (or equivalent rating) by at least one
NRSRO, (6) repurchase agreements involving U.S. Government Securities, and (7)
other high-quality short-term obligations.
The Master Portfolio may purchase only money market instruments that
are rated within the highest rating category for short-term debt by at least two
NRSROs (or if rated by only one NRSRO, by that rating agency), or if unrated,
determined by or under the direction of the Master Portfolio's Board of Trustees
to be of comparable quality.
Under normal market conditions, the Master Portfolio will invest at
least 25% of its total assets in securities of issuers in the financial services
industry (which includes, but is not limited to, banks, personal credit and
business credit institutions, and other financial services institutions).
The Master Portfolio maintains a dollar-weighted average portfolio
maturity appropriate to its objective of maintaining a stable net asset value
per share, and not in excess of 90 days. It is a fundamental policy of the
Master Portfolio that the maturity of any instrument that grants the holder an
optional right to redeem at par plus interest and without penalty will be deemed
at any time to be the next date provided for payment on exercise of such
optional redemption right. A fundamental policy may be changed only with the
approval of a "majority of the outstanding voting securities" as defined in the
1940 Act.
Other Policies
Both the Fund and the Colonial Fund may purchase floating and variable
rate money market instruments. Both funds may engage in repurchase agreements;
however, neither fund will invest more than 10% of its net assets in securities
that are illiquid, including repurchase agreements with maturities in excess of
seven days.
Operations of the Colonial Fund Following the Reorganization
As noted above, there are differences in the investment policies of the
Fund and the Colonial Fund. It is not expected, however, that the Colonial Fund
will revise its investment policies following the Reorganization to reflect
those of the Fund. Based on its review of the investment portfolios of the Fund,
however, SR&F believes that most, if not all, of the assets of the Fund will be
consistent with the investment policies of the Colonial Fund and thus can be
transferred to and held by the Colonial Fund. If the Reorganization is approved,
the Fund will sell, prior to the effective time of the Reorganization, any
assets that are inconsistent with the Colonial Fund's investment polices. The
proceeds of any such sales will be held in temporary investments or reinvested
in assets that qualify to be held by the Colonial Fund. The possible need for
the Fund to dispose of assets prior to the effective time of the Reorganization
could result in selling securities at a disadvantageous time and could result in
the Fund realizing losses that would not otherwise have been realized. After the
Reorganization, the trustees and officers of Colonial Trust II (the "Trust") and
its investment adviser, manager, distributor and other outside agents will
continue to serve in their current capacities.
Comparative Fee Table
The following table sets forth the current fees and expenses of the
Fund and the Colonial Fund as of September 30, 1998. Excluding extraordinary
expenses, the current fees and expenses of the Colonial Fund are expected to
remain unchanged as a result of the Reorganization.
<TABLE>
Annual Fund Operating Expenses
(As a percentage of average daily net assets)
Pro Forma Combined Fund (i.e.,
Colonial Money Shares of Colonial Fund Following
Market Fund the Reorganization)
SoGen Money Fund Class A Shares
<S> <C> <C> <C>
Management and
Administration Fee 0.40% 0.35% 0.25%(1)
12b-1 fees 0.00% 0.00% 0.00%
Transfer Agent Fees 0.07% 0.20% 0.20%
Expense of SR&F Cash
Reserves Portfolio NA 0.15% 0.24%
Other Expenses 0.37% 0.17% 0.16%
Total Expenses 0.84% 0.87% 0.85%
Total Fund Operating Expenses 0.75%(2) 0.68%(3) 0.66(4)
</TABLE>
(1) The 0.25% fee for administration services; a management fee in not
applicable.
(2) SGAM Corp., the investment adviser to the Fund, had agreed to
waive its advisory fee and, if necessary, reimburse expenses of the Fund
through July 31, 1999 to the extent that the Fund's aggregate expenses exceeded
0.75% of its average daily net assets.
(3) On March 2, 1998 the Colonial Fund converted to a master fund/feeder
fund strcture. Management fees paid (0.12%) are for the period from October 1,
1997 to Febuary 28, 1998. Adminstration fees (0.04) are from the period March
2, 1998 to September 30, 1998. The administrator for the Colonial Fund has
voluntarily agree to waive 0.19% of the administration fee. The administrator
may terminate this fee waiver at any time without shareholder approval. Absent
such fee waiver administration fees would have been 0.23% and total operating
expenses would have been 0.87%
(4) The administrator for the Colonial Fund has voluntarily agreed to
waive 0.19% of the administration fee. The administrator may terminate this
fee waiver at any time without shareholder approval. Absent such fee waiver,
management and administration fees would have been 0.25%, and the total
operating expenses would have been 0.85%.
Comparison of Principal Risk Factors
Because the Colonial Fund's investment objective is substantially
similar to that of the Fund, the investment risks of the two Funds are generally
similar. These risks are those typically associated with investing in money
market funds. Certain differences are identified below. See the Prospectus of
the Colonial Fund, which accompanies this Statement, for a more detailed
discussion of the investment risks of the Colonial Fund.
There can be no assurance that either fund will achieve its investment
objective. In periods of declining interest rates, the market value of the fixed
income securities in which the Funds invest generally will rise, and in periods
of rising interest rates the opposite generally will be true. Also, when
interest rates are falling, net cash inflows from the continuous sale of a
Fund's shares are likely to be invested in portfolio instruments producing lower
yields than the balance of that Fund's portfolio, thereby reducing its yield. In
periods of rising interests rates, the opposite can be true.
Both the Colonial Fund and the Fund may enter into repurchase
agreements. Repurchase agreements carry certain risks not associated with direct
investments in securities, including possible decline in the market value of the
underlying securities and delays and costs to the Fund if the other party to the
repurchase agreement becomes insolvent.
There are additional risks associated with investing in the Colonial
Fund of which investors should be aware. For example, under normal market
conditions, the Master Portfolio will invest at least 25% of its total assets in
securities of issuers in the financial services industry (which includes, but is
not limited to, banks, personal credit and business credit institutions, and
other financial services institutions). This investment policy carries certain
risks. The financial services industry is subject to extensive government
regulation which may limit both the amounts and types of loans which may be made
and interest rates which may be charged. In addition, the profitability of the
industry is largely dependent upon the availability and cost of funds for
lending purposes, general economic conditions and exposure to credit losses
arising from possible financial difficulties of borrowers. Those financial
services companies which are engaged in insurance underwriting may be exposed to
adverse competitive conditions which may result in underwriting losses.
Certain of the Colonial Fund's investments present additional risks, in
particular, investments in asset-backed securities, eurodollar certificates of
deposit and when-issued or delayed delivery securities.
* * *
PLEASE SEE THE PROSPECTUSES FOR THE FUND AND THE COLONIAL FUND FOR FURTHER
INFORMATION CONCERNING EACH FUND'S INVESTMENT POLICIES AND RISKS.
* * *
Fundamental Versus Nonfundamental Investment Limitations
Neither the Fund nor the Colonial Fund may change its fundamental
investment limitations without the affirmative vote of the holders of a majority
of its outstanding shares (as defined in the 1940 Act). However, investment
limitations that are (i) not fundamental or (ii) "operating" policies of the
Fund or the Colonial Fund may be changed by their Board of Directors or Board of
Trustees, respectively, without shareholder approval. The fundamental policies
of the Colonial Fund differ from those of the Fund. The fundamental policies of
each Fund are set forth in its Statement of Additional Information.
Purchase and Redemption Information, Exchange Privileges, Distributions and
Pricing
Shares of the Fund are sold on a no-load basis. Shares may be
purchased, redeemed, and exchanged directly at net asset value without paying a
sales charge. The Fund does not charge any redemption fees or Rule 12b-1 fees.
The purchase price for shares of the Fund will be the net asset value next
determined after the Fund receives the shareholder's request in proper form. The
minimum initial investment amounts in the Fund for each account is $10,000, and
the minimum initial investment for each purchase of additional shares is $100,
with certain exceptions set forth in the Fund's prospectus.
Class A Shares of the Colonial Fund are sold on a no-load basis. Class
A shares may be purchased and redeemed directly at net asset value without
paying a sales charge. The Colonial Fund does not charge any redemption fees or
Rule 12b-1 fees on its Class A shares. The purchase price for Class A shares of
the Colonial Fund will be the net asset value next determined after the Colonial
Fund receives the shareholder's request in proper form. The minimum initial
investment amounts in the Colonial Fund for each account is $1,000, and the
minimum initial investment for each purchase of additional shares is $50, with
certain exceptions as set forth in the Colonial Fund's prospectus. The Colonial
Fund may deduct $10 from accounts valued at less than $1,000 unless the account
value has dropped below $1,000 solely as a result of any share value
depreciation.
Each fund's policies, procedures, and restrictions concerning share
redemption and dividend payment, and the determination of net asset value are
identical, as set forth in the Prospectus for each fund. Please refer to the
Prospectus for further information on these subjects. Please note that Class A
shares of the Colonial Fund may be exchanged for shares of other funds
distributed by the Colonial Fund's distributor, including funds advised by SR&F,
the Colonial Fund's administrator or its affiliates, Newport Fund Management,
Inc. and Crabbe Huson Group, Inc. An exchange from the Colonial Fund into a
non-money market fund will be at the applicable offering price next determined
including any sales charges.
Forms of Organization
The Colonial Fund is a diversified portfolio of the Trust, an open-end
management investment company. The Trust was organized as a Massachusetts
business trust in 1980. The Fund is a separate series of the Company, a Maryland
corporation. There are certain differences between the Declaration of Trust for
the Trust and the Articles of Incorporation for the Company. These differences
should not result in any substantial difference in the operation or
administration of the funds.
Liability of Shareholders
For Maryland corporations such as the Fund, the personal liability of
individual Fund shareholders is limited by statute. Under certain circumstances,
however, shareholders may be held personally liable under Massachusetts law for
obligations of the Colonial Fund. To protect its shareholders, the Colonial
Fund's Declaration of Trust, filed with the Commonwealth of Massachusetts,
expressly disclaims the liability of its shareholders for acts or obligations of
the Colonial Fund. The Declaration requires notice of this disclaimer to be
given in each note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer. In the unlikely event a
shareholder, based on the mere fact of being a shareholder, is held personally
liable for the Colonial Fund's obligations, the Colonial Fund is required to
indemnify the shareholder against all loss and expense arising from such
liability, but only out of the assets of the particular series of shares of
which he or she is or was a shareholder. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Colonial Fund itself
cannot meet its obligations to indemnify shareholders and pay judgments against
them.
Shareholder Meetings; Election of Members of the Board
Neither Massachusetts business trust law nor Maryland corporate law
requires investment companies to hold annual meetings of shareholders. The
ability of shareholders to elect Board members from time to time will not change
as a result of the Reorganization.
Terms of Board Members
The Trust's charter provides that, except in the event of death,
resignation, or removal, each Trustee elected by shareholders or by the Trustees
shall serve until the next meeting of shareholders called for the purpose of
electing trustees. The Company's by-laws provide that each director shall hold
office until his successor is elected and qualified, or until his earlier death,
resignation or removal.
Removal of Board Members
Under the Trust's charter, a Trustee can be removed, with or without
cause, (i) by a majority vote of the Trustees then in office, or (ii) at any
meeting called for that purpose, by a vote of the holders of two-thirds of the
Trust's outstanding shares. Under the Company's by-laws, at any shareholder
meeting at which a quorum is present, the affirmative vote of the holders of a
majority of the votes entitled to be cast for the election of directors is
needed to remove a director from office, with or without cause.
Special Meetings of Shareholders
The Company's by-laws provide that the Secretary for the Company must
call a shareholders' meeting (i) when one or more matters are required to be
acted on by shareholders under the Investment Company Act of 1940, as amended
("1940 Act") or the General Corporation Law of the State of Maryland, and (ii)
at the request in writing of the Chairman of the Board, the President, a
majority of the Board of Directors, or of shareholders holding at least ten
percent of the shares of stock of the Company outstanding and entitled to vote
at a meeting.
The Declaration of Trust provides that shareholders' meetings of the
Trust or of any series or class may be called by the Trustees or such other
person or persons as may be specified in the by-laws and held from time to time
for the purpose of taking action upon any matter requiring the vote or the
authority of the shareholders of Trust or any series or class or upon any other
matter deemed by the Trustees to be necessary or desirable. The Declaration of
Trust also provides that shareholders are entitled to at least seven days'
written notice of any meeting of shareholders. The by-laws of the Trust state
that a meeting of the shareholders of the Trust or of any one or more series or
classes of shares may be called at any time by the Trustees, by the president
or, if the Trustees and the President fail to call any meeting of shareholder
for a period of thirty days after written application of one or more
shareholders who hold at least ten percent of all outstanding shares of the
Trust, if shareholders of all series are required under the Declaration of Trust
to vote in the aggregate and not by individual series at such meeting, or of any
series or class, if shareholders of such series or class are entitled under the
Declaration of Trust to vote by individual series or class at such meeting, then
such shareholders may call such meeting. If the meeting is a meeting of the
shareholders of one or more series or classes of shares, but not a meeting of
all shareholders of Trust, then only the shareholders of such one or more series
or classes shall be entitled to notice of and to vote at the meeting.
Liability of Board Members and Officers; Indemnification
The Articles of Incorporation for the Company provide that to the full
extent that limitations on the liability of directors and officers are permitted
by the Maryland General Corporation Law, no director or officer of the Company
will have any liability to SoGen Funds, Inc. or its shareholders for damages.
The Articles of Incorporation further provide that the limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the Company whether or not that person is a director or officer at the time
of any proceeding in which liability is asserted. The Declaration of Trust for
the Trust provides that the Trustees will not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, adviser or
principal underwriter of the Trust, nor will any Trustee be responsible for the
act or omission of any other Trustee, however, the terms of the Declaration of
Trust do not protect any Trustee against any liability to which such Trustee
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office. Finally, the Declaration of Trust provides that every note, bond,
contract, instrument, certificate, share or undertaking and every other act or
thing whatsoever executed or done by or on behalf of the Trust or the Trustees
or any of them in connection with the Trust will be conclusively deemed to have
been executed or done only in or with respect to their or his or her capacity as
Trustees of the Trust executed or done by or on behalf of the Trust or the
Trustees, and such Trustees or Trustee will not be personally liable thereon.
The Articles of Incorporation for the Company provide that the Company
will indemnify and advance expenses to its currently acting and its former
directors to the full extent that indemnification of directors is permitted by
the Maryland General Corporation Law. The Articles of Incorporation further
state that the Company will indemnify and advance expenses to its officers to
the same extent as its directors and may do so to such further extent as is
consistent with the law. The by-laws for the Company provide that the Company
will indemnify each person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director, officer, employee or agent of
the Company or is or was serving at the request of the Company as director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against all judgments, penalties, fines, settlements
and reasonable expenses, including attorneys' fees, actually incurred by him in
connection with such Proceeding and the amount of every such judgment, penalty,
fine settlement and reasonable expense so incurred by such person will be paid
by the Company or, if paid by such person, will be paid by the Company to the
fullest extent permitted by law, subject to certain conditions and limitations.
The Declaration of Trust for the Trust provides that the Trust will
indemnify each of its Trustees and officers (including persons who serve at the
request of the Trust as directors, officers or trustees of another organization
in which the Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a "Covered Person") against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees reasonably
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, except that no Covered Person
shall be indemnified against any liability to the Trust or its shareholders to
which such Covered Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's officer.
The Trust has agreed to assume the Company's indemnification and
related payment or reimbursement of expenses obligations pursuant to the
Company's by-laws and charter for a period of five years after the closing of
the Reorganization with respect to events occurring at any time up to and
including such time, including events contemplated by the Plan, up to an amount
equal to the assets of the Fund. Further, Liberty has agreed, at its sole
expense, to extend "directors and officers" insurance coverage to the
disinterested Directors for a period of five years after the closing of the
Reorganization.
Voting Rights of Shareholders
The Trust's charter grants shareholders the power to vote only with
respect to: (i) the election of trustees; (ii) the approval of any investment
advisory contract; (iii) the termination of the Trust or any series thereof;
(iv) any amendments to the charter; (v) approval of any merger or consolidation;
(vi) whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or a series thereof; or (vii) any matters relating to the Trust as may be
required by law, the charter, the by-laws, or any registration of the Trust with
the Securities and Exchange Commission (the "SEC") or any state. The Company's
charter does not specify instances under which shareholders have the right to
vote, but, as a Maryland corporation that is a registered investment company
pursuant to the 1940 Act, shareholders have the right to vote with respect to
substantially the same items as is the case for the Trust.
Certain Service Provider Arrangements
Investment Advisory Fees. SGAM Corp., a Delaware corporation, with
offices at 1221 Avenue of the Americas, New York, New York 10020, serves as the
investment adviser to the Fund. It serves as the investment adviser pursuant to
an investment advisory agreement that became effective on April 26, 1990. SGAM
Corp. is an indirect, majority-owned subsidiary of Societe Generale Asset
Management S.A., which is one of France's largest banks.
SR&F serves as the investment adviser for the Master Portfolio in which
the Colonial Fund invests all of its assets. SR&F is an indirect subsidiary of
Liberty Financial Companies, Inc. ("Liberty Financial"), which in turn is an
indirect subsidiary of Liberty Mutual Insurance Company ("Liberty Mutual").
Liberty Mutual is an underwriter of workers' compensation insurance and a
property and casualty insurer in the U.S.
The fees to which each fund is subject for investment management
services is set forth below:
<TABLE>
- ---------------------------------------- ---------------------------------------------------------------------
Fund Management Fee (% of Average Daily Net Asset Value)
- ---------------------------------------- ---------------------------------------------------------------------
<S> <C>
SoGen Money Fund 0.40%
SR&F Cash Reserves Portfolio 0.25% of the Master Portfolio's
average daily net assets up to $500
million; and 0.225% of the Master
Portfolio's average daily net assets in
excess of $500 million
- ---------------------------------------- ---------------------------------------------------------------------
</TABLE>
Distributor. SG Cowen Securities Corporation, with offices at 1221
Avenue of the Americas, New York, New York 10020, serves as the Fund's
principal underwriter. Liberty Funds Distributor, Inc. serves as the
distributor for Colonial Fund. Please refer to the Colonial Fund's
prospectus for more details on Liberty Funds Distributor, Inc.
