As filed with the Securities and Exchange Commission on November 18, 1998.
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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.
<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 of the Combination; Reasons for the Combination; Tax
Consequences of the Combination; Comparison of Investment Objectives,
Policies and Restrictions; Principal Risk Factors
4 Cover Letter, Summary of the Combination; Reasons for the Combination; Tax
Consequences of the Combination; Comparison of Investment Objectives,
Policies and Restrictions; Principal Risk Factors; Exhibit A
5,6 Summary of the Combination; Reasons for the Combination; Comparison of
Investment Objectives, Policies and Restrictions; Principal Risk Factors;
Summary of Expenses; Capitalization; Exhibit B
7 General Information; Determination and Recommendation of the Trustees;
Required Vote
8 General 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
<PAGE>
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 THE 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.
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.
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
maximum current income, consistent with safety 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 Societe Generale Securities Corporation
(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 17, 1998
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
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 [ ].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
November __, 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>
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) [ ]
COMBINED PROXY STATEMENT AND PROSPECTUS
Dated November __, 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 a.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 SoGen Funds, Inc. 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 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 [ ], 1998 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 November __, 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 __, 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 _______ __, 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 ("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. 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, 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
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 [ ], 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 Eveillard of up to a maximum of
$25 million over five years based on SGAM Corp.'s EBITDA over that period.
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 December 31,
1998 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
structured to be a tax-free reorganization, and there will be no tax effect on
shareholders of the Fund. 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 will 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 Funds.
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 maximum current income, consistent with safety
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 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 as of [March 31, 1998], and of the Colonial Fund as of [August 31, 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>
<CAPTION>
Annual Fund Operating Expenses
(As a percentage of average daily net assets)
<S> <C> <C> <C>
Colonial Money Pro Forma Combined Fund (i.e.,
Market Fund Shares of Colonial Fund Following
SoGen Money Fund Class A Shares the Reorganization)
Management and Administration Fee
0.40% 0.50% [0.50] %
12b-1 fees 0.00% 0.00% [0.00] %
Transfer Agent Fees 0.13% 0.20% [0.20] %
Other Expenses 0.48% 0.18% [0.18] %
Total Expenses 1.01 % 0.88% [0.88] %
Total Fund Operating Expenses 0.75%* 0.69%** [0.69] %**
</TABLE>
*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.
**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 0.69%, and the total operating expenses
would have been 0.88%.
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
regulations 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.
The Colonial Fund may buy securities intending to seek short-term
trading profits. A change in the securities held by the Colonial Fund is known
as "portfolio turnover" and generally involves some expense to the Colonial
Fund. These expenses may include brokerage commissions or dealer mark-ups and
other transaction costs on both the sale of securities and the reinvestment of
the proceeds in other securities. If sales of portfolio securities cause the
Colonial Fund to realize net short-term capital gains, such gains will be
taxable as ordinary income. As a result of the Colonial Fund's investment
policies, under certain market conditions the Colonial Fund's portfolio turnover
rate may be higher than that of other mutual funds. The Colonial Fund's
portfolio turnover rate for a fiscal year is the ratio of the lesser of
purchases or sales of portfolio securities to the monthly average of the value
of portfolio securities, excluding securities whose maturities at acquisition
were one year or less. The Colonial Fund's portfolio turnover rate is not a
limiting factor when the investment adviser considers a change in the Colonial
Fund's portfolio.
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, redeemed, and exchanged 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 affiliate, Newport Fund Management,
Inc.
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, but nothing herein contained shall protect
any Trustee. The Declaration of Trust further provides that a Trustee is not
protected against any liability to which he or she 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 at the time the Reorganization is consummated].
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; consolidation or
sale of assets; (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], 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:
- ---------------------------- --------------------------------------------------
Fund Management Fee (% of Average Daily Net Asset Value)
- ---------------------------- --------------------------------------------------
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
- ----------------------------- -------------------------------------------------
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.
Administrator. Colonial Management Associates, Inc. serves as the
administrator to the Colonial Fund.
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 Colonial Fund. Liberty Funds Services, Inc.,
a wholly-owned indirect subsidiary of Liberty Mutual, serves as the shareholder
services and transfer agent to the Colonial Fund.
DST Systems, Inc., 1004 Baltimore, Kansas City, Missouri 64105 is the
shareholder servicing agent for both the Fund and the Colonial 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 December
[31], 1998. In the event that the Reorganization is approved by the shareholders
of the Fund, but is not completed on or before December [31], 1998, 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 the 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 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 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 as
of_________ __, 1998: (i) the capitalization of the Fund; (ii) the
capitalization of the Colonial Fund; and (iii) 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.
