<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 25, 1997
REGISTRATION NO. 33-63560
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
----------------
[X]
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
[_]
[X]
POST-EFFECTIVE AMENDMENT NO. 4
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 6
(CHECK APPROPRIATE BOX OR BOXES.)
----------------
SOGEN FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
----------------
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (800) 334-2143
----------------
JEAN-MARIE EVEILLARD
SOGEN FUNDS, INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------------
It is proposed that this filing will become effective (check appropriate
box):
[_] Immediately upon filing pursuant to paragraph (b)
[X] On July 31, 1997 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)
[_] On (date) pursuant to paragraph (a) of Rule 485
----------------
PURSUANT TO THE PROVISIONS OF RULE 24F-2 UNDER THE INVESTMENT CO. ACT OF
1940, REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF SHARES UNDER THE SECU-
RITIES ACT OF 1933, AND REGISTRANT'S RULE 24F-2 NOTICE FOR THE FISCAL YEAR
ENDED MARCH 31, 1997 WAS FILED ON MAY 23, 1997.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
SOGEN FUNDS, INC.
CROSS-REFERENCE SHEET
PURSUANT TO RULE 495(A)
UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
FORM N-1A ITEM NO. PROSPECTUS CAPTION
------------------ ------------------
PART A
------
<C> <S> <C>
Item 1. Cover Page.............. Cover Page
Item 2. Synopsis................ Fee Table
Item 3. Condensed Financial Financial Highlights; Performance and Yield
Information............ Information
Item 4. General Description of Organization of the Funds; Overseas Fund
Registrant............. Investment Objective and Policies; Gold
Fund Investment Objective and Policies;
Money Fund Investment Objective and
Policies; Investment Restrictions;
Implementation of Policies and Risks
Item 5. Management of the
Company................ Management of the Companies
Item 6. Capital Stock and Other Dividends, Capital Gain Distribution and
Securities............. Taxes; Capital Stock; Inquiries
Item 7. Purchase of Securities Management of the Companies; How to
Being Offered.......... Purchase Shares; Net Asset Value
Item 8. Redemption or
Repurchase............. How to Redeem Shares
Item 9. Legal Proceedings....... Not Applicable
<CAPTION>
STATEMENT OF ADDITIONAL
FORM N-1A ITEM NO. INFORMATION CAPTION
------------------ -----------------------
PART B
------
<C> <S> <C>
Item 10. Cover Page.............. Cover Page
Item 11. Table of Contents....... Table of Contents
Item 12. General Information and
History................ Organization of the Funds
Item 13. Investment Objectives
and Policies........... Investment Objectives, Policies and
Restrictions
Item 14. Management of the
Registrant............. Management of the Company
Item 15. Control Persons and
Principal Holders of
Securities............. Management of the Company
Item 16. Investment Adviser and
Other Services......... Investment Adviser and Other Services;
Distribution of the Funds' Shares; Custody
of Portfolio; Independent Auditors
Item 17. Brokerage Allocation.... Brokerage Allocation
Item 18. Capital Stock and Other
Securities............. Not Applicable
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered ......... Distribution of the Funds' Shares
Computation of Net Asset Value
Item 20. Tax Status.............. Tax Status
Item 21. Underwriters............ Distribution of the Funds' Shares
Item 22. Calculation of
Performance Data....... Investment Objective, Policy and
Restrictions
Item 23. Financial Statements.... Financial Statements
</TABLE>
<PAGE>
SOGEN INTERNATIONAL FUND
SOGEN OVERSEAS FUND
SOGEN GOLD FUND
SOGEN MONEY FUND
----------------------------------
[LOGO OF SOGEN APPEARS HERE]
This document contains the prospectuses for SoGen International Fund,
Inc. and SoGen Funds, Inc. (individually a "Company" or together the
"Companies"), each of which is an open-end management investment company.
SoGen International Fund, Inc. has a single portfolio, SoGen Interna-
tional Fund. SoGen Funds, Inc. is a series fund currently comprising
three portfolios, SoGen Overseas Fund, SoGen Gold Fund and SoGen Money
Fund.
----------------------------------
Prospectuses
July 31, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SoGen International Fund, Inc. Prospectus.................................. --
Fee Table................................................................. --
Financial Highlights...................................................... --
Organization of the Company............................................... --
Investment Objective, Policy and Restrictions............................. --
Risk Factors.............................................................. --
SoGen Funds, Inc. Prospectus............................................... 3
Fee Table................................................................. 5
Financial Highlights...................................................... 6
Organization of the Company............................................... 8
Overseas Fund Investment Objective and Policies........................... 8
Gold Fund Investment Objective and Policies............................... 9
Money Fund Investment Objective and Policies.............................. 10
Investment Restrictions................................................... 12
Implementation of Policies and Risks...................................... 13
Management of the Companies................................................ 19
Capital Stock.............................................................. 20
Dividends, Capital Gain Distributions and Taxes............................ 21
Performance and Yield Information.......................................... 23
Net Asset Value............................................................ 24
How to Purchase Shares..................................................... 24
How to Redeem Shares....................................................... 29
Shareholder Services....................................................... 32
Inquiries.................................................................. 35
</TABLE>
----------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATION NOT CONTAINED IN THESE PROSPECTUSES AND THE STATEMENTS OF ADDITIONAL
INFORMATION AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY SOGEN INTERNATIONAL FUND, INC. OR
SOGEN FUNDS, INC. THESE PROSPECTUSES DO NOT CONSTITUTE AN OFFER TO SELL SECU-
RITIES IN ANY JURISDICTION TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
IN SUCH JURISDICTION.
2
<PAGE>
PROSPECTUS
SOGEN OVERSEAS FUND
SOGEN GOLD FUND
SOGEN MONEY FUND
---------------------------------
LOGO
1221 AVENUE OF THE AMERICAS, NEW YORK, NY 10020
(800) 334-2143
----------------------
Societe Generale Asset Management Corp.
Investment Adviser
Societe Generale Securities Corporation
Principal Underwriter
----------------------
SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund (each individually
a "Fund" or collectively the "Funds") are three portfolios of SoGen Funds,
Inc. (the "Company"), an open-end management investment company. Additional
funds may be created by the directors from time to time.
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR EN-
DORSED BY ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT IN-
SURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
This Prospectus sets forth concisely information about the Funds that an in-
vestor ought to know before investing. It should be read and retained for fu-
ture reference. A Statement of Additional Information dated July 31, 1997,
containing additional information about the Funds, has been filed with the Se-
curities and Exchange Commission. It is incorporated herein by reference and
is available free of charge by contacting the Company at (800) 334-2143.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
3
<PAGE>
The Funds and their investment objectives are:
SOGEN OVERSEAS FUND. Long-term growth of capital by investing primarily in
securities of small and medium size non-U.S. companies. (See page seven.)
SOGEN GOLD FUND. Growth of capital by investing primarily in securities of
companies engaged in mining, processing, dealing in or holding gold or other
precious metals both in the United States and in foreign countries. (See pages
eight and nine.)
SOGEN MONEY FUND. As high a level of current income as is considered consis-
tent 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. An investment in SoGen Money Fund is neither insured nor guaranteed
by the U.S. Government and there can be no assurance that the Fund will be
able to maintain a stable net asset value of $1.00 per share. (See pages nine
through eleven.)
----------------------
July 31, 1997
4
<PAGE>
SOGEN FUNDS, INC.
FEE TABLE
<TABLE>
<CAPTION>
SOGEN SOGEN SOGEN
OVERSEAS GOLD MONEY
FUND FUND FUND
-------- ----- -----
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a per-
centage of public offering price).................. 3.75% 3.75% None
==== ==== ====
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees...................................... 0.75% 0.75% 0.04%
12b-1 Fees........................................... 0.25%* 0.25%* None
Other Expenses....................................... 0.27% 0.45% 0.71%
---- ---- ----
Total Fund Operating Expenses........................ 1.27% 1.45% 0.75%**
==== ==== ====
</TABLE>
EXAMPLE
An investor in a Fund would pay the following expenses on a $1,000 invest-
ment, assuming a 5% annual return, with or without redemption, at the end of
each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Overseas Fund................................... $50 $76 $105 $185
Gold Fund....................................... $52 $82 $114 $205
Money Fund...................................... $ 8 $24 $ 42 $ 93
</TABLE>
The information set forth above is to assist an investor in understanding
the various costs and expenses to which an investment in a Fund would be sub-
ject. "Other Expenses" for the Money Fund have been restated to reflect the
expected level of expense reimbursement for the current fiscal year. For fur-
ther information see "Management of the Companies" and "How to Purchase
Shares."
Societe Generale Asset Management Corp. ("SGAM Corp."), the investment ad-
viser has voluntarily limited the total expenses of the Money Fund (excluding
interest, taxes, brokerage and extraordinary expenses) to an annual rate of
0.75% of the Fund's average net assets until July 31, 1998. After July 31,
1998, the expense limitation may be terminated or revised at any time.
This example should not be considered a representation of past or future ex-
penses, and actual expenses may be greater or less than those shown above. The
assumed 5% return is hypothetical and should not be considered a representa-
tion of past or future annual returns, which may be greater or less than the
assumed amount.
- -----------
* 12b-1 fees paid by a Fund may cause long-term shareholders to pay more than
the economic equivalent of the maximum front-end sales charges permitted
under rules adopted by the National Association of Securities Dealers, Inc.
** After reimbursement of expenses and investment advisory fee waiver. Without
such reimbursement, "Total Fund Operating Expenses" would have been 1.14%.
As long as this temporary expense limitation continues, it may lower the
Fund's expenses and increase its total return.
5
<PAGE>
SOGEN FUNDS, INC.
FINANCIAL HIGHLIGHTS
The following Financial Highlights and the related financial statements for
the period from August 31, 1993 to March 31, 1994 and the fiscal years ended
March 31, 1995, 1996 and 1997 have been audited by KPMG Peat Marwick LLP, in-
dependent auditors, whose report thereon is unqualified and appears in the
SoGen Funds, Inc. March 31, 1997 Annual Report to Shareholders, which is in-
corporated by reference in the Statement of Additional Information. This in-
formation should be read in conjunction with the Financial Statements and
notes thereto, which also appear in the Company's Annual Report to Sharehold-
ers.
<TABLE>
<CAPTION>
SOGEN
OVERSEAS FUND
-----------------------------------------------
PERIOD
FROM
YEAR YEAR YEAR AUGUST 31,
ENDED ENDED ENDED 1993 TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1995 1994
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of
period......................... $ 13.26 $ 11.65 $ 11.54 $ 10.00
-------- -------- -------- --------
Income from investment opera-
tions:
Net investment income (loss)... 0.61 0.48 0.14 (0.01)
Net realized and unrealized
gains (losses) on invest-
ments......................... 0.95 1.74 0.04 1.55
-------- -------- -------- --------
Total from investment opera-
tions......................... 1.56 2.22 0.18 1.54
-------- -------- -------- --------
Less distributions:
Dividends from net investment
income........................ (0.60) (0.44) (0.05) --
Distributions from capital
gains......................... (0.38) (0.17) (0.02) --
-------- -------- -------- --------
Total distributions............ (0.98) (0.61) (0.07) --
-------- -------- -------- --------
Net asset value, end of period.. $ 13.84 $ 13.26 $ 11.65 $ 11.54
======== ======== ======== ========
TOTAL RETURN(A)................. 12.16% 19.47% 1.56% 15.35%++
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(000's)........................ $953,315 $647,398 $439,230 $119,843
Ratio of operating expenses to
average net assets............. 1.27%** 1.37%** 1.40% 1.72%*
Ratio of net investment income
to average net assets.......... 2.28%** 3.31%** 2.29% (0.23%)*
Portfolio turnover rate......... 15.18% 9.46% 3.16% 6.11%
Average commission rate
paid(O)........................ $ 0.0207 $ 0.0190 -- --
</TABLE>
6
<PAGE>
SOGEN FUNDS, INC.
<TABLE>
<CAPTION>
SOGEN SOGEN
GOLD FUND MONEY FUND
- --------------------------------------------- -------------------------------------------
PERIOD PERIOD
FROM FROM
YEAR YEAR YEAR AUGUST 31, YEAR YEAR YEAR AUGUST 31,
ENDED ENDED ENDED 1993 TO ENDED ENDED ENDED 1993 TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1995 1994 1997 1996 1995 1994
- --------- --------- --------- ---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
-------
$ 12.25 $ 11.28 $ 11.42 $ 10.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------ ------- ------
0.26 0.24 0.08 (0.01) 0.05 0.05 0.04 0.01
(1.75) 1.35 (0.10) 1.43 -- -- -- --
------- ------- ------- ------- ------- ------ ------- ------
(1.49) 1.59 (0.02) 1.42 0.05 0.05 0.04 0.01
------- ------- ------- ------- ------- ------ ------- ------
(0.14) (0.35) (0.04) -- (0.05) (0.05) (0.04) (0.01)
(0.02) (0.27) (0.08) -- -- -- -- --
------- ------- ------- ------- ------- ------ ------- ------
(0.16) (0.62) (0.12) -- (0.05) (0.05) (0.04) (0.01)
------- ------- ------- ------- ------- ------ ------- ------
$ 10.60 $ 12.25 $ 11.28 $ 11.42 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ====== ======= ======
(12.21)% 14.81% (0.14%) 14.15%++ 4.61% 5.03% 4.13% 1.25%++
$52,651 $63,261 $50,922 $22,406 $13,128 $8,487 $10,445 $6,392
1.45%** 1.41%** 1.46% 2.27%* 0.75%+ 0.75%+ 0.75%+ 0.75%*+
1.20%** 1.29%** 0.79% (0.32%)* 4.63%+ 4.98%+ 4.14%+ 2.18%*+
16.83% 22.40% 11.56% 4.55% -- -- -- --
$0.0009 $0.0002 -- -- -- -- -- --
</TABLE>
(Refer to the following page for footnotes.)
7
<PAGE>
SOGEN FUNDS, INC.
ORGANIZATION OF THE COMPANY
The Company is an open-end management investment company incorporated under
the laws of Maryland in May 1993. The Company has three portfolios, SoGen
Overseas Fund, SoGen Gold Fund and SoGen Money Fund (referred to herein as the
"Overseas Fund," the "Gold Fund" and the "Money Fund," respectively). Each
Fund is a separate, diversified portfolio of assets and has a different in-
vestment objective which it pursues through separate investment policies, as
described below. The difference in objectives and policies among the Funds af-
fects the degree of risk and return of each Fund.
OVERSEAS FUND INVESTMENT OBJECTIVE AND POLICIES
The Overseas Fund seeks long-term growth of capital by investing primarily
in securities of small and medium size non-U.S. companies. The Fund particu-
larly seeks companies that have growth potential, financial strength and sta-
bility, strong management and fundamental value. However, the Fund may invest
in companies that do not have all of these characteristics.
The Fund may invest in securities traded in mature markets (for example, Ja-
pan, Canada and the United Kingdom) and in emerging markets (Mexico and Indo-
nesia, for example). A list of the mature and emerging markets in which the
Fund may invest is included in the Statement of Additional Information under
"Investment Policies, Techniques and Risks--Foreign Securities." There are no
limits on the Fund's geographic asset distribution, but the Fund ordinarily
invests in at least three countries outside the United States.
- -----------
Footnotes from previous page.
(a) Does not give effect to deduction of the sales load.
* Annualized.
** The ratios of operating expenses to average net assets and net investment
income to average net assets for the year ended March 31, 1997 for SoGen
Overseas Fund would have been the same and 2.27%, respectively, and for
SoGen Gold Fund 1.46% and 1.19%, respectively, without the effect of the
earnings credits. The ratio of operating expenses to average net assets and
net investment income to average net assets for the year ended March 31,
1996 for SoGen Overseas Fund would have been 1.38% and 3.30%, respectively,
and for SoGen Gold Fund 1.43% and 1.26%, respectively, without the effect
of the earnings credits.
+ The ratios (annualized in the case of a partial year) of operating expenses
to average net assets and net investment income to average net assets of
SoGen Money Fund would have been 1.14% and 4.26%, respectively, for the
year ended March 31, 1997, 0.97% and 4.76%, respectively, for the year
ended March 31, 1996, 1.55% and 3.34%, respectively, for the year ended
March 31, 1995, and 4.00% and (1.07%), respectively, for the period August
31, 1993 to March 31, 1994 without the effect of the earnings credits, and
the investment advisory fee waiver and expense reimbursement provided by
SGAM Corp.
++ Total returns disclosed for the period ended March 31, 1994 are not
annualized. Annualized total returns for the period ended March 31, 1994
were 26.40%, 24.34% and 2.14% for SoGen Overseas Fund, SoGen Gold Fund and
SoGen Money Fund, respectively.
(O)Average commission rate paid is expressed on a per share basis. Not all
commissions are computed on a per share basis; therefore, commissions ex-
pressed as a percentage of transactions may be higher. Due to the new Secu-
rities and Exchange Commission disclosure guidelines, average commissions
per share are calculated only for the years ended March 31, 1997 and 1996
and not for the prior periods.
8
<PAGE>
SOGEN FUNDS, INC.
The equity securities in which the Fund may invest include common and pre-
ferred stocks, warrants or other similar rights, and convertible securities.
The Fund may purchase foreign securities in the form of sponsored or
unsponsored American Depository Receipts (ADRs), Global Depository Receipts
(GDRs) and European Depository Receipts (EDRs) or other securities represent-
ing underlying shares of foreign issuers. The Fund may also invest in any
other type of security, including up to 20% of its total assets in debt secu-
rities. Such debt securities may include lower-rated securities, commonly re-
ferred to as "junk bonds" (i.e., securities rated BB or lower by Standard &
Poor's Corporation ("S&P") or Ba or lower by Moody's Investors Service, Inc.
("Moody's")), and securities that are not rated. There are no restrictions as
to the ratings of debt securities acquired by the Fund or the portion of the
Fund's assets that may be invested in debt securities in a particular rating
category. Under normal market conditions, the Fund invests at least 75% of its
total assets, taken at market value, in foreign securities. The Fund may also
invest in "structured securities" in which the value is linked to the price of
an underlying instrument.
GOLD FUND INVESTMENT OBJECTIVE AND POLICIES
The Gold Fund seeks growth of capital by investing primarily in securities
of companies engaged in mining, processing, dealing in or holding gold or
other precious metals such as silver, platinum and palladium, both in the
United States and in foreign countries. Gold-related investments have provided
protection against loss of purchasing power during periods of extensive price
inflation and/or following periods of extensive credit expansion. Under normal
circumstances, at least 65% of the value of the Fund's total assets will be
invested in securities (which may include both equity and, to a limited ex-
tent, debt securities) consisting of issuers engaged in gold operations, in-
cluding securities of gold mining finance companies as well as operating com-
panies with long-, medium- or short-life mines. Up to 35% of the Fund's assets
may be invested in equity and, to a limited extent, debt securities unrelated
to the precious metals industry where the investment adviser believes such se-
curities are consistent with the Fund's investment objective.
The Fund's investment adviser is of the belief that a gold-based investment
medium will, over the medium term, protect capital from adverse monetary and
political developments of a national or international nature and may offer
better opportunity for capital growth than many other forms of investment. In-
vestments in gold may provide more of a hedge against currencies with declin-
ing buying power, devaluation and inflation than other types of investments.
In those periods when investments in gold and gold-related securities appreci-
ate in value relative to the U.S. dollar, the Fund's investments may serve to
offset erosion in the purchasing power of the U.S. dollar.
As indicated, the investment adviser is of the belief that the price of gold
and gold-related securities generally are likely to experience significant ap-
preciation during the next three to five years. If, however, this expected
bull market in gold-related
9
<PAGE>
SOGEN FUNDS, INC.
securities does not develop within the investment adviser's time frame, or
should the investment adviser conclude that any price appreciation that has
occurred is not likely to continue, the investment adviser expects that it
will recommend to the Company's Board of Directors that the Company seek the
vote of the Gold Fund's shareholders to liquidate the Gold Fund. Liquidation
would involve the sale of all of the Gold Fund's assets, followed by the dis-
tribution of the proceeds, less accrued liabilities, to shareholders. The de-
cision to recommend liquidation will not, however, affect the right of Gold
Fund shareholders to redeem their shares or to exchange their shares for
shares of the Money Fund or the Overseas Fund, in the latter case without pay-
ment of any additional sales charge. Potential investors should carefully
weigh the consequences of investing in, and paying the related sales charge
for, a fund that may have a limited term from the date of this Prospectus.
The Fund anticipates that it will normally invest in common stocks and secu-
rities convertible into common stocks, such as convertible preferreds, con-
vertible debentures and sponsored or unsponsored American Depository Receipts
(ADRs), Global Depository Receipts (GDRs) and European Depository Receipts
(EDRs) for those securities, all of which may be traded on a securities ex-
change or over-the-counter. The Fund may invest up to 20% of its total assets
in debt securities, including lower-rated securities, commonly referred to as
"junk bonds" (i.e., securities rated BB or lower by S&P or Ba or lower by
Moody's and securities that are not rated). There are no restrictions as to
the ratings of debt securities acquired by the Fund or the portion of the
Fund's assets that may be invested in debt securities in a particular rating
category. The market performance of non-convertible debt securities of compa-
nies engaged in mining and processing gold can be expected to be comparable to
that of other debt obligations of similar quality and generally will not react
to fluctuations in the price of gold. An investment in the debt instruments of
gold-related companies, therefore, cannot be expected to provide the hedge
against inflation that may be provided through investment in equity securities
of companies engaged in such activities. Investment in such debt securities
can serve to reduce the risk of fluctuation in net asset value of a portfolio
composed primarily of gold-related equity investments. The Fund may also in-
vest in "structured securities" in which the value is linked to the price of
an underlying instrument.
Because of the Fund's policy of investing primarily in securities of compa-
nies engaged in gold mining, processing, dealing in or holding gold and other
precious metals, a substantial part of the Fund's assets will generally be in-
vested in securities of companies domiciled or operating in one or more for-
eign countries. (See "Implementation of Policies and Risks.")
MONEY FUND INVESTMENT OBJECTIVE AND POLICIES
The Money Fund seeks as high a level of current income as is considered
consistent with the preservation of capital and liquidity. The Fund pursues
its
10
<PAGE>
SOGEN FUNDS, INC.
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 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; 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 securi-
ties. 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 sta-
tistical rating organizations. (For a description of the ratings, see
"Appendix -- Ratings of Investment Securities" in the Statement of Ad-
ditional 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 in-
vestment 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 domi-
cile country of the foreign issuer. Eurodollar certificates of deposit may not
be subject to the same regulatory requirements as certificates of deposit is-
sued 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
11
<PAGE>
SOGEN FUNDS, INC.
agreement, the Fund might have expenses in enforcing its rights, and could ex-
perience 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 adviser 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 re-
stricted 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 distribu-
tion. 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 re-
sold to other institutional investors, like the Fund, through or with the as-
sistance of the issuer 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. Invest-
ment in Section 4(2) paper could have the effect of reducing the Fund's li-
quidity 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 en-
hancement techniques include letters of credit, insurance bonds, limited guar-
antees (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.
INVESTMENT RESTRICTIONS
The Funds have adopted certain investment restrictions that may not be
changed without shareholder approval. Among other restrictions, each Fund will
not:
1. With respect to 75% of its total assets, invest more than 5% of its
assets (valued at time of investment) in securities of any one issuer,
except in U.S. government obligations, or acquire securities of any
one issuer which at the time of investment represent more than 10% of
the voting securities of the issuer;
2. Borrow money, except unsecured borrowings from banks as a temporary
measure in exceptional circumstances, and such borrowings may not ex-
12
<PAGE>
SOGEN FUNDS, INC.
ceed 10% of a Fund's net assets at the time of the borrowing. A Fund
will not purchase securities while borrowings exceed 5% of its total
assets; or
3. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry (other than U.S. Govern-
ment Securities), except that the Gold Fund will, as a matter of fun-
damental policy, concentrate its investments in the precious metals
industry and the Money Fund may concentrate its investments in U.S.
bank obligations.