Administrator. Colonial Management Associates, Inc. serves as the
administrator to the Colonial Fund. Please refer to the Colonial Fund's
prospectus for more details on Colonial Management Associates, Inc.
Transfer Agent, Accounting Agent and Shareholder Servicing Agent.
SteinRoe Services Inc., a wholly-owned indirect subsidiary of Liberty Mutual
serves as the transfer agent to the Master Portfolio. Liberty Funds Services,
Inc., a wholly-owned indirect subsidiary of Liberty Mutual, serves as the
shareholder services and transfer agent to the Colonial Fund. Please refer to
the Colonial Fund's prospectus for more details on Liberty Funds Services, Inc.
DST Systems, Inc., 1004 Baltimore, Kansas City, Missouri 64105 is
the shareholder servicing agent for the Fund.
Custodial Services. Investors Fiduciary Trust Company serves as the
domestic custodian and Chase Manhattan Bank serves as the global custodian for
the Fund. Chase Manhattan Bank serves as the custodian for the Colonial Fund and
State Street Bank and Trust Company serves as the custodian for the Master
Portfolio.
MATTERS TO BE VOTED UPON AT THE MEETING
Approval or Disapproval of the Agreement and Plan of Reorganization between
Sogen Funds, Inc., Acting on Behalf of SoGen Money Fund, and Colonial Trust II,
Acting on Behalf of the Colonial Money Market Fund, and of the Transactions
Contemplated Therein.
The terms and conditions under which the Reorganization may be
consummated are set forth in the Plan. Significant provisions of the Plan are
summarized below. However, this summary is qualified in its entirety by
reference to the Plan, a copy of which is attached as Exhibit A to this
Statement and incorporated by reference into this Statement.
Description of the Plan
The Plan provides that at the Closing Date all of the portfolio
securities and other assets of the Fund will be transferred to the Colonial
Fund, and the Colonial Fund will assume all the liabilities of the Fund. The
Colonial Fund will issue to the Fund full and fractional Class A shares of
beneficial interest in the Colonial Fund having a net asset value equal to the
net asset value of the Fund. The Fund then will distribute to its shareholders,
on a pro rata basis, the shares of the Colonial Fund so received. On completion
of the Reorganization, an open account will be established on the books of the
Colonial Fund in the name of each shareholder of record of the Fund.
Certificates representing shares in the Colonial Fund will not be physically
issued. As promptly as practicable after the consummation of the Reorganization,
the Fund will be terminated under the laws of the State of Maryland. After the
Closing Date, the Fund will not conduct any business except in connection with
its ceasing its operations and liquidating.
Approval of Interim Investment Management Agreement
By voting in favor of the Reorganization, you will also be voting in
favor of an interim investment management agreement between the Fund and the
successor to SGAM Corp. (the "Interim Investment Management Agreement").
Consummation of the Acquisition will result in an "assignment" of the Fund's
current investment management agreement with SGAM Corp., thus terminating those
agreements as a matter of law. The Acquisition is scheduled to occur on January
15, 1999. In the event that the Reorganization is approved by the shareholders
of the Fund, but is not completed on or before January 15, 1999, the Fund would
be without an investment management agreement from that date until the closing
of the Reorganization. To cover this possibility, approval of the Reorganization
would also include approval of the Interim Investment Management Agreement, the
terms of which are substantially identical to those of the Current Investment
Management Agreement with SGAM Corp. The Interim Investment Management Agreement
would take effect only if the Reorganization is not finalized prior to the
consummation of the Acquisition, and would remain in effect only until the
earlier of the closing date of the Reorganization and March 31, 1999. At a
meeting held on October 23, 1998, the Board of the Company approved the Interim
Investment Management Agreement. The proposed Interim Investment Management
Agreement is attached to this Statement as Exhibit B.
Board Consideration
Prior to its scheduled meeting held on April 24, 1998, the Board of
Directors of the Company was informed that SGAM S.A. had determined to seek a
buyer for SGAM Corp. At the April 24, 1998 meeting, the disinterested Directors
reviewed the scope of their responsibilities should a sale by SGAM Corp. be
officially proposed by SGAM S.A., and discussed the advisability of retaining
separate independent counsel to advise them in the event SGAM S.A. was
successful in finding a buyer for SGAM Corp. The Board noted that although the
prospect of a sale did not alter their responsibilities with respect to matters
brought to their attention during the meeting (including the continuation of the
investment management agreement with SGAM Corp.), it did raise the issue of
whether SGAM Corp.'s operations might be disrupted as a result of staff
uncertainty. Representatives of SGAM Corp. who were present at that meeting
responded that they had been informed of SGAM S.A.'s decision and that based on
conversations with the senior personnel, management expected SGAM Corp.'s team
of portfolio managers and senior administrative personnel to remain on the job
throughout the process.
The disinterested Directors retained independent counsel who requested
certain information for the Board to review in connection with any proposed
transaction, including, with respect to any potential acquiring entity, (i) a
history of its compliance with applicable regulations, (ii) its performance
record (including the background of its investment personnel and the resources
available to support them), (iii) detailed financial statements, (iv) any plans
it may have to change the way the Fund is managed or distributed, and (v) the
consideration being paid. In addition, to the extent that any proposed
transaction would involve a merger of the Fund into an existing fund managed by
such entity, independent counsel requested information on (i) any tax
consequences to the Fund's shareholders, (ii) compatibility of the two funds'
portfolios and estimates of the transaction costs and taxes associated with
making any necessary adjustments, (iii) comparisons of expense ratios and
management fees (including Morningstar Reports and identification of any
differences in the categories of services that are included in the respective
funds' management contracts), (iv) any differences in shareholder services, and
(v) any differences in investment policies and objectives.
On August 13, 1998, following the signing of the Purchase Agreement,
representatives of SGAM Corp. and Liberty met with the Company's Board of
Directors to discuss the Reorganization. At the meeting, the overall terms of
the proposed Reorganization, as well as the perceived benefits for SGAM Corp.
and for its investment advisory clients, were described. In addition, the
background and capabilities of Liberty and its affiliates were enumerated. The
Board was presented with the opportunity to ask questions of representatives of
both SGAM Corp. and Liberty. On or about September 7, 1998, the disinterested
Directors were supplied with information in response to the request of their
independent counsel.
At a subsequent meeting of the Company's Board of Directors held on
September 17, 1998, the Board considered in depth the Reorganization and Plan
relating to the Fund, and requested a written report on the management resources
that would be available to the Fund after the Acquisition and satisfaction of
certain other outstanding issues. At that meeting, the Board discussed the
materials presented by Liberty and raised a number of issues relating to the
terms of the Reorganization and the Plan, as well as to the terms of the
Acquisition of SGAM Corp. Representatives of SGAM Corp. and Liberty were present
at the meeting to respond to the Board's inquiries. Among other things, the
Board requested elaboration on (i) the expense ratio of the Colonial Fund prior
and subsequent to the Reorganization, (ii) the level of management services that
Liberty would provide to the Colonial Fund following the Reorganization, and
(iii) Liberty's financial ability both to pay the purchase price of the
Acquisition given current market conditions and to continue to devote adequate
resources to the Colonial Fund.
The Board noted that, due to the fact that the Colonial Fund had a
substantially larger amount of assets than does the Fund, the overall expense
ratio for the Colonial Fund is lower than that for the Fund. The Board also
considered that there was little expectation that the assets of the Fund would
increase significantly in the foreseeable future and that it was only the
continuing waiver of fees and reimbursement of fees that made it possible for
the Fund to offer a competitive yield.
In addition, the Board examined the level of management services that
Liberty has historically provided to the Colonial Fund. The Board reviewed the
performance of the Colonial Fund and sought assurances from Liberty that the
same level of services would be provided in the future.
Finally, the Board inquired into Liberty's ability to pay for the
purchase of SGAM Corp. in light of current market conditions. In response,
Liberty reviewed with the Board its financial resources. Liberty assured the
Board that it was in sound financial health and that it had the ability to pay
the purchase price of the Acquisition and to continue to devote adequate
resources to the management of the Colonial Fund.
At additional meetings held in late September and October, the Board
met to further review the Reorganization. At these meetings, Liberty and SGAM
Corp. provided to the Board additional information relating to the issues raised
at the September 17 meeting. The Board considered the additional information and
was given the opportunity to ask questions to representatives of Liberty and
SGAM Corp.
The Board approved the Reorganization at a meeting held on October 19,
1998. In addition to the matters described above, the Board also considered the
following factors in approving the proposed Reorganization and the Plan for Each
Fund.
First, the Board considered the ability under the Reorganization for
Class A shareholders of the Colonial Fund to have exchange privileges that would
permit an investment in the Colonial Fund to be exchanged, without initial or
deferred sales charges, into Class A shares of 38 other open-end funds that are
part of the Colonial Management family of mutual funds and that have a variety
of investment objectives and policies. The Board considered the enhanced
exchange privileges available as a result of the Reorganization to be a benefit
to the shareholders of the Fund.
Second, Colonial Management's wholesaling, marketing, and distribution
system is more extensive than that of SGAM Corp. While growth of a fund does not
always result in economies of scale or other benefits to shareholders, sales of
fund shares on a continuous basis can result in a positive cash flow, or a
reduction of net outflow, of investor dollars into the fund, enabling the fund
to meet expenses and pay redemptions without the need to sell its investments at
what may be inappropriate times. Shares of the Colonial Fund will be marketed
alongside the other Colonial Management funds through more than 25,000
investment executives associated with broker-dealers with whom the distributor
for the Colonial Management funds has selling agreements and approximately 300
investment executives employed by Liberty Securities Corporation, a subsidiary
of Liberty that sells mutual funds, variable annuities, and other investment
products primarily through offices located in banks and other financial
institutions.
Finally, because each Fund shareholder will receive shares of the
Colonial Fund having an equal aggregate net asset value to their Fund shares and
will not directly or indirectly bear any costs of the Reorganization, the Board
determined that the shareholders will not suffer any dilution as a result of the
Reorganization.
In reviewing the terms of each Plan, the disinterested Directors of the
Company were advised and represented by independent counsel.
The Board believes that the proposed arrangements are in the best
interests of the shareholders of the Fund and recommends that the shareholders
of the Fund vote "FOR" the Reorganization.
Similarly, at a meeting of the Board of Trustees of the Trust, the
Board of Trustees, acting on behalf of the Colonial Fund, considered the
proposed Reorganization with respect to the Colonial Fund. Based on their
evaluation of the relevant information provided to them, and in light of their
fiduciary duties under federal and state law, the Board of Trustees unanimously
determined that (a) the proposed Reorganization would be in the best interests
of the Colonial Fund and its shareholders, and (b) the interests of the existing
Colonial Fund shareholders will not be diluted as a result of the proposed
Reorganization.
CAPITALIZATION
Because the Fund will be combined in the Reorganization with the
Colonial Fund, the total capitalization of the Colonial Fund after the
Reorganization is expected to be greater than the current capitalization of
either the Fund or the Colonial Fund. The following table sets forth the
capitalization of the Fund and Colonial Fund at September 30, 1998; and (ii) the
pro forma capitalization of the Colonial Fund as adjusted to give effect to the
Reorganization. If the Reorganization is consummated, the capitalization of the
Colonial Fund is likely to be different at the Closing Date as a result of daily
share purchase and redemption activity in the Fund and the Colonial Fund.
<TABLE>
- ------------------------------------- ------------------------ ------------------------- ----------------------------
SoGen Money Fund Pro Forma Combined Fund
Colonial Fund
- ------------------------------------- ------------------------ ------------------------- ----------------------------
<S> <C> <C> <C>
Total Net Assets.............. $31,314,838 $252,070,347 $283,385,185
Shares Outstanding........... 31,314,838 252,057,497 283,372,335
Net Asset Value Per Share.. $1.00 $1.00 $1.00
- ------------------------------------- ------------------------ ------------------------- ----------------------------
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
It is anticipated that the Reorganization will be tax-free for federal
tax purposes. If the Reorganization is not consummated as a tax-free
reorganization, such transactions are not expected to result in a significant
amount of gain. It is a condition to the consummation of the Reorganization
(unless waived as set forth below) that the Company, on behalf of the Fund,
and the Trust, on behalf of the Colonial Fund, receive an opinion of counsel
substantially to the effect that for federal income tax purposes: (i) no gain
or loss will be recognized by the Fund upon the exchange of its
assets for Class A shares of the Colonial Fund and the
assumption by the Colonial Fund of the liabilities of the Fund; (ii) the basis
in the hands of the Colonial Fund of the assets of the Fund transferred to the
Colonial Fund will be the same as the basis of such assets in the hands of the
Fund immediately prior to the transfer; (iii) the holding periods of the assets
of the Fund in the hands of the Colonial Fund will include the period during
which such assets were held by the Fund; (iv) no gain or loss will be recognized
by the Colonial Fund upon the receipt of the assets of the Fund in exchange for
the Colonial Fund shares and the assumption by the Colonial Fund of the
liabilities of the Fund; (v) no gain or loss will be recognized by the
shareholders of the Fund upon the receipt of Colonial Fund shares in exchange
for their shares in the Fund; (vi) the basis of the Colonial Fund shares
received by the shareholders of the Fund will be the same as the basis of the
shares of the Fund exchanged therefor; and (vii) a Fund shareholder's holding
period for his or her shares in the Colonial Fund will be determined by
including the period for which he or she held the Fund shares exchanged
therefor, provided that he or she held such Fund shares as capital assets.
The Board of Directors of the Fund and the Board of Trustees of the Colonial
Fund may jointly waive receipt of this opinion if they determine such waiver
will not have a material adverse effect on the interests of shareholders of
the Fund and the Colonial Fund.
Neither the Fund nor the Colonial Money Fund has sought a tax ruling
from the Internal Revenue Service (the "IRS"). The opinion of counsel is not
binding on the IRS and does not preclude the IRS from adopting a contrary
position. Shareholders should consult their own tax advisers concerning the
potential tax consequences to them, including state and local income tax
consequences.
INFORMATION RELATING TO VOTING MATTERS
General Information
This Statement is being furnished in connection with the solicitation
of proxies by the Company's Board of Directors in connection with the Special
Meeting of the Fund's shareholders. It is expected that the solicitation of
proxies will be primarily by mail. Officers and service contractors of the
Company may also solicit proxies by telephone, fax, or personal interview. Any
shareholder giving a proxy may revoke it at any time before it is exercised by
submitting to the Company a written notice of revocation or a subsequently
executed proxy or by attending the Special Meeting and voting in person.
The cost of preparing, printing and mailing the enclosed combined proxy
statement and prospectus, accompanying notice and proxy statement and all other
costs in connection with the solicitation of proxies will be paid by Liberty or
an affiliate of Liberty (and not the Company or the Fund), including any
additional solicitation made by letter, telephone or telegraph. In addition to
solicitation by mail, certain officers and representatives of the Company,
officers and employees of SGAM Corp. and certain financial services firms and
their representatives, who will receive no extra compensation for their
services, may solicit proxies by telephone, telegram or personally.
Shareholder Communications Corporation ("SCC") has been engaged to
assist in the solicitation of proxies. As the Special Meeting date approaches,
certain shareholders of the Fund may receive a telephone call from a
representative of SCC if their vote has not yet been received. Authorization to
permit SCC to execute proxies may be obtained by telephonic or electronically
transmitted instructions from shareholders of the Fund. Proxies that are
obtained telephonically will be recorded in accordance with the procedures set
forth below. The Directors believe that these procedures are reasonably designed
to ensure that the identity of the shareholder casting the vote is accurately
determined and that the voting instructions of the shareholder are accurately
determined. The cost of this assistance is expected to be approximately $2,070
and, as stated above, will not be borne by the Fund or the Company.
In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask for each shareholder's full name, address,
social security or employer identification number, title (if the shareholder is
authorized to act on behalf of an entity, such as a corporation), and the number
of shares owned and to confirm that the shareholder has received the proxy
statement card in the mail. If the information solicited agrees with the
information provided to SCC, then the SCC representative has the responsibility
to explain the process, read the proposals listed on the proxy card, and ask for
the shareholder's instructions on each proposal. The SCC representative,
although he or she is permitted to answer questions about the process, is not
permitted to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the proxy statement. SCC will record the
shareholder's instructions on the card. Within 72 hours, SCC will send the
shareholder a letter or mailgram to confirm his or her vote and asking the
shareholder to call SCC immediately if his or her instructions are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Special Meeting, but
does not wish to give his or her proxy by telephone, the shareholder may still
submit the proxy card originally sent with the proxy statement or attend in
person. Should shareholders require additional information regarding the proxy
or replacement proxy cards, they may contact SCC toll-free at (800) 794-6889.
Any proxy given by a shareholder, whether in writing or by telephone, is
revocable.
Only shareholders of record at the close of business on October 30,
1998, will be entitled to vote at the Special Meeting. On that date there were
outstanding and entitled to be voted 37,717,837 shares of the Fund. Each share
is entitled to one vote.
If the accompanying proxy is executed and returned in time for the
Special Meeting, the shares covered thereby will be voted in accordance with the
proxy on all matters that may properly come before the Special Meeting or any
adjournment of the Special Meeting. For information on adjournment of the
Special Meeting, see "Quorum" below.
Shareholder and Board Approvals
The Plan (and the transactions contemplated thereby) is being submitted
at the Special Meeting for approval by the shareholders of the Fund. The
approval of the Plan by the holders of a majority of the outstanding shares of
the Fund is required for the approval of the Proposal with respect to the Fund.