- ------------------------------ ---------------- --------------- ----------------
SoGen Money Pro Forma
Fund Colonial Fund Combined Fund
- ------------------------------ ---------------- --------------- ----------------
Total Net Assets..............
Shares Outstanding...........
Net Asset Value Per Share..
- ------------------------------------- ------------------------ -----------------
FEDERAL INCOME TAX CONSEQUENCES
It is anticipated that the Reorganization will be tax-free for federal
tax purposes. It is a condition to the consummation of the Reorganization 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.
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 (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 $[ ]
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 [37,726,436] 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 ______ __, 1998, the name, address, and
share ownership of the persons who beneficially owned 5% or more of any 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 _________ __, 1998 are as follows:
Share Ownership of
Share Ownership of the Colonial Fund
Name/Address the Fund After the Reorganization
On ________ __, 1998, the name, address, and share ownership of the
persons who beneficially owned 5% or more of the outstanding shares 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 _______ __, 1998, are as follows:
Share Ownership of Share Ownership of
the Colonial Fund the Colonial Fund
Name/Address Before the Reorganization After the Reorganization
On _______ __, the directors and officers of the Company, as a group,
owned ________ shares of the Fund, which were approximately __% shares of the
Fund. As of _______ __ 1998, the Trustees and officers of the Trust, as a group,
beneficially owned ________ shares of the Colonial Fund, which were
approximately ___% of that fund's then outstanding shares.
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 ______ __, 1998.
Financial Information for the Colonial Fund
Below is financial information about the Colonial Fund for the fiscal
years ended June 30, 1998. It is based on a single share outstanding through
such period. This information is derived from financial statements for such
period 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.
[INSERT FINANCIAL TABLES]
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 accountants for the Fund and Ernst & Young L.L.P. 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 included in reliance upon
such reports given upon the authority of such firm as an expert 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
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of, [ ], 1998 by and
between the SoGen Funds, Inc. ("SFI"), a Maryland corporation established under
Articles of Incorporation dated [ ] 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 statement of assets and liabilities, the statement
of operations, the statement of changes in net assets,
and the schedule of investments as at and for the two
years 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 statements of
assets 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.
<PAGE>
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 affecting 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 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 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 a partner of KPMG Peat Marwick LLP, for the fiscal
year ended March 31, 1998 and signed pro forma tax returns for
the period from April 1, 1998 to the Closing Date (which pro
forma tax returns shall be furnished promptly after the
Closing Date).
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.
<PAGE>
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.
<PAGE>
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:
_______________________ SOGEN FUNDS, INC.
Assistant Secretary on behalf of SoGen Money Fund
ATTEST:
- -----------------------
By:__________________________
Joined in for the purpose of
paragraphs 1.5 and 11.2
THE COLONIAL GROUP, INC.
By: _________________________
SOCIETE GENERALE ASSET MANAGEMENT CORP.
By: _________________________
EXHIBIT B
[Insert Financial History - to be filed by amendment]
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:
5. 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;
6. 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;
7. 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);
8. 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);*
9. 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;
10. 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;
11. Make margin purchases of securities, except for the use of
such short-term credits as are needed for clearance of
transactions; and
12. 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:
13. 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;
14. 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;**
15. 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;
16. 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);
17. Purchase or sell commodities or commodities contracts or oil,
gas or mineral programs;
18. Purchase securities on margin, except for use of short-term
credit necessary for clearance of purchases and sales of
portfolio securities;
19. 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;
20. 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;
21. 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
22. Issue any senior securities except to the extent permitted
under the Act.
<PAGE>
COLONIAL MONEY MARKET FUND
Statement of Additional Information
December 15, 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 15, 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, 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>
Page
1. The financial statements and Report of Independent Accountants
of Colonial Money Market Fund included in the Fund's Annual
Report to Shareholders for the fiscal year ended June 30, 1998
(SEC Accession Number 000021847-98-000094). (to be filed by
amendment)
2. The financial statements and Independent Auditor's Report of
SGMF included in the Fund's Annual Report to Shareholders for
the fiscal year ended March 31, 1998 (SEC Accession Number
0000950130-98-002858). (to be filed by amendment)
3. Pro Forma Combined Financial Statements for CMMF and SGMF
prepared for the year ended June 30, 1998 and March 31, 1998,
respectively. (to be filed by amendment)
<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 (CSDUSGF) (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 Counsel to Colonial Fund as to Legality
of the Securities Being Registered(to be filed by amendment)
12. Opinion and Consent of Counsel to Colonial Fund Supporting Tax Matters and
Consequences to Shareholders(to be filed by amendment)
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)
<PAGE>
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)
<PAGE>
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
(to be filed by amendment)
14.(b)Consent of Independent Auditors, KPMG Peat Marwick LLP (to be
filed by amendment)
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.