A complete description of the Funds' investment restrictions is included in
the Statement of Additional Information.
IMPLEMENTATION OF POLICIES AND RISKS
In addition to the investment policies described above (and subject to cer-
tain restrictions described herein), the Funds 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 Funds' Statement of Additional Informa-
tion.
Because the Funds' 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.
The value of shares of the Overseas Fund and the Gold Fund when sold may be
higher or lower than when purchased. Although the Money 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.
The Overseas Fund and the Gold Fund provide investors with an opportunity to
place a portion of their assets in a diversified portfolio of foreign securi-
ties. In addition, the Money Fund may invest in U.S. dollar-denominated high-
quality foreign debt securities. From time to time, many foreign economies
have grown faster than the U.S. economy, and the returns on investments in
these countries have exceeded those of similar U.S. investments, although
there can be no assurance that these conditions will continue. International
investing allows investors to achieve greater diversification and to take ad-
vantage of changes in foreign economies and market conditions.
Investors should understand and consider carefully the greater risks in-
volved in foreign investing. Investing in foreign securities and other posi-
tions which are generally denominated in foreign currencies, and utilization
of forward foreign currency exchange contracts (see "Currency Exchange Trans-
actions" below), involve certain
13
<PAGE>
SOGEN FUNDS, INC.
risks and opportunities not typically associated with investing in U.S. secu-
rities. These include: fluctuations in the rates of exchange between the U.S.
dollar and foreign currencies; changes in exchange control regulations or cur-
rency restrictions that would prevent cash from being brought back to the
United States; less public information with respect to issuers of securities;
less governmental supervision of stock exchanges, securities brokers and is-
suers of securities; different accounting, auditing and financial reporting
standards; different settlement periods and trading practices; less liquidity
and frequently greater price volatility in foreign markets than in the United
States; imposition of foreign taxes; and sometimes less advantageous legal,
operational and financial protections applicable to foreign sub-custodial ar-
rangements.
Investing in countries outside the United States entails political risk.
There exists the possibility of restrictions on foreign investors, expropria-
tion of assets, confiscatory taxation, seizure or nationalization of foreign
bank deposits or other assets, establishment of exchange controls, or other
adverse political or social developments that could affect investment in these
nations. Economies in individual markets may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross domestic product,
rates of inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many emerging market coun-
tries have experienced extremely high rates of inflation for many years. That
has had and may continue to have very negative effects on the economies and
securities markets of those countries.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States. There
also may be a lower level of monitoring and regulation in emerging markets of
traders, insiders and investors. Enforcement of existing regulations has been
extremely limited.
Since the Money 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 addi-
tion, the Money Fund does not intend to invest in the securities markets of
emerging countries.
FLUCTUATIONS IN THE PRICE OF GOLD (GOLD FUND).
Due to the Gold Fund's policy of concentrating its investments in gold and
other precious metal-related issuers, investment in the Fund's shares involves
special considerations, including changes in U.S. or foreign tax, currency or
mining laws and increased environmental costs. The price of gold has been sub-
ject to dramatic downward and upward price movements over short periods of
time and may be affected by unpredictable international monetary and political
policies such as cur-
14
<PAGE>
SOGEN FUNDS, INC.
rency devaluations or revaluations, economic conditions within an individual
country, trade imbalances, or trade or currency restrictions between coun-
tries. The price of gold, in turn, is likely to affect the market prices of
securities of companies mining or processing gold, and accordingly, the value
of the Fund's investments in such securities may also be affected. Gold-re-
lated investments as a group have performed less well than the stock market in
general during periods when the U.S. dollar is strong, inflation is low and
general economic conditions are stable.
CURRENCY EXCHANGE TRANSACTIONS (OVERSEAS FUND AND GOLD FUND).
A Fund may engage in currency exchange transactions to hedge against losses
in the U.S. dollar value of its portfolio securities resulting from possible
variations in exchange rates and not for speculation. A currency exchange
transaction may be conducted either on a spot (i.e. cash) basis at the spot
rate for purchasing or selling currency prevailing in the foreign exchange
market or through a forward currency exchange contract ("forward contract"). A
forward contract is an agreement to purchase or sell a specified currency at a
specified future date (or within a specified time period) and price set at the
time of the contract. Forward contracts are usually entered into with banks
and broker/dealers, are not exchange-traded and are usually for less than one
year, but may be renewed. Currency exchange transactions may involve curren-
cies of the different countries in which a Fund may invest. Although forward
contracts may be used to protect a Fund from adverse currency movements, the
use of such hedges may reduce or eliminate the potentially positive effect of
currency revaluations on the Fund's total return.
INVESTMENTS IN DEBT SECURITIES (OVERSEAS FUND AND GOLD FUND).
Each of the Overseas Fund and Gold Fund may invest up to 20% of its total
assets in debt securities that are below investment grade quality. The Funds
may also invest in debt securities which are in default. "Investment grade"
debt securities are those rated within the four highest ratings categories of
S&P or Moody's or, if unrated, determined by the Fund's investment adviser to
be of comparable quality. The market value of debt securities generally varies
in response to changes in interest rates and the financial conditions of each
issuer. During periods of declining interest rates, the value of debt securi-
ties generally increases. Conversely, during periods of rising interest rates,
the value of such securities generally declines. These changes in market value
will be reflected in each Fund's net asset value.
Securities rated BBB by S&P or Baa by Moody's (the lowest investment grade
ratings) are considered to be medium grade and to have speculative character-
istics. Debt securities that are rated below investment grade or, if unrated,
are considered by SGAM Corp. to be equivalent to below investment grade (often
referred to as "junk bonds"), on balance, are considered predominantly specu-
lative with respect to the issuer's capacity to pay interest and repay princi-
pal according to the terms of the obligation and, therefore, carry greater in-
vestment risk, including the possibility
15
<PAGE>
SOGEN FUNDS, INC.
of issuer default and bankruptcy. They are likely to be less marketable and
more adversely affected by economic downturns than higher-quality debt securi-
ties. (For additional information on these debt securities see "Lower-Rated
Debt Securities" in the Statement of Additional Information.)
INVESTMENT IN OTHER INVESTMENT COMPANIES (OVERSEAS FUND).
Certain markets are closed in whole or in part to equity investments by for-
eigners. The Overseas Fund may be able to invest in such markets solely or
primarily through governmentally-authorized investment companies. The Fund
generally may invest up to 10% of its assets in shares of other investment
companies and up to 5% of its assets in any one investment company (in each
case measured at the time of investment), as long as no investment represents
more than 3% of the outstanding voting stock of the acquired investment com-
pany at the time of investment. These restrictions do not apply to certain in-
vestment companies known as private investment companies and "qualified pur-
chaser" investment companies.
Investment in another investment company may involve the payment of a pre-
mium above the value of the issuer's portfolio securities, and is subject to
market availability. In the case of a purchase of shares of such a company in
a public offering, the purchase price may include an underwriting spread. The
Fund does not intend to invest in such an investment company unless, in the
judgment of the Fund's investment adviser, the potential benefits of such in-
vestment justify the payment of any applicable premium or sales charge. As a
shareholder in an investment company, the Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time, the Fund would continue to pay its own management fees
and other expenses.
"WHEN-ISSUED" OR "DELAYED DELIVERY" SECURITIES.
The Funds 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 Funds 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. A 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 in-
tention of actually acquiring the securities. However, the Funds reserve the
right to sell acquired when-issued or delayed delivery securities before their
settlement dates if deemed advisable.
VARIABLE RATE SECURITIES (MONEY FUND).
The Money Fund may invest in instruments having rates of interest that are
adjusted periodically or which "float" continuously according to formulae in-
tended
16
<PAGE>
SOGEN FUNDS, INC.
to minimize fluctuation in the values of the instruments ("Variable Rate Secu-
rities"). The interest rates of Variable Rate Securities ordinarily are deter-
mined 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
increase, the potential for capital appreciation or depreciation is less than
for fixed-rate obligations. Some Variable Rate Securities ("Variable Rate De-
mand 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 con-
sidered 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.
STRUCTURED SECURITIES (OVERSEAS FUND AND GOLD FUND).
The Overseas Fund and the Gold Fund may invest in structured notes and/or
preferred stock, the value of which is linked to the price of an underlying
instrument. Structured securities have different characteristics and risks
than other types of securities in which the Funds may invest. For example, the
coupon, dividend and/or redemption amounts may be increased or decreased de-
pending on the change in the value of an underlying instrument. See "Struc-
tured Securities" in the Statement of Additional Information for further in-
formation.
TEMPORARY STRATEGIES; CASH RESERVES (OVERSEAS FUND AND GOLD FUND).
The Overseas Fund and the Gold Fund each has the flexibility to respond
promptly to changes in market and economic conditions. In the interest of pre-
serving shareholders' capital, SGAM Corp. may employ a temporary defensive in-
vestment strategy if it determines such a strategy to be warranted. Pursuant
to such a defensive strategy, a Fund temporarily may hold cash (U.S. dollars,
foreign currencies, multinational currency units) and/or invest up to 100% of
its assets in high quality debt securities or money market instruments of U.S.
or foreign issuers. Most or all of a Fund's investments may be made in the
United States and denominated in U.S. dollars. It is impossible to predict
whether, when or for how long a Fund will employ defensive strategies.
In addition, pending investment of proceeds from new sales of shares or to
meet ordinary daily cash needs, a Fund temporarily may hold cash (U.S. dol-
lars, foreign currencies or multinational currency units) and may invest any
portion of its assets in money market instruments.
17
<PAGE>
SOGEN FUNDS, INC.
ILLIQUID SECURITIES.
Each Fund may invest up to 15% (10% in the case of the Money Fund) of its
total assets in illiquid securities, including securities acquired in private
placements. Because an active trading market for such securities may not ex-
ist, 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. A Fund, subject to the limitations for illiquid in-
vestments 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 Statement of Additional Information.
EXPENSES (OVERSEAS FUND AND GOLD FUND).
The cost of investing in foreign securities is higher than the cost of in-
vesting in U.S. securities. Investing in each Fund is an efficient way for an
individual to participate in foreign markets, but its expenses, including ad-
visory and custody fees, are higher than the expenses of a typical domestic
mutual fund.
CHANGE OF OBJECTIVE.
A Fund's investment objective may be changed by the Board of Directors with-
out shareholder approval. If there were such a change, each shareholder should
consider whether a Fund would remain an appropriate investment in light of his
or her then current financial position and needs. Shareholders will be noti-
fied a minimum of sixty days in advance of any change in investment objective.
18
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
MANAGEMENT OF THE COMPANIES
BOARD OF DIRECTORS.
The business and affairs of the Companies are managed under the direction of
their respective Boards of Directors.
INVESTMENT ADVISER.
Each of the Companies' portfolios is managed by SGAM Corp., 1221 Avenue of
the Americas, New York, New York 10020. SGAM Corp. is a registered investment
adviser which is indirectly owned by Societe Generale, one of France's largest
banks. Jean-Marie Eveillard, President and a director of each of the Compa-
nies, is primarily responsible for the day-to-day management of the Companies'
investment portfolios. Mr. Eveillard has been a Director and President or Ex-
ecutive Vice President of SGAM Corp. since prior to 1992.
SGAM Corp. furnishes investment advice to the Funds consistent with each
Fund's stated investment objective and policies. SGAM Corp. also furnishes the
Companies with office space and certain facilities and services required for
their business and pays any compensation and expenses of the officers of the
Companies.
For these services and facilities, each Fund pays SGAM Corp. a fee, paid
quarterly or monthly, as indicated, at an annual rate of the average daily net
assets of that Fund as follows:
<TABLE>
<S> <C>
International Fund (Quarterly).......... 1.00% of the first $25 million and
0.75% of the excess over $25 million
Overseas Fund (Monthly)................. 0.75%
Gold Fund (Monthly)..................... 0.75%
Money Fund (Monthly).................... 0.40%
</TABLE>
SGAM Corp. may waive all or a portion of its fee. The annual fee rates
listed above for the International Fund, Overseas Fund and Gold Fund are
higher than the rate of fees paid by most United States mutual funds. The Com-
panies believe, however, that the advisory fee rates are not higher than the
rate of fees paid by most other mutual funds that invest significantly in for-
eign equity securities. For the fiscal year ended March 31, 1997, the Interna-
tional Fund, Overseas Fund, Gold Fund and Money Fund paid advisory fees equal
to 0.75%, 0.75%, 0.75% and 0.04%, respectively, of their average daily net as-
set values, and each of the Funds' total expenses, including the advisory fee,
equaled 1.21%, 1.27%, 1.45% and 0.75%, respectively, of their average daily
net asset values.
19
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
PORTFOLIO TRANSACTIONS.
SGAM Corp. selects the brokers and dealers which execute orders for the pur-
chase and sale of each Fund's portfolio securities. SGAM Corp. seeks to
achieve "best execution" of such orders. "Best execution" means prompt and re-
liable execution at the most favorable securities prices, taking into account
a number of largely judgmental considerations. Consistent with the foregoing,
portfolio transactions may be executed by brokers affiliated with Societe
Generale so long as the commission paid to the affiliated broker is reasonable
and fair compared to the commission that would be charged by an unaffiliated
broker in a comparable transaction. In addition, subject to the consideration
of best price and execution and to applicable regulations, SGAM Corp. may con-
sider sales of the Funds' shares as a factor in the selection of brokers to
execute portfolio transactions.
PRINCIPAL UNDERWRITER.
The Funds' shares are offered, in states and countries in which such offer
is lawful, to investors either through selected securities dealers or directly
by the Funds' principal underwriter, Societe Generale Securities Corporation
("SGSC"), 1221 Avenue of the Americas, New York, New York 10020. SGSC is a
registered broker-dealer and an affiliate of Societe Generale.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.
DST Systems, Inc. ("DST"), P.O. Box 419324, Kansas City, Missouri, 64141-
6324, serves as transfer agent and dividend disbursing agent for each of the
Funds.
CAPITAL STOCK
The authorized capital stock of SoGen International Fund, Inc. consists of
250,000,000 shares, all of one class and of $0.001 par value. The authorized
capital stock of SoGen Funds, Inc. consists of 1 billion shares of common
stock, par value $0.001 per share of which 150,000,000 shares have been desig-
nated as shares of the Overseas Fund, 150,000,000 shares have been designated
as shares of the Gold Fund and 700,000,000 shares have been designated as
shares of the Money Fund. All shares issued and outstanding are fully paid and
non-assessable and are redeemable at net asset value at the option of share-
holders. Shares have no preemptive or conversion rights and are freely trans-
ferable.
With respect to SoGen Funds, Inc., the Board of Directors is authorized to
reclassify and issue any unissued shares of the Funds without shareholder ap-
proval. Accordingly, in the future, the Directors may create additional series
of shares with different investment objectives, policies or restrictions. Any
issuance of shares of another series or class would be governed by the Invest-
ment Company Act of 1940 and Maryland law.
20
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
Pursuant to their By-Laws, the Companies do not generally hold annual meet-
ings of shareholders. Shareholder meetings, however, will be held when re-
quired by the Investment Company Act of 1940 or Maryland law, or when called
by the Chairman of the Board, the President or shareholders owning at least
10% of the outstanding shares of a Fund. The cost of any such notice and meet-
ing will be borne by the individual Fund for which the meeting was called.
Each share of common stock of SoGen International Fund is entitled to one
vote, and each share of common stock of the Overseas Fund, Gold Fund and Money
Fund is entitled to one vote for each dollar of net asset value and a propor-
tionate fraction of a vote for each fraction of a dollar of net asset value.
Generally, shares of each Fund within SoGen Funds, Inc. vote together on any
matter submitted to shareholders, except when otherwise required by the In-
vestment Company Act of 1940 or when a matter affects the interests of each
Fund in a different way, in which case the shareholders of each Fund vote sep-
arately by class. If the directors determine that a matter does not affect the
interests of a Fund, then the shareholders of that Fund will not be entitled
to vote on that matter. Approval of the investment advisory agreement and the
distribution plan and agreement are matters to be determined separately by
each Fund.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
The Money Fund intends to declare a dividend of its net investment income
daily and pays such dividends monthly. The Money Fund intends to distribute
net realized capital gains, if any, at least annually.
It is the policy of the International Fund, Overseas Fund and Gold Fund to
make annual distributions of net investment income and net realized capital
gains, if any. Unless a shareholder otherwise elects, as permitted in the New
Account Application, income dividends and capital gains distributions will be
reinvested in additional shares of the Funds at net asset value per share cal-
culated as of the payment date. The Funds pay both income dividends and capi-
tal gains distributions on a per share basis. As a result, on the ex-dividend
date of such payment, the net asset value per share of the International Fund,
Overseas Fund and Gold Fund will be reduced by the amount of such payment. The
net asset value per share of the Money Fund is expected, however, to remain
constant at $1.00 per share.
Each Fund intends to qualify and has elected to be treated as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986,
as amended. To qualify, a Fund must meet certain income, diversification and
distribution requirements. As a regulated investment company, a Fund generally
will not be subject to federal income or excise taxes on income and capital
gains distributed to shareholders within applicable time limits, although for-
eign source income received by a Fund may be subject to foreign withholding
taxes.
21
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
Shareholders normally will be taxed on the dividends and capital gain dis-
tributions they receive from a Fund whether received in additional shares or
cash. Dividend payments representing taxable net investment income and any net
short-term capital gains will be taxable as ordinary income. If any portion of
the income of a Fund consists of dividends received from U.S. corporations, a
portion of the dividends paid by such Fund may qualify for the dividends-re-
ceived deduction available to corporate shareholders. Distributions of any net
long-term capital gains designated as capital gains distributions will be tax-
able to shareholders as long-term capital gains regardless of how long they
have held their shares. A distribution will be treated as paid on December 31
of the current calendar year if it is declared by a Fund in October, November
or December with a record date in such a month and paid by the Fund during
January of the following calendar year.
Upon the sale or other disposition of shares of a Fund, a shareholder may
realize a capital gain or loss which will be long-term or short-term, gener-
ally depending upon the shareholder's holding period for the shares.
Information regarding the tax status of income dividends and capital gains
distributions will be sent to shareholders by January 31 of each year.
BACKUP WITHHOLDING.
The Funds are generally required by the Internal Revenue Service ("IRS") to
withhold 31% of the amount of taxable income dividends, capital gains distri-
butions and (except in the case of the Money Fund) redemption proceeds paid to
shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, a U.S. shareholder must certify on the New Ac-
count Application or on a separate Form W-9 that his Social Security or Tax-
payer Identification Number is correct and that he is exempt from, or is not
currently subject to, backup withholding. A non-U.S. shareholder is generally
subject to this 31% withholding on capital gains distributions and redemption
proceeds unless he certifies on the New Account Application or on a separate
Form W-8 that he is a non-resident alien and is not engaged in a trade or
business in the United States regarding his Fund shares.
NON-UNITED STATES SHAREHOLDERS.
Under current U.S. law, the Funds will ordinarily be obligated to withhold
30% of any ordinary income dividend payments to non-U.S. shareholders unless a
tax treaty exists between the U.S. and the shareholder's country of residence
which provides for withholding on a different basis. Non-U.S. shareholders may
incur a U.S. estate tax liability if they die owning a Fund's shares. Such
shareholders should consult their tax counselors as to the tax liability they
may incur to the United States as a result of owning a Fund's shares and as to
the availability of any credits against taxes payable to their own countries
for taxes paid to the United States.
22
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
The foregoing information is intended for general information only. Fund
distributions also may be subject to state, local and foreign taxes. Share-
holders should consult their own tax advisers regarding the particular tax
consequences of an investment in a Fund.
PERFORMANCE AND YIELD INFORMATION
INTERNATIONAL FUND, OVERSEAS FUND AND GOLD FUND.
From time to time, each of the International Fund, Overseas Fund and Gold
Fund may illustrate in sales literature and advertisements its cumulative to-
tal return and its average annual total return. A cumulative total return re-
flects a Fund's performance over a stated period of time based on an assumed
initial investment. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same cumulative total
return if a Fund's performance had been constant over the entire period. Be-
cause average annual returns tend to smooth out variations in a Fund's re-
turns, a prospective investor should recognize that they are not the same as
actual year-by-year results. Both types of total return will be calculated as-
suming the deduction of the maximum sales commission of 3.75% and the rein-
vestment of all income dividends and capital gains distributions. A Fund's
performance figures will be based on historical results and are not intended
to indicate future performance.
MONEY FUND.
From time to time quotations of the Money Fund's "current yield" and "effec-
tive yield" may be included in advertisements and communications to sharehold-
ers. Both yield figures are based on historical earnings and are not intended
to indicate future performance. The "yield" of the Fund refers to the net in-
come generated by an investment in the Fund over a specified seven-day period.
This income is then "annualized", i.e., the amount generated by the investment
during that week is assumed to be generated each week over a 52-week period
and is shown as a percentage of the investment. The "effective yield" is ex-
pressed similarly but, when annualized, the income earned by an investment in
the Fund is assumed to be reinvested. The "effective yield" will be slightly
higher than the "current yield" because of the compounding effect of this as-
sumed reinvestment. "Current yield" and "effective yield" for the Fund will
vary based on changes in market conditions, the level of interest rates and
the level of the Fund's expenses. The Fund may include in its advertisements
and communications to shareholders total return quotations which include
unrealized gains and losses.
PERFORMANCE RATINGS.
From time to time the Funds may discuss in sales literature and advertise-
ments, their performance ratings or other information as published by recog-
nized mutual
23
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
fund statistical services, such as Morningstar, Inc. or Lipper Analytical
Services, Inc. or by publications of general interest such as Business Week or
Money.
NET ASSET VALUE
Each Fund's net asset value per share is computed as of the close of trading
on the New York Stock Exchange ("NYSE") on each day during which the NYSE is
open for trading. The net asset value per share is computed by dividing the
total current value of the assets of a Fund, less its liabilities, by the to-
tal number of shares outstanding at the time of such computation.
In the case of the International Fund, Overseas Fund and Gold Fund, portfo-
lio securities are valued primarily based on market quotations where avail-
able. Short-term investments maturing in sixty days or less are valued at cost
plus interest earned, which approximates value. In the case of the Money Fund,
portfolio securities are valued at their amortized cost, which approximates
market value, subject to guidelines and procedures established by the Board of
Directors in accordance with applicable SEC regulations. Securities for which
current market quotations are not readily available are valued at fair value
as determined in good faith by the Boards of Directors of the Companies.
HOW TO PURCHASE SHARES
The minimum initial investment to open a shareholder account is $1,000 for
the International Fund, Overseas Fund and Gold Fund and $10,000 for the Money
Fund, except that (i) the Automatic Investment Program and Automatic Exchange
Program each requires a minimum initial investment of $100 per Fund (see
"Shareholder Services") and (ii) an account with the Money Fund that is opened
by an exchange (see "Shareholder Services--Exchange Privilege") requires a
minimum investment of $1,000. "Starter" checks and third-party checks will not
be accepted for purposes of opening a new account. The minimum amount for sub-
sequent investments is $100 per Fund. A Fund's shares may be purchased through
authorized dealers or through SGSC, the Funds' underwriter. A completed and
signed application is required for the initial account opened with the Funds.
If there is no application accompanying this Prospectus, call (800) 334-2143
to obtain one.
PURCHASES THROUGH DEALERS.
Investors may purchase a Fund's shares through selected securities dealers
with whom SGSC has sales agreements. A prospective investor may obtain addi-
tional New Account Applications from such authorized dealers. For a list of
authorized dealers, please contact SGSC at (212) 278-5800.
24
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
Financial service firms that do not have a sales agreement with SGSC also
may place orders for purchases of a Fund's shares, but may charge the investor
a transaction fee in addition to the applicable sales load.
Authorized dealers and financial service firms are responsible for promptly
transmitting purchase orders to SGSC.
PURCHASES THROUGH SGSC.
Shares of a Fund may be purchased through SGSC by mailing a check made pay-
able to The SoGen Funds along with the completed New Account Application to
The SoGen Funds, c/o DST, P.O. Box 419324, Kansas City, MO 64141-6324. Shares
may also be purchased through SGSC by Automated Clearing House ("ACH") trans-
fer or by bank wire. Please call (800) 334-2143 for procedures as to how to
establish and administer the ACH purchase option, and please call prior to
wiring any funds. See "Shareholders' Reference Guide" at the back of this Pro-
spectus for wiring instructions.