Abstentions will have the effect of a "no" vote on the Proposal.
The vote of the shareholders of the Colonial Fund is not being
solicited because their approval or consent is not required for the
Reorganization to be consummated. On October 30, 1998, the name, address, and
share ownership of the persons who beneficially owned 5% or more of any class of
the Fund's outstanding shares, and the percentage of shares that would be owned
by such persons upon consummation of the Reorganization based upon their
holdings and outstanding shares at October 30 1998 are as follows:
<TABLE>
Share Ownership of
the Colonial Fund
Name/Address Share Ownership of the Fund After the Reorganization
<S> <C> <C>
Jean-Marie Eveillard 5,018,380.270 (13.31%) 2.56% (Class A)
Elizabeth M. Eveillard Jt Ten.
3 East 84th Street
New York, NY 10028-0407
</TABLE>
On October 30, 1998, the name, address, and share ownership of the
persons who beneficially owned 5% or more of the outstanding shares of any class
of the Colonial Fund and the percentage of shares that would be owned by such
persons upon consummation of the Reorganization based upon their holdings and
outstanding shares at September 30, 1998, are as follows:
<TABLE>
Share Ownership of Share Ownership of
the Colonial Fund the Colonial Fund
Name/Address Before the Reorganization After the Reorganization
<S> <C> <C>
Colonial Management Associates, Inc. 965,073.590 21.58%
One Financial Center (21.58%: Class B)
Boston, MA 02111
Liberty Funds Distributor, Inc. 14,225,975.520 7.26%
One Financial Center (8.99%: Class A)
Boston, MA 02111
Liberty Financial Companies 10,931,675.770 5.58%
600 Atlantic Avenue (6.91%: Class A)
Boston, MA 02210
Gilbert P. Hyatt 21,565,532.530 11.00%
P. O. Box 81230 (13.62%: Class A)
Las Vegas, NV 89180-1230
Nicholas Stevens 1,094,458.040 24.47%
c/o Shephard & Associates (24.47%: Class B)
9200 Sunset Blvd.
Penthouse 22
Los Angeles, CA 90069
</TABLE>
On October 30, 1998, the directors and officers of the Company, as a
group, owned 5,562,086.870 shares of the Fund, which were approximately 15%
shares of the Fund. As of October 30, 1998, the Trustees and officers of the
Trust, as a group, did not own shares of the Colonial Fund.
Shareholders have the right to redeem their Fund Shares at their net
asset value until the Closing Date. Thereafter, former Fund shareholders may
redeem their Colonial Fund Shares acquired in the Reorganization at their net
asset value.
Quorum
The presence at the Special Meeting, in person or by proxy, of the
holders of a majority of the shares of the Fund entitled to be cast shall be
necessary and sufficient to constitute a quorum for the transaction of business.
In the event that the necessary quorum to transact business or the vote required
to approve the Proposal is not obtained at the Special Meeting, the persons
named as proxies may propose one or more adjournments of the Special Meeting to
permit further solicitation of proxies. Any such adjournment as to a matter will
require the affirmative vote of the holders of a majority of the Fund's shares
present in person or by proxy at the Special Meeting. The persons named as
proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor and will vote against any such adjournment those
proxies to be voted against the Proposal. If no shareholder entitled to vote is
present in person or by proxy, any officer present to preside or act at the
Special Meeting as Secretary may also adjourn the meeting. For purposes of
determining the presence of a quorum for transacting business at the Special
Meeting, abstentions will be treated as shares that are present but which have
not been voted. Shareholders are urged to forward their voting instructions
promptly.
ADDITIONAL INFORMATION
The Fund and the Colonial Fund are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and the 1940
Act, as applicable, and, in accordance with such requirements, files proxy
materials, reports, and other information with the SEC. These materials can be
inspected and copied at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549 and at the offices of the Fund
and the Colonial Fund listed on the first page of this Statement. Copies of such
materials can also be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, at prescribed rates, or at no charge from the EDGAR
database on the SEC's website at "www.sec.gov."
Board Members and Officers
The current Trustees and officers of the Trust will continue to serve
as Trustees and officers of the Trust following the Reorganization. The current
Directors and officers of the Company will not continue to serve in such
positions following the Reorganization, except to the extent that action may be
required of them in connection with the winding up of the affairs of the Fund.
Financial Information of the Fund
Financial information about the Fund for the fiscal year ended March
31, 1998 is contained in the Annual Report to Shareholders that was recently
distributed to shareholders of the Fund. The Annual Report to Shareholders is
incorporated by reference into the Statement of Additional Information to this
Statement dated December 18, 1998.
Financial Information for the Colonial Fund
The following financial highlights for a share outstanding throughout
each period have been audited by PricewaterhouseCoopers LLP, independent
accountants to the Trust. The data should be read in conjunction with the
financial statements, related notes, and report of PricewaterhouseCoopers LLP on
those items, which are included in the Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information to this
Statement.
COLONIAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
Period ended June 30
-----------------------------------------------------
1998(a)(b)
Class A Class B Class C
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (c)(d) 0.041 0.032 0.037(e)
------------ ------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.041) (0.032) (0.037)
------------ ------------ ------------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------
Total return (f)(g)(h) 4.17% 3.28% 3.81%
------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS
Expenses (c)(d)(i)(j) 0.69% 1.69% 1.09%(e)
Net investment
income (c)(d)(i)(j) 4.93% 3.93% 4.53%(e)
Net assets at end
of period (000) $ 128,658 $ 61,811 $ 3,304
</TABLE>
(a) The Fund changed its fiscal year end from August 31 to June 30.
Information presented is for the period September 1, 1997 through June
30, 1998.
(b) Effective March 2, 1998, SR&F became the investment Adviser of the
Fund.
(c) Net of fees waived by the Administrator which amounted to $0.001 per
share and 0.19% (annualized).
(d) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses
of SR&F Cash Reserves Portfolio.
(e) Net of fees waived by the Distributor which amounted to $0.005 per
share and 0.60% (annualized).
(f) Total return at net asset value assuming all distributions reinvested
and no contingent deferred sales charge.
(g) Not annualized.
(h) Had the Administrator and Distributor not waived a portion of
expenses, total return would have been reduced.
(i) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(j) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended August 31
----------------------------------------------------------
1997
Class A Class B Class C (b)
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (a) 0.048 0.038 0.039
------------ ------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.048) (0.038) (0.039)
------------ ------------ ------------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------
Total return (c) 4.90% 3.82% 3.97%
============ ============ ============
RATIOS TO AVERAGE NET ASSETS
Expenses 0.72%(e) 1.72%(e) 1.64%(e)
Fees and expenses waived
or borne by the Adviser -- -- --
Net investment
income 4.73%(e) 3.73%(e) 3.81%(e)
Net assets at end
of period (000) $ 144,076 $ 70,242 $ 2,904
(a) Net of fees and expenses waived or borne by the Adviser which amounted
to: $ -- $ -- $ --
(b) Effective July 1, 1997, Class D shares were redesignated Class C shares.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years ratios' are net of benefits
received, if any.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended August 31
- ------------------------------------------------------------------------------------------------------------------------------
1996 1995
Class A Class B Class C Class A Class B Class C
- ------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------ ----------- ----------- ----------- ----------- -----------
0.048 0.038 0.038 0.050 0.040 0.040
- ------------ ----------- ----------- ----------- ----------- -----------
(0.048) (0.038) (0.038) (0.050) (0.040) (0.040)
- ------------ ----------- ----------- ----------- ----------- -----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------ ----------- ----------- ----------- ----------- -----------
4.93% 3.86% 3.85% 5.14%(d) 4.08%(d) 4.07%(d)
============ =========== =========== =========== =========== ===========
0.70%(e) 1.70%(e) 1.70%(e) 0.69% 1.69% 1.69%
-- -- -- 0.04% 0.04% 0.04%
4.76%(e) 3.76%(e) 3.76%(e) 4.96% 3.96% 3.96%
$ 115,063 $ 76,539 $ 4,435 $ 83,086 $ 55,441 $ 625
$ -- $ -- $ -- $ 0.000 $ 0.000 $ 0.000
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
Year ended August 31
---------------------------------------------------
1994
Class A Class B Class C (b)
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000 $ 1.000
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (a) 0.028 0.018 0.005
----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.028) (0.018) (0.005)
----------- ----------- -----------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000
----------- ----------- -----------
Total return (c)(d) 2.85% 1.82% 0.45%(e)
----------- ----------- -----------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.73% 1.73% 1.73%(f)
Fees and expenses waived
or borne by the Adviser 0.20% 0.20% 0.20%(f)
Net investment
income 3.01% 2.01% 2.01%(f)
Net assets at end
of period (000) $ 97,115 $ 54,535 $ 518
</TABLE>
(a) Net of fees and expenses waived or borne by the Adviser which amounted
to: 0.002 0.002 0.002
(b) Class C shares were initially offered on July 1, 1994. Per share amounts
reflect activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(e) Not annualized.
(f) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended
August 31
-------------------------------
1993
Class A Class B
----------- -----------
<S> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000
----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (a) 0.023 0.013
----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.023) (0.013)
----------- -----------
Net asset value -
End of period $ 1.000 $ 1.000
----------- -----------
Total return (c)(d) 2.28% 1.27%
----------- -----------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.88% 1.88%
Fees and expenses waived
or borne by the Adviser 0.20% 0.20%
Net investment
income 2.26% 1.26%
Net assets at end
of period (000) $ 44,693 $ 10,890
$ 0.002 $ 0.002
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Fund and the Colonial Fund for their
most recent fiscal year ends, which are included in their respective
Prospectuses and Statements of Additional Information and in the Statement of
Additional Information related to this Statement have been audited by KPMG Peat
Marwick LLP, independent auditors for the Fund, and PricewaterhouseCoopers LLP,
independent accountants for the Colonial Fund, to the extent indicated in their
respective reports thereon, incorporated by reference or included in such
Prospectuses and Statements of Additional Information. Such financial statements
included in such Prospectuses and Statements of Additional Information have been
incorporated or included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
OTHER BUSINESS
The Board of Directors of the Company knows of no other business to be
brought before the Special Meeting. However, if any other matters come before
the Special Meeting, it is the intention that proxies that do not contain
specific restrictions to the contrary will be voted on such matters in
accordance with the judgment of the persons named in the enclosed form of proxy.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Fund in writing at the
address on page 1 of this Statement or by telephoning (800) 334-2143.
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a proxy
statement or a shareholder meeting subsequent to the Special Meeting, if any,
should send their written proposals to the Secretary of the Company, 1221 Avenue
of the Americas, New York, New York 10020, within a reasonable time before the
solicitation of proxies for such meeting. Pursuant to its by-laws, the Company
does not generally, and has no present intention to, hold annual meetings of
shareholders. The timely submission of a proposal does not guarantee its
inclusion.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING ARE URGED TO
DATE AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE
WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES. IN ORDER TO AVOID THE EXPENSE OF FURTHER SOLICITATION, WE ASK
YOUR COOPERATION IN COMPLETING AND RETURNING YOUR PROXY PROMPTLY.
By Order of the Board of Directors
Philip J. Bafundo
Secretary
<PAGE>
SOGEN FUND INVESTMENT OBJECTIVE
The SoGen Fund seeks as high a level of current income as is considered
consistent with the preservation of capital and liquidity by investing
exclusively in U.S. dollar-denominated money market instruments which mature in
397 days or less.
HOW SOGEN FUND PURSUES ITS OBJECTIVES AND CERTAIN RISK FACTORS
The Fund pursues its objective by investing exclusively in the
following types of U.S. dollar-denominated money market instruments which mature
in 397 days or less and which the Fund's investment adviser has determined to
present minimal credit risk:
1. Bank certificates of deposit, time deposits or bankers'
acceptances 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.
2. Commercial paper rated Prime-1 or Prime-2 by Moody's, A-1 or
A-2 by S&P, Duff 2 or higher by Duff & Phelps, Inc. ("Duff"),
or F-2 or higher by Fitch Investors Service, Inc. ("Fitch");
commercial paper or notes of issuers with unsecured debt issue
outstanding currently rated Aa or higher by Moody's, AA or
higher by S&P, AA or higher by Duff, or AA or higher by Fitch
where the obligation is on the same or a higher level of
priority and collateralized to the same extent as the rated
issue; investments in other corporate obligations such as
publicly traded bonds, debentures and notes rated Aa by
Moody's AA by S&P, Duff or Fitch; and other similar securities
which, if unrated by Moody's, S&P, Duff or Fitch, are
determined by the Fund's investment adviser, using guidelines
approved by the Board of Directors, to be at least equal
in quality to one or more of the above referenced securities.
Notwithstanding the foregoing, the Fund may invest no more
than 5% of its total assets in securities that are accorded
the second highest rating by the requisite number of
nationally recognized statistical rating organizations.
(For a description of the ratings, see "Appendix--Ratings of
Investment Securities" in the Statement of Additional
Information.)
3. Obligations of, or guaranteed by, the U.S. or Canadian
governments, their agencies or instrumentalities.
4. Repurchase agreements involving obligations that are suitable
for investment under the categories set forth above.
To the extent that the Fund purchases Eurodollar certificates of
deposit, consideration will be given to their marketability and possible
restrictions on international currency transactions and to regulations imposed
by the domicile country of the foreign user. Eurodollar certificates of deposit
may not be subject to the same regulatory requirements ads certificates of
deposit issued by U.S. banks and associated income may be subject to the
imposition of foreign taxes.
The Fund may invest in repurchase agreements, which are instruments
under which the Fund acquires ownership of a security from a broker/dealer or
bank that agrees to repurchase the security at a mutually agreed upon time and
price (which price is higher than the purchase price), thereby determining the
yield during the Fund's holding period. Maturity of the securities subject to
repurchase may exceed 397 days. In the event of a bankruptcy or other default of
a seller of a repurchase agreement, the Fund might have expenses in enforcing
its rights, and could experience losses, including a decline in the value of the
underlying security and loss of income. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions such as
broker/dealers which are deemed by the Fund's investment advisor to be
creditworthy.
The Fund may invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933, and resold to qualified institutional buyers
under Securities Act Rule 144A ("Section 4(2) paper"). Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund which agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction and may be
accomplished in accordance with Rule 144A. Section 4(2) paper normally is resold
to other institutional investors, like the Fund, through or with the assistance
of the issuers or investment dealers who make a market in the Section 4(2)
paper, thus providing liquidity. The investment adviser will carefully monitor
the Fund's investments in these securities, focusing on such factors, among
others, as valuation, liquidity and availability of information. Investment in
Section 4(2) paper could have the effect of reducing the Fund's liquidity to the
extent that qualified institutional buyers become, for a time, uninterested in
purchasing these restricted securities.
The Fund may invest in asset-backed securities, i.e., securities backed
by automobile receivables and credit-card receivables and other securities
backed by other types of receivables. Credit support for asset-backed securities
may be based on the underlying assets or provided by a third party. Credit
enhancement techniques include letters of credit, insurance bonds, limited
guarantees (which are generally provided by the issuer), senior-subordinated
structures and over collateralization. Asset-backed securities purchased by the
Fund will be subject to the same quality requirements as other securities
purchased by the Fund.
In addition to the investment policies described below (and subject to
certain restrictions described herein), SoGen Fund may invest in some or all of
the following securities and employ some or all of the following investment
techniques, some of which may present special risks as described below. A more
complete discussion of these securities and investment techniques and their
associated risks is contained in the Fund's Statement of Additional Information.
<PAGE>
Because SoGen Fund's investments will be subject to the market
fluctuations and risks inherent in all investments, there can be no assurance
that the Funds' stated objectives will be realized. SGAM Corp. will seek to
minimize these risks through professional management and investment
diversification. Although the Fund is designed to maintain a stable share price
of $1.00, there can be no assurance that the Fund will be able to do so.
Foreign Investments.
Since the Fund will invest only in U.S. dollar-denominated securities,
the return on its shares will not be subject to the risk of adverse changes in
the exchange rates between the U.S. dollar and foreign currencies. In addition,
the Fund does not intend to invest in the securities markets of emerging
countries.
"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. 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.
Variable Rate Securities.
The Fund may invest in instruments having rates of interest that are
adjusted periodically of which "float" continuously according to formulate
intended to minimize fluctuation in the values of the instruments ("Variable
Rate Securities"). The interest rates of Variable Rate Securities ordinarily are
determined by reference to, or are a percentage of, an objective standard such
as a bank's prime rate, the 90-day U.S. Treasury Bill rate, or the rate of
return on commercial paper or bank certificates of deposit. Generally, the
changes in the interest rates on Variable Rate Securities reduce the
fluctuations in the market values of such securities. Accordingly, as interest
rates decrease or increased, the potential for capital appreciation or
depreciation is less than for fixed-rate obligations. Some Variable Rate
Securities ("Variable Rate Demand Securities") have a demand feature entitling
the purchaser to resell the securities at an amount approximately equal to
amortized cost or the principal amount thereof plus accrued interest. The Fund
will determine the maturity of Variable Rate Securities in accordance with
Securities and Exchange Commission rules which allow the Fund to consider
certain of such instruments as having maturities shorter than the maturity date
on the face of the instrument. Under such rules, the maturity date of Variable
Rate Demand Securities may be considered to be the longer of the period
remaining until the next readjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand.
Illiquid Securities.
The Fund may invest up to 10% of its total assets in illiquid
securities, including securities acquired in private placements. Because an
active trading market for such securities may not exist, the sale of such
securities may be subject to delay and additional costs. Time deposits and
repurchase agreements maturing in more than seven days are considered to be
illiquid. The Fund, subject to the limitations for illiquid investments stated
above, may purchase securities that have been privately placed but that are not
eligible for purchase and sale under Rule 144A under the Securities Act of 1933.