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.
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 18th day of November, 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.
SIGNATURE TITLE DATE
/s/ STEPHEN E. GIBSON President (chief executive officer) November 18, 1998
- -------------------------
Stephen E. Gibson
/s/ TIMOTHY J. JACOBY Treasurer and Chief Financial November 18, 1998
- -------------------------
Timothy J. Jacoby Officer (principal financial officer)
/s/ J. KEVIN CONNAUGHTON Controller and Chief Accounting November 18, 1998
- -------------------------
J. Kevin Connaughton Officer (principal accounting officer)
/s/ ROBERT J. BIRNBAUM* Trustee November 18, 1998
- ---------------------------
/s/ TOM BLEASDALE* Trustee November 18, 1998
- ---------------------------
Tom Bleasdale
/s/ JOHN V. CARBERRY* Trustee November 18, 1998
- ---------------------------
John V. Carberry
/s/ LORA S. COLLINS* Trustee November 18, 1998
- ---------------------------
Lora S. Collins
/s/ JAMES E. GRINNELL* Trustee November 18 1998
- ---------------------------
James E. Grinnell
/s/ RICHARD W. LOWRY* Trustee November 18, 1998
- --------------------------
Richard W. Lowry
/s/ SALVATORE MACERA* Trustee November 18, 1998
- ---------------------------
Salvatore Macera
/s/ WILLIAM E. MAYER* Trustee November 18, 1998
- ---------------------------
William E. Mayer
/s/ JAMES L. MOODY, JR.* Trustee November 18, 1998
- ---------------------------
James L. Moody, Jr.
/s/ JOHN J. NEUHAUSER* Trustee November 18, 1998
- ---------------------------
John J. Neuhauser
/s/ THOMAS E. STITZEL* Trustee November 18, 1998
- ---------------------------
Thomas E. Stitzel
/s/ ROBERT L. SULLIVAN* Trustee November 18, 1998
- --------------------------
Robert L. Sullivan
/s/ ANNE-LEE VERVILLE* Trustee November 18, 1998
- --------------------------
Anne-Lee Verville
/s/ SUZAN M. BARRON November 18, 1998
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*/Suzan M. Barron
Attorney-in-fact for each trustee
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 18th day of November, 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 SR&F Base Trust in their
capacities and on the date indicated.
SIGNATURES TITLE DATE
/s/ THOMAS W. BUTCH President (Principal November 18, 1998
Thomas W. Butch Executive Officer)
/s/ GARY A. ANETSBERGER Senior Vice President November 18, 1998
Gary A. Anetsberger and Chief Financial
Officer (Principal
Financial Officer)
/s/ SHARON R. ROBERTSON Controller (Principal November 18, 1998
Sharon R. Robertson Accounting Officer)
<PAGE>
/s/ WILLIAM W. BOYD Trustee November 18, 1998
William W. Boyd
/s/ LINDSAY COOK Trustee November 18, 1998
Lindsay Cook
/s/ DOUGLAS A. HACKER Trustee November 18, 1998
Douglas A. Hacker
/s/ JANET LANGFORD KELLY Trustee November 18, 1998
Janet Langford Kelly
/s/ CHARLES R. NELSON Trustee November 18, 1998
Charles R. Nelson
/s/ THOMAS C. THEOBALD Trustee November 18, 1998
Thomas C. Theobald
<PAGE>
EXHIBIT INDEX
17. Form of Proxy
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* On behalf of its Colonial Money Market Fund series.
* [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.
<PAGE>
EXHIBIT 17
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.)
<PAGE>
(Continued from other side.)
Every properly signed proxy will be voted in the manner specified hereon and, in
the absence of specification, will be treated as GRANTING authority to vote FOR
the Proposal.
Please sign exactly as you
name or names appear. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title as
such.
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(Signature of Shareholder)
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(Signature of joint owner, if any)
Dated, ___________________, 1998
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