PUBLIC OFFERING PRICE.
The public offering price at which transactions will be effected will be
equal to the net asset value per share plus, in the case of the International
Fund, Overseas Fund and Gold Fund, a sales charge as described below. The net
asset value per share of the Money Fund is expected to remain constant at
$1.00 per share. Orders for shares received by DST prior to the close of trad-
ing on the NYSE, or orders received by dealers prior to such time and trans-
mitted to SGSC prior to the latter's close of business, will be effected based
on the net asset value determined as of the close of trading on the NYSE that
day. Net asset value per share is calculated as set forth in the section of
this Prospectus entitled "Net Asset Value." The sales charges currently in ef-
fect are as follows:
<TABLE>
<CAPTION>
SALES CHARGE DEALER
SALES CHARGE EXPRESSED AS DISCOUNT AS
AS PERCENT OF APPROXIMATE PERCENT OF
PUBLIC OFFERING PERCENT OF NET PUBLIC OFFERING
INVESTMENT AMOUNTS PRICE AMOUNT INVESTED PRICE
- ------------------ --------------- --------------- ---------------
<S> <C> <C> <C>
Less than $25,000............. 3.75% 3.90% 3.35%
$25,000 or more but less than
$50,000..................... 3.25% 3.35% 2.85%
$50,000 or more but less than
$100,000.................... 2.75% 2.83% 2.35%
$100,000 or more but less than
$500,000.................... 2.00% 2.04% 1.60%
$500,000 or more but less than
$1,000,000.................. 1.00% 1.01% 0.80%
$1,000,000 and over........... 0.00% 0.00% 0.00%
</TABLE>
Sales charges applicable to persons residing in countries outside the United
States may vary from those listed above.
SGSC reallows discounts to selected dealers with whom it has sales agree-
ments and is entitled to retain the balance over the dealer discounts. SGSC
may from time to time reallow the entire sales load, and may provide addi-
tional promotional incentives, to dealers selling a Fund's shares. Such addi-
tional promotional incentive may
25
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
include financial assistance in connection with pre-approved conferences or
seminars, sales or training programs for invited sales personnel and payment
for travel expenses for such seminars or training programs. In some instances
the entire reallowance or incentives may be offered only to certain dealers
which have sold or may sell significant amounts of a Fund's shares. Authorized
dealers to whom substantially the entire sales charge is reallowed may be
deemed to be underwriters as that term is defined under the Securities Act of
1933.
SGAM Corp. may from time to time pay a concession to a dealer which employs
a registered representative whose client invests in a Fund. Such amount will
be paid from the resources of SGAM Corp.
REDUCING THE SALES CHARGE.
As shown in the table above, the size of the total investment in a Fund will
affect the sales charge. Described below are several methods to reduce the ap-
plicable sales charge. In order to obtain a reduction in the sales charge, an
investor must notify, at the time of purchase, his dealer, SGSC or DST of the
applicability of one of the following:
AGGREGATION. The investment schedule above applies to the total amount being
invested by any "person," which term includes an individual, his spouse, par-
ents and children; a trustee or other fiduciary purchasing for a single trust,
estate or single fiduciary account (including a pension, profit-sharing or
other employee benefit trust created pursuant to a plan qualified under the
Internal Revenue Code) although more than one beneficiary is involved; or any
U.S. bank or investment adviser purchasing shares for its investment advisory
clients or customers. Any such person purchasing for several accounts at the
same time may combine these investments into a single transaction in order to
reduce the applicable sales charge. Individual accounts and
corporate/partnership accounts may not be aggregated for purposes of reducing
the sales charge.
CONCURRENT PURCHASES. The sales load associated with an investment may be
reduced by combining concurrent purchases of shares of the International Fund,
Overseas Fund, Gold Fund and shares of other funds advised by SGAM Corp., of-
fered subsequent to the date of this Prospectus subject to a sales load
("SoGen Load Funds"), by any "person," as described above in "Aggregation".
The concurrent purchase discount does not apply to purchases of SoGen Money
Fund. The applicable sales load will be based on the total dollar amount of
the investment in shares of two or more SoGen Load Funds that are concurrently
purchased.
RIGHTS OF ACCUMULATION. A Fund's shares may be purchased at a reduced sales
charge by a "person" (as defined above in "Aggregation") who is already a
shareholder by taking into account not only the amount then being invested,
but also the current net asset value of the shares of any SoGen Load Fund al-
ready held by
26
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
such person. If the current net asset value of the qualifying shares already
held plus the net asset value of the current purchase exceeds a point in the
schedule of sales charges at which the charge is reduced to a lower percent-
age, the entire current purchase is eligible for the reduced charge. To be en-
titled to a reduced sales charge pursuant to the Rights of Accumulation, the
investor must notify his dealer, SGSC or DST at the time of purchase that he
wishes to take advantage of such entitlement, and give the numbers of his ac-
counts, and those accounts held in the name of his spouse, parents or children
and the specific relationship of each such other person to the investor.
LETTER OF INTENTION. A person (as defined above in "Aggregation") may also
qualify for a reduced sales charge by completing the Letter of Intention (the
"Letter") contained in the New Account Application or a form for this purpose
which may be obtained by contacting the Funds at (800) 334-2143. This enables
the investor to aggregate purchases of shares of any SoGen Load Fund during a
thirteen-month period for purposes of calculating the applicable sales charge.
Applicable shares of any SoGen Load Fund currently owned by the investor will
be credited as purchases toward the completion of the Letter at the greater of
their net asset value on the date the Letter is executed or their cost. No
retroactive adjustment will be made if purchases exceed the amount indicated
in the Letter. For each investment made, the investor must notify his dealer,
SGSC or DST that a Letter is on file along with all account numbers associated
with the Letter.
The Letter is not a binding obligation on the investor. However, 5% of the
amount specified in the Letter will be held in escrow, and if the investor's
purchases are less than the amount specified, the investor will be requested
to remit to the appropriate Fund an amount equal to the difference between the
sales charge paid and the sales charge applicable to the aggregate purchases
actually made. If not remitted within 20 days after written request, an
appropriate number of escrowed shares will be redeemed in order to realize the
difference. However, the sales charge applicable to the investment will in no
event be higher than if the shareholder had not submitted a Letter. Either the
shareholder or the Company may cancel the arrangement at will.
SALES AT NET ASSET VALUE. Shares of the International Fund, Overseas Fund
and Gold Fund may be sold at net asset value (i.e., without a sales charge)
(i) to registered representatives or employees of authorized dealers, the
spouse, parents or children of such person, or to any trust, pension, profit-
sharing or other benefit plan for only such persons, (ii) to banks or trust
companies or their affiliates when the bank, trust company or affiliate is au-
thorized to make investment decisions on behalf of a client, (iii) to invest-
ment advisers and financial planners who place trades for their own accounts
or the accounts of their clients and who charge a management, consulting or
other fee for their services, (iv) to clients of such investment advisers
27
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
and financial planners who place trades for their own accounts if the accounts
are linked to the master account of such investment adviser or financial plan-
ner on the books and records of the broker, agent, investment adviser or fi-
nancial institution, and (v) to retirement and deferred compensation plans and
trusts used to fund those plans, including, but not limited to, those defined
in Section 401(a), 403(b) or 457 of the Internal Revenue Code and "rabbi
trusts." Investors may be charged a fee if they effect transactions in Fund
shares through a broker or agent. Shares of the Funds may also be sold at net
asset value to current officers, directors and employees of the Companies,
SGAM Corp., SGSC, U.S. branches and affiliates of Societe Generale, employees
of certain firms providing services to the Funds (such as the custodian and
the shareholder servicing agent), and to the spouse, parents and children of
any such person, or to any trust, pension, profit-sharing or other benefit
plan for only such persons. A Fund may also issue shares at net asset value in
connection with the acquisition of, or merger or consolidation with, another
investment company. The sales of shares at net asset value described in this
section are made upon the written assurance of the purchaser that the purchase
is made for investment purposes and that the shares will not be resold except
through redemption. Such notice must be given to SGSC or DST at the time of
purchase on a form for this purpose as available from the Funds.
REINSTATEMENT PRIVILEGE.
In addition, an investor is entitled to a one-time per account privilege to
reinvest in any SoGen Load Fund, the proceeds of a full or partial redemption
of shares from a SoGen Load Fund at the then applicable net asset value with-
out payment of a sales charge. To exercise this privilege the investor must
submit to SGSC or DST, within 30 calendar days after the redemption, both a
written request for reinstatement and a check or bank wire in an amount not
exceeding the redemption proceeds. An investor may also transfer an investment
in any SoGen Load Fund to an IRA or other tax qualified retirement plan ac-
count in any SoGen Load Fund without payment of a sales charge. Such a trans-
fer involves a redemption of a Fund's shares and a reinvestment of the pro-
ceeds and, hence, may involve a taxable transaction for income tax purposes.
Reinstatement will not prevent recognition of a gain realized on the redemp-
tion, but a loss may be disallowed for tax purposes. The amount of gain or
loss resulting from the redemption may be affected by exercise of the rein-
statement privilege if the shares redeemed were held for 90 days or less, or
if a shareholder reinvests in the Funds within 30 days.
BOOKSHARE ACCOUNT PLAN.
To facilitate the handling of transactions with shareholders, the Funds use
a bookshare account plan for shareholder accounts. DST, as the Funds' transfer
agent, automatically opens and maintains an account for each of the Funds'
shareholders directly registered with a Fund. All interests in shares, full
and fractional (rounded to three decimal places), are reflected in a share-
holder's book account. After any
28
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
purchase, a confirmation is mailed to the shareholder indicating the amount of
full and fractional shares purchased, the price per share and a statement of
his account. Stock certificates will not be issued unless the shareholder sub-
mits a written request to that effect to DST. (No stock certificates will be
issued for the Money Fund or tax-sheltered accounts.) Under no circumstances
will a stock certificate for a fraction of a share be issued.
CONDITIONS OF PURCHASE.
The Companies and SGSC each reserves the right to refuse any order for
purchase of shares and to cancel any purchase due to nonpayment. Share
purchases are not binding on the Companies or SGSC until they are confirmed by
DST as paid. All payments must be made in U.S. dollars, and all checks must be
drawn on U.S. banks. No cash will be accepted. As a condition of this
offering, if an investor's purchase is canceled due to nonpayment or because
his check or ACH transfer does not clear, the investor will be responsible for
any loss a Fund may incur as a result thereof.
RULE 12B-1 PLAN (INTERNATIONAL FUND, OVERSEAS FUND AND GOLD FUND).
The International Fund, Overseas Fund and Gold Fund have each adopted a Dis-
tribution Plan and Agreement (the "Plan") pursuant to Rule 12b-1 under the In-
vestment Company Act of 1940. Under the Plan, each Fund may pay SGSC a quar-
terly distribution related fee at an annual rate not to exceed 0.25% of the
average daily value of a Fund's net assets. SGSC is obligated to use the
amounts received under the Plan for payments to qualifying dealers (not to ex-
ceed 0.25% of the average daily net asset value of accounts originated by such
dealers) for their assistance in the distribution of a Fund's shares and the
provision of shareholder services and for other expenses such as advertising
costs and the payment for the printing and distribution of prospectuses to
prospective investors. SGSC bears distribution expenses to the extent they are
not covered by payments under the Plan. Any distribution expenses incurred by
SGSC in any fiscal year of a Fund which are not reimbursed from payments under
the Plan accrued in such fiscal year, will not be carried over for payment un-
der the Plan in any subsequent year.
HOW TO REDEEM SHARES
Shareholders have the right to redeem all or any part of their shares of a
Fund for cash at the net asset value next computed after receipt of the re-
demption request in proper form as further described below. Neither the Compa-
nies nor SGSC currently charges a fee or commission upon the redemption of a
Fund's shares. Although it does not presently intend to do so, the Boards of
Directors of the Companies are empowered to impose a redemption fee of up to
1.0% of the value of shares being redeemed.
29
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
Shareholders may redeem either through authorized dealers, through SGSC or
by telephone. Shares held in the dealer's "street name" must be redeemed
through the dealer.
REDEMPTIONS THROUGH DEALERS.
Shareholders who have an account with an authorized dealer may submit a re-
demption request to such dealer. Authorized dealers are responsible for
promptly transmitting redemption requests to SGSC. Dealers may impose a charge
for handling redemption transactions placed through them and may have particu-
lar requirements concerning redemptions. Accordingly, shareholders should con-
tact their authorized dealers for more information.
REDEMPTIONS THROUGH SGSC.
Shareholders may redeem their Fund shares through SGSC by transmitting writ-
ten redemption instructions to The SoGen Funds, c/o DST, P.O. Box 419324, Kan-
sas City, MO 64141-6324.
REDEMPTIONS BY TELEPHONE.
Unless contrary instructions are elected in the New Account Application or
Special Options Form, shareholders may redeem a Fund's shares in non-retire-
ment accounts by telephone by calling DST at (800) 334-2143. Telephone redemp-
tion requests received prior to the close of business on the NYSE on any Fund
business day will be effected on that day. Such requests received after the
close of business on the NYSE will be effected on the following business day.
Shareholders may not make a redemption request by telephone if the proceeds
are to be wired or mailed to a bank account number or address other than the
one previously designated by the shareholder. Such requests must be in writing
accompanied by a signature guarantee. Shareholders who would like to change
wiring instructions should send written notification, signed by all of the ac-
count's registered shareholders and accompanied by a signature guarantee, to
DST at the address listed above. (See "Redemption Price" below for acceptable
guarantors. See "Receiving Redemption Proceeds" below for change of address
procedures.) There is a $100,000 maximum on telephone redemptions by check.
There is no limitation on redemptions by ACH transfer or by bank wire; howev-
er, a fee will be deducted from proceeds sent by bank wire. Telephone redemp-
tion privileges may be difficult to implement and may be modified or suspended
without notice during periods of drastic economic or market changes. DST has
instituted procedures it believes are reasonably designed to ensure that re-
demption instructions communicated by telephone are genuine, and could be lia-
ble for losses caused by unauthorized or fraudulent instructions in the ab-
sence of such procedures. DST will require a form of personal identification
prior to acting upon telephone instructions, will provide a written confirma-
tion of such transaction and will record a shareholder's instructions. TELE-
PHONE REDEMPTION PRIVILEGES MAY BE MODIFIED OR TERMINATED AT ANY TIME BY THE
COMPANIES UPON 60 DAYS' WRITTEN NOTICE TO SHAREHOLDERS.
30
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
REDEMPTION PRICE.
Orders to redeem shares received in proper form by DST prior to the close of
trading on the NYSE, or redemption orders received by dealers prior to such
time and transmitted to SGSC prior to the latter's close of business, will be
effected at the net asset value determined as of the close of trading on the
NYSE that day.
Redemption requests must meet all the following requirements to be consid-
ered in proper form:
1. Written and signed instructions from the registered owner(s) must be
received by DST (except for telephone redemptions).
2. A letter or a stock power signed by the registered owner(s) must be
signature guaranteed by an acceptable guarantor. A guarantee is re-
quired for such redemptions to be paid by check greater than $100,000,
or where the redemption proceeds are to be sent to an address other
than the address of record, to a person other than the registered
shareholder(s) for the account or to a bank account number other than
the one previously designated by the shareholder. A signature guaran-
tee is not required for any amount redeemed by ACH transfer or bank
wire when a pre-designated bank has been identified by the sharehold-
er. Any one of the following guarantors is normally acceptable: (a) a
commercial bank or trust company; (b) a member firm of a domestic
stock exchange; (c) a foreign branch of any institution included in
paragraph (a) or (b); (d) a national securities exchange; or (e) a
savings association. Guarantees from a notary public are not accept-
able.
3. All certificates, if any, to be redeemed must be received by DST.
4. In the case of shares held of record in the name of a corporation,
trust, fiduciary or partnership, evidence of authority to sign and a
stock power with signature(s) guaranteed must be received by DST.
RECEIVING REDEMPTION PROCEEDS.
Payment of the redemption price will generally be made within three business
days after receipt of the redemption request in proper form, but the Companies
may suspend the right of redemption and postpone payment during any period
when (i) trading on the NYSE is restricted or such exchange is closed, other
than customary weekend and holiday closings, (ii) the Securities and Exchange
Commission ("SEC") has by order permitted such suspension, or (iii) an emer-
gency, as defined by the rules of the SEC, exists, making disposal of portfo-
lio securities or determination of a Fund's net asset value not reasonably
practicable.
The Funds will not mail redemption proceeds for any shares until checks or
ACH transfers received in payment for such shares have cleared, which may take
up to fifteen days. Investors who wish to avoid any such delay should purchase
shares by bank wire. In addition, any change of address will require a fif-
teen-day holding
31
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
period before the proceeds of any redemption will be released to the new ad-
dress. Shareholders will have the ability to use the exchange privilege during
this holding period. Shareholders can avoid the fifteen-day holding period if
either the redemption or change of address request is signed by all registered
owners and is accompanied by a signature guarantee for each owner. The fif-
teen-day holding period can also be avoided by establishing bank wire redemp-
tion instructions through the New Account Application or Special Options Form.
Redemption proceeds are normally paid in the form of a check. Proceeds can
also be sent to a shareholder's bank account by ACH transfer or by bank wire
when a pre-designated bank has been identified in the New Account Application
or Special Options Form. Proceeds sent by ACH transfer should generally be
credited to a shareholder's account on the second business day after the re-
demption. Proceeds sent by bank wire should be credited on the business day
following the redemption; however, a fee will be deducted from such proceeds.
The amount realized on a redemption may be more or less than the investor's
cost, depending on the net asset value of a Fund's shares at the time of such
redemption, and a gain or loss may be recognized for tax purposes.
MINIMUM ACCOUNT SIZE.
Due to the relatively high cost of maintaining smaller accounts, the Compa-
nies reserve the right to redeem shares in any account if the value of that
account drops below $500, except accounts for shareholders currently partici-
pating in the Automatic Investment program described below. A shareholder will
be allowed at least 60 days to make an additional investment to bring his ac-
count value to $500 or more before the redemption is processed.
SHAREHOLDER SERVICES
The Companies offer the following shareholder services:
EXCHANGE PRIVILEGE.
Shareholders or authorized parties are entitled to exchange some or all of
their shares for shares of the Money Fund and shares of other SoGen Load
Funds. Such shares exchanged will be valued at their respective net asset val-
ues computed as of the close of trading on the NYSE on the day the exchange is
requested.
An exchange of shares pursuant to the exchange privilege may result in a
shareholder realizing a taxable gain or loss for income tax purposes. The ex-
change privilege is available to shareholders residing in any state in which
the shares of the Fund being acquired may legally be sold. A shareholder wish-
ing to utilize the exchange privilege should read the prospectus of the Fund
being acquired.
There is no charge for the exchange privilege. Any exchange, however, must
meet the applicable minimum investment amount for the Fund into which the ex-
change is being made. The minimum initial investment amount for the Interna-
tional
32
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
Fund, Overseas Fund and the Gold Fund, whether by exchange or purchase, is
$1,000. The minimum initial investment amount for the Money Fund is $10,000
directly and $1,000 by exchange. All subsequent amounts exchanged must be $100
or more. Upon exchanges of shares of the Money Fund for shares of any SoGen
Load Fund, payment of the appliable sales load must be made, unless a sales
load has already been paid on such shares. For additional information concern-
ing exchanges, or to effect exchanges, contact the Funds at (800) 334-2143.
Exchanges by telephone may be difficult to implement in times of drastic
economic or market changes. The exchange privilege should not be used to take
advantage of short-term swings in the securities markets. The Companies re-
serve the right to limit or terminate the exchange privilege as to any share-
holder who makes exchanges more than four times a year (other than through the
Automatic Exchange Program or a similar periodic investment program). The Com-
panies can modify or revoke the exchange privilege for all shareholders upon
60 days' prior written notice or without notice in times of drastic economic
or market changes.
AUTOMATIC EXCHANGE PROGRAM.
Shareholders who wish to automatically exchange shares of one Fund for an-
other on a monthly basis can do so by means of the Automatic Exchange Program.
The minimum exchange amount is $100. If the balance in the account the share-
holder is exchanging from falls below the designated automatic exchange
amount, all remaining shares will be exchanged and the program will be discon-
tinued. All conditions with respect to exchange transactions apply as dis-
cussed in "Exchange Privilege" above.
TELEPHONE PRIVILEGES.
Unless contrary instructions are elected in the New Account Application or
Special Options Form, the account will be entitled to make telephone redemp-
tions, exchanges and account maintenance requests. Neither the Companies nor
their agents will be liable for following instructions communicated by tele-
phone that are reasonably believed to be genuine. Reasonable procedures will
be employed on behalf of each Fund to confirm that the instructions are genu-
ine. Such procedures include, but are not limited to, written confirmation of
telephone transactions, tape recording telephone conversations and requiring
specific personal information prior to acting upon telephone instructions.
Any owner(s), trustee(s) or other fiduciary entity as indicated in the ac-
count registration, investment professional of record and/or other parties
that can provide specific personal information will be allowed to initiate any
of the above referenced telephone transactions. Personal information may in-
clude a combination of the following items: (i) the fund and account number,
(ii) the account registration, (iii) the social security or tax identification
number on the account, (iv) the address of record and any other information
deemed appropriate to allow access to the account.
33
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
Certain retirement accounts are not eligible for all the telephone privi-
leges referenced above. Please call (800) 334-2143 with all inquiries pertain-
ing to the legal requirements for any transaction.
AUTOMATIC INVESTMENT PROGRAM.
Investors may make regular semi-monthly, monthly or quarterly investments of
$100 (or more) in shares of a Fund, automatically from a checking or savings
account. Upon written authorization, DST will debit the investor's account as
indicated and use the proceeds to purchase shares of a Fund for the investor's
account. Because approval by the investor's bank is required, establishment of
an Automatic Investment Program may require at least thirty days. To establish
an Automatic Investment Program, indication must be made on the New Account
Application or Special Options Form, and a check (minimum $100 if a new ac-
count is being established), savings account deposit slip or savings account
statement must be forwarded to DST. Shares purchased through Automatic Invest-
ment Program payments are subject to the redemption restrictions for recent
purchases described in "How to Redeem Shares." The Companies may amend or
cease to offer the Automatic Investment Program at any time.
DIVIDEND DIRECTION PLAN.
Shareholders in a Fund may elect to have income dividends and capital gains
distributions on their Fund shares invested without the payment of any sales
charge in shares of the Money Fund or shares of any SoGen Load Fund in which
they have an existing account and maintain a minimum account balance. All div-
idends and distributions so invested are taxable for U.S. federal income tax
purposes as though received in cash. For further information about this privi-
lege, contact DST in writing at the appropriate address listed on page 25 or
by telephone at (800) 334-2143.
SYSTEMATIC WITHDRAWAL PLAN.
A shareholder who owns shares of a Fund with a current net asset value of
$10,000 or more may use those shares to establish a Systematic Withdrawal Plan
to receive a monthly or quarterly check in a stated amount of not less than
$50 on or about the 25th day of the month. Dividends and distributions on
shares invested under a Systematic Withdrawal Plan may not be taken in cash
but must be reinvested, which will be done at net asset value. A Fund's shares
will be redeemed as necessary to meet withdrawal payments. Withdrawals in ex-
cess of dividends and distributions will reduce and may deplete the invested
principal and may result in a gain or loss for tax purposes. Purchases of ad-
ditional shares made concurrently with withdrawals of shares are undesirable
because of sales charges incurred when purchases are made. Accordingly, a
shareholder may not maintain a Systematic Withdrawal Plan while simultaneously
making regular purchases. New accounts established by check, after the 10th of
the month, will not begin distribution until the following month due to the
fifteen-day hold on check purchases. The Companies may amend or cease to offer
the Systematic Withdrawal Plan at any time.
34
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
RETIREMENT PLANS.