That rule permits certain qualified institutional buyers, such as the Funds, to
trade in private placed securities that have not been registered for sale under
that Act. Rule 144A securities may or may not be liquid depending on guidelines
established by the Board of Directors. See "Illiquid Securities" in the Fund's
Statement of Additional Information
Change of Objective
The Fund's investment objective may be changed by the Board of
Directors without shareholder approval. If there were such a change, each
shareholder should consider whether the Fund would remain an appropriate
investment in light of his or her then current financial position and needs.
Shareholders will be notified a minimum of sixty days in advance of any change
in investment objective.
Fundamental Investment Policies of SoGen Fund
As fundamental investment policies which may not be changed without the
approval of a majority of its outstanding voting securities, the Fund may 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 unsecured borrowings from banks as a
temporary measure in exceptional circumstances, and such
borrowings may not exceed 10% of the Fund's net assets at the
time of the borrowing. The Fund will not purchase securities
while borrowings exceed 5% of its total assets;
3. Invest more than 25% of assets (valued at time of investment)
in securities of companies in any one industry other than U.S.
Government Securities (except that the Fund may concentrate
its investments in U.S. bank obligations);
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 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; and
8. Sell securities short or maintain a short position, except short
sales against-the-box.
Fundamental Investment Policies of Colonial Fund
As fundamental investment policies which may not be changed without the
approval of a majority of its outstanding voting securities, the Fund may not:
1. Invest in a security if, as a result of such investment, more
than 25% of its total assets (taken at market value at the
time of each investment) would be invested in the securities
of issuers in any particular industry, except that this
restriction does not apply to (i) U.S. Government securities,
(ii) repurchase agreements, or (iii) securities of issuers in
the financial services industry, and except that all or
substantially all of the assets of the Fund may be invested in
another registered investment company having the same
investment objective and substantially similar investment
policies as the Fund;
2. Invest in a security if, with respect to 75% of its assets, as
a result of such investment, more than 5% of its total assets
(taken at market value at the time of such investment) would
be invested in the securities of any one issuer, except that
this restriction does not apply to U.S. Government securities
or repurchase agreements for such securities and except that
all or substantially all of the assets of the Fund may be
invested in another registered investment company having the
same investment objective and substantially similar investment
policies as the Fund;**
3. Invest in a security if, as a result of such investment, it
would hold more than 10% (taken at the time of such
investment) of the outstanding voting securities of any one
issuer, except that all or substantially all of the assets of
the Fund may be invested in another registered investment
company having the same investment objective and substantially
similar investment policies as the Fund;
4. Purchase or sell real estate (although it may purchase
securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate, or
interests therein);
- ---------------
* SoGen Fund has no present intention of lending its portfolio securities.
** Notwithstanding the foregoing, and in accordance with Rule 2a-7 of
the Act (the "Rule"), the Portfolio will not, immediately after the acquisition
of any security (other than a Government Security or certain other securities as
permitted under the Rule), invest more than 5% of its total assets in the
securities of any one issuer; provided, however, that it may invest up to 25% of
its total assets in First Tier Securities (as that term is defined in the Rule)
of a single issuer for a period of up to three business days after the purchase
thereof.
5. Purchase or sell commodities or commodities contracts or oil, gas or
mineral programs;
6. Purchase securities on margin, except for use of short-term
credit necessary for clearance of purchases and sales of
portfolio securities;
7. Make loans, although it may (a) participate in an interfund
lending program with other affiliated funds provided that no
such loan may be made if, as a result, the aggregate of such
loans would exceed 33-1/3% of the value of its total assets
(taken at market value at the time of such loans); (b)
purchase money market instruments and enter into repurchase
agreements; and (c) acquire publicly distributed or privately
placed debt securities;
8. Borrow except that it may (a) borrow for non-leveraging,
temporary or emergency purposes, (b) engage in reverse
repurchase agreements and make other borrowings, provided that
the combination of (a) and (b) shall not exceed 33 1/3% of the
value of its total assets (including the amount borrowed) less
liabilities (other than borrowings) or such other percentage
permitted by law;
9. Act as an underwriter of securities, except insofar as it may
be deemed to be an "underwriter" for purposes of the
Securities Act of 1933 on disposition of securities acquired
subject to legal or contractual restrictions on resale, except
that all or substantially all of the assets of the Fund may be
invested in another registered investment company having the
same investment objective and substantially similar investment
policies as the Fund; or
10. Issue any senior securities except to the extent permitted under
the Act.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of, [ ], 1999 by and
between the SoGen Funds, Inc. ("SFI"), a Maryland corporation established under
Articles of Incorporation dated May 28, 1993, as amended, on behalf of the SoGen
Money Fund]("SoGen Fund"), a series of SFI, and Colonial Trust II (the "Colonial
Trust"), a Massachusetts business trust established under a Declaration of Trust
dated February 14, 1980, as amended, on behalf of Colonial Money Market Fund
("Colonial Fund"), a series of the Colonial Trust, joined in for the purpose
(and only for the purpose) of paragraphs 1.5 and 11.2 hereof by The Colonial
Group, Inc. ("Colonial"), a Massachusetts corporation, Societe Generale Asset
Management Corp. ("SGAM Corp."), a Delaware corporation.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368 (a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and any
successor provision. The reorganization will consist of the transfer of all of
the assets of SoGen Fund in exchange solely for Class A shares of beneficial
interest of Colonial Fund ("Colonial Shares") and the assumption by Colonial
Fund of the liabilities of SoGen Fund (other than certain expenses of the
reorganization contemplated hereby) and the distribution of such Colonial Shares
to the shareholders of SoGen Fund in liquidation of SoGen Fund, all upon the
terms and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF SOGEN FUND IN EXCHANGE FOR ASSUMPTION
OF LIABILITIES AND COLONIAL SHARES AND LIQUIDATION OF SOGEN FUND.
1.1 Subject to the terms and conditions herein set forth and
on the basis of the representations and warranties contained
herein,
(a) SFI, on behalf of the SoGen Fund will transfer and
deliver to Colonial Fund and Colonial Fund will acquire
all the assets of SoGen Fund as set forth in paragraph
1.2.
(b) Colonial Fund will assume all of the SoGen Fund's
liabilities and obligations of any kind whatsoever,
whether absolute, accrued, contingent or
otherwise, including any liability arising out of
indemnification and related payment or reimbursement
of expenses obligations pursuant to the By-Laws
or Articles of Incorporation of SFI (the
"Obligations"), each as in effect on the date hereof
(collectively, the SoGen Charter") with respect to
events occurring at any time up to and including
the Closing Date (as defined in paragraph 1.2 hereof)
including events contemplated by this Agreement,
except that expenses of reorganization contemplated
hereby to be paid by Colonial and SGAM Corp. pursuant
to paragraphs 1.5 and 11.2 shall not be assumed or paid
by the Colonial Fund, and
(c) Colonial Fund will issue and deliver to SoGen Fund in
exchange for such assets the number of Colonial Shares
(including fractional shares, if any) determined by
dividing the net asset value of SoGen Fund, computed in
the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Colonial
Share, computed in the manner and as of the time and
date set forth in paragraph 2.2. Such transactions
shall take place at the closing provided for in
paragraph 3.1 (the "Closing").
Notwithstanding any other provisions hereof, the Obligations
defined in paragraph 1.1(b) above shall be binding for five
years after the Closing Date upon the Colonial Fund. In the
event that the Colonial Fund shall be reorganized or merged
into another registered investment company at any time prior
to the expiration of five years from the Closing Date, proper
provision shall be made so that the successor registered
investment company of the Colonial Fund shall continue to
honor the Obligations. Further, the Obligations shall not be
terminated or modified in such a manner as to adversely affect
any director to whom the Obligations apply without the consent
of such affected director (it being expressly agreed that the
directors to whom the Obligations apply shall be third party
beneficiaries of the provisions of paragraph 1.1(b) with
respect to the Obligations.
1.2 The assets of SoGen Fund to be acquired by Colonial Fund shall
consist of all cash, securities (other than securities that
Colonial Fund is not permitted to acquire), dividends and
interest receivable, receivables for shares sold and all other
assets which are owned by SoGen Fund on the closing date
provided in paragraph 3.1 (the "Closing Date") and any
deferred expenses, other than unamortized organizational
expenses, shown as an asset on the books of SoGen Fund on the
Closing Date.
1.3 As provided in paragraph 3.4, as soon after the Closing Date
as is conveniently practicable (the "Liquidation Date"), SoGen
Fund will liquidate and distribute pro rata to its
shareholders of record ("SoGen Fund Shareholders"), determined
as of the close of business on the Valuation Date (as defined
in paragraph 2.1), the Colonial Shares received by SoGen Fund
pursuant to paragraph 1.1. Such liquidation and distribution
will be accomplished by the transfer of the Colonial Shares
then credited to the account of SoGen Fund on the books of
Colonial Fund to open accounts on the share records of
Colonial Fund in the names of the SoGen Fund shareholders and
representing the respective pro rata number of Colonial Shares
due such shareholders. Colonial Fund shall not be obligated to
issue certificates representing Colonial Shares in connection
with such exchange.
1.4 With respect to Colonial Shares distributable pursuant to
paragraph 1.3 to a SoGen Fund Shareholder holding a
certificate or certificates for shares of SoGen Fund, if any,
on the Valuation Date, Colonial Trust will not permit such
shareholder to receive Colonial Share certificates therefor,
exchange such Colonial Shares for shares of other investment
companies, effect an account transfer of such Colonial Shares,
or pledge or redeem such Colonial Shares until Colonial Trust
has been notified by SoGen Fund or its agent that such
Shareholder has surrendered all his or her outstanding
certificates for SoGen Fund shares or, in the event of lost
certificates, posted adequate bond.
1.5 Subject to the provisions of paragraph 11.2, Colonial will pay
or cause an affiliate to pay the expenses of SoGen Fund and
Colonial Fund incurred in connection with the consummation of
the reorganization contemplated hereby, including legal fees,
costs of filing, printing and mailing the Proxy Statement and
the Registration Statement referred to in paragraph 5.3, and
proxy solicitation costs.
1.6 As promptly as possible after the Closing Date, the SoGen Fund
shall be terminated pursuant to the provisions of the laws of
the State of Maryland, and, after the Closing Date, the SoGen
Fund shall not conduct any business except in connection with
its dissolution and liquidation.
2. VALUATION.
2.1 For the purpose of paragraph 1, the value of SoGen Fund's
assets to be acquired by Colonial Fund hereunder shall be the
net asset value computed as of the close of business on the
New York Stock Exchange on the business day next preceding the
Closing (such time and date being herein called the "Valuation
Date") using the valuation procedures set forth in the
Declaration of Trust of Colonial Trust and the then current
prospectus or statement of additional information of Colonial
Fund, without deduction for the expenses of the reorganization
contemplated hereby to be paid by Colonial and SGAM Corp.
pursuant to paragraphs 1.5 and 11.2, and shall be certified by
SoGen Fund.
2.2 For the purpose of paragraph 2.1, the net asset value of a
Colonial Share shall be the net asset value per share computed
as of the close of business on the New York Stock Exchange on
the Valuation Date, using the valuation procedures set forth
in the Declaration of Trust of Colonial Trust and the then
current prospectus or statement of additional information of
Colonial Fund, without deduction for the expenses of the
reorganization contemplated hereby to be paid by Colonial and
SGAM Corp. pursuant to paragraphs 1.5 and 11.2, and shall be
certified by Colonial Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be such date as the parties may agree
in writing. The Closing shall be held at 9:00 a.m. at the
offices of Colonial Management Associates, Inc., One Financial
Center, Boston, Massachusetts 02111, or at such other time
and/or place as the parties may agree.
3.2 The portfolio securities of SoGen Fund shall be made available
by SoGen Fund to The Chase Manhattan Bank, as custodian for
Colonial Fund (the "Custodian"), for examination no later than
five business days preceding the Valuation Date. On the
Closing Date, such portfolio securities and all SoGen Fund's
cash shall be delivered by SoGen Fund to the custodian for the
account of Colonial Fund, such portfolio securities to be duly
endorsed in proper form for transfer in such manner and
condition as to constitute good delivery thereof in accordance
with the custom of brokers or, in the case of portfolio
securities held in the U.S. Treasury Department's book-entry
system or by Depository Trust Company, Participants Trust
Company or other third party depositories, by transfer to the
account of the custodian in accordance with Rule 17f-4 or Rule
17f-5, as the case may be, under the Investment Company Act of
1940, (the "1940 Act") and accompanied by all necessary
federal and state stock transfer stamps or a check for the
appropriate purchase price thereof. The cash delivered shall
be in the form of currency or certified or official bank
checks in Boston funds, payable to the order of "The Chase
Manhattan Bank, custodian for Colonial Money Market Fund".
3.3 In the event that on the Valuation Date (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall
be restricted, or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of SoGen Fund or
Colonial Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when
trading shall have been fully resumed and reporting shall have
been restored; provided that if trading shall not be fully
resumed and reporting restored within three business days of
the Valuation Date, this Agreement may be terminated by either
of SFI or Colonial Trust upon the giving of written notice to
the other party.
3.4 At the Closing, SoGen Fund or its transfer agent shall
deliver to Colonial Fund or its designated agent a list of
the names and addresses of the SoGen Fund Shareholders
and the number of outstanding shares of beneficial
interest of SoGen Fund owned by each SoGen Fund
Shareholder, all as of the close of business on the Valuation
Date, certified by the Secretary or Assistant Secretary of
SFI. Colonial Trust will provide to SoGen Fund evidence
satisfactory to it that the Colonial Shares issuable
pursuant to paragraph 1.1 have been credited to SoGen Fund's
account on the books of Colonial Fund. On the Liquidation
Date, Colonial Trust will provide to SoGen Fund evidence
satisfactory to it that such Colonial Shares have been
credited pro rata to open accounts in the names of the SoGen
Fund shareholders as provided in paragraph 1.3.
3.5 At the Closing each party shall deliver to the other such
bills of sale, agreements of assumption of liabilities,
checks, assignments, stock certificates, receipts or other
documents as such other party or its counsel may reasonably
request in connection with the transfer of assets, assumption
of liabilities and liquidation contemplated by paragraph 1.
<PAGE>
4. REPRESENTATIONS AND WARRANTIES.
4.1 SFI, on behalf of SoGen Fund, represents and warrants the
following to the Colonial Trust and to the Colonial Fund as of
the date hereof and agrees to confirm the continuing accuracy
and completeness in all material respects of the following on
the Closing Date:
(a) SFI is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Maryland;
(b) SFI is a duly registered investment company classified
as a management company of the open-end diversified
type and its registration with the Securities and
Exchange Commission as an investment company under the
1940 Act, is in full force and effect, and SoGen Fund
is a separate series thereof duly designated in
accordance with the applicable provisions of the
Articles of Incorporation of SFI and the 1940 Act;
(c) SFI or any person whom SFI may be obligated to
indemnify is not in violation in any material respect
of any provision of its Articles of Incorporation or
By-laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which SFI is a
party or by which SoGen Fund is bound, and the
execution, delivery and performance of this Agreement
will not result in any such violation;
(d) SFI has no material contracts or other commitments
(other than this Agreement, two Agency Agreements dated
November 25, 1996 by and between SFI and DST Systems,
Inc. and SoGen International Fund, Inc. and DST
Systems, Inc. and such other contracts as may be
entered into in the ordinary course of its investment
business) which if terminated, may result in material
liability to SoGen Fund or under which (whether or not
terminated) any material payments for periods
subsequent to the Closing Date will be due from SoGen
Fund;
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened against
SoGen Fund, any of its properties or assets, or any
person whom SoGen Fund may be obligated to indemnify
except as previously disclosed in writing to Colonial
Fund. SoGen Fund knows of no facts which might form
the basis for the institution of such proceedings,
and is not a party to or subject to the provisions of
any order, decree or judgment of any court or
governmental body which materially and adversely
affects its business or its ability to consummate the
transactions contemplated hereby;
<PAGE>
(f) The schedule of investments and the
statement of assets and liabilities as of March 31,
1998,and the statement of operations for the year
ended March 31, 1998, the statements of changes
in net assets for each of the years in the two-year
period ended March 31, 1998, and the financial
highlights for each of the years in the five-year
period ended March 31, 1998 of SoGen Fund,
audited by KPMG Peat Marwick LLP,
copies of which have been furnished to Colonial Fund,
fairly reflect the financial condition and results of
operations of SoGen Fund as of such dates and for
the periods then ended in accordance with generally
accepted accounting principles consistently applied,
and SoGen Fund has no known liabilities of a
material amount, contingent or otherwise, other than
those shown on the statement of assets and
liabilities referred to above or those incurred in
the ordinary course of its business since
March 31, 1998;
(g) Since March 31, 1998, there has not been any material
adverse change in SoGen Fund's financial condition,
assets, liabilities or business other than changes
occurring in the ordinary course of business, or any
incurrence by SoGen Fund of indebtedness, except as
disclosed in writing to Colonial Fund. For the purposes
of this subparagraph (g), distributions of net
investment income and net realized capital gains,
changes in portfolio securities, changes in the market
value of portfolio securities or net redemptions shall
be deemed to be in the ordinary course of business;
(h) By the Closing Date, all federal and other tax returns
and reports of SoGen Fund required by law to have been
filed by such date (giving effect to extensions) shall
have been filed, and all federal and other taxes shown
to be due on said returns and reports shall have been
paid so far as due, or provision shall have been made
for the payment thereof, and to the best of SoGen
Fund's knowledge no such return is currently under
audit and no assessment has been asserted with respect
to such returns;
(i) For all taxable years and all applicable quarters of
such years from the date of its inception, SoGen Fund
has met the requirements of subchapter M of the Code,
for treatment as a "regulated investment company"
within the meaning of Section 851(a) of the Code.
