FOUNDERS FUNDS, INC.
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1998
The section of the Funds' Statement of Additional Information entitled
"Directors and Officers" is hereby amended on page 40 to add the following
information concerning two new directors of Founders Funds, Inc. elected in May
1998:
ROBERT P. MASTROVITA**
88 Upland Road
Duxbury, Massachusetts
Director
Private investor; Chairman of private foundation. Formerly
(1982 to 1997), Chairman and Director, Hagler, Mastrovita &
Hewitt, Inc., Boston, Massachusetts, a registered investment
adviser. Member, Boston Society of Security Analysts.
Overseer and Investment Committee Member, Boston Children's
Hospital. Born: November 6, 1944.
GEORGE W. PHILLIPS
101 Chestnut Street
Boston, Massachusetts
Director
Retired. Director and Chairman, Strategic Planning Committee,
Warren Bancorp, Inc., Peabody, Massachusetts, a
state-chartered bank holding company. Formerly (1991 to
1997), Mr. Phillips was President and Chief Executive Officer
of Warren Bancorp, Inc. and Warren Five Cents Savings Bank.
Trustee and Chairman of the Finance and Investment Committees,
Children's Medical Center of Boston, Boston, Massachusetts.
Born: April 5, 1938.
** Mr. Mastrovita served as a non-employee director of The Boston Company,
Inc. and Boston Safe Deposit and Trust Company until March 15, 1998. During
1998, Mr. Mastrovita received $10,250 for his service in these capacities. In
addition, since July 1998, he has received directors' retirement benefits
from these companies at a rate of $15,000 per year. Since both of these
companies are indirect subsidiaries of Mellon Bank Corporation, Founders'
ultimate parent company, it is possible that Mr. Mastrovita might be
determined to be an interested director as defined in the Investment Company
Act of 1940. However, the Company does not concede that these prior
directorships or Mr. Mastrovita's receipt of directors' retirement benefits
would make him an interested director of the Funds.
The section of the Funds' Statement of Additional Information entitled
"Directors and Officers" is hereby amended on page 40 to add the following
information concerning a new director of Founders Funds, Inc. elected in
December 1998:
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JOAN D. MANLEY
0031 Wild Irishman Lane
Keystone, Colorado
Director
Retired. Formerly (1960 to 1984), Ms. Manley served in several
executive capacities with Time Incorporated, most recently as
Group Vice President, Director, and Chairman of Time-Life Books,
Inc. and Book of the Month Club, Inc. Director, Sara Lee
Corporation, Chicago, Illinois. Director, Big Flower Holdings,
Inc., New York, New York. Born: September 23, 1932.
The section of the Funds' Statement of Additional Information entitled
"Directors and Officers" is hereby amended on page 39 to delete the reference to
William H. Baughn, who retired as a director effective December 31, 1998.
The section of the Funds' Statement of Additional Information entitled
"Directors and Officers" is hereby amended on page 42 to add the following
information concerning two new officers of Founders Funds, Inc. elected in
August 1998:
STEPHANIE D. PIERCE
200 Park Avenue
New York, NY 10166
Vice President, Assistant Treasurer and Assistant Secretary
Ms. Pierce has been an employee of Funds Distributor, Inc., since
April 1998, as Vice President, Client Development Manager in the
New York office. From April 1997 to March 1998, she was
employed by Citibank, NA. As an officer of Citibank, she was the
Relationship Manager on the Business and Professional Banking
team. Born: August 18, 1968.
GEORGE A. RIO
60 State Street
Boston, MA 02109
Vice President and Assistant Treasurer
Executive Vice President and Client Service Director of Funds
Distributor, Inc. and Premier Mutual Fund Services, Inc. (since
April 1998). From June 1995 to March 1998, he was Senior Vice
President, Senior Key Account Manager for Putnam Mutual Funds.
From May 1994 to June 1995, he was Director of Business
Development for First Data Corporation. From September 1983 to
May 1994, he was Senior Vice President & Manager of Client
Services and Director of Internal Audit at The Boston Company.
Born: January 2, 1955.
The section of the Funds' Statement of Additional Information entitled
"Investment Adviser and Distributor -- Investment Adviser" is hereby amended on
pages 48-49 to replace the last paragraph on page 48, which carries over to the
top of page 49, with the following:
Founders and its predecessor companies have been providing
investment management services since 1938. In addition to serving as
adviser to the Funds, Founders serves as investment adviser or
<PAGE>
sub-adviser to various other mutual funds and private accounts. The
officers of Founders include Richard W. Sabo, President and Chief
Executive Officer; Robert T. Ammann, Vice President; Thomas M.
Arrington, Vice President; Angelo Barr, Vice President and National
Sales Manager; Scott A. Chapman, Vice President; Kenneth R.
Christoffersen, Vice President, General Counsel and Secretary; Gregory
P. Contillo, Senior Vice President and Chief Marketing Officer; Frank
Gaffney, Vice President; Roberto Galindo, Jr., Vice President; Laurine
Garrity, Vice President; Michael W. Gerding, Senior Vice President;
Michael K. Haines, Senior Vice President; Brian F. Kelly, Vice
President; Paul A. LaRocco, Vice President; Douglas A. Loeffler, Vice
President; John B. Mezger, Vice President and Director of Private
Advisory Services; David L. Ray, Senior Vice President and Treasurer;
and Linda M. Ripley, Vice President.
The date of this Supplement is December 31, 1998.
This Supplement supersedes the Supplement dated August 24, 1998.