The Companies offer IRA, SEP and 403(b)(7) plans which allow investors to
save for retirement and defer taxes on investment income, if any. The tax bene-
fits of these plans may not be available for all persons. Investors should con-
sult their tax advisers regarding their eligibility.
For appropriate applications, please contact the Funds at (800) 334-2143.
SHAREHOLDER STATEMENTS AND REPORTS.
A confirmation statement is mailed to shareholders for each transaction in a
Fund, and a summary statement and tax reporting are provided at year end. Each
Fund also provides shareholders with an annual Prospectus as well as annual and
semi-annual reports.
ACCOUNT MAINTENANCE.
Shareholders will often need to update certain account information during
their relationship with the Funds. Please call (800) 334-2143 with any ques-
tions concerning the legal requirements necessary to execute your request.
INQUIRIES
For information on how to buy shares of a Fund or to request additional lit-
erature about any of the Funds, or for account information, shareholder serv-
ices or information on how to redeem shares, please call (800) 334-2143.
35
<PAGE>
SOGEN FUNDS, INC.
(This Page Left Blank Intentionally)
36
<PAGE>
SOGEN FUNDS, INC.
(This Page Left Blank Intentionally)
37
<PAGE>
SOGEN INTERNATIONAL FUND, INC____________________________SOGEN.FUNDS, INC.
SHAREHOLDERS' REFERENCE GUIDE
TELEPHONE NUMBERS:
For Fund Information, Account & Shareholder Services
(800) 334-2143
MAIL:
Direct Purchases, Redemptions
and Account Updates: The SoGen Funds
c/o DST Systems, Inc.
P.O. Box 419324,
Kansas City, MO
64141-6324
Overnight Mail: The SoGen Funds
c/o DST Systems, Inc.
1004 Baltimore
Kansas City, MO
64105-1807
WIRING INSTRUCTIONS:
You may wire funds to us at: IFTC, Kansas City, MO
ABA Routing #101003621
Account #7534116
Reference: (Your account number and trade
confirmation number)
To avoid rejection of your wire, you must inform us of your intention to
wire when you place your purchase order AND include your SoGen Fund account
number and the trade confirmation number in the reference section of the wire.
AUTOMATIC INVESTMENT PROGRAM--regular investments of at least $100, automat-
ically from your checking or savings account. Because approval by your bank is
required, establishment of an Automatic Investment Program may require at
least thirty days. See the "Automatic Investment Program" section of the Pro-
spectus for details.
SYSTEMATIC WITHDRAWAL PLAN--With a minimum net asset value of $10,000, you
may establish a Systematic Withdrawal Plan to receive, not less than $50, on a
monthly or quarterly basis. Distributions are made on or about the 25th of the
month. New accounts established by check after the 10th of the month, will not
begin distribution until the following month due to the fifteen-day hold on
check purchases. Please see the "Systematic Withdrawal Plan" section of the
Prospectus for details.
INVESTMENT THROUGH ACH--A convenient way for you to invest or redeem shares
in your SoGen Fund account. Please contact your financial representatives or
the Funds directly at (800) 334-2143 for further information.
38
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
SOGEN FUNDS, INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
INVESTMENT ADVISER
------------------
Societe Generale Asset Management Corp.
1221 Avenue of the Americas
New York, NY 10020
UNDERWRITER
-----------
Societe Generale Securities Corporation
1221 Avenue of the Americas
New York, NY 10020
(212) 278-5800
LEGAL COUNSEL
-------------
Dechert Price & Rhoads
30 Rockefeller Plaza
New York, NY 10112
INDEPENDENT AUDITORS
--------------------
KPMG Peat Marwick LLP
345 Park Avenue
New York, NY 10154
DOMESTIC CUSTODIAN
------------------
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
GLOBAL CUSTODIAN
----------------
The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, NY 11245
SHAREHOLDER SERVICING AGENT
---------------------------
DST Systems, Inc.
P.O. Box 419324
Kansas City, MO 64141-6324
(800) 334-2143
<PAGE>
[LOGO OF SOGEN APPEARS HERE]
SoGen International Fund, Inc.
------------------------------
SoGen Funds, Inc.
1221 Avenue of the Americas
New York, NY 10020
SGC1
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------
SOGEN OVERSEAS FUND
SOGEN GOLD FUND
SOGEN MONEY FUND
-------------------------
[LOGO OF SOGEN APPEARS HERE]
1221 AVENUE OF THE AMERICAS
NEW YORK, NY 10020
(800) 334-2143
----------------
Societe Generale Asset Management Corp.
1221 Avenue of the Americas
New York, NY 10020
Investment Adviser
Societe Generale Securities Corporation
1221 Avenue of the Americas
New York, NY 10020
Principal Underwriter
----------------
This Statement of Additional Information provides information about SoGen
Overseas Fund, SoGen Gold Fund and SoGen Money Fund, three separate portfolios
of SoGen Funds, Inc. (the "Company"), an open-end management investment compa-
ny, in addition to the information contained in the Prospectus of the Company
dated July 31, 1997. This Statement of Additional Information is not a pro-
spectus. It relates to and should be read in conjunction with the Prospectus
of the Company, a copy of which can be obtained by writing or by calling the
Company at (800)-334-2143.
----------------
July 31, 1997
SN-51
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
STATEMENT OF CROSS-REFERENCED
ADDITIONAL TO CAPTIONS IN
INFORMATION THE PROSPECTUS
PAGE PAGE
------------ ----------------
<S> <C> <C>
ORGANIZATION OF THE FUNDS....................... 3 8
INVESTMENT OBJECTIVES, POLICIES AND
RESTRICTIONS................................... 3 8
MANAGEMENT OF THE COMPANY....................... 12 19
INVESTMENT ADVISER AND OTHER SERVICES........... 14 19
DISTRIBUTION OF THE FUNDS' SHARES............... 16 29
COMPUTATION OF NET ASSET VALUE.................. 17 24
HOW TO PURCHASE SHARES.......................... 18 24
TAX STATUS...................................... 18 21
BROKERAGE ALLOCATION............................ 21 20
CUSTODY OF PORTFOLIO............................ 23 --
INDEPENDENT AUDITORS............................ 23 --
FINANCIAL STATEMENTS............................ 23 --
APPENDIX........................................ 24 --
</TABLE>
2
<PAGE>
ORGANIZATION OF THE FUNDS
SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund, (each individu-
ally referred to as a "Fund", collectively, the "Funds" or, alternatively, the
"Overseas Fund," the "Gold Fund," and the "Money Fund," respectively) are
three separate portfolios of SoGen Funds, Inc. (the "Company"), an open-end
management investment company incorporated under the laws of Maryland in May
1993. Each Fund is a separate, diversified portfolio of assets and has a dif-
ferent investment objective which it pursues through separate investment poli-
cies, as described below. The Company's investment adviser is Societe Generale
Asset Management Corp. ("SGAM"), a registered investment adviser. The
Company's principal underwriter is Societe Generale Securities Corporation
("SGSC"), a registered broker-dealer located in New York.
Pursuant to the laws of Maryland, the Company's jurisdiction of incorpora-
tion, the Board of Directors of the Company has adopted By-Laws of the Company
that do not require annual meetings of the Funds' shareholders. The absence of
a requirement that the Company hold annual meetings of the Funds' shareholders
reduces its expenses. Meetings of shareholders will continue to be held when
required by the Investment Company Act of 1940 or Maryland law or when called
by the Chairman of the Board of Directors, the President or shareholders own-
ing 10% of a Fund's outstanding shares. The cost of any such notice and meet-
ing will be borne by each Fund.
Under the provisions of the Investment Company Act of 1940, a vacancy in the
office of director of the Company may be filled between meetings of the share-
holders of the Company by vote of the directors then in office if, immediately
after filling such vacancy, at least two-thirds of the directors then holding
office have been elected to the office of director by the shareholders of the
Funds. In the event that at any time less than a majority of the directors of
the Company holding office at that time were elected by the shareholders of
the Funds, the Board of Directors or the Chairman of the Board shall, within
sixty days, cause a meeting of shareholders to be held for the purpose of
electing directors to fill any vacancies in the Board of Directors.
The staff of the Securities and Exchange Commission has advised the Funds
that it interprets Section 16(c) of the Investment Company Act of 1940, which
provides a means for dissident shareholders of common-law trusts to communi-
cate with other shareholders of such trusts and to vote upon the removal of
trustees upon the request in writing by the record holders of not less than 10
percent of the outstanding shares of the trust, to apply to investment compa-
nies, such as the Company, that are incorporated under Maryland law.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES OF THE FUNDS.
OVERSEAS FUND. The Overseas Fund seeks long-term growth of capital by in-
vesting primarily in securities of small and medium size non-U.S. companies.
The Fund uses the techniques and invests in the types of securities described
below and in the Prospectus.
GOLD FUND. The Gold Fund seeks growth of capital by investing primarily in
securities of companies engaged in mining, processing, dealing in or holding
gold or other precious metals such as silver, platinum and palladium, both in
the United States and in foreign countries. Gold-related investments have pro-
vided protection against loss of purchasing power during periods of extensive
price inflation and/or following periods of extensive credit expansion. Under
normal circumstances, at least 65% of the value of the Fund's total assets
will be invested in securities (which may include both equity and, to a lim-
ited extent, debt securities) consisting of issuers engaged in gold opera-
tions, including securities of gold mining finance companies as well as oper-
ating companies with long, medium or short-life mines.
MONEY FUND. The Money 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.
INVESTMENT POLICIES, TECHNIQUES AND RISKS.
FOREIGN SECURITIES. Each Fund may (and the Overseas Fund will) invest in
foreign securities, which may entail a greater degree of risk (including risks
relating to exchange rate fluctuations, tax provisions, or expropriation of
assets) than does investment in securities of domestic issuers. The Funds may
invest in securities of
3
<PAGE>
foreign issuers directly or in the form of American Depository Receipts
(ADRs), Global Depository Receipts (GDRs), European Depository Receipts
(EDRs), or other securities representing underlying shares of foreign issuers.
Positions in these securities are not necessarily denominated in the same cur-
rency as the common stocks into which they may be converted. ADRs are receipts
typically issued by an American bank or trust company evidencing ownership of
the underlying securities. EDRs are European receipts evidencing a similar ar-
rangement. GDRs are global offerings where two securities are issued simulta-
neously in two markets, usually publicly in non-U.S. markets and privately in
the U.S. market. Generally ADRs, in registered form, are designed for use in
the U.S. securities markets, EDRs, in bearer form, are designed for use in Eu-
ropean securities markets. GDR's are designed for use in the U.S. and European
securities markets. Each of the Funds (except the Money Fund) may invest in
both "sponsored" and "unsponsored" ADRs. In a sponsored ADR, the issuer typi-
cally pays some or all of the expenses of the depository and agrees to provide
its regular shareholder communications to ADR holders. An unsponsored ADR is
created independently of the issuer of the underlying security. The ADR hold-
ers generally pay the expenses of the depository and do not have an undertak-
ing from the issuer of the underlying security to furnish shareholder communi-
cations. Issuers of unsponsored ADRs are not obligated to disclose material
information in the United States and, therefore, there may not be a correla-
tion between such information and the market value of the ADRs. Neither Fund
expects to invest 5% or more of its total assets in unsponsored ADRs.
With respect to portfolio securities that are issued by foreign issuers or
denominated in foreign currencies, the investment performance of a Fund is af-
fected by the strength or weakness of the U.S. dollar against these curren-
cies. For example, if the dollar falls in value relative to the Japanese yen,
the dollar value of a yen-denominated stock held in the portfolio will rise
even though the price of the stock remains unchanged. Conversely, if the dol-
lar rises in value relative to the yen, the dollar value of the yen-denomi-
nated stock will fall. (See discussion of transaction hedging and portfolio
hedging under "Currency Exchange Transactions.")
Investors should understand and consider carefully the risks involved in
foreign investing. Investing in foreign securities, positions which are gener-
ally denominated in foreign currencies, and utilization of forward foreign
currency exchange contracts involve certain risks and opportunities not typi-
cally associated with investing in U.S. securities. These considerations in-
clude: fluctuations in the rates of exchange between the U.S. dollar and for-
eign currencies; possible imposition of exchange control regulations or cur-
rency restrictions that would prevent cash from being brought back to the
United States; less public information with respect to issuers of securities;
less governmental supervision of stock exchanges, securities brokers, and is-
suers of securities; different accounting, auditing and financial reporting
standards; different settlement periods and trading practices; less liquidity
and frequently greater price volatility in foreign markets than in the United
States; imposition of foreign taxes; and sometimes less advantageous legal,
operational and financial protections applicable to foreign sub-custodial ar-
rangements.
Although the Funds seek to invest in companies and governments of countries
having stable political environments, there is the possibility of expropria-
tion or confiscatory taxation, seizure or nationalization of foreign bank de-
posits or other assets, establishment of exchange controls, the adoption of
foreign government restrictions, or other adverse political, social or diplo-
matic developments that could affect investment in these nations.
The countries in which the Overseas Fund invests are included in those
listed below. The Overseas Fund may not invest in all the countries listed,
and it may invest in other countries as well, when such investments are con-
sistent with the Fund's investment objective and policies. In addition, the
Gold Fund may invest in gold-related investments in any of such countries
deemed suitable by the investment adviser.
4
<PAGE>
MATURE MARKETS EMERGING MARKETS
Australia Argentina Nigeria
Austria Brazil Pakistan
Belgium Chile People's Republic of China
Canada Czech Republic Peru
Denmark Ecuador Philippines
Finland Greece Poland
France Hungary Portugal
Germany India South Africa
Hong Kong Indonesia South Korea
Ireland Israel Sri Lanka
Italy Jamaica Taiwan
Japan Jordan Thailand
Luxembourg Kenya Turkey
Netherlands Malaysia Uruguay
New Zealand Mexico Venezuela
Norway Morocco Vietnam
Singapore
Spain
Sweden
Switzerland
United Kingdom
United States
It may not be feasible for the Overseas Fund or the Gold Fund currently to
invest in all of these countries due to restricted access to their securities
markets or inability to implement satisfactory custodial arrangements.
Since the Money 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 addi-
tion, the Money Fund does not intend to invest in the securities markets of
emerging countries.
FLUCTUATIONS IN THE PRICE OF GOLD (GOLD FUND). The price of gold has been
subject to substantial upward and downward price movements over short periods
of time and may be affected by unpredictable international monetary and polit-
ical policies, such as currency devaluations or revaluations, economic condi-
tions within an individual country, trade imbalances or trade or currency re-
strictions between countries and world inflation rates and interest rates. The
price of gold, in turn, is likely to affect the market prices of securities of
companies mining, processing or dealing in gold, and accordingly, the value of
the Fund's investments in such securities also may be affected.
CURRENCY EXCHANGE TRANSACTIONS (OVERSEAS FUND AND GOLD FUND). A currency ex-
change transaction may be conducted either on a spot (i.e., cash) basis at the
spot rate for purchasing or selling currency prevailing in the foreign ex-
change market or through a forward currency exchange contract ("Forward Con-
tract"). A Forward Contract is an agreement to purchase or sell a specified
currency at a specified future date (or within a specified time period) and
price set at the time of the contract. Forward Contracts are usually entered
into with banks and broker/dealers, are not exchange traded and are usually
for less than one year, but may be renewed.
Currency exchange transactions may involve currencies of the different coun-
tries in which the Overseas Fund and Gold Fund may invest, and serve as hedges
against possible variations in the exchange rates between these currencies and
the U.S. dollar. A Fund's currency transactions are limited to transaction
hedging and portfolio hedging involving either specific transactions or port-
folio positions. Transaction hedging is the purchase or sale of a Forward Con-
tract with respect to specific payables or receivables of a Fund accruing in
connection
5
<PAGE>
with the purchase or sale of portfolio securities. Portfolio hedging is the
use of a Forward Contract with respect to a portfolio security position denom-
inated or quoted in a particular currency. A Fund may engage in portfolio
hedging with respect to the currency of a particular country in amounts ap-
proximating actual or anticipated positions in securities denominated in that
currency.
If a Fund enters into a Forward Contract, the custodian bank will segregate
liquid assets of the Fund having a value equal to the Fund's commitment under
such Forward Contract.
At the maturity of a Forward Contract to deliver a particular currency, a
Fund may either sell the portfolio security related to such contract and make
delivery of the currency, or it may retain the security and either acquire the
currency on the spot market or terminate its contractual obligation to deliver
the currency by purchasing an offsetting contract with the same currency
trader obligating it to purchase on the same maturity date the same amount of
the currency.
It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of a Forward Contract. Accordingly, it
may be necessary for a Fund to purchase additional currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of currency the Fund is obligated to deliver, and if a
decision is made to sell the security and make delivery of the currency. Con-
versely, it may be necessary to sell on the spot market some of the currency
received upon the sale of the portfolio security if its market value exceeds
the amount of currency the Fund is obligated to deliver.
If a Fund retains the portfolio security and engages in an offsetting trans-
action, the Fund will incur a gain or a loss to the extent that there has been
movement in Forward Contract prices. If a Fund engages in an offsetting trans-
action, it may subsequently enter into a new Forward Contract to sell the cur-
rency. Should forward prices decline during the period between the date a Fund
enters into a Forward Contract for the sale of a currency and the date it en-
ters into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should for-
ward prices increase, the Fund will suffer a loss to the extent the price of
the currency it has agreed to purchase exceeds the price of the currency it
has agreed to sell. A default on the contract would deprive the Fund of
unrealized profits or force the Fund to cover its commitments for purchase or
sale of currency, if any, at the current market price.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the oppor-
tunity for gain if the value of the hedged currency should rise. Moreover, it
may not be possible for a Fund to hedge against a devaluation that is so gen-
erally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates. The cost to a Fund of
engaging in currency exchange transactions varies with such factors as the
currency involved, the length of the contract period and prevailing market
conditions. Since currency exchange transactions are usually conducted on a
principal basis, no fees or commissions are involved.
LOWER-RATED DEBT SECURITIES (OVERSEAS FUND AND GOLD FUND). Each of the Over-
seas Fund and the Gold Fund may invest in debt securities, including lower-
rated securities (i.e., securities rated BB or lower by Standard & Poor's Cor-
poration ("S&P") or Ba or lower by Moody's Investors Service, Inc.
("Moody's"), commonly called "junk bonds") and securities that are not rated.
There are no restrictions as to the ratings of debt securities acquired by a
Fund or the portion of a Fund's assets that may be invested in debt securities
in a particular rating category, except that a Fund will not invest more than
20% of its assets in securities rated below investment grade or unrated secu-
rities considered by the investment adviser to be of comparable credit quali-
ty.
Securities rated BBB by S&P or Baa by Moody's (the lowest investment grade
ratings) are considered to be of medium grade and to have speculative charac-
teristics. Debt securities rated below investment grade are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Although lower-rated debt and comparable unrated debt securities
may offer higher yields than do higher rated securities, they generally in-
volve greater volatility of price and risk of principal and income, including
the possibility of default by, or bankruptcy of, the issuers of the securi-
ties. In addition, the markets in which lower-rated and unrated debt securi-
ties are traded are more limited than those in which higher rated securities
are traded. Adverse publicity and investors' perceptions, whether or not based
on fundamental analysis, may decrease the values and liquidity of lower-rated
debt securities, especially in a thinly traded market. During periods of thin
trading in these markets, the spread between bid and asked prices is likely to
increase significantly, and a Fund may have
6
<PAGE>
greater difficulty selling its portfolio securities. See "Computation of Net
Asset Value." Analyses of the creditworthiness of issuers of lower-rated debt
securities may be more complex than for issuers of higher rated securities,
and the ability of the Fund to achieve its investment objective may, to the
extent of investment in lower-rated debt securities, be more dependent upon
such creditworthiness analyses than would be the case if the Fund were invest-
ing in higher rated securities.
Lower-rated debt securities may be more susceptible to real or perceived ad-
verse economic and competitive industry conditions than investment grade secu-
rities. The prices of lower-rated debt securities have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic downturns or individual corporate developments.
A projection of an economic downturn or of a period of rising interest rates,
for example, could cause a decline in lower-rated debt securities' prices be-
cause the advent of a recession could lessen the ability of a highly-leveraged
company to make principal and interest payments on its debt securities. If the
issuer of lower-rated debt securities defaults, a Fund may incur additional
expenses seeking recovery.
A more complete description of the characteristics of bonds in each rating
category is included in the appendix to this Statement of Additional Informa-
tion.
BANK OBLIGATIONS. Each Fund may invest in bank obligations, which may in-
clude bank certificates of deposit, time deposits or bankers' acceptances.
Certificates of deposit and time deposits are negotiable certificates issued
against funds deposited in a commercial bank for a definite period of time and
earning a specified return. Bankers' acceptances are negotiable drafts or
bills of exchange, normally drawn by an importer or exporter to pay for spe-
cific merchandise, which are "accepted" by a bank, meaning in effect that the
bank unconditionally agrees to pay the face value of the instrument on maturi-
ty. Investments in these instruments are limited to obligations of domestic
banks (including their foreign branches) and U.S. and foreign branches of for-
eign banks having capital surplus and undivided profits in excess of $100 mil-
lion.
ASSET-BACKED SECURITIES (MONEY FUND). The Money Fund can invest a portion of
its assets in debt obligations known as "Asset-Backed Securities" which are
Eligible Securities (as that term is hereinafter defined). The credit quality
of most Asset-Backed Securities depends primarily on the credit quality of the
assets underlying such securities, how well the entity issuing the security is
insulated from the credit risk of the originator (or any other affiliated en-
tities), and the amount and quality of any credit support provided to the se-
curities. The rate of principal payments on Asset-Backed Securities generally
depends on the rate of principal payments received on the underlying assets,
which in turn may be affected by a variety of economic and other factors. As a
result, the yield on any Asset-Backed Security is difficult to predict with
precision and actual yield to maturity may be more or less than the antici-
pated yield to maturity. Asset-Backed Securities may be classified as "Pass-
Through Certificates" or "Collateralized Obligations." Where deemed appropri-
ate by the Board of Directors, Asset-Backed Securities may be valued using
prices provided by a pricing service. The stated maturity of a particular As-
set-Backed Security will be treated as the instrument's maturity for purposes
of the Fund's portfolio maturity requirements, unless there exists an associ-
ated demand feature, enabling the Fund to treat the instrument as having a
shorter maturity.
"Pass-Through Certificates" are Asset-Backed Securities which represent an
undivided fractional ownership interest in the underlying pool of assets.
Pass-Through Certificates usually provide for payments of principal and inter-
est received to be passed through to their holders, usually after deduction
for certain costs and expenses incurred in administering the pool. Because
Pass-Through Certificates represent ownership interests in the underlying as-
sets, the holders thereof bear directly the risk of any defaults by the obli-
gors on the underlying assets not covered by any credit support.
Asset-Backed Securities issued in the form of debt instruments, also known
as Collateralized Obligations, are generally issued as the debt of a special
purpose entity organized solely for the purpose of owning such assets and is-
suing such debt. The assets collateralizing such Asset-Backed Securities are
pledged to a trustee or custodian for the benefit of the holders thereof. Such
issuers generally hold no assets other than those underlying the Asset-Backed
Securities and any credit support provided. As a result, although payments on
such Asset-Backed Securities are obligations of the issuers, in the event of
default on the underlying assets not covered by any credit support, the issu-
ing entities are unlikely to have sufficient assets to satisfy their obliga-
tions on the related Asset-Backed Securities.
7
<PAGE>
METHODS OF ALLOCATING CASH FLOWS. While many Asset-Backed Securities are is-
sued with only one class of security, many others are issued in more than one
class, each with different payment terms. Multiple class Asset-Backed Securi-
ties are issued for two main reasons. First, multiple classes may be used as a
method of providing credit-support. This is accomplished typically through
creation of one or more classes whose right to payments on the Asset-Backed
Security is made subordinate to the right to such payments of the remaining
class or classes. Second, multiple classes may permit the issuance of securi-
ties with payment terms, interest rates or other characteristics differing
both from those of each other and from those of the underlying assets. Exam-
ples include so-called "multi-tranche CMOs" (collateralized mortgage obliga-
tions with serial maturities such that all principal payments received on the
mortgages underlying the securities are first paid to the class with the ear-
liest stated maturity, and then sequentially to the class with the next stated
maturity), "Strips" (Asset-Backed Securities entitling the holder to dispro-
portionate interests with respect to the allocation of interest and principal
of the assets backing the security), and securities with a class or classes
having characteristics which mimic the characteristics of non-Asset-Backed Se-
curities, such as floating interest rates (i.e., interest rates which adjust
as a specified benchmark changes) or scheduled amortization of principal.