Neither SFI nor SoGen Fund has at any time since its
inception been liable for and is now liable for any
material excise tax pursuant to Section 4982 of the
Code. SoGen Fund has duly filed all federal, state,
local and foreign tax returns which are required to
have been filed, and all taxes of SoGen Fund which are
due and payable have been paid except for amounts
that alone or in the aggregate would not reasonably
be expected to have a material adverse effect.
SoGen Fund is in compliance in all material respects
with applicable regulations of the Internal Revenue
Service pertaining to the reporting of dividends and
other distributions on and redemptions of its
capital stock and to withholding in respect of
dividends and other distributions to shareholders, and
is not liable for any material penalties which could be
imposed thereunder;
<PAGE>
(j) The authorized capital of SFI consists of [ ] shares
of authorized stock with a par value of one tenth of
one cent (0.001) per share of such number of
different series or classes as designated in SFI's
Articles of Incorporation, four series of which
(including SoGen Fund) are currently authorized and
outstanding. All issued and outstanding shares of
SoGen Fund are, and at the Closing Date will be,
duly and validly issued and outstanding, fully paid
and (except as set forth in the SoGen Fund's
Prospectus) non-assessable by SoGen Fund and will have
been issued in compliance with all applicable
registration or qualification requirements of federal
and state securities laws. No options, warrants or
other rights to subscribe for or purchase, or
securities convertible into or exchangeable for, any
shares of beneficial interest of SoGen Fund are
outstanding and none will be outstanding on the Closing
Date;
(k) At the Closing Date, SoGen Fund will have good and
marketable title to its assets to be transferred to
Colonial Fund pursuant to paragraph 1.2, and full
right, power, and authority to sell, assign, transfer
and deliver such assets as contemplated hereby, and
upon delivery and payment for such assets Colonial Fund
will acquire good and marketable title thereto, subject
to no restrictions on the full transfer thereof,
including such restrictions as might arise under the
Securities Act of 1933, as amended (the "1933 Act");
(l) The SoGen Fund's investment operations from inception
to the date hereof have been in compliance with the
investment policies and investment restrictions set
forth in its prospectus and statement of additional
information as in effect from time to time, except as
previously disclosed in writing to Colonial Fund;
(m) The execution, delivery and performance of this
Agreement has been duly authorized by the Directors of
SFI, and, upon approval thereof by the required
majority of the shareholders of SoGen Fund, this
Agreement will constitute the valid and binding
obligation of SoGen Fund enforceable in accordance with
its terms; and
(n) The Colonial Shares to be issued to SoGen Fund pursuant
to paragraph 1 will not be acquired for the purpose of
making any distribution thereof other than to the SoGen
Fund Shareholders as provided in paragraph 1.3.
<PAGE>
4.2 Colonial Trust, on behalf of Colonial Fund, represents and
warrants the following to SFI and to the SoGen Fund as of the
date hereof and agrees to confirm the continuing accuracy and
completeness in all material respects of the following on the
Closing Date:
(a) Colonial Trust is a business trust duly organized,
validly existing and in good standing under the laws of
The Commonwealth of Massachusetts;
(b) Colonial Trust is a duly registered investment company
classified as a management company of the open-end
diversified type and its registration with the
Securities and Exchange Commission as an investment
company under the 1940 Act is in full force and effect,
and Colonial Fund is a separate series thereof duly
designated in accordance with the applicable provisions
of the Declaration of Trust of Colonial Trust and the
1940 Act;
(c) The current prospectus and statement of additional
information dated October 30, 1998 of Colonial Fund
conform in all material respects to the applicable
requirements of the 1933 Act and the rules and
regulations of the Securities and Exchange Commission
thereunder and do not include any untrue statement of
a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances
under which they were made, not misleading, and
there are no material contracts to which Colonial
Fund is a party that are not referred to in such
prospectus and statement of additional information or
in the registration statement of which they are a
part;
(d) At the Closing Date, Colonial Fund will have good and
marketable title to its assets;
(e) Colonial Trust is not in violation in any material
respect of any provisions of its Declaration of Trust
or By-laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Colonial
Trust is a party or by which Colonial Fund is bound,
and the execution, delivery and performance of this
Agreement will not result in any such violation;
(f) No litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened against
Colonial Fund or any of its properties or assets,
except as previously disclosed in writing to SoGen
Fund. Colonial Fund knows of no facts which might form
the basis for the institution of such proceedings, and
is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental
body which materially and adversely affects its
business or its ability to consummate the transactions
contemplated hereby;
<PAGE>
(g) The statement of assets, the statement of operations,
the statement of changes in assets, and the schedule
of investments as at and for the two years ended
August 31, 1998 of Colonial Fund, audited by
PricewaterhouseCoopers LLP, copies of which have been
furnished to SoGen Fund, fairly reflect the
financial condition and results of operations of
Colonial Fund as of such dates and the results of its
operations for the periods then ended in accordance
with generally accepted accounting principles
consistently applied, and Colonial Fund has no
known liabilities of a material amount,
contingent or otherwise, other than those shown on
the statements of assets referred to above or those
incurred in the ordinary course of its business since
August 31, 1998;
(h) Since August 31, 1998, there has not been any material
adverse change in Colonial Fund's financial condition,
assets, liabilities or business other than changes
occurring in the ordinary course of business, or any
incurrence by Colonial Fund of indebtedness, except as
disclosed in writing to SoGen Fund. For the purposes of
this subparagraph (h), changes in portfolio securities,
changes in the market value of portfolio securities or
net redemptions shall be deemed to be in the ordinary
course of business;
(i) By the Closing Date, all federal and other tax returns
and reports of Colonial Fund required by law to have
been be filed by such date (giving effect to
extensions) shall have been filed, and all federal and
other taxes shown to be due on said returns and reports
shall have been paid so far as due, or provision shall
have been made for the payment thereof, and to the best
of Colonial Fund's knowledge no such return is
currently under audit and no assessment has been
asserted with respect to such returns;
(j) For each fiscal year of its operation, Colonial Fund
has met the requirements of Subchapter M of the Code
for qualification as a regulated investment company;
(k) The authorized capital of Colonial Trust consists
of an unlimited number of shares of beneficial
interest, no par value, of such number of different
series as the Board of Trustees may authorize from
time to time, six series of which (including Colonial
Fund) are currently authorized and outstanding. The
outstanding shares of beneficial interest
in Colonial Fund are, and at the Closing Date will be,
divided into Class A shares, Class B shares and Class
C shares, each having the characteristics described
in the prospectus and statement of additional
information referred to in paragraph 4.2(c). All
issued and outstanding shares of the Colonial Fund
are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and non-assessable
by Colonial Trust, and will have been issued in
compliance with all applicable registration or
qualification requirements of federal and state
securities laws. Except for Class B shares which
convert to Class A shares after the expiration of a
period of time, no options, warrants or other rights
to subscribe for or purchase, or securities
convertible into or exchangeable for, any shares of
beneficial interest in Colonial Fund of any class are
outstanding and none will be outstanding on the
Closing Date;
(l) The Colonial Fund's investment operations from
inception to the date hereof have been in compliance
with the investment policies and investment
restrictions set forth in its prospectus and statement
of additional information as in effect from time to
time;
(m) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary
action on the part of Colonial Trust, and this
Agreement constitutes the valid and binding obligation
of Colonial Trust and Colonial Fund enforceable in
accordance with its terms;
(n) The Colonial Shares to be issued and delivered to SoGen
Fund pursuant to the terms of this Agreement will at
the Closing Date have been duly authorized and, when so
issued and delivered, will be duly and validly issued
Class A shares of beneficial interest in Colonial Fund,
and will be fully paid and non-assessable (except as
set forth in Colonial Fund's Statement of Additional
Information) by Colonial Trust, and no shareholder of
Colonial Trust will have any preemptive right of
subscription or purchase in respect thereof;
(o) The information to be furnished by Colonial Fund for
use in the Registration Statement and Proxy Statement
referred to in paragraph 5.3 shall be accurate and
complete in all material respects and shall comply with
federal securities and other laws and regulations
applicable thereto; and
(p) Colonial Fund will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933
Act, the 1940 Act and such of the state Blue Sky or
securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
5. COVENANTS OF SOGEN FUND AND COLONIAL FUND.
Colonial Trust, on behalf of Colonial Fund, and SFI, on behalf of SoGen
Fund, each hereby covenants and agrees with the other as follows:
5.1 Colonial Fund and SoGen Fund each will operate its business in
the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of
business will include regular and customary periodic dividends
and distributions.
5.2 SoGen Fund will call a meeting of its shareholders to be held
prior to the Closing Date to consider and act upon this
Agreement and take all other reasonable action necessary to
obtain the required shareholder approval of the transactions
contemplated hereby.
5.3 In connection with the SoGen Fund shareholders' meeting
referred to in paragraph 5.2, SoGen Fund will prepare a Proxy
Statement for such meeting, to be included in a Registration
Statement on Form N-14 which Colonial Trust will prepare and
file for the registration under the 1933 Act of the Colonial
Shares to be distributed to the SoGen Fund shareholders
pursuant hereto, all in compliance with the applicable
requirements of the 1933 Act, the Securities Exchange Act of
1934 (the "1934 Act"), and the 1940 Act.
5.4 The information to be furnished by SoGen Fund for use in the
Registration Statement and the information to be furnished by
Colonial Fund for use in the Proxy Statement, each as referred
to in paragraph 5.3, shall be accurate and complete in all
material respects and shall comply with federal securities and
other laws and regulations thereunder applicable thereto.
5.5 Colonial Fund will advise SoGen Fund promptly if at any time
prior to the Closing Date the assets of SoGen Fund include any
securities which Colonial Fund is not permitted to acquire.
5.6 Subject to the provisions of this Agreement, SoGen Fund and
Colonial Fund will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably
necessary, proper or advisable to cause the conditions to the
other party's obligations to consummate the transactions
contemplated hereby to be met or fulfilled and otherwise to
consummate and make effective such transactions.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SOGEN FUND.
The obligations of SoGen Fund to consummate the transactions
provided for herein shall be subject, at its election, to the
performance by Colonial Trust and Colonial Fund of all the
obligations to be performed by them hereunder on or before the
Closing Date and, in addition thereto, to the following
further conditions:
6.1 Colonial Trust, on behalf of Colonial Fund, shall have
delivered to SFI a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant
Treasurer, in form satisfactory to SFI and dated as of the
Closing Date, to the effect that the representations and
warranties of Colonial Trust on behalf of Colonial Fund made
in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and that Colonial
Trust and Colonial Fund have complied with all the covenants
and agreements and satisfied all of the conditions on their
parts to be performed or satisfied under this Agreement at or
prior to the Closing Date.
6.2 SFI shall have received a favorable opinion from Ropes & Gray,
counsel to Colonial Trust for the transactions contemplated
hereby, dated the Closing Date and, in a form satisfactory to
Dechert, Price & Rhoads, counsel to SoGen Fund, to the
following effect:
(a) Colonial Trust is a business trust duly organized and
validly existing under the laws of The Commonwealth
of Massachusetts and has power to own all of its
properties and assets and to carry on its business as
presently conducted, and Colonial Fund is a
separate series thereof duly constituted in accordance
with the applicable provisions of the 1940 Act and the
Declaration of Trust and By-laws of Colonial Trust;
(b) this Agreement has been duly authorized, executed
and delivered on behalf of Colonial Fund and, assuming
the Prospectus and Registration Statement referred
to in paragraph 5.3 complies with applicable
federal securities laws and assuming the due
authorization, execution and delivery thereof by SFI
on behalf of SoGen Fund, is the valid and binding
obligation of Colonial Fund enforceable against
Colonial Fund in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency,
reorganization or other similar laws effecting the
enforcement of creditors' rights generally and other
equitable principles;
(c) Colonial Fund has the power to assume the
liabilities to be assumed by it hereunder and upon
consummation of the transactions contemplated
hereby Colonial Fund will have duly assumed such
liabilities; (d) the Colonial Shares to be issued for
transfer to the shareholders of SoGen Fund as provided
by this Agreement are duly authorized and upon such
transfer and delivery will be validly issued and
outstanding and fully paid and nonassessable (except
as set forth in Colonial Fund's Statement of
Additional Information) Class A shares of beneficial
interest in Colonial Fund, and no shareholder of
Colonial Fund has any preemptive right of subscription
or purchase in respect thereof; (e) the execution and
delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby
will not, violate Colonial Trust's Declaration of Trust
or By-laws, or any provision of any agreement known
to such counsel to which Colonial Trust or Colonial
Fund is a party or by which it is bound or, to the
knowledge of such counsel, result in the
acceleration of any obligation or the imposition of
any penalty under any agreement, judgment, or decree
to which Colonial Trust or Colonial Fund is a party
or by which it is bound; (f) to the knowledge of
such counsel, no consent, approval, authorization
or order of any court or governmental authority is
required for the consummation by Colonial Trust or
Colonial Fund of the transactions contemplated by
this Agreement except such as have been obtained;
(g) such counsel does not know of any legal or
governmental proceedings relating to Colonial Trust or
Colonial Fund existing on or before the date of
mailing of the Prospectus referred to in paragraph
5.3 or the Closing Date required to be described
in the Registration Statement referred to in
paragraph 5.3 which are not described as required; (h)
Colonial Trust is registered with the Securities and
Exchange Commission as an investment company under
the 1940 Act; and (i) to the best knowledge of such
counsel, no litigation or administrative proceeding
or investigation of or before any court or
governmental body is presently pending or
threatened as to Colonial Trust or Colonial Fund or any
of their properties or assets and neither Colonial
Trust nor Colonial Fund is a party to or subject to
the provisions of any order, decree or judgment of
any court or governmental body, which materially
and adversely affects its business.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF COLONIAL FUND.
The obligations of Colonial Fund to complete the transactions
provided for herein shall be subject, at its election, to the
performance by SoGen Fund of all the obligations to be
performed by it hereunder on or before the Closing Date and,
in addition thereto, to the following further conditions:
7.1 SFI, on behalf of SoGen Fund, shall have delivered to Colonial
Trust a certificate executed in its name by its President or
Vice President and its Treasurer or Assistant Treasurer, in
form and substance satisfactory to Colonial Trust and dated
the Closing Date, to the effect that the representations and
warranties of SoGen Fund made in this Agreement are true and
correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement,
and that SFI and SoGen Fund have complied with all the
covenants and agreements and satisfied all of the conditions
on its part to be performed or satisfied under this Agreement
at or prior to the Closing Date;
7.2 Colonial Trust shall have received a favorable opinion from
Dechert, Price & Rhoads, counsel to SFI, dated the Closing
Date and in a form satisfactory to Ropes & Gray, counsel to
Colonial Fund, to the following effect:
(a) SFI is a corporation duly organized and validly
existing under the laws of the State of Maryland and
has power to own all of its properties and assets
and to carry on its business as presently conducted,
and SoGen Fund is a separate series thereof duly
constituted in accordance with the applicable
provisions of the 1940 Act and the Articles of
Incorporation of SFI; (b) this Agreement has been
duly authorized, executed and delivered on behalf
of SoGen Fund and, assuming the Proxy Statement
referred to in paragraph 5.3 complies with applicable
federal securities laws and assuming the due
authorization, execution and delivery thereof by
Colonial Trust on behalf of Colonial Fund, is the
valid and binding obligation of SoGen Fund enforceable
against SoGen Fund in accordance with its terms,
except as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights
generally and other equitable principles; (c) SoGen
Fund has the power to sell, assign, transfer and
deliver the assets to be transferred by it hereunder,
and, upon consummation of the transactions contemplated
hereby, SoGen Fund will have duly transferred such
assets to Colonial Fund; (d) the execution and delivery
of this Agreement did not, and the consummation of the
transactions contemplated hereby will not, violate
SFI's Articles of Incorporation or By-laws, or any
provision of any agreement known to such counsel to
which SFI or SoGen Fund is a party or by which i
is bound or, to the knowledge of such counsel, result
in the acceleration of any obligation or the imposition
of any penalty under any agreement, judgment, or decree
to which SFI or SoGen Fund is a party or by which it
is bound; (e) to the knowledge of such counsel,
no consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by SFI or SoGen Fund of the transactions
contemplated by this Agreement, except such as have
been obtained; (f) such counsel does not know of
any legal or governmental proceedings relating to
SFI or SoGen Fund existing on or before the date of
mailing of the Prospectus referred to in paragraph 5.3
or the Closing Date required to be described in the
Registration Statement referred to in paragraph
5.3 which are not described as required; (g) SFI is
registered with the Securities and Exchange Commission
as an investment company under the 1940 Act; and
(h) to the best knowledge of such counsel, no
litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened as to SFI or
SoGen Fund or any of its properties or assets and
neither SFI nor SoGen Fund is a party to or subject
to the provisions of any order, decree or judgment
of any court or governmental body,which materially
and adversely affects its business.
7.3 SoGen Fund shall have furnished to Colonial Fund tax returns,
signed by an authorized representative of KPMG Peat Marwick
LLP, for the fiscal year ended March 31, 1998 .
7.4 Prior to the Closing Date, SoGen Fund shall have declared a
dividend or dividends which, together with all previous
dividends, shall have the effect of distributing all of SoGen
Fund's investment company taxable income for its taxable years
ending on or after March 31, 1998 and on or prior to the
Closing Date (computed without regard to any deduction for
dividends paid), and all of its net capital gains realized in
each of its taxable years ending on or after March 31, 1998
and on or prior to the Closing Date.
7.5 SoGen Fund shall have furnished to Colonial Fund a
certificate, signed by the President (or any Vice President)
and the Treasurer of SFI, as to the adjusted tax basis in the
hands of SoGen Fund of the securities delivered to Colonial
Fund pursuant to this Agreement.
7.6 The custodian of SoGen Fund shall have delivered to
Colonial Fund a certificate identifying all of the assets of
SoGen Fund held by such custodian as of the Valuation Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF
COLONIAL FUND AND SOGEN FUND.