TYPES OF CREDIT SUPPORT. Asset-Backed Securities are often backed by a pool
of assets representing the obligations of a number of different parties. To
lessen the effect of failures by obligors on these underlying assets to make
payments, such securities may contain elements of credit support. Such credit
support falls into two classes: liquidity protection and protection against
ultimate default on the underlying assets. Liquidity protection refers to the
provision of advances, generally by the entity administering the pool of as-
sets, to ensure that scheduled payments on the underlying pool are made in a
timely fashion. Protection against ultimate default ensures payment on at
least a portion of the assets in the pool. Such protection may be provided
through guarantees, insurance policies or letters of credit obtained from
third parties, through various means of structuring the transaction, or
through a combination of such approaches. Examples of Asset-Backed Securities
with credit support arising out of the structure of the transaction include
"senior-subordinated securities" (multiple class Asset-Backed Securities with
certain classes subordinate to other classes as to the payment of principal
thereon, with the result that defaults on the underlying assets are borne
first by the holders of the subordinated class) and Asset-Backed Securities
that have "reserve funds" (where cash or investments, sometimes funded from a
portion of the initial payments on the underlying assets, are held in reserve
against future losses) or that have been "over-collateralized" (where the
scheduled payments on, or the principal amount of, the underlying assets sub-
stantially exceed that required to make payment on the Asset-Backed Securities
and pay any servicing or other fees). The degree of credit support provided on
each issue is based generally on historical information respecting the level
of credit risk associated with such payments. Delinquency or loss in excess of
that anticipated could adversely affect the return on an investment in an As-
set-Backed Security.
CREDIT CARD RECEIVABLE SECURITIES. The Fund may invest in Asset Backed Secu-
rities backed by receivables from revolving credit card agreements ("Credit
Card Receivable Securities"). Most of the Credit Card Receivable Securities
issued publicly to date have been Pass-Through Certificates. In order to
lengthen the maturity of Credit Card Receivable Securities, most such securi-
ties provide for a fixed period during which only interest payments on the un-
derlying accounts are passed through to the security holder and principal pay-
ments received on such accounts are used to fund the transfer to the pool of
assets supporting the related Credit Card Receivable Securities of additional
credit card charges made on an account. The initial fixed period usually may
be shortened upon the occurrence of specified events which signal a potential
deterioration in the quality of the assets backing the security, such as the
imposition of a cap on interest rates. The ability of the issuer to extend the
life of an issue of Credit Card Receivable Securities thus depends upon the
continued generation of additional principal amounts in the underlying ac-
counts during the initial period and the non-occurrence of specified events.
Competitive, regulatory and general economic factors could adversely affect
the rate at which new receivables are created in an account and conveyed to an
issuer, shortening the expected weighted average life of the related Credit
Card Receivable Security and reducing its yield. An acceleration in cardhold-
ers' payment rates or any other event which shortens the period during which
additional credit card charges on an account may be transferred to the pool of
assets supporting the related Credit Card Receivable Security could have a
similar effect on the weighted average life and yield.
Credit card holders are entitled to the protection of a number of state and
federal consumer credit laws, many of which give such holder the right to set
off certain amounts against balances owed on the credit card, thereby reducing
amounts paid on accounts. In addition, unlike most other Asset-Backed Securi-
ties, accounts are unsecured obligations of the cardholder.
8
<PAGE>
WHEN-ISSUED OR DELAYED-DELIVERY SECURITIES. Each Fund may purchase securi-
ties on a "when-issued" or "delayed delivery" basis. Although the payment and
interest terms of these securities are established at the time a Fund enters
into the commitment, the securities may be delivered and paid for a month or
more after the date of purchase, when their value may have changed. A Fund
makes such commitments only with the intention of actually acquiring the secu-
rities, but may sell the securities before settlement date if the investment
adviser deems it advisable for investment reasons.
At the time a Fund enters into a binding obligation to purchase securities
on a when-issued basis, liquid assets of the Fund having a value at least as
great as the purchase price of the securities to be purchased will be segre-
gated on the books of the Fund and held by the custodian throughout the period
of the obligation. The use of these investment strategies, as well as any bor-
rowing by a Fund, may increase net asset value fluctuation.
STRUCTURED SECURITIES (OVERSEAS FUND AND GOLD FUND). The Overseas Fund may
invest in structured notes and/or preferred stock, the value of which is
linked to currencies, interest rates, other commodities, indices or other fi-
nancial indicators, and the Gold Fund may invest in structured notes and/or
preferred stock, the value of which is linked to the price of gold or other
precious metals. Structured securities differ from other types of securities
in which the Funds may invest in several respects. For example, the coupon
dividend and/or redemption amount at maturity may be increased or decreased
depending on changes in the value of the underlying instrument.
Investment in structured securities involves certain risks. In addition to
the credit risk of the security's issuer and the normal risks of price changes
in response to changes in interest rates, the redemption amount may decrease
as a result of changes in the price of the underlying instrument. Further, in
the case of certain structured securities, the coupon and/or dividend may be
reduced to zero, and any further declines in the value of the underlying in-
strument may then reduce the redemption amount payable on maturity. Finally,
structured securities may be more volatile than the price of the underlying
instrument.
ILLIQUID SECURITIES. Each Fund may invest up to 15% (10% in the case of the
Money Fund) of its total assets in illiquid securities, including certain se-
curities that are subject to legal or contractual restrictions on resale ("re-
stricted securities").
Generally, restricted securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933 (the "1933 Act").
Where registration is required, a Fund may be obligated to pay all or part of
the registration expenses and a considerable period may elapse between the
time of the decision to sell and the time the Fund may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Fund might obtain a less favor-
able price than that which prevailed when it decided to sell. Restricted secu-
rities will be priced at fair value as determined in good faith by the Board
of Directors. If, through the appreciation of illiquid securities or the de-
preciation of liquid securities, a Fund should be in a position where more
than 15% of the value of its net assets is invested in illiquid assets, in-
cluding restricted securities, the Fund will take appropriate steps to protect
liquidity.
Notwithstanding the above, a Fund may purchase securities that have been
privately placed but that are eligible for purchase and sale under Rule 144A
under the 1933 Act. That rule permits certain qualified institutional buyers,
such as the Funds, to trade in privately placed securities that have not been
registered for sale under the 1933 Act. SGAM Corp., under the supervision of
the Board of Directors of the Company, will consider whether securities pur-
chased under Rule 144A are illiquid and thus subject to a Fund's restriction
on investing in illiquid securities. A determination as to whether a Rule 144A
security is liquid or not is a factual issue requiring an evaluation of a num-
ber of factors. In making this determination, SGAM Corp. will consider the
trading markets for the specific security, taking into account the unregis-
tered nature of a Rule 144A security. In addition, SGAM Corp. could consider
(1) the frequency of trades and quotes, (2) the number of dealers and poten-
tial purchasers, (3) the dealer undertakings to make a market, and (4) the na-
ture of the security and of market place trades (e.g., the time needed to dis-
pose of the security, the method of soliciting offers and the mechanics of
transfer). The liquidity of Rule 144A securities would be monitored and if, as
a result of changed conditions, it is determined that a Rule 144A security is
no longer liquid, a Fund's holdings of illiquid securities would be reviewed
to determine what steps, if any, are required to assure that the Fund does not
invest more than the maximum percentage of its assets in illiquid securities.
Investing in Rule 144A securities could have the effect of increasing the
amount of a Fund's assets invested in illiquid securities if qualified insti-
tutional buyers are unwilling to purchase such securities.
9
<PAGE>
CHANGE OF OBJECTIVE. The investment objective of each Fund is not a funda-
mental policy and, accordingly, may be changed by the Board of Directors with-
out shareholder approval. Shareholders will be notified a minimum of sixty
days in advance of any change in investment objective.
INVESTMENT RESTRICTIONS.
In pursuing its investment objective, each Fund will not:
1. With respect to 75% of the value of a 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 govern-
ment of the United States, or any of its agencies or instrumentalities,
or acquire securities of any one issuer which, at the time of invest-
ment, represent more than 10% of the voting securities of the issuer;
2. Borrow money except unsecured borrowings from banks as a temporary meas-
ure in exceptional circumstances, and such borrowings may not exceed 10%
of a Fund's net assets at the time of the borrowing. A Fund will not
purchase securities while borrowings exceed 5% of its total assets;
3. Invest more than 25% of its assets (valued at time of investment) in se-
curities of companies in any one industry other than U.S. Government Se-
curities (except that the Gold Fund will, as a matter of fundamental
policy, concentrate its investments in the precious metals industry and
the Money Fund may concentrate its investments in U.S. bank obliga-
tions);
4. Make loans, but this restriction shall not prevent a Fund from (a) buy-
ing 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 pri-
vately placed with financial institutions or (b) lending portfolio secu-
rities, provided that a Fund may not lend securities if, as a result,
the aggregate value of all securities loaned would exceed 33% of its to-
tal assets (taken at market value at the time of such loan);*
5. Underwrite the distribution of securities of other issuers; however, a
Fund may acquire "restricted" securities which, in the event of a re-
sale, might be required to be registered under the Securities Act of
1933 (the "1933 Act") on the grounds that the Fund could be regarded as
an underwriter as defined by the 1933 Act with respect to such resale;
6. Purchase and sell real estate or interests in real estate, although it
may invest in marketable securities of enterprises that invest in real
estate or interests in real estate;
7. Make margin purchases of securities, except for the use of such short-
term credits as are needed for clearance of transactions;
8. Sell securities short or maintain a short position, except short sales
against-the-box.
Restrictions 1 through 8 above (except the portions in parentheses) are
"fundamental," which means that they cannot be changed without the vote of a
majority of the outstanding voting securities of a Fund (defined by the In-
vestment Company Act of 1940 as the lesser of (i) 67% of a Fund's shares pres-
ent at a meeting if more than 50% of the shares outstanding are present or
(ii) more than 50% of a Fund's outstanding shares). In addition, each Fund is
subject to a number of restrictions that may be changed by the Board of Direc-
tors without shareholder approval. Under those non-fundamental restrictions, a
Fund will not:
a. Invest in companies for the purpose of management or the exercise of
control;
b. Invest in oil, gas or other mineral leases or exploration or development
programs, although it may invest in marketable securities of enterprises
engaged in oil, gas or mineral exploration;
c. Invest more than 10% of its net assets (valued at time of investment) in
warrants, valued at the lower of cost or market; provided that warrants
acquired in units or attached to securities shall be deemed to be with-
out value for purposes of this restriction;
d. Pledge, mortgage or hypothecate its assets, except as may be necessary
in connection with permitted borrowings or in connection with short
sales;
e. Purchase or sell commodities or commodity contracts, except that it may
enter into forward contracts and may sell commodities received by it as
distributions on portfolio investments; and
- --------
* The Funds have no present intention of lending their portfolio securities.
10
<PAGE>
f. Purchase or sell put and call options on securities or on futures con-
tracts.
The Money Fund will only purchase securities that present minimal credit
risks and which are First Tier or Second Tier Securities (otherwise referred
to as "Eligible Securities"). An Eligible Security is:
(1) a security with a remaining maturity of 397 days or less: (a) that is
rated by the requisite nationally recognized statistical rating organizations
designated by the Securities and Exchange Commission (currently Moody's, S&P,
Duff and Phelps, Inc., Fitch Investors Services, Inc., Thompson Bankwatch,
and, with respect to debt issued by banks, bank holding companies, United
Kingdom building societies, broker/dealers and broker/ dealers' parent compa-
nies, and bank-supported debt, IBCA Limited and its affiliate, IBCA, Inc. --
collectively, the "NRSROs") in one of the two highest rating categories for
short-term debt obligations (the requisite NRSROs being any two or, if only
rated by one, that one NRSRO), or (b) that itself was unrated by any NRSRO,
but was issued by an issuer that has outstanding a class of short-term debt
obligations (or any security within that class) meeting the requirements of
subparagraph 1(a) above that is of comparable priority and security;
(2) a security that at the time of issuance was a long-term security but has
a remaining maturity of 397 days or less and: (a) whose issuer received a rat-
ing in one of the two highest rating categories for short-term debt obliga-
tions from the requisite NRSROs (the requisite NRSROs being any two or, if
only rated by one, that one NRSRO) with respect to a class of short-term debt
obligations (or any security within that class) that is currently comparable
in priority and security with the subject security or (b) which has long-term
ratings from the requisite NRSROs (the requisite NRSROs being any two or, if
only rated by one, that one NRSRO) which are in one of the two highest catego-
ries; or
(3) a security not rated by an NRSRO but deemed by the investment adviser
pursuant to guidelines adopted by the Board of Directors, to be of comparable
quality to securities described in (1) and (2) and to present minimal credit
risks.
A First Tier Security is any Eligible Security which qualifies as such be-
cause it carries (or other relevant securities issued by its issuer carry) top
NRSRO ratings (a single top rating is sufficient if only one NRSRO rates the
security) or has been determined, pursuant to guidelines adopted by the Board
of Directors, to be of comparable quality to such a security. A Second Tier
Security is any other Eligible Security.
The Money Fund will limit its investments in the First Tier Securities of
any one issuer to no more than five percent of its assets. (Repurchase agree-
ments collateralized by non-Government securities will be taken into account
when making this calculation.) Moreover, the Money Fund's total holdings of
Second Tier Securities will not exceed 5% of its assets, with investment in
the Second Tier Securities of any one issuer being limited to the greater of
1% of the Fund's assets or $1 million. In addition, the underlying securities
involved in repurchase agreements collateralized by non-Government securities
will be First Tier Securities at the time the repurchase agreements are exe-
cuted.
Notwithstanding the foregoing investment restrictions, the Overseas Fund and
the Gold Fund may purchase securities pursuant to the exercise of subscription
rights, provided that such purchase will not result a Fund's ceasing to be a
diversified investment company. Japanese and European corporations frequently
issue additional capital stock by means of subscription rights offerings to
existing shareholders at a price substantially below the market price of the
shares. The failure to exercise such rights would result in a Fund's interest
in the issuing company being diluted. The market for such rights is not well
developed in all cases and, accordingly, a Fund may not always realize full
value on the sale of rights. The exception applies in cases where the limits
set forth in the investment restrictions would otherwise be exceeded by exer-
cising rights or would have already been exceeded as a result of fluctuations
in the market value of a Fund's portfolio securities with the result that a
Fund would be forced either to sell securities at a time when it might not
otherwise have done so, or to forego exercising the rights.
TOTAL RETURN. From time to time the Overseas Fund and Gold Fund advertise
their average annual total return. During the one year period ended March 31,
1997, average annual rates of return were 7.93% and (15.52%), for the Overseas
Fund and Gold Fund, respectively. Quotations of average annual returns for
each Fund will be expressed in terms of the average annual compounded rates of
return of a hypothetical investment in each Fund over periods of 1, 5 and 10
years (up to the life of the Fund), calculated pursuant to the following for-
mula: P(1+T)n=ERV (where P = a hypothetical initial payment of $1000, T = the
average annual return, n = the number of years, and ERV = the ending redeem-
able value of a hypothetical $1000 payment made at the
11
<PAGE>
beginning of the period). This calculation assumes deduction of a proportional
share of Fund expenses on an annual basis and deduction of the maximum sales
charge of 3.75% on the amount initially invested, and assumes reinvestment of
all income dividends and capital gains distributions during the period.
CURRENT YIELD AND EFFECTIVE YIELD. From time to time the Money Fund may ad-
vertise its current yield and effective yield. Current yield will be based on
income per share received by a hypothetical investment over a given 7-day pe-
riod (less expenses accrued during the period) and then "annualized" (i.e.,
assuming that the 7-day yield would be received over 52 weeks, stated in terms
of an annual percentage return on the investment). Effective yield is calcu-
lated in a manner similar to that used to calculate current yield, but when
annualized, the income earned by an investment in the Money Fund is assumed to
be reinvested. The effective yield will be slightly higher than the current
yield because of this assumed reinvestment. The Money Fund's current and ef-
fective 7-day yields for the seven days ended March 31, 1997 were 4.78% and
4.90%, respectively. Current yield and effective yield for the Money Fund will
vary based on changes in market conditions, the level of interest rates and
the level of the Fund's expenses and no reported yield figures should be con-
sidered an indication of the performance that may be expected in the future.
COMPARISON OF PORTFOLIO PERFORMANCE. From time to time the Company may dis-
cuss in sales literature and advertisements, specific performance grades or
rankings or other information as published by recognized grades or rankings or
other information as published by recognized mutual fund statistical services,
such as Morningstar, Inc. or Lipper Analytical Services, Inc., or by publica-
tions of general interest such as Barron's, Business Week, Financial World,
Forbes, Fortune, Kiplinger's Personal Finance, Money, Morningstar Mutual
Funds, Smart Money, The Wall Street Journal or Worth.
PORTFOLIO TURNOVER. Although the Overseas Fund and the Gold Fund will not
make a practice of short-term trading, purchases and sales of securities will
be made whenever appropriate, in the investment adviser's view, to achieve a
Fund's investment objective. The rate of portfolio turnover is calculated by
dividing the lesser of the cost of purchases or the proceeds from sales of
portfolio securities (excluding short-term U.S. government obligations and
other short-term investments) for the particular fiscal year by the monthly
average of the value of the portfolio securities (excluding short-term U.S.
government obligations and short-term investments) owned by a Fund during the
particular fiscal year. The rates of portfolio turnover for the Overseas Fund
and Gold Fund during the fiscal year ended March 31, 1995 were 3.16% and
11.56%, respectively, during the fiscal year ended March 31, 1996 were 9.46%
and 22.40%, respectively and during the fiscal year ended March 31, 1997 were
15.18% and 16.83%, respectively. The rate of portfolio turnover is not a lim-
iting factor when management deems portfolio changes appropriate to achieve a
Fund's stated objective. However, it is possible that, under certain circum-
stances, a Fund may have to limit its short-term portfolio turnover to permit
it to qualify as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code").
MANAGEMENT OF THE COMPANY
The business of the Company is managed by its Board of Directors which
elects officers responsible for the day to day operations of the Funds and for
the execution of the policies formulated by the Board of Directors. Several of
the directors and officers of the Company are directors or officers of SGAM
Corp., SGSC or Societe Generale, Paris, France, the indirect owner of one hun-
dred percent (100%) of the outstanding voting securities of SGAM Corp., and
the owner of fifty percent (50%) of the outstanding voting securities of SGSC.
Jean-Marie Eveillard, the President and a director of the Company, owns 100%
of SGAM Corp.'s non-voting Series B common stock which represents 19.9% of the
total capital of SGAM Corp.
The following table sets forth the principal occupation or employment of the
members of the Board of Directors and principal officers of the Company. Each
of the following persons is also a director and/or officer of SoGen Interna-
tional Fund, Inc. and SoGen Variable Funds, Inc.
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE COMPANY DURING PAST FIVE (5) YEARS
- ---------------- ---------------- --------------------------
<S> <C> <C>
Philippe Collas* Chairman of the Board Head of Asset Management at
17, cours Valmy and Director Societe Generale since September
92972 Paris 1995. Head of Human Resource
France Management at Societe Generale
from prior to 1992.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE COMPANY DURING PAST FIVE (5) YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
Jean-Marie Eveillard*(1) President and Director Director and President or
1221 Avenue of the Executive Vice President of SGAM
Americas Corp. from prior to 1992.
New York, NY 10020
Fred J. Meyer(2) Director Chief Financial Officer of
437 Madison Avenue Omnicom Group Inc. from prior to
New York, NY 10022 1992. Director of Novartis
Corporation, and Zurich-American
Insurance Cos.
Dominique Raillard(2) Director President of Act 2 International
15, boulevard Delessert (consulting) since July 1995.
75016 Paris Group Executive Vice President
France of Promodes (consumer
products) -- U.S. Companies
Division from prior to 1992 to
1995.
Nathan Snyder(1)(2) Director Independent Consultant from prior
163 Parish Rd. S. to 1992.
New Canaan, CT 06840
Philip J. Bafundo* Vice President, Secretary and Treasurer, SGAM
1221 Avenue of the Secretary and Treasurer Corp. from prior to 1992.
Americas Certified Public Accountant (New
New York, NY 10020 York).
Ignatius Chithelen* Vice President Securities Analyst, SGAM Corp.
1221 Avenue of the since October 1993. Reporter at
Americas Forbes from prior to 1992 to
New York, NY 10020 April 1992. Private investor
from May 1992 to September 1993.
Sean J. McKeown Vice President Operations Manager, SGAM Corp.
1221 Avenue of the since June 1997. Vice President,
Americas Citibank Investment Products &
New York, NY 10020 Distribution from October 1993
to June 1997. Vice President,
Citicorp Investment Services
from prior to October 1993.
Catherine A. Shaffer* Vice President First Vice President, SGSC from
1221 Avenue of the prior to 1992.
Americas
New York, NY 10020
Edwin S. Olsen* Vice President Vice President, SGSC from prior
1221 Avenue of the to 1992.
Americas
New York, NY 10020
Elizabeth Tobin* Vice President and Securities Analyst, SGAM Corp.
1221 Avenue of the Assistant Secretary from prior to 1992.
Americas
New York, NY 10020
Charles de Vaulx* Vice President Securities Analyst, SGAM Corp.
1221 Avenue of the from prior to 1992.
Americas
New York, NY 10020
</TABLE>
- --------
* An "interested person" of the Company as defined in the Investment Company
Act of 1940, as amended.
(1) Member of the Executive Committee. When the Board of Directors is not in
session, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) Member of the Audit Committee.
13
<PAGE>
The Company makes no payments to any of its officers for services. However,
currently each of the Company's directors who are not officers or employees of
SGAM Corp., SGSC or Societe Generale are paid by the Company an annual fee of
$6,000 and a fee of $1,000 for each meeting of the Company's Board of Direc-
tors and for each meeting of any Committee of the Board that they attend
(other than those held by telephone conference call). Each director is reim-
bursed by the Company for any expenses he may incur by reason of attending
such meetings or in connection with services he may perform for the Company.
During the fiscal year ended March 31, 1997, an aggregate of $36,000 was paid
or accrued for directors' fees and expenses by the Company. See Note 2 of
Notes to the Financial Statements on page 27 of the Company's Annual Report to
Shareholders for a description of various transactions during the Company's
most recent fiscal year between the Company and its directors and affiliates
of its directors.
COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS. The following table sets
forth information regarding compensation of Directors by the Company and by
the fund complex of which the Company is a part for the fiscal year ended
March 31, 1997. Officers of the Company and directors who are interested per-
sons of the Company do not receive any compensation from the Company of any
other fund in the fund complex which is a U.S. registered investment company.
In the column headed "Total Compensation From Registrant and Fund Complex Paid
to Directors," the number in parentheses indicates the total number of boards
in the fund complex on which the director serves.
COMPENSATION TABLE
FISCAL YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM
AGGREGATE ACCRUED ANNUAL REGISTRANT
COMPENSATION AS PART OF BENEFITS AND FUND
FROM FUND UPON COMPLEX PAID
NAME OF PERSON, POSITION REGISTRANT EXPENSES RETIREMENT TO DIRECTORS
- ------------------------ ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Fred J. Meyer*, Director...... $11,000 N/A N/A $25,000(3)
Jean-Marie Eveillard**,
Director and President....... $ -- N/A N/A $ --
Dominique Raillard*,
Director..................... $12,000 N/A N/A $27,000(3)
Nathan Snyder*, Director...... $12,000 N/A N/A $28,000(3)
Philippe Collas**, Director
and Chairman................. $ -- N/A N/A $ --
</TABLE>
- --------
* Member of the Audit Committee.