The respective obligations of SFI and Colonial Trust hereunder are each
subject to the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein
shall have been approved by the vote of the required majority
of the holders of the outstanding shares of SoGen Fund of
record on the record date for the meeting of its shareholders
referred to in paragraph 5.2;
8.2 The transactions contemplated by the Stock Purchase
Agreement dated August 13, 1998 among Societe Generale Asset
Management, S.A., Jean-Marie Eveillard and Liberty Financial
Investments, Inc. shall have been consummated.
8.3 On the Closing Date no action, suit or other preceding
shall be pending before any court or governmental agency in
which it is sought to restrain or prohibit, or obtain damages
or other relief in connection with, this Agreement or the
transactions contemplated hereby;
8.4 All consents of other parties and all other consents,
orders and permits of federal, state and local regulatory
authorities (including those of the Securities and Exchange
Commission and of state Blue Sky and securities authorities)
deemed necessary by SFI or Colonial Trust to permit
consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or
properties of Colonial Fund or SoGen Fund, provided that
either party hereto may for itself waive any of such
conditions;
8.5 The Registration Statement referred to in paragraph 5.3
shall have become effective under the 1933 Act and no stop
order suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the
1933 Act;
8.6 The parties shall have received a favorable opinion of
Dechert, Price & Rhoads satisfactory to SFI and Colonial
Trust, substantially to the effect that, for federal income
tax purposes:
(a) The acquisition by Colonial Fund of the assets of SoGen
Fund in exchange for Colonial Fund's assumption of the
liabilities and Obligations of SoGen Fund and issuance
of Colonial Shares, followed by the distribution by
SoGen Fund of such Colonial Shares to the shareholders
of SoGen Fund in exchange for their shares of SoGen
Fund, all as provided in paragraph 1 hereof, will
constitute a reorganization within the meaning of
Section 368(a) of the Code, and SoGen Fund and Colonial
Fund will each be "a party to a reorganization" within
the meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized to SoGen Fund (i)
upon the transfer of its assets to Colonial Fund in
exchange for Colonial Shares or (ii) upon the
distribution of the Colonial shares to the shareholders
of the SoGen Fund as contemplated in paragraph 1
hereof;
(c) No gain or loss will be recognized to Colonial Fund
upon the receipt of the assets of SoGen Fund in
exchange for the assumption of liabilities and
Obligations and issuance of Colonial Shares as
contemplated in paragraph 1 hereof;
(d) The tax basis of the assets of SoGen Fund acquired by
Colonial Fund will be the same as the basis of those
assets in the hands of SoGen Fund immediately prior to
the transfer, and the holding period of the assets of
SoGen Fund in the hands of Colonial Fund will include
the period during which those assets were held by SoGen
Fund;
(e) The shareholders of SoGen Fund will recognize no gain
or loss upon the exchange of all of their shares of
SoGen Fund for Colonial Shares;
(f) The tax basis of the Colonial Shares to be received by
the shareholders of SoGen Fund will be the same as the
tax basis of the shares of SoGen Fund surrendered in
exchange therefor;
(g) The holding period of the Colonial Shares to be
received by the shareholders of SoGen Fund will include
the period during which the shares of SoGen Fund
surrendered in exchange therefor were held, provided
such shares of SoGen Fund were held as a capital asset
on the date of the exchange.
8.7 At any time prior to the Closing, any of the foregoing
conditions other than that set forth in 8.2 above may be
waived jointly by the Board of Directors of SFI and the Board
of Trustees of the Colonial Trust if, in their judgment, such
waiver will not have a material adverse effect on the
interests of the shareholders of the SoGen Fund and the
Colonial Fund.
9. BROKERAGE FEES AND EXPENSES.
9.1 SFI, on behalf of SoGen Fund, and Colonial Trust, on
behalf of Colonial Fund, each represents and warrants to the
other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for
herein.
9.2 SFI, on behalf of SoGen Fund, and Colonial Trust, on
behalf of Colonial Fund, shall each be liable for all expenses
incurred by such party in connection with entering into and
carrying out the provisions of this Agreement other than those
to be paid by Colonial and SGAM Corp. as provided in
paragraphs 1.5 and 11.2, whether or not the transactions
contemplated hereby are consummated.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
10.1 SFI on behalf of SoGen Fund and Colonial Trust on behalf
of Colonial Fund agree that neither party has made any
representation, warranty or covenant not set forth herein and
that this Agreement constitutes the entire agreement between
the parties.
10.2 The representations, warranties and covenants contained
in this Agreement or in any document delivered pursuant hereto
or in connection herewith shall not survive the consummation
of the transactions contemplated hereunder except paragraphs
1.1, 1.3, 1.5, 1.6, 5.4, 9, 10, 13 and 14.
11. TERMINATION.
11.1 This Agreement may be terminated by the mutual agreement
of Colonial Trust and SFI. In addition, either Colonial Trust
or SFI may at its option terminate this Agreement at or prior
to the Closing Date because:
(a) Of a material breach by the other of any
representation, warranty, covenant or agreement
contained herein to be performed by the other party at
or prior to the Closing Date; or
(b) A condition herein expressed to be precedent to the
obligations of the terminating party has not been met
and it reasonably appears that it will not or cannot be
met.
(c) If the transactions contemplated by this Agreement have
not been substantially completed by March 31, 1999,
this Agreement shall automatically terminate on that
date unless a later date is agreed to by both SFI and
Colonial Trust.
11.2 In the event that the transactions contemplated by this
Agreement are not consummated by reason of SFI's or SoGen
Fund's unwillingness or inability to go forward therewith
other than by reason of the nonfulfillment or failure of any
condition to SFI's or SoGen Fund's obligations referred to in
paragraphs 6 and 8, or by reason of Colonial Trust's or
Colonial Fund's unwillingness or inability to go forward
therewith other than by reason of the nonfulfillment or
failure of any conditions to Colonial Trust's or Colonial
Fund's obligations referred to in paragraphs 7 and 8, then,
Colonial or SGAM, as the case may be, shall reimburse the
other for the expenses incurred by them pursuant to this
Agreement.
11.3 If for any reason the transactions contemplated by this
Agreement are not consummated, no party shall be liable to any
other party for any damages resulting therefrom, including
without limitation consequential damages, except as
specifically set forth in paragraph 11.2.
12. AMENDMENTS.
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of SFI on
behalf of SoGen Fund and Colonial Trust on behalf of Colonial Fund; provided,
however, that following the shareholders' meeting called by SoGen Fund pursuant
to paragraph 5.2 no such amendment may have the effect of changing the
provisions for determining the number of Colonial Shares to be issued to
shareholders of SoGen Fund under this Agreement to the detriment of such
shareholders without their further approval.
13. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to SFI, 1221 Avenue of the
Americas, New York, New York 10020, attention Jean-Marie Eveillard, or to
Colonial Trust, One Financial Center, Boston, Massachusetts 02111, attention
Nancy L. Conlin as well as to Fried, Frank, Harris, Shriver & Jacobson, One New
York Plaza, New York, New York 10004, Attention: Charles M. Nathan.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
NON-RECOURSE.
14.1 The article and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
14.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
but no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any party without the
written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties
hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.
14.5 A copy of the Articles of Incorporation of SFI and Colonial
Trust are on file with the Secretary of the State of Maryland
and Commonwealth of Massachusetts, respectively, and notice is
hereby given that no trustee, officer, agent or employee of
either SFI or Colonial Trust shall have any personal liability
under this Agreement, and that this Agreement is binding only
upon the assets and properties of SoGen Fund and Colonial
Fund.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as a sealed instrument by its President or Vice
President and its corporate seal to be affixed thereto and attested by its
Secretary or Assistant Secretary.
COLONIAL TRUST II,
on behalf of Colonial Money Market Fund
By:__________________________
ATTEST:
- -----------------------
Assistant Secretary
SOGEN FUNDS, INC.
on behalf of SoGen Money Fund
By:__________________________
ATTEST:
- -----------------------
Joined in for the purpose of
paragraphs 1.5 and 11.2
THE COLONIAL GROUP, INC.
By: _________________________
SOCIETE GENERALE ASSET MANAGEMENT CORP.
By: _________________________
<PAGE>
EXHIBIT B
SOGEN FUNDS, INC.
1221 Avenue of the Americas, 8th Floor
New York, New York 10020
[Date]
Societe Generale Asset Management Corp.
1221 Avenue of the Americas, 8th Floor
New York, New York 10020
Interim Investment Advisory Contract
Dear Sirs:
SoGen Funds, Inc. (the "Company"), a Maryland corporation
consisting of four portfolios, SoGen International Fund, SoGen Overseas Fund,
SoGen Gold Fund and SoGen Money Fund, is engaged in the business of an
investment company. Its Board of Directors has selected you to act as the
investment adviser of the Company on behalf of SoGen Money Fund (the "Fund") and
to provide certain other services to the Company on behalf of the Fund, 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, dated May 3,
1985, as amended.
(b) Articles Supplementary of the Company, dated July 24,
1998.
(c) By-Laws of the Company as in effect on the date hereof.
(d) Statement of Rules adopted by the Board of Directors of
the Company on March 2, 1970, as subsequently amended.
(e) 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 Fund's portfolio consistent with the Fund's
investment objective, policy and restrictions set forth in the Company's
Registration Statement under the Securities Act of 1933, as amended (the
"Registration Statement") , and the current prospectus and statement of
additional information included therein (the "Prospectus"). You will recommend
what securities shall be purchased for the Fund, what portfolio securities shall
be sold by the Fund, and what portion of the Fund's assets shall be held
uninvested, subject always to such investment objective, policy and restrictions
and to the provisions of the Company's Articles of Incorporation, By-Laws,
Statement of Rules and the requirements of the Investment Company Act of 1940,
as amended (the "1940 Act"), as each of the same shall be from time to time in
effect. You shall advise and assist the officers of the Company in taking such
steps as are necessary or appropriate to carry out the decisions of its Board of
Directors and any appropriate committees of such Board regarding the foregoing
matters and general conduct of the investment business of the Company.
3. Allocation of Charges and Expenses. You will pay the
compensation and expenses of all officers of the Company and will furnish,
without expense to the Company, the services of such of your officers and
employees as may duly be elected officers or directors of the Company, subject
to their individual consent to serve and to any limitations imposed by law. You
will pay the Company's office rent and ordinary office expenses and will provide
investment, advisory, research and statistical facilities and all clerical
services relating to research, statistical and investment work. (It is
understood that the foregoing provision does not obligate you to pay for the
maintenance of the Company's general ledger and securities cost ledger or for
daily pricing of the Company's securities, but that it does obligate you,
without expense to the Company, to oversee the provision of such services by the
Company's agent.) You will not be required hereunder to pay any expenses of the
Company other than those above enumerated in this paragraph 3. In particular,
but without limiting the generality of the foregoing, you will not be required
to pay hereunder: brokers' commissions; legal or auditing expenses; taxes or
governmental fees; any direct expenses of issue, sale, underwriting,
distribution, redemption or repurchase of shares of the Company; 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, the Fund
will promptly pay you a monthly fee after the last day of each month, at the
annual rate of 0.40 of 1% of the average daily value of the net assets of the
Fund during the month. If this Agreement is terminated as of any day not the
last day of a calendar quarter, such 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 quarter, such fee shall be based on the average daily
value of the net assets of the Fund in the part of the quarter for which this
Agreement shall be effective and shall be that proportion of such fee as the
number of business days (days on which the New York Stock Exchange is open all
or part of the day for unrestricted trading) in such period bears to the number
of business days in such quarter. 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
quarter 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. 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 of 1940, as amended (the "Investment Advisers Act")
and the rules and regulations thereunder. In providing the Company with
investment management and supervision, it is recognized that you will seek the
best combination of price (inclusive of brokerage commissions) and execution,
and, consistent with such policy, may give consideration to the research,
statistical and other services furnished by brokers or dealers as such Board may
direct or authorize from time to time
Notwithstanding the above, it is understood that it is
desirable for the Company that you have access to research services provided by
brokers who execute brokerage transactions at a higher cost to the Company than
may result when allocating brokerage to other brokers on the basis of seeking
the best combination of price (inclusive of brokerage commissions) and
execution. Such research services include written reports, responses to specific
inquiries, interviews with analysts, invitations to meetings arranged by brokers
with the managements of companies in the Company's portfolio or in which the
Company may invest and may include other types of research from time to time
approved by the Board of Directors of the Company. Only research services
provided to you for the benefit of the Company will be considered in selecting
brokers to effect portfolio transactions for the Company unless otherwise
authorized by such Board. You are authorized to place orders for the purchase
and sale of securities for the Company with brokers who provide such research
services, subject to review by the Board of Directors of the Company from time
to time, but not less frequently than quarterly, with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to you and your affiliates in connection with their
services to other clients as well as the Company. You acknowledge that you will
comply with all applicable provisions of the 1940 Act, 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.
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 the Fund
and each Managed Account simultaneously, and if all such orders are not filled
at the same price, you may cause the Fund and each Managed Account to pay or
receive the average of the prices at which the orders were filled for the Fund
and all Managed Accounts. If all such orders cannot be executed fully under
prevailing market conditions, you may allocate the traded securities between the
Fund and the Managed Accounts in a manner you consider appropriate, taking into
account the size of the order placed for the Fund and each such Managed Account
and, in the event of a sale, the size of the pre-sale position of the Fund and
each such Managed Account, as well as any other factors you deem relevant. The
Company recognizes that in some cases this procedure may affect adversely the
price paid or received by the Fund or the size of the position purchased or sold
by the Fund. In addition, the Company understands that the persons employed by
you to provide service to the Company in connection with the performance of your
duties under this Agreement will not devote their full time to that service.
Moreover, nothing contained in this Agreement will be deemed to limit or
restrict your right or the right of any of your affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or natural 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 Fund, you will act solely as investment counsel for such clients and not in
any way on behalf of the Company except to the extent that you are acting as
principal underwriter of the Capital Stock of the Fund. In connection with
purchases or sales of portfolio securities for the account of the Fund, neither
you nor any of your directors, officers or employees will act as a principal.
8. Limitation of Liability of Adviser. You shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Company in connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on your
part in the performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement.
9. Use of Name. If you cease to act as the Company's
investment adviser, or, in any event, if you so request in writing, the Company
agrees to take all necessary action to change the name of the Company and the
Fund to a name not including the term "SoGen". 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 "SoGen" 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 the earlier of the date the Fund reorganizes into
the Colonial Money Market Fund and March 31, 1999. 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 Fund, or by you. This Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this paragraph 9, 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,
SOGEN FUNDS, INC.
By:
Name:
Title:
The foregoing Agreement is hereby accepted.
[SUCCESSOR TO SOCIETE GENERALE
ASSET MANAGEMENT CORP.]
By:
Name:
Title:
<PAGE>
EXHIBIT C
SOGEN MONEY FUND
FINANCIAL HIGHLIGHTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS ENDED YEAR ENDED MARCH 31, AUGUST 31, 1993
SEPTEMBER 30, 1998 ---------------------------------- TO MARCH 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------------ ------ ------- ------- ------ ---------------
<S> <C> <C> <C> <C> <C> <C>
SOGEN MONEY FUND
SELECTED PER SHARE DATA
Net asset value,
beginning of period.... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------ ------- ------- ------ ------
Income from investment
operations:
Net investment income.. 0.02 0.05 0.05 0.05 0.04 0.01
Net realized and
unrealized gains on
investments........... -- -- -- -- -- --
------- ------ ------- ------- ------ ------
Total from investment
operations........... 0.02 0.05 0.05 0.05 0.04 0.01
------- ------ ------- ------- ------ ------
Less distributions:
Dividends from net
investment income..... (0.02) (0.05) (0.05) (0.05) (0.04) (0.01)
Distributions from
capital gains......... -- -- -- -- -- --
------- ------ ------- ------- ------ ------
Total distributions... (0.02) (0.05) (0.05) (0.05) (0.04) (0.01)
------- ------ ------- ------- ------ ------
Net asset value, end of
period................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ====== ======= ======= ====== ======
TOTAL RETURN............ 4.91%* 4.97% 4.61% 5.03% 4.13% 1.25%++
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of
period (millions)...... $31 $19 $13 $8 $10 $6
Ratio of operating
expenses to average net
assets+................ 0.75%* 0.75% 0.75% 0.75% 0.75% 0.75%*
Ratio of net investment
income to average net
assets+................ 4.91%* 4.92% 4.63% 4.98% 4.14% 2.18%*
</TABLE>
- - -------
SoGen Funds, Inc.
NOTES TO FINANCIAL HIGHLIGHTS
* Annualized.
# Not annualized.
++ Total returns disclosed for the period ended March 31, 1994 are not
annualized. Annualized total return for the period ended March 31, 1994
was 2.14% for SoGen Money Fund.
+ The ratio of operating expenses to average net assets without the effect of
earnings credits and in the case of SoGen Money Fund, without the effect of
earnings credits, investment advisory fee waiver and expense reimbursement
are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1998
(UNAUDITED) YEAR ENDED MARCH 31,
------------------ -----------------------------
CLASS A 1998 1997 1996 1995 1994+
--------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
SoGen Money Fund........ 0.82% 1.01% 1.14% 0.97% 1.55% 4.00%
The ratio of net investment income to average net assets without the effect
of earnings credits, and in the case of SoGen Money Fund, without the ef-
fect of earnings credits, investment advisory fee waiver and expense reim-
bursement are as
follows:
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1998
(UNAUDITED) YEAR ENDED MARCH 31,
------------------ -----------------------------
CLASS A 1998 1997 1996 1995 1994+
--------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
SoGen Money Fund........ 4.84% 4.66% 4.26% 4.76% 3.34% (1.07%)
</TABLE>
+ For the period from August 31, 1993 to March 31, 1994 for SoGen Money Fund.