** "Interested person" of the Company as defined in the Act because of the af-
filiation with SGAM Corp. the Fund's investment adviser.
The directors and officers of the Company, as a group, owned approximately
2,041,789 shares of capital stock of the Company at June 30, 1997. The follow-
ing persons owned of record 5% or more of the outstanding shares of capital
stock of the Company as of June 30, 1997:
<TABLE>
<CAPTION>
TYPE OF OWNERSHIP OWNER SHARE OWNERSHIP
----------------- ----- ---------------
<S> <C> <C>
Of Record Only Charles Schwab & Co. Inc. 31.25%
101 Montgomery Street
San Francisco, CA 94104-4122
</TABLE>
While the Company is a Maryland corporation, certain of its directors and
officers are non-residents of the United States and may have all, or a sub-
stantial part, of their assets located outside the United States. None of the
officers or directors has authorized an agent for service of process in the
United States. As a result, it may be difficult for U.S. investors to effect
service of process upon non-U.S. directors or officers within the United
States or effectively to enforce judgments of courts of the United States
predicated upon civil liabilities of such officers or directors under the fed-
eral securities laws of the United States.
INVESTMENT ADVISER AND OTHER SERVICES
As described in the Company's Prospectus, SGAM Corp. is the Company's in-
vestment adviser and, as such, manages the Overseas Fund, the Gold Fund and
the Money Fund. SGAM Corp. was incorporated in Delaware in February 1990, and
is indirectly owned by Societe Generale, one of France's largest banks.
14
<PAGE>
The persons named below are affiliated with the Company and are also affili-
ated persons of SGAM Corp., SGSC or Societe Generale. The capacity in which
such persons are affiliated with the Company and SGAM Corp., SGSC or Societe
Generale is also indicated.
<TABLE>
<CAPTION>
OFFICE HELD OFFICE HELD WITH SGAM CORP.,
NAME WITH THE COMPANY SGSC OR SOCIETE GENERALE
---- ---------------- ----------------------------
<S> <C> <C>
Philippe Collas Chairman of the Board Head of Asset Management, Societe
and Director Generale. Chairman of the Board and
Director, SGAM Corp.
Jean-Marie Eveillard President and Director President and Director, SGAM Corp.
Philip J. Bafundo Vice President, Secretary and Treasurer, SGAM Corp.
Secretary and Treasurer
Ignatius Chithelen Vice President Securities Analyst, SGAM Corp.
Sean J. McKeown Vice President Operations Manager, SGAM Corp.
Catherine A. Shaffer Vice President First Vice President, SGSC
Edwin S. Olsen Vice President Vice President, SGSC
Elizabeth Tobin Vice President and Securities Analyst, SGAM Corp.
Assistant Secretary
Charles de Vaulx Vice President Securities Analyst, SGAM Corp.
</TABLE>
Under its investment advisory contract with the Company, which became effec-
tive August 17, 1993, SGAM Corp. furnishes the Company with investment advice
consistent with each Fund's stated investment objective. SGAM Corp. also fur-
nishes the Company with office space and certain facilities required for the
business of the Funds, and statistical and research data, and pays any compen-
sation and expenses of the Company's officers. In return, each Fund pays SGAM
Corp. a monthly fee at the annual rate of the average daily value of the
Fund's net assets as follows:
<TABLE>
<S> <C>
Overseas Fund........................................................ 0.75%
Gold Fund............................................................ 0.75%
Money Fund........................................................... 0.40%
</TABLE>
The annual fee rates listed above for the Overseas Fund and the Gold Fund,
respectively, are higher than the rate of fees paid by most U.S. mutual funds.
The Company believes, however, that the advisory fee rates are not higher than
the rate of fees paid by most other mutual funds that invest significantly in
foreign equity securities.
The Overseas Fund and the Gold Fund paid investment advisory fees for the
period from August 31, 1993 to March 31, 1994 of $190,616 and $42,315, respec-
tively, for the fiscal year ended March 31, 1995, $2,534,231 and $273,897, re-
spectively, for the fiscal year ended March 31, 1996, $3,991,923 and $392,561,
respectively, and for the fiscal year ended March 31, 1997, the investment ad-
visory fees were $5,899,446 and $449,545, respectively. For the fiscal year
ended March 31, 1997, $38,752 of the investment advisory fee of $43,519 for
the Money Fund was waived by SGAM Corp.
Under the investment advisory contract between the Company and SGAM Corp.,
the investment adviser is responsible for the management of each of the Funds'
portfolios and constantly reviews their holdings in the light of its own re-
search analyses and those of other relevant sources. Reports of portfolio
transactions are given regularly to the directors of the Company, who review
each Fund's portfolio at meetings held four times a year.
Under the terms of the investment advisory agreement, a Fund will discon-
tinue the use of the term "SoGen" in a Fund's name or the use of any marks or
symbols owned by the investment adviser if the investment adviser ceases to
act as a Fund's investment adviser or if the investment adviser so requests.
As of the date of this Statement of Additional Information, SGAM Corp. owned
of record and beneficially, 5,000 shares of the Overseas Fund, 3,500 shares of
the Gold Fund and 15,000 shares of the Money Fund.
A Fund may, with the approval of the Company's Board of Directors, from time
to time enter into arrangements with institutions to provide sub-transfer
agent services and other related services where a number of persons hold Fund
shares through one account registered with the Fund's transfer agent, DST Sys-
tems, Inc. ("DST") in the name of that institution. Under those arrangements,
a Fund may compensate the institution rendering such services on a per sub-ac-
count basis.
15
<PAGE>
DISTRIBUTION OF THE FUNDS' SHARES
The Company and SGSC have entered into an underwriting contract pursuant to
which SGSC offers, as agent, shares of each Fund to investors, either directly
or through selected securities dealers, in states and countries in which a
Fund's shares are qualified and in which SGSC is qualified as a dealer or where
such qualification is not required.
Pursuant to the Distribution Plan and Agreement (the "Plan") between the Com-
pany and SGSC, adopted by the Overseas Fund and the Gold Fund in accordance
with the provisions of Rule 12b-1 under the Investment Company Act of 1940,
each Fund may pay SGSC a quarterly distribution fee of up to, on an annual ba-
sis, 0.25% of the average daily net asset value of the Fund. Under the Plan,
SGSC must apply the full amount of fees received from a Fund to the payment of
fees to dealers for their assistance in the sale of the shares of the Fund and
for the provision to shareholder services and for other distribution related
expenses such as the payment of advertising costs and the payment for the prep-
aration, printing and distribution of prospectuses to investors. SGSC bears a
Fund's distribution costs to the extent they exceed payments under the Plan.
For the fiscal year ended March 31, 1997, the Company paid SGSC $2,107,016 pur-
suant to the Plan, $7,972 of which was paid by SGSC to Societe Generale and
subsidiaries of Societe Generale. SGSC and SGAM Corp. bear the Company's dis-
tribution costs to the extent they exceed payments under the Plan.
Substantially all of the amounts paid to SGSC under the Plan are paid to
dealers selling shares of the Funds, including Societe Generale and certain of
its subsidiaries, for their assistance in selling shares of the Funds. A dealer
selling shares normally receives a fee, calculated on a quarterly basis, equal
to 0.25% of the average daily net asset value of the shares of a Fund held by
the dealer's customers. SGSC has retained $875,270 of the amount paid to it
pursuant to the Plan with respect to the fiscal year ended March 31, 1997, as
reimbursement for expenses incurred in promoting the sale of the Company's
shares, including printing and distribution of prospectuses and sales litera-
ture for advertising. Distribution expenses incurred in any fiscal year which
are not reimbursed from payments under the Plan accrued in such fiscal year
will not be carried over for payment under the Plan in any subsequent year.
The Plan provides that it will continue in effect only so long as its contin-
uance is approved at least annually by the directors of the Company and by the
directors who are not interested persons of the Company and who have no direct
or indirect financial interest in the operation of the Plan or in any agree-
ments relating to the Plan (the "Independent Directors"). In the case of an
agreement relating to the Plan, the Plan provides that such agreement may be
terminated, without penalty, by a vote of a majority of the Independent Direc-
tors, or, as to a Fund, by a majority of the Fund's outstanding voting securi-
ties on 60 days' written notice to SGSC, and provides further that such agree-
ment will automatically terminate in the event of its assignment. The Plan also
states that it may not be amended to increase the maximum amount of the pay-
ments thereunder without the approval of a majority of the outstanding voting
securities (as defined on page 10) of a Fund. No material amendment to the Plan
will, in any event, be effective unless it is approved by a vote of the direc-
tors and the Independent Directors of the Company.
When the Company seeks an Independent Director to fill a vacancy on the board
or as an addition to the board or as a nominee for election by stockholders,
the selection or nomination of the Independent Director is, under resolutions
adopted by the directors, contemporaneously with their adoption of the Plan,
committed to the discretion of the Independent Directors.
With respect to fiscal year ended March 31, 1997, SGSC, the principal under-
writer of the Company's shares, Societe Generale (including subsidiaries) and
SGAM Corp. received commissions and other compensation in connection with oper-
ation of the Company as follows:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
NAME OF NET
PRINCIPAL UNDERWRITING COMMISSIONS ON
UNDERWRITER DISCOUNTS AND REPURCHASES BROKERAGE OTHER
OR AFFILIATE DEALER COMMISSIONS OR REDEMPTIONS COMMISSIONS COMPENSATION
------------ ------------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
SGSC.................... $462,833 $-- $58,356 $2,107,016*
Societe Generale
(including
subsidiaries).......... $ 8,694 $-- $ 8,699 $ 7,972**
SGAM Corp............... $ -- $-- $ -- $6,353,758***
</TABLE>
16
<PAGE>
- --------
* For the period reported, the Company's distribution fee paid or payable to
SGSC pursuant to the Plan. Substantially all of such amount was paid or
will be paid to dealers, including Societe Generale and certain subsidiar-
ies, selling shares of the Company.
** Amounts paid to Societe Generale as a dealer of the Company's shares pur-
suant to the Plan, which amount is included in the $2,107,016 paid to SGSC
under the Plan.
*** The Company's investment advisory fee paid or payable to SGAM Corp. for
the fiscal year ended March 31, 1997.
During the three years ended March 31, 1995, 1996 and 1997, the aggregate
amount of sales charges on sales of the Company's shares was $6,522,581,
$2,263,995 and $2,098,953, respectively. During the years ended March 31, 1995
and 1996, SGSC received net underwriting discounts and dealer commissions of
$747,619, and $477,279, respectively. Societe Generale received dealer dis-
counts of $8,988 for the fiscal year ended March 31, 1996.
SGAM Corp. has entered into an agreement with SGSC, dated April 30, 1990,
under which net commissions and fees earned by SGSC in its capacity as under-
writer to the Funds, are remitted to SGAM Corp. In consideration for certain
services provided by SGSC, SGAM Corp. pays SGSC a $25,000 per annum fee, pay-
able monthly, and reimburses SGSC for certain expenses incurred on behalf of
SGAM Corp. For SGAM Corp.'s fiscal year ended, December 31, 1996, such commis-
sions and fees with respect to the Funds amounted to $1,249,640, and the re-
lated reimbursement for services amounted to $18,052.
The investment advisory and underwriting contracts continue in effect from
year to year so long as the continuance of each contract is specifically ap-
proved at least annually by the Board of Directors or by a vote of a majority
of the outstanding voting securities of each Fund (as defined on page 10). In
addition, the terms of each contract and the renewals thereof must be approved
annually by the vote of a majority of the directors who are not "interested
persons" (as defined in the Investment Company Act of 1940) of SGAM Corp.,
SGSC or the Company. Each contract will terminate automatically in the event
of its assignment (as defined in the Investment Company Act of 1940) and may
be terminated, without penalty, on sixty days' written notice at the option of
either party thereto or by a vote of a majority of the outstanding voting se-
curities of a Fund.
COMPUTATION OF NET ASSET VALUE
Each Fund computes its net asset value once daily as of the close of trading
on each day the New York Stock Exchange is open for trading. The Exchange is
closed on the following days: New Year's Day, Rev. Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share is computed
by dividing the total current value of the assets of a Fund, less its liabili-
ties, by the total number of shares outstanding at the time of such computa-
tion.
The Money Fund values its portfolio instruments at amortized cost, which
means that they are valued at their acquisition cost, as adjusted for amorti-
zation of premium or discount, rather than at current market value. Calcula-
tions are made to compare the value of the Fund's investments valued at amor-
tized cost with market values. Market valuations are obtained by using actual
quotations provided by market makers, estimates of market value, or values ob-
tained from yield data relating to classes of money market instruments pub-
lished by reputable sources at the mean between the bid and asked prices for
the instruments. The amortized cost method of valuation seeks to maintain a
stable $1.00 per share net asset value even where there are fluctuations in
interest rates that affect the value of portfolio instruments. Accordingly,
this method of valuation can in certain circumstances lead to a dilution of a
shareholder's interest. If a deviation of 1/2 of 1% or more were to occur be-
tween the net asset value per share calculated by reference to market values
and the Money Fund's $1.00 per share net asset value or if there were any
other deviation which the Board of Directors believed would result in a mate-
rial dilution to shareholders or purchasers, the Board of Directors would
promptly consider what action, if any, should be initiated. If the Money
Fund's net asset value per share (computed using market values) declined, or
were expected to decline, below $1.00 (computed using amortized cost), the
Board of Directors might temporarily reduce or suspend dividend payments in an
effort to maintain the net asset value at $1.00 per share. As a result of such
reduction or suspension of dividends or other action by the Board of Direc-
tors, an investor would receive less income during a given period than if such
a reduction or suspension had not taken place. Such action could result in in-
vestors receiving no dividend for the period during which they hold their
shares and receiving, upon redemption, a price per share lower than that which
they paid. On the other hand, if the Money Fund's net asset value per share
(computed using market values) were to increase, or were anticipated to in-
crease above $1.00 (computed using amortized cost), the Board of Directors
might supplement dividends in an effort to maintain the net asset value at
$1.00 per share.
17
<PAGE>
A portfolio security, other than a bond, which is traded on a U.S. national
securities exchange or a securities exchange abroad is normally valued at the
price of the last sale on the exchange as of the close of business on the date
on which assets are valued. If there are no sales on such date, such portfolio
securities will be valued at the mean between the closing bid and asked prices.
Securities, other than bonds, traded in the over-the-counter market are valued
at the mean between the last bid and asked prices prior to the time of valua-
tion, except if such unlisted security is among the NASDAQ designated "Tier 1"
securities in which case it is valued at its last sale price. All bonds,
whether listed on an exchange or traded in the over-the-counter market, for
which market quotations are readily available are valued at the mean between
the last bid and asked prices received from dealers in the over-the-counter
market in the United States or abroad, except that when no asked price is
available, bonds are valued at the last bid price alone. Short-term investments
maturing in sixty days or less are valued at cost plus interest earned, which
approximates value. Securities for which current market quotations are not
readily available are valued at fair value as determined in good faith by the
Company's Board of Directors. A make-up sheet showing the computation of the
total offering price, using as a basis the value of the Company's portfolio se-
curities and other assets and its outstanding securities as of March 31, 1997,
appears as the Statement of Assets and Liabilities on page 21 of the March 31,
1997 Annual Report to Shareholders.
HOW TO PURCHASE SHARES
The methods of buying and selling shares and the sales charges applicable to
purchases of shares of a Fund are described in the Company's Prospectus.
As stated in the Prospectus, shares of the Overseas Fund and the Gold Fund
may be purchased at net asset value by various persons associated with the Com-
pany, SGSC, SGAM Corp., branches of Societe Generale, certain firms providing
services to the Company or affiliates thereof for the purpose of promoting good
will with employees and others with whom the Company has business relation-
ships, as well as in other special circumstances. Shares are offered to other
persons at net asset value in circumstances where there are economies of sell-
ing efforts and sales related expenses with respect to offers to certain in-
vestors.
TAX STATUS
Each Fund intends to qualify annually as a "regulated investment company" un-
der the Code. In order to qualify as a regulated investment company for a tax-
able year, a Fund must, among other things, (a) derive at least 90% of its
gross income from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies and other income derived with respect to the business of investing
in such stock, securities or currencies; (b) derive less than 30% of its gross
income from the sale or other disposition of stock or securities and options,
futures, forward contracts and foreign currencies held for less than three
months (excluding gains from certain hedging transactions and from foreign cur-
rencies (and options, futures and forward contracts on foreign currencies) that
are directly related to each Fund's principal business of investing in such
stocks or securities or options or futures thereon); (c) diversify its holdings
so that, at the end of each fiscal quarter, (i) at least 50% of the market
value of its assets is represented by cash, cash items, U.S. government securi-
ties, securities of other regulated investment companies and other securities,
with such other securities of any one issuer qualifying only if the Fund's in-
vestment is limited to an amount not greater than 5% of the Fund's assets or
10% of the voting securities of the issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any one issuer (other than
U.S. government securities or securities of other regulated investment compa-
nies); and (d) distribute at least 90% of its investment company taxable income
(which includes, among other items, dividends, interest and net short-term cap-
ital gains in excess of net long-term capital losses) for the year.
As a regulated investment company, each Fund generally will not be subject to
U.S. federal income tax on its investment company taxable income and net capi-
tal gains (the excess of net long-term capital gains over net short-term capi-
tal losses), if any, that it distributes to shareholders. Each Fund intends to
distribute to its shareholders, at least annually, substantially all of its in-
vestment company taxable income and net capital gains. Amounts not distributed
on a timely basis in accordance with a calendar year distribution requirement
are subject to a non-deductible 4% excise tax. To prevent imposition of the ex-
cise tax, each Fund must distribute during each calendar year an amount equal
to the sum of (1) at least 98% of its ordinary income (not taking into account
any capital gains or losses) for the calendar year, (2) at least 98% of its
capital gains in excess of its capital losses (adjusted for certain ordinary
losses) for the one-year period ending on October 31 of the calendar year, and
(3) any ordinary income and capital gains for previous years that were not dis-
tributed during those years. A distribution will be treated as paid on December
31 of the current calendar year if it is declared by a Fund in
18
<PAGE>
October, November or December with a record date in such a month and paid by
the Fund during January of the following calendar year. Such distributions will
be taxable to shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are re-
ceived. To prevent application of the excise tax, each Fund intends to make its
distributions in accordance with the calendar year distribution requirement.
Different tax treatment, including a penalty on pre-retirement distributions,
is accorded accounts maintained as IRAs. Shareholders should consult their tax
advisors for more information.
Dividends paid out of a Fund's investment company taxable income will be tax-
able to a U.S. shareholder as ordinary income. To the extent that a portion of
a Fund's income consists of dividends paid by U.S. corporations, a portion of
the dividends paid by the Fund may be eligible for the corporate dividends-re-
ceived deduction. It is expected that a small portion of the dividends paid by
the Overseas Fund and the Gold Fund will so qualify. Distributions of net capi-
tal gains, if any, designated as capital gains distributions are taxable as
long-term capital gains, regardless of how long the shareholder has held the
Fund's shares, and are not eligible for the dividends-received deduction.
Shareholders receiving distributions in the form of additional shares, rather
than cash, generally will have a cost basis in each such share equal to the net
asset value of a share of the Fund on the reinvestment date. Shareholders will
be notified annually as to the U.S. federal tax status of distributions, and
shareholders receiving distributions in the form of additional shares will re-
ceive a report as to the net asset value of those shares.
Investments by a Fund in zero coupon securities will result in income to the
Fund equal to a portion of the excess of the face value of the securities over
their issue price (the "original issue discount") each year that the securities
are held, even though the Fund receives no interest payments. This income is
included in determining the amount of income which the Fund must distribute to
maintain its status as a regulated investment company and to avoid the payment
of federal income tax and the 4% excise tax. If a Fund invests in certain high
yield original issue discount obligations issued by U.S. corporations, a por-
tion of the original issue discount accruing on such an obligation may be eli-
gible for the corporate dividends-received deduction. In such event, a portion
of the dividends of investment company taxable income received from the Fund by
its corporate shareholders may be eligible for this corporate dividends-re-
ceived deduction if so designated by the Fund in a written notice to sharehold-
ers. For the fiscal year ended March 31, 1997, the percentages of net invest-
ment income that qualified for the dividends-received deduction for the Over-
seas Fund, Gold Fund and Money Fund were 0.36%, 25.12% and 0.00%, respectively.
Certain foreign currency contracts in which the Overseas Fund and the Gold
Fund may invest are "section 1256 contracts." Gains or losses on section 1256
contracts generally are considered 60% long-term and 40% short-term capital
gains or losses; however, foreign currency gains or losses (as discussed below)
arising from certain section 1256 contracts may be treated as ordinary income
or loss. Also, section 1256 contracts held by a Fund at the end of each taxable
year (and, generally, for purposes of the 4% excise tax, on October 31 of each
year) are "marked-to-market" (that is, treated as sold at fair market value),
resulting in unrealized gains or losses being treated as though they were real-
ized.
Generally, the hedging transactions undertaken by the Overseas Fund and the
Gold Fund may result in "straddles" for U.S. federal income tax purposes. The
straddle rules may affect the character of gains (or losses) realized by these
Funds. In addition, losses realized by these Funds on positions that are part
of a straddle may be deferred under the straddle rules, rather than being taken
into account in calculating the taxable income for the taxable year in which
the losses are realized. Because only a few regulations implementing the strad-
dle rules have been promulgated, the tax consequences to these Funds of engag-
ing in hedging transactions are not entirely clear. Hedging transactions may
increase the amount of short-term capital gains realized by a Fund which is
taxed as ordinary income when distributed to shareholders.
The Overseas Fund and the Gold Fund may make one or more of the elections
available under the Code which are applicable to straddles. If either Fund
makes any of the elections, the amount, character and timing of the recognition
of gains or losses from the affected straddle positions will be determined un-
der rules that vary according to the election(s) made. The rules applicable un-
der certain of the elections may operate to accelerate the recognition of gains
or losses from the affected straddle positions.
Because the straddle rules may affect the character of gains or losses, defer
losses and/or accelerate the recognition of gain or losses from the affected
straddle positions, the amount which may be distributed to shareholders, and
which will be taxed to them as ordinary income or long-term capital gains, may
be increased or decreased as compared to a fund that did not engage in such
hedging transactions.
19
<PAGE>
The 30% limitation and the diversification requirements applicable to the
Funds' assets may limit the extent to which the Overseas Fund and the Gold
Fund will be able to engage in transactions in foreign currency contracts.
Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time a Fund accrues receivables or liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables, or pays such liabilities, generally are treated as ordinary in-
come or ordinary loss. Similarly, on disposition of debt securities denomi-
nated in a foreign currency and on disposition of certain foreign currency
contracts, gains or losses attributable to fluctuations in the value of for-
eign currency between the date of acquisition of the security or contract and
the date of disposition also are treated as ordinary gain or loss. These gains
or losses, referred to under the Code as "section 988" gains or losses, may
increase or decrease the amount of a Fund's investment company taxable income
to be distributed to its shareholders as ordinary income.
Upon the sale or other disposition of shares of a Fund, a shareholder may
realize a capital gain or loss which will be long-term or short-term, gener-
ally depending upon the shareholder's holding period for the shares. Any loss
realized on a sale or exchange will be disallowed to the extent the shares
disposed of are replaced (including shares acquired pursuant to a dividend re-
investment plan) within a period of 61 days beginning 30 days before and end-
ing 30 days after disposition of the shares. In such a case, the basis of the
shares acquired will be adjusted to reflect the disallowed loss. Any loss re-
alized by a shareholder on a disposition of Fund shares held by the share-
holder for six months or less will be treated as a long-term capital loss to
the extent of any distributions of net capital gains received by the share-
holder with respect to such shares.