<PAGE>
COLONIAL MONEY MARKET FUND
Statement of Additional Information
December 18, 1998
This Statement of Additional Information (SAI) is not a prospectus and is
authorized for distribution only when accompanied or preceded by the Prospectus
of Colonial Money Market Fund (CMMF) dated October 30, 1998 relating to the
proposed combination of SoGen Money Fund (SGMF) and CMMF. This SAI should be
read together with the Prospectus. The SAI for CMMF dated October 30, 1998 and
the SAI for SGMF dated July 31, 1998, each filed with the Securities and
Exchange Commission, are herein incorporated by reference. Copies of each
Prospectus and SAI relating to CMMF are available without charge and may be
obtained by writing to Liberty Funds Distributor, Inc., One Financial Center,
Boston, MA 02111-2621 or by calling 1-800-426-3750. Copies of each Prospectus
and SAI relating to SGMF are available without charge and may be obtained by
writing Societe Generale Securities Corporation (SoGen Distributor), 1221 Avenue
of the Americas, New York, NY 10020, or by calling 1-800-334-2143.
This SAI consists of the information set forth herein and the following
described documents, each of which is herein incorporated by reference:
<PAGE>
-77-
1. The financial statements and Report of Independent Accountants
of CMMF included in its Annual Report to Shareholders for the
fiscal year ended June 30, 1998 (SEC Accession Number
000021847-98-000094).
2. The financial statements and Independent Auditors' Report of
SGMF included in its Annual Report to Shareholders for the
fiscal year ended March 31, 1998 (SEC Accession Number
0000950130-98-002858).
3. The financial statements included in SGMF's Semi-Annual Report
to Shareholders for the period ended September 30, 1998 (SEC
Accession Number 0000950130-98-005675).
4. Pro Forma Combined Financial Statements for CMMF and SGMF
prepared for the period ended September 30, 1998.
<PAGE>
PRO FORMA INVESTMENT PORTFOLIO
SOGEN MONEY FUND (SGMF)
AND
COLONIAL MONEY MARKET FUND (CMMF)
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
SGMF CMMF
September 30, 1998 September 30, 1998
Annualized
Yield at Time (unaudited) (unaudited)
Maturity of Purchase Par Value Par Value
<S> <C> <C> <C> <C>
Commercial Paper - 11.2%
American Express Credit Corporation 10/01/98 5.15% $693 $693
PepsiCo, Inc. 10/01/98 5.50% 1,300 1,300
Caterpillar Financial Services Corporation 10/02/98 5.53% 1,225 1,225
E.I. du Pont De Nemours and Company 10/02/98 5.49% 1,000 1,000
E.I. du Pont De Nemours and Company 10/02/98 5.50% 525 525
Abbot Laboratories 10/05/98 5.45% 565 565
General Motors Acceptance Company 10/05/98 5.53% 1,499 1,499
The Sherwin Williams Company 10/05/98 5.50% 625 625
The Coca Cola Company 10/06/98 5.50% 1,227 1,227
Merrill Lynch and Co., Inc. 10/06/98 5.49% 1,060 1,060
Merrill Lynch and Co., Inc. 10/06/98 5.56% 489 489
Ford Motor Credit Company 10/07/98 5.45% 1,343 1,343
Ford Motor Credit Company 10/07/98 5.51% 206 206
The Coca Cola Company 10/08/98 5.47% 322 322
H.J. Heinz Company 10/08/98 5.49% 1,144 1,144
Pearson Inc. 10/08/98 5.90% 375 375
The Sherwin Williams Company 10/08/98 5.52% 619 619
Xerox Corporation 10/08/98 5.50% 799 799
Campbell Soup Company 10/09/98 5.50% 1,040 1,040
Pearson Inc. 10/09/98 5.65% 895 895
Pearson Inc. 10/09/98 5.71% 279 279
The Southland Corporation 10/09/98 5.45% 424 424
Motorola, Inc. 10/13/98 5.30% 1,547 1,547
Pioneer Hi-Bred International, Inc. 10/13/98 5.50% 1,397 1,397
The Walt Disney Company 10/13/98 5.40% 998 998
Fuji Photo Film Finance U.S.A., Inc. 10/14/98 5.32% 1,547 1,547
The Southland Corporation 10/14/98 5.52% 1,123 1,123
General Electric Capital Corporation 10/16/98 5.50% 1,497 1,497
Hitachi America LTD. 10/19/98 5.50% 997 997
Emerson Electric Co. 10/21/98 5.47% 518 518
Hitachi America LTD. 10/21/98 5.56% 548 548
Lucent Technologies Inc. 10/22/98 5.25% 1,272 1,272
Abbot Laboratories 10/29/98 5.20% 981 981
Colgate Palmolive Company 10/30/98 5.23% 1,543 1,543
------------
Total Commercial Paper (cost of $31,622)(a) 31,622
------------
Other Investments - 89.4%
Stein Roe & Farnham Cash Reserves Fund 253,487
------------
Other assets & liabilities - (0.6)% (307) (1,417)
------------ ------------
Net assets - 100.0% $31,315 $252,070
============ ============
</TABLE>
PRO FORMA INVESTMENT PORTFOLIO
SOGEN MONEY FUND (SGMF)
AND
COLONIAL MONEY MARKET FUND (CMMF)
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
Pro Pro
Porma Forma
Adjustment Combined
Annualized
Yield at Time (unaudited) (unaudited)
Maturity of Purchase Par Value Par Value
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper - 11.2%
American Express Credit Corporation 10/01/98 5.15% $693 $693
PepsiCo, Inc. 10/01/98 5.50% 1,300 1,300
Caterpillar Financial Services Corporation 10/02/98 5.53% 1,225 1,225
E.I. du Pont De Nemours and Company 10/02/98 5.49% 1,000 1,000
E.I. du Pont De Nemours and Company 10/02/98 5.50% 525 525
Abbot Laboratories 10/05/98 5.45% 565 565
General Motors Acceptance Company 10/05/98 5.53% 1,499 1,499
The Sherwin Williams Company 10/05/98 5.50% 625 625
The Coca Cola Company 10/06/98 5.50% 1,227 1,227
Merrill Lynch and Co., Inc. 10/06/98 5.49% 1,060 1,060
Merrill Lynch and Co., Inc. 10/06/98 5.56% 489 489
Ford Motor Credit Company 10/07/98 5.45% 1,343 1,343
Ford Motor Credit Company 10/07/98 5.51% 206 206
The Coca Cola Company 10/08/98 5.47% 322 322
H.J. Heinz Company 10/08/98 5.49% 1,144 1,144
Pearson Inc. 10/08/98 5.90% 375 375
The Sherwin Williams Company 10/08/98 5.52% 619 619
Xerox Corporation 10/08/98 5.50% 799 799
Campbell Soup Company 10/09/98 5.50% 1,040 1,040
Pearson Inc. 10/09/98 5.65% 895 895
Pearson Inc. 10/09/98 5.71% 279 279
The Southland Corporation 10/09/98 5.45% 424 424
Motorola, Inc. 10/13/98 5.30% 1,547 1,547
Pioneer Hi-Bred International, Inc. 10/13/98 5.50% 1,397 1,397
The Walt Disney Company 10/13/98 5.40% 998 998
Fuji Photo Film Finance U.S.A., Inc. 10/14/98 5.32% 1,547 1,547
The Southland Corporation 10/14/98 5.52% 1,123 1,123
General Electric Capital Corporation 10/16/98 5.50% 1,497 1,497
Hitachi America LTD. 10/19/98 5.50% 997 997
Emerson Electric Co. 10/21/98 5.47% 518 518
Hitachi America LTD. 10/21/98 5.56% 548 548
Lucent Technologies Inc. 10/22/98 5.25% 1,272 1,272
Abbot Laboratories 10/29/98 5.20% 981 981
Colgate Palmolive Company 10/30/98 5.23% 1,543 1,543
------------
Total Commercial Paper (cost of $31,622)(a) 31,622
------------
Other Investments - 89.4%
Stein Roe & Farnham Cash Reserves Fund 253,487
------------
Other assets & liabilities - (0.6)% (1,724)
------------
Net assets - 100.0% $283,385
============
Notes to Investment Portfolio:
(a) Cost for federal income tax purposes is the same.
</TABLE>
SOGEN MONEY FUND (SGMF)
AND
COLONIAL MONEY MARKET FUND (CMMF)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
SGMF CMMF COMBINED ADJUSTMENT PRO FORMA
September 30, 1998 September 30, 1998
<S> <C> <C> <C> <C>
ASSETS
Investments at market $31,621 $253,487 $285,108 $285,108
Cash 8 - 8 8
Receivable for:
Fund shares sold 109 5 114 114
Other 1 10 11 11
------- ------- ------- -------
Total Assets 31,739 253,502 285,241 285,241
LIABILITIES
Payable for:
Fund shares repurchased 323 1,103 1,426 1,426
Distributions - 329 329 329
Accrued:
Advisory fees 52 - 52 52
Directors's fees 1 - 1 1
Other 48 - 48 48
------- ------- ------- -----
Total Liabilities 424 1,432 1,856 1,856
NET ASSETS $31,315 $252,070 $283,385 $283,385
======= ======== ======== ========
</TABLE>
SOGEN MONEY FUND (SGMF)
AND
COLONIAL MONEY MARKET FUND (CLASS A) (CMMF)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SGMF CMMF
INVESTMENT INCOME 9/30/1998 9/30/1998 COMBINED
<S> <C> <C> <C> <C> <C>
Interest $1,143,218 5.64% $6,357,995 3.16% $7,501,213 3.38%
EXPENSES
Management fee 81,085 0.40% 243,294 0.12% 324,379 0.15%
Transfer agent 14,813 0.07% 403,013 0.20% 417,826 0.19%
Transfer agent out of pocket - - 86,003 0.04% 86,003 0.04%
Administration fee - - 72,246 0.04% 72,246 0.03%
Bookkeeping fee - - 64,102 0.03% 64,102 0.03%
Trustees fee 495 0.00% 18,917 0.01% 19,412 0.01%
Custodian fee 32,058 0.16% 817 0.00% 32,875 0.01%
Audit fee 14,501 0.07% 26,175 0.01% 40,676 0.02%
Legal fee 212 0.00% 10,145 0.01% 10,357 0.00%
Registration fee 15,449 0.08% 98,706 0.05% 114,155 0.05%
Reports to Shareholders 808 0.00% 16,336 0.01% 17,144 0.01%
Amortization of organization costs 10,178 0.05% - 10,178 0.00%
Hub expense N/A 310,308 0.15% 310,308 0.14%
Other 915 0.00% 20,333 0.01% 21,248 0.
Total operating expenses 170,514 0.84% 1,370,396 0.68% 1,540,910 0.69%
Pre 12b-1 operating income 170,514 0.84% 1,370,396 0.68% 1,540,910 0.69%
12b-1 fees:
Service fee - - - - -
Pre reimbursement income 972,704 4.80% 4,987,599 2.48% 5,960,303 2.69%
Reimbursement (18,526) -0.09% - - (18,526) -0.01%
Net investment income $991,230 4.89% $4,987,599 2.48% $5,978,829 2.70%
========= =========== ===========
NOTE: All percentages shown are as a percent of the respective average net assets shown below each column.
Average Net Assets (Total Fund) 20,271,250 201,506,500 221,777,750
</TABLE>
SOGEN MONEY FUND (SGMF)
AND
COLONIAL MONEY MARKET FUND (CLASS A) (CMMF)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTMENT INCOME ADJUST COMBINED (New Class A)
<S> <C> <C> <C>
Interest $7,501,213
EXPENSES
Management fee (324,379)(a) -
Transfer agent 25,730 (b) 443,556 0.20%
Transfer agent out of pocket 5,997 (b) 92,000 0.04%
Administration fee 60,821 (c) 133,067 0.06%
Bookkeeping fee (6,078)(d) 58,024 0.03%
Trustees fee (495)(e) 18,917 0.01%
Custodian fee (31,875)(f) 1,000 0.00%
Audit fee (14,501)(g) 26,175 0.01%
Legal fee (212)(h) 10,145 0.00%
Registration fee (5,449)(I) 108,706 0.05%
Reports to Shareholders (644)(j) 16,500 0.01%
Amortization of organization costs (10,178) 0 0.00%
Hub expense 227,503 (k) 537,811 0.24%
Other (248) 21,000 0.01%
Total operating expenses 1,466,901 0.66%
Pre 12b-1 operating income 1,466,901 0.66%
12b-1 fees:
Service fee -
Pre reimbursement income 6,034,312 2.72%
Reimbursement (8,348)(l)
Net investment income $6,034,312 2.72%
==========
NOTE: All percentages shown are as a percent of the respective average net assets shown below each column.
Average Net Assets (Total Fund) 221,777,750
</TABLE>
(a) Elimination of SGMF and CMMF management fee. Under a master fund/feeder fund
arrangement.
(b) Based on CMMF's Transfer Agent fee schedule.
(c) Based on a full year of CMMF's Administration fee schedule. The amount shown
for 9/30/98 is only a partial year, due to the Fund entering into master
feeder/fund feeder arrangement mid year.
(d) Based on CMMF's Bookkeeping fee
schedule
(e) Elimination of SGMF trustee fee and adjustment for new net assets
under the Colonial Trustee Plan.
(f) Elimination of SGMF custody bills and
adjusted for new net assets with CMMF current custodial agreement.
(g) Elimination of SGMF audit and adjusted for increase in net assets.
(h) Elimination of SGMF legal bills.
(i) Adjustment due to the elimination of duplicate registration in some
states.
(j) Elimination of the duplicate portion of shareholder report costs.
(k) Adjustment to Master Portfolio expenses for new asset base.
(l) Elimination of SGMF reimbursement plan.
<PAGE>
Part C. OTHER INFORMATION
Item 15. Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust, as amended,
provides for indemnification of the Registrant's Trustees and officers. The
effect of the relevant section of Article VIII of the Registrant's Agreement and
Declaration of Trust, as amended, is to provide indemnification for each of the
Registrant's Trustees and officers against liabilities and counsel fees
reasonably incurred in connection with the defense of any legal proceeding in
which such Trustee or officer may be involved by reason of being or having been
a Trustee or officer, except with respect to any matter as to which such Trustee
or officer shall have been adjudicated not to have acted in good faith in the
reasonable belief that such Trustee's or officer's action was in the best
interest of the Registrant, and except that no Trustee or officer shall be
indemnified against any liability to the Registrant or its shareholders to which
such Trustee or officer shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Trustee's or officers's office.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to Trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission (the "Commission") such indemnification is against public policy as
expressed in the Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. Financial Statements and Exhibits.
1. Amendment No. 5 to the Agreement and Declaration of Trust
(incorporated by reference to Post-Effective Amendment No. 28
to the Registration Statement of Colonial Trust II,
Registration Nos. 2-66976 and 811-3009, filed with the
Commission on December 13, 1996)
2. By-Laws, as amended, (incorporated by reference from
Post-Effective Amendment No. 25 to the Registration Statement
of Colonial Trust II, Registration Nos. 2-66976 and 811-3009,
filed with the Commission on March 20, 1996)
3. Not applicable
4. Agreement and Plan of Reorganization constitutes Exhibit A in
Part A of this Registration Statement
5. Not applicable
6. Form of Management Agreement (CMMF) (incorporated by reference
from Post-Effective Amendment No. 24 to the Registration
Statement of Colonial Trust II, Registration Nos. 2-66976 and
811-3009, filed with the Commission on December 11, 1995)
7.(a) Form of Distributor's Contract (incorporated herein by
reference to Exhibit 6.(a) to Post-Effective Amendment No. 101
to the Registration Statement of Colonial Trust III,
Registration Nos. 2-15184 and 811-881, filed with the
Commission on July 24, 1998)
7.(b) Form of Selling Agreement (incorporated herein by reference to
Exhibit 6.(a) to Post-Effective Amendment No. 10 to the
Registration Statement of Colonial Trust VI, Registration Nos.
33-45117 and 811-6529, filed with the Commission on September
27, 1996)
7.(c) Form of Bank and Bank Affiliated Selling Agreement
(incorporated herein by reference to Exhibit 6.(c) to
Post-Effective Amendment No. 10 to the Registration Statement
of Colonial Trust VI, Registration Nos. 33-45117 and 811-6529,
filed with the Commission on September 27, 1996)
7.(d) Form of Asset Retention Agreement (incorporated herein by
reference to Exhibit 6.(d) to Post-Effective Amendment No. 10
to Registration Statement of Colonial Trust VI, Registration
Nos. 33-45117 and 811-6529, filed with the Commission on
September 27, 1996)
8. Not applicable
9. Custody Agreement with The Chase Manhattan Bank (incorporated
herein by reference to Exhibit 8 to Post-Effective Amendment
No. 13 to the Registration Statement of Colonial Trust VI,
Registration Nos. 33-45117 and 811-6529, filed with the
Commission on October 24, 1997)
10. Form of Distribution Plan adopted pursuant to Section 12b-1 of
the Investment Company Act of 1940 (incorporated by reference
to the Distributor's Contract filed as Exhibit 7.(a) hereto)
11. Opinion and Consent of Ropes & Gray, Counsel to Colonial Fund,
as to Legality of the Securities Being Registered
12. Opinion and Consent of Dechert Price & Rhoads, Counsel to
SoGen Funds, Inc., Supporting Tax Matters and Consequences to
Shareholders
13.(a) Form of Pricing and Bookkeeping Agreement with Colonial
Management Associates, Inc. (incorporated herein by reference
to Exhibit 9.(b) to Post-Effective Amendment No. 10 to the
Registration Statement of Colonial Trust VI, Registration Nos.
33-45117 and 811-6529, filed with the Commission on September
27, 1996)
13.(b) Amendment to Appendix I of Pricing and Bookkeeping Agreement
(incorporated by reference to Post-Effective Amendment No. 29
to the Registration Statement of Colonial Trust II,
Registration Nos. 2-66976 and 811-3009, filed on March 11,
1997)
13.(c) Amended and Restated Shareholders' Servicing and Transfer
Agent Agreement, as amended, with Colonial Management
Associates, Inc. and Colonial Investors Service Center, Inc.