Under certain circumstances the sales charge incurred in acquiring shares of
a Fund may not be taken into account in determining the gain or loss on the
disposition of those shares. This rule applies if shares of a Fund are ex-
changed within 90 days after the date they were purchased and the new shares
are acquired without a sales charge or at a reduced sales charge. In that
case, the gain or loss recognized on the exchange will be determined by ex-
cluding from the tax basis of the shares exchanged, all or a portion of the
amount of the sales charge that was imposed on the acquisition of those
shares. This exclusion applies to the extent that the otherwise applicable
sales charge with respect to the newly acquired shares is reduced as a result
of having incurred the initial sales charge. The portion of the initial sales
charge that is excluded from the basis of the exchanged shares is instead
treated as an amount paid for the new shares.
The Overseas Fund and the Gold Fund may be subject to foreign withholding
taxes on income and gains derived from their investments outside the United
States. Such taxes would reduce the yield on the Funds' investments. Tax
treaties between certain countries and the United States may reduce or elimi-
nate such taxes. If more than 50% of the value of a Fund's total assets at the
close of any taxable year consists of stocks or securities of foreign corpora-
tions, the Fund may elect, for U.S. federal income tax purposes, to treat any
foreign country income or withholding taxes paid by the Fund that can be
treated as income taxes under U.S. income tax principles, as paid by its
shareholders. For any year that either Fund makes such an election, each of
its shareholders will be required to include in his income (in addition to
taxable dividends actually received) his allocable share of such taxes paid by
the Fund, and will be entitled, subject to certain limitations, to credit his
portion of these foreign taxes against his U.S. federal income tax due, if
any, or to deduct it (as an itemized deduction) from his U.S. taxable income,
if any.
Generally, a credit for foreign taxes is subject to the limitation that it
may not exceed the shareholder's U.S. tax attributable to his foreign source
taxable income. With respect to the Overseas Fund and Gold Fund, if the pass
through election described above is made, the source of the electing Fund's
income flows through to its shareholders. Certain gains from the sale of secu-
rities and certain currency fluctuation gains will not be treated as foreign
source taxable income. In addition, this foreign tax credit limitation must be
applied separately to certain categories of foreign source income, one of
which is foreign source "passive income." For this purpose, foreign "passive
income" includes dividends, interest, capital gains and certain foreign cur-
rency gains. As a consequence, certain shareholders may not be able to claim a
foreign tax credit for the full amount of their proportionate share of foreign
taxes paid by the Fund. The foreign tax credit can be used to offset only 90%
of the alternative minimum tax (as computed under the Code for purposes of
this limitation) imposed on corporations and individuals. If a Fund is not el-
igible to make the pass-through election described above, the foreign taxes it
pays will reduce its income, and distributions by the Fund will be treated as
U.S. source income. Each shareholder will be notified within 60 days after the
close of the Fund's taxable year whether, pursuant to the election described
above, the foreign taxes paid by the Fund will be treated as paid by its
shareholders for that
20
<PAGE>
year and, if so, such notification will designate (i) such shareholder's por-
tion of the foreign taxes paid to such country and (ii) the portion of the
Fund's dividends and distributions that represents income derived from sources
within such country.
Investments by a Fund in stock of certain foreign corporations which gener-
ate largely passive investment-type income, or which hold a significant per-
centage of assets which generate such income (referred to as "passive foreign
investment companies" or "PFICs"), are subject to special tax rules designed
to prevent deferral of U.S. taxation of the Fund's share of the PFIC's earn-
ings. In the absence of certain elections to report these earnings on a cur-
rent basis, regardless of whether the Fund actually receives any distributions
from the PFIC, a Fund would be required to report certain "excess distribu-
tions" from, and any gain from the disposition of stock of the PFIC, as ordi-
nary income. This ordinary income would be allocated ratably to a Fund's hold-
ing period for the stock. Any amounts allocated to prior taxable years would
be taxable to the Fund at the highest rate of tax applicable in that year, in-
creased by an interest charge determined as though the amounts were underpay-
ments of tax. Amounts allocated to the year of the distribution or disposition
would be included in a Fund's net investment income for that year and, to the
extent distributed as a dividend to the Fund's shareholders, would not be tax-
able to the Fund.
Each Fund may be required to withhold U.S. federal income tax at the rate of
31% of all taxable distributions payable to shareholders who fail to provide
the Fund with their correct taxpayer identification number or to make required
certifications, or who have been notified by the IRS that they are subject to
backup withholding. Corporate shareholders and certain shareholders specified
in the Code generally are exempt from such backup withholding. Backup with-
holding is not an additional tax. Any amounts withheld may be credited against
the shareholder's U.S. federal income tax liability.
Since, at the time of an investor's purchase of a Fund's shares, a portion
of the per share net asset value by which the purchase price is determined may
be represented by realized or unrealized appreciation in the Fund's portfolio
or undistributed income of the Fund, subsequent distributions (or a portion
thereof) on such shares may in reality represent a return of his capital. How-
ever, such a subsequent distribution would be taxable to such investor even if
the net asset value of his shares is, as a result of the distributions, re-
duced below his cost for such shares. Prior to purchasing shares of the Fund,
an investor should carefully consider such tax liability which he might incur
by reason of any subsequent distributions of net investment income and capital
gains.
Fund shareholders may be subject to state, local and foreign taxes on their
Fund distributions and redemptions of Fund shares. Also, the tax consequences
to a foreign shareholder of an investment in a Fund may be different from
those described above. Shareholders are advised to consult their own tax ad-
visers with respect to the particular tax consequences to them of an invest-
ment in a Fund.
BROKERAGE ALLOCATION
SGAM Corp. is responsible for selecting members of securities exchanges,
brokers and dealers (such members, brokers and dealers being hereinafter re-
ferred to as "brokers") for the execution of a Fund's portfolio transactions
and, when applicable, the negotiation of commissions in connection therewith.
Purchase and sale orders are usually placed with brokers who are selected by
SGAM Corp. as being able to achieve "best execution" of such orders. "Best ex-
ecution" means prompt and reliable execution at the most favorable securities
price, taking into account the other considerations as here-in-after set
forth. The determination of what may constitute best execution of a securities
transaction by a broker involves a number of considerations, including, with-
out limitation, the overall direct net economic result to a Fund (involving
both price paid or received and any commissions and other costs paid), the ef-
ficiency with which the transaction is effected, the ability to effect the
transaction at all where a large block is involved, availability of the broker
to stand ready to execute possibly difficult transactions in the future, and
the financial strength and stability of the broker. Such considerations are
judgmental and are weighed by SGAM Corp. in determining the overall reasona-
bleness of brokerage commissions. While there is no commitment or understand-
ing to do so, subject to its policy of obtaining best execution, a Fund may
use affiliates of Societe Generale as brokers in the purchase and sale of se-
curities. For the fiscal years ended March 31, 1995, 1996 and 1997, the Com-
pany paid SGSC and affiliates of Societe Generale $54,019, $44,749 and
$67,054, respectively, in such brokerage commissions for transactions effected
on various exchanges. Such commissions paid for the fiscal year ended March
31, 1997 represented 6.5% of the aggregate brokerage commissions paid by the
Company during such period and was
21
<PAGE>
paid in connection with transactions representing 5.7% of the aggregate dollar
amount of all transactions effected by the Company (including principal trans-
actions for which no direct brokerage commissions are paid). SGSC may not,
acting as principal, sell any security or other property to, or purchase any
security or other property from, a Fund, except to the extent that such pur-
chase or sale may be permitted by an order, rule or regulation of the Securi-
ties and Exchange Commission.
SGAM Corp. is authorized to allocate brokerage and principal business to
brokers other than SGSC (but not excluding other affiliates of Societe
Generale) who have provided brokerage and research services, as such services
are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), for the Company and/or other accounts, if any, for
which SGAM Corp. exercises investment discretion (as defined in Section
3(a)(35) of the 1934 Act) and, as to transactions as to which fixed minimum
commission rates are not applicable, to cause a Fund to pay a commission for
effecting a securities transaction in excess of the amount another broker
would have charged for effecting the transaction, if SGAM Corp. in making the
selection in question determines in good faith that such amount of commission
is reasonable in relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that particular transaction
or of SGAM Corp.'s overall responsibilities with respect to a Fund and the
other accounts as to which it exercises investment discretion. In reaching
such determination, SGAM Corp. is not required to place or attempt to place a
specific dollar value on the research or execution services of a broker or on
the portion of any commission reflecting either of said services. In demon-
strating that such determinations were made in good faith, SGAM Corp. must be
prepared to show that all commissions were allocated and paid for purposes
contemplated by a Fund's brokerage policy; that the research services provide
lawful and appropriate assistance to SGAM Corp. in the performance of its in-
vestment decision-making responsibilities; and that the commissions paid were
within a reasonable range. The determination that commissions were within a
reasonable range will be based on any available information as to the level of
commissions known to be charged by other brokers on comparable transactions,
but there will be taken into account the Company's policies that (i) obtaining
a low commission is deemed secondary to obtaining a favorable securities
price, since it is recognized that usually it is more beneficial to a Fund to
obtain a favorable price than to pay the lowest commission, and (ii) the qual-
ity, comprehensiveness and frequency of research studies which are provided
for SGAM Corp. are useful to SGAM Corp. in performing its services under the
investment advisory contract with the Company. Research services provided by
brokers to SGAM Corp. are considered to be in addition to, and not in lieu of,
services required to be performed by SGAM Corp. under such investment advisory
contract. Research services provided by brokers include written reports, re-
sponses to specific inquiries and interviews with analysts. These services
also include invitations to meetings arranged by such brokers with the manage-
ment of companies in the Funds' portfolios or in which the Funds may invest.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to obtaining prices at least as favorable
as those provided by other qualified brokers, SGAM Corp. may consider sales of
shares of a Fund as a factor in the selection of brokers to execute portfolio
transactions.
Each Fund has been advised by SGAM Corp. that it may combine brokerage or-
ders for the Fund with orders from its other clients (including the other
Funds) when placing such orders with brokers for execution. In the event or-
ders are placed for a Fund and one or more other clients for the purchase or
sale of the same security, the Fund and each such other client may share in
each transaction in the proportion that each customer's order bears to the ag-
gregate of such orders. The Funds' orders are accorded priority over those re-
ceived from SGAM Corp. for its own account or from any of its officers, direc-
tors or employees.
While SGAM Corp. is primarily responsible for the allocation of each Fund's
portfolio transactions to brokers, its polices and practices in this regard
must be consistent with the foregoing and are periodically reviewed by the
Company's Board of Directors. In this connection, the directors periodically
review and discuss with SGAM Corp. the commissions paid by each Fund and, in
transactions where a Fund pays commissions which are in excess of the commis-
sions other brokers would have charged, SGAM Corp.'s determinations that such
higher commissions are reasonable in relation to the value of the brokerage
and research services. According to the Company's records, the amount of bro-
kerage commissions paid by the Company during the fiscal year ended March 31,
1997, which was attributable to research services was $1,026,488, in connec-
tion with transactions amounting to $382,994,906. During the fiscal years
ended March 31, 1997, 1996, and 1995, the Company paid total brokerage commis-
sions of $1,028,722, $924,146 and $944,560, respectively.
22
<PAGE>
CUSTODY OF PORTFOLIO
Domestic portfolio securities of each Fund are held pursuant to a custodian
agreement between the Company and Investors Fiduciary Trust Company, 127 West
10th Street, Kansas City, MO 64105. Certain of such securities may be depos-
ited in the book-entry system operated by the Federal Reserve System or with
the Depository Trust Company. The Company's sub-custodian, State Street Bank
and Trust, holds domestic securities issued in physical form. Pursuant to a
Global Custody Agreement between the Company and The Chase Manhattan Bank
("Chase"), 4 Chase MetroTech Center, Brooklyn, NY 11245, foreign securities
may be held by certain foreign sub-custodians which are participants in the
Global Investor Services Division of Chase and in certain foreign branches of
Chase.
INDEPENDENT AUDITORS
The Company's independent auditors are KPMG Peat Marwick LLP, Certified Pub-
lic Accountants, 345 Park Avenue, New York, NY 10154. KPMG Peat Marwick LLP
audits each Fund's annual financial statements and renders its report thereon,
which is included in the Annual Report to Shareholders.
FINANCIAL STATEMENTS
The Company's financial statements and notes thereto appearing in the March
31, 1997 Annual Report to Shareholders and the report thereon of KPMG Peat
Marwick LLP, Certified Public Accountants, appearing therein, are incorporated
by reference in this Statement of Additional Information. The Fund will fur-
nish, without charge, a copy of such Annual Report to Shareholders on request.
All such requests should be directed to the Secretary of the Fund, at 1221 Av-
enue of the Americas, New York, NY 10020.
23
<PAGE>
APPENDIX
RATINGS OF INVESTMENT SECURITIES
The rating of a rating service represents the service's opinion as to the
credit quality of the security being rated. However, the ratings are general
and are not absolute standards of quality or guarantees as to the creditwor-
thiness of an issuer. Consequently, the Funds' investment adviser believes
that the quality of debt securities in which a Fund invests should be continu-
ously reviewed. A rating is not a recommendation to purchase, sell or hold a
security, because it does not take into account market value or suitability
for a particular investor. When a security has received a rating from more
than one service, each rating should be evaluated independently. Ratings are
based on current information furnished by the issuer or obtained by the rat-
ings services from other sources which they consider reliable. Ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information, or for other reasons.
The following is a description of the characteristics of ratings used by
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").
MOODY'S RATINGS.
Aaa -- Bonds rated Aaa are judged to be the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt-
edge." Interest payments are protected by a large or by an exceptionally sta-
ble margin and principal is secure. Although the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such bonds.
Aa -- Bonds rated Aa are judged to be high quality by all standards. To-
gether with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa bonds or fluctuation of protective elements may
be of greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than in Aaa bonds.
A -- Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective ele-
ments may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded dur-
ing both good and bad times over the future. Uncertainty of position charac-
terizes bonds in this class.
B -- Bonds rated B generally lack characteristics of the desirable invest-
ment. Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Caa -- Bonds rated Caa are of poor standing. Such bonds may be in default or
there may be present elements of danger with respect to principal or interest.
Ca -- Bonds rated Ca represent obligations which are speculative in a high
degree. Such bonds are often in default or have other marked shortcomings.
S&P RATINGS.
AAA -- Bonds rated AAA have the highest rating. Capacity to pay principal
and interest is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay principal and inter-
est and differ from AAA bonds only in small degree.
24
<PAGE>
A -- Bonds rated A have a strong capacity to pay principal and interest, al-
though they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this capac-
ity than for bonds in higher rated categories.
BB -- B -- CCC -- CC -- Bonds A-1 -- A-rated BB, B, CCC and CC are regarded,
on balance, as predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal in accordance with the terms of the obli-
gation.
BB indicates the lowest degree of speculation among such bonds and CC the
highest degree of speculation. Although such bonds will likely have some qual-
ity and protective characteristics, these are outweighed by large uncertain-
ties or major risk exposures to adverse conditions.
25
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a)(1) Financial Statements
a. Financial Statements Included in Prospectus and Statement of Additional
Information: All financial statements are incorporated by reference to the An-
nual Report to Shareholders for the year ended March 31, 1997.
<TABLE>
<CAPTION>
ANNUAL REPORT
PAGE REFERENCE
--------------
<S> <C>
Schedule of Investments -- March 31, 1997...................... 6-20
Statement of Assets and Liabilities -- March 31, 1997.......... 21
Statement of Operations -- Fiscal year ended March 31, 1997.... 22
Statements of Changes in Net Assets -- Fiscal years ended March
31, 1996 and 1997............................................. 23
Notes to Financial Statements.................................. 24-29
Independent Auditors' Report................................... 32
</TABLE>
b. Financial Statements Included in Part C of the Registration Statement:
None
(2) All other financial statements and supporting schedules are omitted be-
cause they are not applicable or the required information is shown in the fi-
nancial statements or the notes thereto.
(b) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1(a) --Articles of Incorporation of the Registrant.*
1(b) --Articles of Amendment and Restatement.*
2 --By-Laws of the Registrant as amended through August 17,
1993.*
4 --Specimen Certificates representing shares of Common Stock
($.001 par value).*
5 --Investment Advisory Contract between the Registrant and
Societe Generale Asset Management Corp. ("SGAM Corp.")*
6(a) --Underwriting Agreement between the Registrant and Societe
Generale Securities Corporation ("SGSC").*
6(b) --Form of Selling Group Agreement.*
8(a) --Custody Agreement between the Registrant and Investors
Fiduciary Trust Company.*
8(b) --Transfer Agency and Registrar Agreement between the
Registrant and DST Systems, Inc.
8(c) --Global Custody Agreement between the Registrant and The Chase
Manhattan Bank, N.A.*
8(d) --Form of Subcustodial Agreement.*
10 --Opinion and Consent of Dechert Price & Rhoads.**
11(a) --Consent of KPMG Peat Marwick LLP.
11(b) --Representation Letter of Dechert Price & Rhoads.
13 --Investment Representation letter of SGAM Corp.*
15 --Rule 12b-1 Distribution Plan and Agreement between the
Registrant and SGSC.*
16 --Calculation of Performance Data in Statement of Additional
Information.
Other exhibits --Power of Attorney of Messrs. Collas*, Eveillard*, Meyer*,
Raillard*, Snyder.*
</TABLE>
- --------
* Previously filed as an exhibit to the Registration Statement.
** Previously filed with the Registrant's Rule 24f-2 Notice.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
C-1
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The following information is furnished as of June 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF RECORD HOLDERS
TITLE OF CLASS AS OF JUNE 30, 1996
- -------------- ------------------------
<S> <C>
Shares of Beneficial Interest of the Overseas Fund,
par value $.001 per share........................... 33,025
Shares of Beneficial Interest of the Gold Fund, par
value of $.001 per share............................ 4,241
Shares of Beneficial Interest of the Money Fund, par
value $.001 per share............................... 538
</TABLE>
ITEM 27. INDEMNIFICATION
Registrant is incorporated under the laws of the State of Maryland and is
subject to Section 2-418 of the Corporations and Associations Article of the
General Corporation Law of the State of Maryland controlling the indemnifica-
tion of directors and officers. Since Registrant has its executive offices in
the State of New York, and is qualified as a foreign corporation doing busi-
ness in such State, the persons covered by the foregoing statute may also be
entitled to and subject to the limitations of the indemnification provisions
of Section 721-726 of the New York Business Corporation Law.
The general effect of these statutes is to protect directors, officers, em-
ployees and agents of the Registrant against legal liability and expenses in-
curred by reason of their positions with the Registrant. The statutes provide
for indemnification for liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the corporation, and in each
case place conditions under which indemnification will be permitted, including
requirements that the indemnified person acted in good faith. Under certain
conditions, payment of expenses in advance of final disposition may be permit-
ted. The By-Laws of the Registrant make the indemnification of its directors,
officers, employees and agents mandatory subject only to the conditions and
limitations imposed by the above-mentioned Section 2-418 of Maryland Law and
by the provisions of Section 17(h) of the Investment Company Act of 1940 as
interpreted and required to be implemented by SEC Release No. IC-11330 of Sep-
tember 4, 1980.
In referring in its By-Laws to, and making indemnification of directors sub-
ject to the conditions and limitations of, both Section 2-418 of the Maryland
Law and Section 17(h) of the Investment Company Act of 1940, the Registrant
intends that conditions and limitations on the extent of the indemnification
of directors and officers imposed by the provisions of either Section 2-418 or
Section 17(h) shall apply and that any inconsistency between the two will be
resolved by applying the provisions of said Section 17(h) if the condition or
limitation imposed by Section 17(h) is the more stringent. In referring in its
By-Laws to SEC Release No. IC-11330 as the source for interpretation and im-
plementation of said Section 17(h), the Registrant understands that it would
be required under its By-Laws to use reasonable and fair means in determining
whether indemnification of a director or officer should be made and undertakes
to use either (1) a final decision on the merits by a court or other body be-
fore whom the proceeding was brought that the person to be indemnified ("in-
demnitee") was not liable to the Registrant or to its security holders by rea-
son of willful malfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of his or her office ("disabling con-
duct") or (2) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by reason
of such disabling conduct, by (a) the vote of a majority of a quorum of direc-
tors who are neither "interested persons" (as defined in the 1940 Act) of the
Registrant nor parties to the proceeding, or (b) an independent legal counsel
in a written opinion. Also, the Registrant will make advances of attorney's
fees or other expenses incurred by a director or officer in his or her defense
only if (in addition to his or her undertaking to repay the advance if he or
she is not ultimately entitled to indemnification) (1) the indemnitee provides
a security for his or her undertaking, (2) the Registrant shall be insured
against losses arising by reason of any lawful advances, or (3) a majority of
a quorum of the non-interested, non-party directors of the Registrant, or an
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts, that there is reason to believe that the
indemnitee ultimately will be found entitled to indemnification.
In addition, the Registrant will maintain a directors' and officers' errors
and omissions liability insurance policy protecting directors and officers
against liability for claims made by reason of any acts, errors or omissions
committed in their capacity as directors of officers. The policy will contain
certain exclusions, among which is exclusion from coverage for active or de-
liberate dishonest or fraudulent acts and exclusion for fines or penalties im-
posed by law or other matters deemed uninsurable.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
SGAM Corp. is the Registrant's investment adviser. In addition to the Regis-
trant, SGAM Corp., acts as investment adviser to SoGen International Fund,
Inc., SoGen Variable Funds, Inc., and pension funds and sub-adviser to non-af-
filiated investment funds.
C-2
<PAGE>
Reference is made to "Management of the Fund" in the Statement of Additional
Information constituting Part B of this Post-Effective Amendment for a de-
scription of the business activities and employment of certain directors and
officers of SGAM Corp. within the last two fiscal years of the Registrant. The
directors of SGAM Corp. not disclosed in Part B are as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- -------------------------------
<S> <C>
Christian d'Allest.............................. Director of Foreign Affiliates,
17, cours Valmy Societe Generale Asset
92972 Paris Management
France
Jean Roger Huet................................. President, New York Branch,
1221 Avenue of the Americas Societe Generale
New York, NY 10020
</TABLE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) SGSC, the Registrant's principal underwriter, also acts as principal un-
derwriter for SoGen International Fund, Inc., and SoGen Variable Funds, Inc.,
each a registered investment company.