(incorporated herein by reference to Exhibit 9.(b) to
Post-Effective Amendment No. 10 to the Registration Statement
of Colonial Trust VI, Registration Nos. 33-45117 and 811-6529,
filed with the Commission on September 27, 1996)
13.(d) Amendment No. 10 to Schedule A of Amended and Restated
Shareholders' Servicing and Transfer Agent Agreement dated
October 1, 1997 (incorporated herein by reference to Exhibit
9.(a)(ii) to Post-Effective Amendment No. 13 to the
Registration Statement of Colonial Trust VI, Registration Nos.
33-45117 and 811-6529, filed with the Commission on October
24, 1997)
13.(e) Amendment No. 15 to Appendix I of Amended and Restated
Shareholders' Servicing and Transfer Agent Agreement dated
October 1, 1997 (incorporated herein by reference to Exhibit
9.(a)(iii) to Post-Effective Amendment No. 13 to the
Registration Statement of Colonial Trust VI, Registration Nos.
33-45117 and 811-6529, filed with the Commission on October
24, 1997)
13.(f) Credit Agreement (incorporated herein by reference to Exhibit
9.(f) to Post-Effective Amendment No. 19 to the Registration
Statement of Colonial Trust V, Registration Nos. 811-5030 and
33-12109, filed with the Commission on May 20, 1996)
13.(g) Amendment No. 1 to the Credit Agreement (incorporated herein
by reference to Exhibit 9.(f) to Post-Effective Amendment No.
99 to the Registration Statement of Colonial Trust III,
Registration Nos. 811-881 and 2-15184, filed with the
Commission on December 17, 1997)
13.(h) Amendment No. 2 to the Credit Agreement (incorporated herein
by reference to Exhibit 9.(g) to Post-Effective Amendment No.
99 to the Registration Statement of Colonial Trust III,
Registration Nos. 811-881 and 2-15184, filed with the
Commission on December 17, 1997)
13.(i) Amendment No. 3 to the Credit Agreement (incorporated herein
by reference to Exhibit 9.(h) to Post-Effective Amendment No.
99 to the Registration Statement of Colonial Trust III,
Registration Nos. 811-881 and 2-15184, filed with the
Commission on December 17, 1997)
13.(j) Form of Administration Agreement with Colonial Management
Associates, Inc. (CMMF) (incorporated herein by reference to
Exhibit 9.(iii) to Post-Effective Amendment No. 34 to the
Registration Statement of Colonial Trust II, Registration Nos.
2-66976 and 811-3009, filed with the Commission on December
31, 1997)
13.(k) Form of Indemnification Agreement (CMMF) (incorporated by
reference to Exhibit 9.(v) to Post-Effective Amendment No. 34
to the Registration Statement of Colonial Trust II
Registration Nos. 2-66976 and 811-3009, filed with the
Commission on December 31, 1997)
14.(a) Consent of Independent Accountants, PricewaterhouseCoopers LLP
14.(b) Consent of Independent Auditors, KPMG Peat Marwick LLP
15. Not applicable
16. Power of Attorney for: Robert J. Birnbaum, Tom Bleasdale, John
V. Carberry, Lora S. Collins, James E. Grinnell, Richard W.
Lowry, Salvatore Macera, William E. Mayer, James L. Moody,
Jr., John J. Neuhauser, Thomas E. Stitzel, Robert L. Sullivan
and Anne-Lee Verville (incorporated herein by reference to
Exhibit 18.(a) to Post-Effective Amendment No. 50 to the
Registration Statement of Colonial Trust IV, Registration Nos.
2-62492 and 811-2865, filed with the Commission on November 9,
1998)
17. Form of Proxy
Item 17. Undertakings.
1. The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this Registration Statement by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information called for
by the applicable registration form for reofferings by persons
who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
<PAGE>
2. The undersigned Registrant agrees that every prospectus that
is filed under paragraph 1 above will be filed as a part of an
amendment to this Registration Statement and will not be used
until the amendment is effective, and that, in determining any
liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the
securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona fide
offering of them.
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of Colonial Trust II (Trust),
as amended, is on file with the Secretary of The Commonwealth of Massachusetts
and notice is hereby given that this Registration Statement has been executed on
behalf of the Trust by officers of the Trust as officers and by its Trustees as
trustees and not individually, and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually but are binding only upon the assets and
property of Colonial Trust II.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant, in the City of Boston and Commonwealth of
Massachusetts, on the 17th day of December, 1998.
COLONIAL TRUST II
By: /s/ STEPHEN E. GIBSON
Stephen E. Gibson
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ STEPHEN E. GIBSON President (chief executive officer) December 17, 1998
- ---------------------------
Stephen E. Gibson
/s/ TIMOTHY J. JACOBY Treasurer and Chief Financial
Timothy J. Jacoby Officer (principal financial officer) December 17 1998
/s/ J. KEVIN CONNAUGHTON Controller and Chief Accounting December 17, 1998
J. Kevin Connaughton Officer (principal accounting officer)
/s/ ROBERT J. BIRNBAUM* Trustee December 17, 1998
- ---------------------------
Robert J. Birnbaum
/s/ TOM BLEASDALE* Trustee December 17, 1998
Tom Bleasdale
/s/ JOHN V. CARBERRY* Trustee December 17, 1998
- -------------------------------
John V. Carberry
/s/ LORA S. COLLINS* Trustee December 17, 1998
- -------------------------------
Lora S. Collins
/s/ JAMES E. GRINNELL* Trustee December 17, 1998
- ----------------------------
James E. Grinnell
/s/ RICHARD W. LOWRY* Trustee December 17, 1998
- --------------------------
Richard W. Lowry
/s/ SALVATORE MACERA* Trustee December 17, 1998
Salvatore Macera
/s/ WILLIAM E. MAYER* Trustee December 17, 1998
- ----------------------------
William E. Mayer
/s/ JAMES L. MOODY, JR.* Trustee December 17, 1998
- ----------------------------
James L. Moody, Jr.
/s/ JOHN J. NEUHAUSER* Trustee December 17, 1998
- ---------------------------
John J. Neuhauser
/s/ THOMAS E. STITZEL* Trustee December 17, 1998
- ------------------------------
Thomas E. Stitzel
/s/ ROBERT L. SULLIVAN* Trustee December 17, 1998
- --------------------------
Robert L. Sullivan
/s/ ANNE-LEE VERVILLE* Trustee December 17, 1998
Anne-Lee Verville
/s/ SUZAN M. BARRON December 17, 1998
- ---------------------------
*/Suzan M. Barron
Attorney-in-fact for each trustee
</TABLE>
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed by the SR&F Base Trust, insofar as it relates to the Colonial Money
Market Fund series of the Registrant, in the City of Chicago and the State of
Illinois on the 17th day of December, 1998.
SR&F BASE TRUST
By: /s/THOMAS W. BUTCH
Thomas W. Butch, President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following trustees and officers of the SR&F Base Trust in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/THOMAS W. BUTCH President (Principal Executive December 17, 1998
- ------------------------
Thomas W. Butch Officer)
/s/GARY A. ANETSBERGER Senior Vice President and December 17, 1998
- ----------------------
Gary A. Anetsberger Chief Financial Officer
(Principal Financial Officer)
/s/SHARON R. ROBERTSON Controller (Principal December 17, 1998
- ----------------------
Sharon R. Robertson Accounting Officer)
/s/WILLIAM W. BOYD Trustee December 17, 1998
William W. Boyd
/s/LINDSAY COOK Trustee December 17, 1998
Lindsay Cook
/s/DOUGLAS A. HACKER Trustee December 17, 1998
Douglas A. Hacker
/s/JANET LANGFORD KELLY Trustee December 17, 1998
Janet Langford Kelly
/s/CHARLES R. NELSON Trustee December 17, 1998
Charles R. Nelson
/s/THOMAS C. THEOBALD Trustee December 17, 1998
Thomas C. Theobald
</TABLE>
<PAGE>
EXHIBIT INDEX
11. Opinion and Consent of Ropes & Gray, Counsel to Colonial
Fund, as to Legality of the Securities Being Registered
12. Opinion and Consent of Dechert Price & Rhoads, Counsel to
SoGen Funds, Inc., Supporting Tax Matters and Consequences to
Shareholders
14.(a) Consent of Independent Accountants, PricewaterhouseCoopers LLP
14.(b) Consent of Independent Auditors, KPMG Peat Marwick LLP
17. Form of Proxy
- --------
December __, 1998
Colonial Money Market Fund
One Financial Center
Boston, MA 02111
Re: Registration Statement on Form N-14
Ladies and Gentlemen:
We have acted as counsel to Colonial Trust II (the "Trust"), in
connection with the Registration Statement of the Trust on Form N-14 (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Act"), relating to the proposed combination of Colonial Money Market Fund (the
"Fund"), a series of the Trust, with SoGen Money Fund (the "SoGen Money Fund"),
a series of SoGen Funds, Inc. (the "SoGen Funds"), and the issuance of shares of
the Fund in connection therewith (the "Shares"), all in accordance with the
terms of the form of Agreement and Plan of Reorganization by and between the
Trust, on behalf of the Fund, SoGen Funds, on behalf of SoGen Money Fund, and
for certain purposes thereunder Societe Generale Asset Management Corp. (the
"SoGen Advisor") and The Colonial Group, Inc. ("TCG"), that was approved by the
Board of Trustees of the Trust at a meeting held on October 23, 1998.
We have examined the Trust's Agreement and Declaration of Trust on file
in the office of the Secretary of State of The Commonwealth of Massachusetts and
the Clerk of the City of Boston and the Trust's By-Laws, as amended, and are
familiar with the actions taken by the Trustees of the Trust in connection with
the issuance and sale of the Shares. We have also examined such other documents
and records as we have deemed necessary for the purposes of this opinion.
We have assumed for purposes of this opinion that, prior to the
issuance of the Shares, the Agreement will have been duly executed and delivered
on behalf of the Trust, and will have been duly approved, executed and delivered
on behalf of each of the SoGen Trust, the SoGen Advisor and TCG.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Trust is a duly organized and validly existing unincorporated association
under the laws of The Commonwealth of Massachusetts and is authorized to issue
an unlimited number of its shares of beneficial interest.
2. The Shares have been duly authorized and, when issued in accordance with the
Agreement, will be validly issued, fully paid and nonassessable by the Fund.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that a notice of such
disclaimer be given in each note, bond, contract, instrument, certificate or
undertaking entered into or executed by the Trust or its Trustees. The Agreement
and Declaration of Trust provides for indemnification out of the property of the
Trust for all loss and expense of any shareholder of the Trust held personally
liable solely by reason of his being or having been a shareholder. Thus, the
risk of a shareholder's incurring financial loss on account of being a
shareholder is limited to circumstances in which the Trust itself would be
unable to meet its obligations.
We understand that this opinion is to be used in connection with the
registration of the Shares for offering and sale pursuant to the Act. We consent
to the filing of this opinion with and as part of the Registration Statement.
Very truly yours,
Ropes & Gray
SoGen Money Fund
Colonial Money Market Fund
[Closing Date], 1999
Page 2
[Closing Date], 1999
SoGen Funds, Inc.
in respect of
the SoGen Money Fund
1221 Avenue of the Americas
New York, New York 10020
Colonial Trust II
in respect of
Colonial Money Market Fund
One Financial Center
Boston, Masssachusetts 02111
Gentlemen:
You have requested our opinion regarding certain federal
income tax consequences to the SoGen Money Fund ("Target"), a
separate series of SoGen Funds, Inc. ("SFI"), to the holders of
the shares of beneficial interest (the "shares") of Target (the
"Target shareholders"), and to Colonial Money Market Fund
("Acquiring Fund"), a separate series of Colonial Trust II (the
"Trust"), in connection with the proposed transfer of
substantially all of the assets of Target to Acquiring Fund in
exchange solely for voting shares of beneficial interest of
Acquiring Fund ("Acquiring Fund shares") and the assumption by
Acquiring Fund of the liabilities of Target, followed by the
distribution of such Acquiring Fund shares received by Target in
complete liquidation, all pursuant to the Agreement and Plan of
Reorganization (the "Plan") dated [ ], 1998 (the
"Reorganization").
For purposes of this opinion, we have examined and rely upon
(1) the Plan, (2) the Form N-14, filed by the Trust on [ ],
1998, with the Securities and Exchange Commission, (3) the facts
and representations contained in the letter dated [Closing Date],
1999, addressed to us from SFI on behalf of Target, (4) the facts
and representations contained in the letter dated [Closing Date],
1999, addressed to us from the Trust on behalf of Acquiring Fund,
and (5) such other documents and instruments as we have deemed
necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of
1986, as amended (the "Code"), United States Treasury
regulations, judicial decisions and administrative rulings and
pronouncements of the Internal Revenue Service, all as in effect
on the date hereof. This opinion is conditioned upon the
Reorganization taking place in the manner described in the Plan
and the Form N-14 referred to above.
Based upon the foregoing, it is our opinion that:
(1) The acquisition by Acquiring Fund of substantially all
of the assets of Target in exchange solely for Acquiring Fund
shares and the assumption by Acquiring Fund of the liabilities of
Target, followed by the distribution of such Acquiring Fund
shares to the Target shareholders in exchange for their Target
shares in complete liquidation of Target, will constitute a
reorganization within the meaning of Section 368(a) of the Code.
Acquiring Fund and Target will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized to Target upon the
transfer of substantially all of its assets to Acquiring Fund in
exchange solely for Acquiring Fund shares, or upon the
distribution to the Target shareholders of the Acquiring Fund
shares.
(3) No gain or loss will be recognized by Acquiring Fund
upon the receipt of Target's assets in exchange for Acquiring
Fund shares.
(4) The basis of the assets of Target in the hands of
Acquiring Fund will be, in each instance, the same as the basis
of those assets in the hands of Target immediately prior to the
Reorganization exchange.
(5) The holding period of Target's assets in the hands of
Acquiring Fund will include the period during which the assets
were held by Target.
(6) No gain or loss will be recognized to the Target
shareholders upon the receipt of Acquiring Fund shares solely in
exchange for Target shares.
(7) The basis of the Acquiring Fund shares received by the
Target shareholders will be the same as the basis of the Target
shares surrendered in exchange therefor.
(8) The holding period of the Acquiring Fund shares
received by the Target shareholders will include the holding
period of the Target shares surrendered in exchange therefor,
provided that such Target shares were held as capital assets in
the hands of the Target shareholders upon the date of the
exchange.
We express no opinion as to the federal income tax
consequences of the Reorganization except as expressly set forth
above, or as to any transaction except those consummated in
accordance with the Plan.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement on Form N-14 to be filed by
the Trust with the Securities and Exchange Commission.
Very truly yours,
Dechert Price & Rhoads
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting part of this Registration Statement on
Form N-14 (the "Registration Statement") of our report dated August 11, 1998
relating to the financial statements and financial highlights appearing in
the June 30, 1998 Annual Report to Shareholders of Colonial Money Market
Fund, a series of Colonial Trust II, which are also incorporated by reference
into the Registration Statement. We also consent to the reference to us
under the headings "Financial Information for the Colonial Fund" and
"Financial Statements" in the Prospectus, which also constitutes part of this
Registration Statement.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 1998
Consent of Independent Auditors
The Board of Trustees and Shareholders
Colonial Trust II
We consent to the use of our report dated May 15, 1998 for
SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund
incorporated by reference in the Combined Proxy Statement
and Prospectus between SoGen Funds, Inc. and Colonial Trust
II and to the reference to our firm under the heading
"Financial Statements" in the Combined Proxy Statement and
Prospectus.
KPMG Peat Marwick LLP
Boston, Massachusetts
December 17, 1998
VOTE BY TOUCH TONE PHONE OR THE INTERNET
CALL TOLL FREE: 1-800-690-6903
OR VISIT OUR WEBSITE: www.proxyvote.com
(See above for further instructions to vote by phone or Internet)
SOGEN FUNDS, INC. - SOGEN MONEY FUND
PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Special Meeting of Shareholders - December 30, 1998
The undersigned hereby appoints Jean-Marie Eveillard, Philip J.
Bafundo, and Carol Moreno, and each of them, the proxies of the undersigned,
with the power of substitution to each of them, to vote all shares of [SoGen
Money Fund] (the "Fund"), a series of SoGen Funds, Inc. (the "Company") which
the undersigned is entitled to vote at the Special Meeting of Shareholders of
the Company to be held at the offices of the Company, 1221 Avenue of the
Americas, 8th Floor, New York, New York 10020, on Friday, December 30, 1998 at
3:00 p.m., and at any adjournments and postponements thereof (the "Special
Meeting").
Unless otherwise specified in the squares provided, the undersigned's vote will
be cast FOR each numbered item below.
The Directors of the Company recommend that you vote FOR the proposal
set forth below.
1. To approve or disapprove an Agreement and Plan of Reorganization by and
between SoGen Funds, Inc., on behalf of the Fund, and the Colonial
Trust II, on behalf of the Colonial Money Market Fund (the "Plan"), and
the transactions contemplated thereby. By approving the Plan,
shareholders will also be approving an interim investment management
agreement between the Fund and the successor to SGAM Corp.
FOR AGAINST ABSTAIN
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly be presented at the Special Meeting.
FOR AGAINST ABSTAIN
(Continued and to be signed on the other side.)
(Continued from other side.)
Every properly signed proxy will be voted in the manner specified hereon and, in
the absence of specification, will be treated as GRANTING authority to vote FOR
the Proposal.
Please sign exactly as your name or names appear. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.
-----------------------------------------------
(Signature of Shareholder)
-----------------------------------------------
(Signature of joint owner, if any)
Dated, ______________________________, 1998
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