(b) The directors and officers of SGSC are as follows:
<TABLE>
<CAPTION>
POSITIONS
POSITIONS AND OFFICES AND
WITH OFFICES
NAME AND PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
----------------------------------- ---------------------- ---------------
<S> <C> <C>
Jacques Bouhet....................... Chairman of the Board --
17, Cours Valmy
92972 Paris
France
Dominique Beaupere................... Director --
Alsthorn Alcatel
75382 Paris
Cedex 08
Gerard de la Riviere................. Director --
17, Cours Valmy
92972 Paris
France
Jean-Bernard Guillebert.............. Director --
17, Cours Valmy
92972 Paris
France
Jean Huet............................ Director --
1221 Avenue of the Americas
New York, NY 10020
Alain Joyet.......................... Director --
1221 Avenue of the Americas
New York, NY 10020
Robert Leroux........................ Director --
17, Cours Valmy
92972, Paris
France
Jean-Paul Oudet...................... Director --
23 Rue De D'Abeville
75009, Paris
France
Pierre Prot.......................... Director --
29, Boulevard Haussmann
75009, Paris
France
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
POSITIONS
POSITIONS AND OFFICES AND
WITH OFFICES
NAME AND PRINCIPAL BUSINESS ADDRESS PRINCIPAL UNDERWRITER WITH REGISTRANT
----------------------------------- ---------------------- ---------------
<S> <C> <C>
Alain Tave........................... Director --
17, Cours Valmy
92972, Paris
France
Yves Tuloup.......................... Director --
43, rue Taitbout
75009 Paris,
France
Curtis Welling....................... Director, President --
1221 Avenue of the Americas and CEO
New York, NY 10020
James Walsh ......................... Chief Operating --
1221 Avenue of the Americas Officer
New York, NY 10020
Marc Poirier......................... Deputy Chief --
1221 Avenue of the Americas Operating Officer
New York, NY 10020
Jeffrey Fox.......................... Chief Financial --
1221 Avenue of the Americas Officer
New York, NY 10020
Kenneth Lampert...................... Compliance Officer --
1221 Avenue of the Americas
New York, NY 10020
Pierre Bergeron...................... Secretary --
1221 Avenue of the Americas
New York, NY 10020
Governor Tipton...................... Assistant Secretary --
1221 Avenue of the Americas
New York, NY 10020
Sibyl Peyer.......................... Assistant Secretary --
1221 Avenue of the Americas
New York, NY 10020
</TABLE>
The following officers all have their principal business address at 1221 Av-
enue of the Americas, New York, NY 10020:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS POSITIONS AND OFFICES POSITIONS AND
ADDRESS WITH PRINCIPAL UNDERWRITER OFFICES WITH REGISTRANT
- --------------------------- -------------------------- -----------------------
<S> <C> <C>
Dominic Freud.............. First Vice President --
Charles Gushee............. First Vice President --
Kenneth Lampert............ First Vice President --
Paul Meyer................. First Vice President --
John Monck................. First Vice President --
Thomas Moyna............... First Vice President --
Rolando E. Pantoja......... First Vice President --
Gillaume Pollet............ First Vice President --
Benoit Raudel.............. First Vice President --
Catherine A. Shaffer....... First Vice President Vice President
Richard B. Amoils.......... Director --
David J. Atkinson.......... Director --
Mark Thomas Berry.......... Director --
Rober H. Despirito......... Director --
Katharine Hazard Flynn..... Director --
David Getzler.............. Director --
Geoffrey Alexander Gimber Director --
Lars Hanan................. Director --
Anna Hayes Connard......... Director --
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS POSITIONS AND OFFICES POSITIONS AND
ADDRESS WITH PRINCIPAL UNDERWRITER OFFICES WITH REGISTRANT
- --------------------------- -------------------------- -----------------------
<S> <C> <C>
Glori Holzman.............. Director --
Matthew Judson............. Director --
M. Robin Krasny............ Director --
Meredith Ress Levy......... Director --
Jose Maria Linares-Perou... Director --
Charles E. Mather IV....... Director --
Carl A. Mayer III.......... Director --
Patrick Joseph Memmi....... Director --
Scott W. Phillips.......... Director --
Peter J. Pinto............. Director --
Marc Poirier............... Director --
Claudio A. Pupkin.......... Director --
Ronald C. Ratcliffe........ Director --
Andrew John Schoenfeld..... Director --
Frederick Wright Searby.... Director --
Joseph Stefanik............ Director --
Jean Philippe Jacque
Villa..................... Director --
Steven Baronoff............ Managing Director --
Richard Greg Brounstein.... Managing Director --
Matthew Edward Czajkowski.. Managing Director --
David Michael Feinman...... Managing Director --
Ian J. Hardington.......... Managing Director --
John L. Kelly.............. Managing Director --
James N. Lane.............. Managing Director --
Jan B. Lochtenberg......... Managing Director --
David M. Malcolm........... Managing Director --
Nimil Rajnikant Parekh..... Managing Director --
Michael Penfield........... Managing Director --
Vinod Sehgal............... Managing Director --
Paul Wesley Shaum.......... Managing Director --
John Sheldon............... Managing Director --
Fiona Jane Tilley.......... Managing Director --
James M. Walsh............. Managing Director --
Jon Frederic Weber......... Managing Director --
Bradford Carver Yates...... Managing Director --
Rex Yamamoto............... Senior General Manager --
Jeffrey Fox................ Senior Vice President --
Joseph Marino.............. Senior Vice President --
Timothy Moyer.............. Senior Vice President --
Robert S. Pirie............ Vice Chairman --
Raz Alon................... Vice President --
Jean Marie Barreau......... Vice President --
Isaac Barrocas............. Vice President --
Francois Barthelemy........ Vice President --
Richard Beston............. Vice President --
John Bianco................ Vice President --
Pascal Bouillon............ Vice President --
Andrew Clark Brummer....... Vice President --
Michael Joseph Casey....... Vice President --
Robert Casey............... Vice President --
Mary Chen.................. Vice President --
D.K. Cockrell II........... Vice President --
Arthur G. Condodina........ Vice President --
Yolanda Cristina
Courtines................. Vice President --
John Enderle............... Vice President --
Lauda Fields............... Vice President --
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS POSITIONS AND OFFICES POSITIONS AND
ADDRESS WITH PRINCIPAL UNDERWRITER OFFICES WITH REGISTRANT
- --------------------------- -------------------------- -----------------------
<S> <C> <C>
William Court Frauen....... Vice President --
Gordes Frobenius........... Vice President --
Michael Gelblat............ Vice President --
Adam Harold Goodfriend..... Vice President --
John C. Griffin............ Vice President --
Vincent Gros............... Vice President --
Markus Sebastian Hansen.... Vice President --
Edward Nelson Heumann...... Vice President --
Eric Hirshfield............ Vice President --
Tsen-Yu Hung............... Vice President --
McLloyd K. Jensen.......... Vice President --
Andrew Joseph.............. Vice President --
Andres B. Josephsohn....... Vice President --
Marc Levesque.............. Vice President --
John Joseph Mandy Jr. ..... Vice President --
Robert Marx................ Vice President --
John T. Maxwell Jr. ....... Vice President --
John Anthony Montgomery
Jr. ...................... Vice President --
Kenneth Nora............... Vice President --
Edwin S. Olsen............. Vice President Vice President
Howard Chin Ho Park........ Vice President --
Philippe Pierson........... Vice President --
Theodore James Podest...... Vice President --
Stephane Reverre........... Vice President --
Robert Roland.............. Vice President --
Jeffrey Prescott Salmon.... Vice President --
Bryan L. Sanders........... Vice President --
Gregory Michael Solomon.... Vice President --
John A. Spettell........... Vice President --
Christopher Stala.......... Vice President --
David A. Steinschraber..... Vice President --
Nathalie Texier............ Vice President --
Richard Tramutola.......... Vice President --
Martin B. Yallop........... Vice President --
Matthew C. Zolin........... Vice President --
</TABLE>
(c) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules promulgated thereun-
der are maintained at the offices of the Registrant, 1221 Avenue of the Ameri-
cas, New York, NY 10020 with the exception of certain accounts, books and
other documents which are kept by the Registrant's custodian, Investors Fidu-
ciary Trust Company, 127 West 10th Street, Kansas City, MO 64105 and registrar
and shareholder servicing agent, DST Systems, Inc. ("DST"), P.O. Box 419324,
Kansas City, Missouri, 64141-6324.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
The Registrant undertakes to call a meeting of shareholders for the purpose
of voting upon the question of removal of a director, if requested to do so by
the holders of at least 10% of a Fund's outstanding shares, and that it will
assist communication with other shareholders as required by Section 16(c) of
the Investment Company Act of 1940.
C-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, THE REGIS-
TRANT, SOGEN FUNDS, INC., CERTIFIES THAT THIS POST-EFFECTIVE AMENDMENT TO ITS
REGISTRATION STATEMENT (NO. 33-63560) MEETS ALL OF THE REQUIREMENTS FOR EFFEC-
TIVENESS PURSUANT TO PARAGRAPH (B) OF RULE 485 UNDER THE 1933 ACT, AND HAS
DULY CAUSED IT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK, ON THE 25TH DAY OF
JULY, 1997.
SoGen Funds, Inc.
/s/ Jean-Marie Eveillard
By: _______________________________
(JEAN-MARIE EVEILLARD, PRESIDENT)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
POST-EFFECTIVE AMENDMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
/s/ Jean-Marie Eveillard
- ------------------------------------- President and July 25, 1997
JEAN-MARIE EVEILLARD Director (principal
executive officer)
/s/ Philip J. Bafundo Vice President and
- ------------------------------------- Treasurer July 25, 1997
PHILIP J. BAFUNDO (principal
financial and
accounting officer)
Philippe Collas* Chairman of the
- ------------------------------------- Board July 25, 1997
PHILIPPE COLLAS
Fred J. Meyer* Director
- ------------------------------------- July 25, 1997
FRED J. MEYER
Dominique Raillard* Director
- ------------------------------------- July 25, 1997
DOMINIQUE RAILLARD
Nathan Snyder* Director
- ------------------------------------- July 25, 1997
NATHAN SNYDER
/s/ Jean-Marie Eveillard
*By: ________________________________
(JEAN-MARIE EVEILLARD, ATTORNEY-
IN-FACT)
C-7
<PAGE>
EXHIBIT 99.8B
AGENCY AGREEMENT
THIS AGREEMENT made the 25th of November, 1996, by and between SOGEN FUNDS,
INC., a corporation existing under the laws of the State of Maryland, having its
principal place of business at 1221 Avenue of the Americas, New York, NY 10020
(the "Fund"), and DST SYSTEMS, INC., a corporation existing under the laws of
the State of Delaware, having its principal place of business at 1055 Broadway,
Kansas City, Missouri 64105 ("DST"):
WITNESSETH:
WHEREAS, the Fund desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent, and DST desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Documents to be Filed with Appointment.
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In connection with the appointment of DST as Transfer Agent and Dividend
Disbursing Agent for the Fund, there will be filed with DST the following
documents:
A. A certified copy of the resolutions of the Board of Directors of the
Fund appointing DST as Transfer Agent and Dividend Disbursing Agent,
approving the form of this Agreement, and designating certain persons
to sign stock certificates, if any, and give written instructions and
requests on behalf of the Fund;
B. A certified copy of the Articles of Incorporation of the Fund and all
amendments thereto;
C. A certified copy of the Bylaws of the Fund;
D. Copies of Registration Statements and amendments thereto, filed with
the Securities and Exchange Commission.
E. Specimens of all forms of outstanding stock certificates, in the forms
approved by the Board of Directors of the Fund, with a certificate of
the Secretary of the Fund, as to such approval;
F. Specimens of the signatures of the officers of the Fund authorized to
sign stock certificates and individuals authorized to sign written
instructions and requests;
G. An opinion of counsel for the Fund with respect to:
(1) The Fund's organization and existence under the laws of its state
of organization,
(2) The status of all shares of stock of the Fund covered by the
appointment under the Securities Act of 1933, as amended, and any
other applicable federal or state statute, and
(3) That all issued shares are, and all unissued shares will be, when
issued, validly issued, fully paid and nonassessable.
2. Certain Representations and Warranties of DST.
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DST represents and warrants to the Fund that:
A. It is a corporation duly organized and existing and in good standing
under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required under the
Securities Exchange Act of 1934.
E. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3. Certain Representations and Warranties of the Fund.
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The Fund represents and warrants to DST that:
A. It is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland.
B. It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
C. A registration statement under the Securities Act of 1933 has been
filed and will be effective with respect to all shares of the Fund
being offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states and such
registration will be effective at all times shares are offered for
sale in such state.
E. The Fund is empowered under applicable laws and by its charter and
Bylaws to enter into and perform this Agreement.
4. Scope of Appointment.
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A. Subject to the conditions set forth in this Agreement, the Fund hereby
appoints DST as Transfer Agent and Dividend Disbursing Agent.
B. DST hereby accepts such appointment and agrees that it will act as the
Fund's Transfer Agent and Dividend Disbursing Agent. DST agrees that
it will also act as agent in connection with the Fund's periodic
withdrawal payment accounts and other open accounts or similar plans
for shareholders, if any.
C. The Fund agrees to use its reasonable efforts to deliver to DST in
Kansas City, Missouri, as soon as they are available, all of its
shareholder account records.
D. DST, utilizing TA2000/TM/, DST's computerized data processing system
for securityholder accounting (the "TA2000 System"), will perform the
following services as transfer and dividend disbursing agent for the
Fund, and as agent of the Fund for shareholder accounts thereof, in a
timely manner: (i) issuing (including countersigning), transferring
and canceling share certificates; (ii) maintaining on the TA2000
System shareholder accounts; (iii) accepting and effectuating the
<PAGE>
registration and maintenance of accounts through Networking and the
purchase, redemption, transfer and exchange of shares in such accounts
through Fund/SERV (Networking and Fund/SERV being programs operated by
the National Securities Clearing Corporation ("NSCC") on behalf of
NSCC's participants, including the Funds), in accordance with
instructions transmitted to and received by DST by transmission from
NSCC on behalf of broker-dealers and banks which have been established
by, or in accordance with the instructions of, an Authorized Person,
as hereinafter defined, on the Dealer File maintained by DST; (iv)
issuing instructions to the Funds' banks for the settlement of
transactions between the Funds and NSCC (acting on behalf of its
broker-dealer and bank participants); (v) providing account and
transaction information from each affected Fund's records on TA2000 in
accordance with NSCC's Networking and Fund/SERV rules for those
broker-dealers; (vi) maintaining shareholder accounts on TA2000
through Networking; (vii) providing transaction journals; (viii) once
annually preparing shareholder meeting lists for use in connection
with the annual meeting and certifying a copy of such list; (ix)
mailing shareholder reports and prospectuses; (x) withholding, as
required by federal law, taxes on shareholder accounts, preparing,
filing and mailing U.S. Treasury Department Forms 1099, 1042, and
1042S and performing and paying backup withholding as required for all
shareholders; (xi) disbursing income dividends and capital gains
distributions to shareholders and recording reinvestment of dividends
and distributions in shares of the Fund; (xii) preparing and mailing
confirmation forms to shareholders and dealers, as instructed, for all
purchases and liquidations of shares of the Fund and other confirmable
transactions in shareholders' accounts; (xiii) providing or making
available on-line daily and monthly reports as provided by the TA2000
System and as requested by the Fund or its management company; (xiv)
maintaining those records necessary to carry out DST's duties
hereunder, including all information reasonably required by the Fund
to account for all transactions in the Fund shares; (xv) calculating
the appropriate sales charge with respect to each purchase of the Fund
shares as instructed by an Authorized Person, as hereinafter defined,
determining the portion of each sales charge payable to the dealer
participating in a sale in accordance with schedules and instructions
delivered to DST by the Fund's principal underwriter or distributor
(hereinafter "principal underwriter") or an Authorized Person from
time to time, disbursing dealer commissions collected to such dealers,
determining the portion of each sales charge payable to such principal
underwriter and disbursing such commissions to the principal
underwriter; (xvi) receiving correspondence pertaining to any former,
existing or new shareholder account, processing such correspondence
for proper recordkeeping, and responding promptly to shareholder
correspondence; mailing to dealers confirmations of wire order trades;
mailing copies of shareholder statements to shareholders and
registered representatives of dealers in accordance with the
instructions of an Authorized Person; (xvii) processing, generally on
the date of receipt, purchases or redemptions or instructions to
settle any mail or wire order purchases or redemptions received in
proper order as set forth in the prospectus, rejecting promptly any
requests not received in proper order (as defined by an Authorized
Person or the Procedures as hereinafter defined), and causing
exchanges of shares to be executed in accordance with the instructions
of Authorized Persons, the applicable prospectus and the general
exchange privilege applicable; (xix) providing to the person
designated by an Authorized Person the daily Blue Sky reports
generated by the Blue Sky module of TA2000 with respect to purchases
of shares of the Funds on TA2000; and (xx) providing to the Fund
escheatment reports as requested by an Authorized Person with respect
to the status of accounts and outstanding checks on TA2000.
E. At the request of an Authorized Person, DST shall use reasonable
efforts to provide the services set forth in Section 4.D. in
connection with transactions (i) on behalf of retirement plans and
participants in retirement plans and transactions ordered by brokers
as part of a "no transaction fee" program ("NTF"), the processing of
which transactions require DST to use methods and procedures other
than those usually employed by DST to perform shareholder servicing
agent services, (ii) involving the provision of information to DST
after the commencement of the nightly processing cycle of the TA2000
System or (iii) which require more manual intervention by DST, either
in the entry of data or in the modification or amendment of reports
generated by the TA2000 System than is usually required by non-
retirement plan, non-NTF and pre-nightly transactions, (the
"Exception Services").
F. DST shall use reasonable efforts to provide, reasonably promptly under
the circumstances, the same services with respect to any new,
additional functions or features or any changes or improvements to
existing functions or features as provided for in the Fund's
instructions, prospectus or application as amended from time to time,
for the Fund provided (i) DST is advised in advance by the Fund of any
changes therein and (ii) the TA2000 System and the mode of operations
utilized by DST as then constituted supports such additional functions
and features. If any addition to, improvement of or change in the
features and functions currently provided by the TA2000 System or the
operations as requested by the Fund requires an enhancement or
modification to the TA2000 System or to operations as presently
conducted by DST, DST shall not be liable therefore until such
modification or enhancement is installed on the TA2000 System or new
mode of operation is instituted. If any new, additional function or
feature or change or improvement to existing functions or features or
new service or mode of operation measurably increases DST's cost of
performing the services required hereunder at the current level of
service, DST shall advise the Fund of the amount of such increase and
if the Fund elects to utilize such function, feature or service, DST
shall be entitled to increase its fees by the amount of the increase
in costs. In no event shall DST be responsible for or liable to
provide any additional function, feature, improvement or change in
method of operation until it has consented thereto in writing.
G. The Fund shall have the right to add new series to the TA2000 System
upon at least thirty (30) days' prior written notice to DST provided
that the requirements of the new series are generally consistent with
services then being provided by DST under this Agreement. Rates or
charges for additional series shall be as set forth in Exhibit A, as
hereinafter defined, for the remainder of the contract term except as
such series use functions, features or characteristics for which DST
has imposed an additional charge as part of its standard pricing
schedule. In the latter event, rates and charges shall be in
accordance with DST's then-standard pricing schedule.
<PAGE>
5. Limit of Authority.
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Unless otherwise expressly limited by the resolution of appointment or by
subsequent action by the Fund, the appointment of DST as Transfer Agent
will be construed to cover the full amount of authorized stock of the class
or classes for which DST is appointed as the same will, from time to time,
be constituted, and any subsequent increases in such authorized amount.
In case of such increase the Fund will file with DST:
A. If the appointment of DST was theretofore expressly limited, a
certified copy of a resolution of the Board of Directors of the Fund
increasing the authority of DST;
B. A certified copy of the amendment to the Articles of Incorporation of
the Fund authorizing the increase of stock;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance of the
increased stock, and an opinion of counsel that the order or consent
of no other governmental or regulatory authority is required;
D. Opinion of counsel for the Fund stating:
(1) The status of the additional shares of stock of the Fund under
the Securities Act of 1933, as amended, and any other applicable
federal or state statute; and
(2) That the additional shares are, or when issued will be, validly
issued, fully paid and nonassessable.
6. Compensation and Expenses.
-------------------------
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, the Fund will pay to DST from time to time
a reasonable compensation for all services rendered as Agent, and
also, all its reasonable billable expenses, charges, counsel fees, and
other disbursements ("Compensation and Expenses") incurred in
connection with the agency. Such compensation is set forth in a
separate schedule to be agreed to by the Fund and DST, a copy of which
is attached hereto as Exhibit A. If the Fund has not paid such
Compensation and Expenses to DST within a reasonable time, DST may
charge against any monies held under this Agreement, the amount of any
Compensation and/or Expenses for which it shall be entitled to
reimbursement under this Agreement.
B. The Fund also agrees promptly to reimburse DST for all reasonable
billable expenses or disbursements incurred by DST in connection with
the performance of services under this Agreement including, but not
limited to, expenses for postage, express delivery services, freight
charges, envelopes, checks, drafts, forms (continuous or otherwise),
specially requested reports and statements, telephone calls,
telegraphs, stationery supplies, counsel fees, outside printing and
mailing firms (including Output Technology, Inc. and Support
Resources, Inc.), magnetic tapes, reels or cartridges (if sent to the
Fund or to a third party at the Fund's request) and magnetic tape
handling charges, off-site record storage, media for storage of
records (e.g., microfilm, microfiche, optical platters, computer
tapes), computer equipment installed at the Fund's request at the
Fund's or a third party's premises, telecommunications equipment,
telephone/telecommunication lines between the Fund and its agents, on
one hand, and DST on the other, proxy soliciting, processing and/or
tabulating costs, second-site backup computer facility, transmission
of statement data for remote printing or processing, and National
Securities Clearing Corporation ("NSCC") transaction fees to the
extent any of the foregoing are paid by DST. The Fund agrees to pay
postage expenses at least one day in advance if so requested. In
addition, any other expenses incurred by DST at the request or with
the consent of the Fund will be promptly reimbursed by the Fund.
C. Amounts due hereunder shall be due and paid on or before the thirtieth
(30th) business day after receipt of the statement therefor by the
Fund (the "Due Date"). The Fund is aware that its failure to pay all
amounts in a timely fashion so that they will be received by DST on or
before the Due Date will give rise to costs to DST not contemplated by
this Agreement, including but not limited to carrying, processing and
accounting charges. Accordingly, subject to Section 6.D. hereof, in
the event that any amounts due hereunder are not received by DST by
the Due Date, the Fund shall pay a late charge equal to the lesser of
the maximum amount permitted by applicable law or the product of that
rate announced from time to time by State Street Bank and Trust
Company as its "Prime Rate" plus three (3) percentage points times the
amount overdue, times the number of days from the Due Date up to and
including the day on which payment is received by DST divided by 365.
The parties hereby agree that such late charge represents a fair and
reasonable computation of the costs incurred by reason of late payment
or payment of amounts not properly due. Acceptance of such late
charge shall in no event constitute a waiver of the Fund's or DST's
default or prevent the non-defaulting party from exercising any other
rights and remedies available to it.
<PAGE>
D. In the event that any charges are disputed, the Fund shall, on or
before the Due Date, pay all undisputed amounts due hereunder and
notify DST in writing of any disputed charges for billable expenses
which it is disputing in good faith. Payment for such disputed charges
shall be due on or before the close of the fifth (5th) business day
after the day on which DST provides to the Fund documentation which an
objective observer would agree reasonably supports the disputed
charges (the "Revised Due Date"). Late charges shall not begin to
accrue as to charges disputed in good faith until the first business
day after the Revised Due Date.
E. The fees and charges set forth on Exhibit A shall increase or may be
increased as follows:
(1) On the first day of each new term, in accordance with the "Fee
Increases" provision in Exhibit A;
(2) DST may increase the fees and charges set forth on Exhibit A upon
at least ninety (90) days prior written notice, if changes in
existing laws, rules or regulations: (i) require substantial
system modifications or (ii) materially increase cost of
performance hereunder;
(3) DST may charge for additional features of TA2000 used by the Fund
which features are not consistent with the Fund's current
processing requirements; and
(4) In the event DST, at the Fund's request or direction, performs
Exception Services, DST shall be entitled to increase the fees
and charges for such Exception Services from those set forth on
Exhibit A to the extent such Exception Services increase DST's
cost of performance.
If DST notifies the Fund of an increase in fees or charges pursuant to
subparagraph (2) of this Section 6.E., the parties shall confer, diligently
and in good faith and agree upon a new fee to cover the amount necessary,
but not more than such amount, to reimburse DST for the Fund's aliquot
portion of the cost of developing the new software to comply with
regulatory charges and for the increased cost of operation.
If DST notifies the Fund of an increase in fees or charges under
subparagraphs (3) or (4) of this Section 6.E., the parties shall confer,
diligently and in good faith, and agree upon a new fee to cover such new
fund feature.
7. Operation of DST System.
-----------------------
In connection with the performance of its services under this Agreement,
DST is responsible for such items as:
A. That entries in DST's records, and in the Fund's records on the TA2000
System created by DST, reflect the orders, instructions, and other
information received by DST from the Fund, the Fund's distributor,
manager or principal underwriter, the Fund's investment adviser, the
Fund's sponsor, the Fund's custodian, or the Fund's administrator
(each an "Authorized Person"), broker-dealers or shareholders;
B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be produced
from its records or data be available and accurately reflect the data
in the Fund's records on the TA2000 System;
C. The accurate and timely issuance of dividend and distribution checks
in accordance with instructions received from the Fund and the data in
the Fund's records on the TA2000 System;
D. That redemption transactions and payments be effected timely, under
normal circumstances on the day of receipt, and accurately in
accordance with redemption instructions received by DST from
Authorized Persons, broker-dealers or shareholders and the data in the
Fund's records on the TA2000 System;
E. The deposit daily in the Fund's appropriate special bank account of
all checks and payments received by DST from NSCC, broker-dealers or
shareholders for investment in shares;
F. Notwithstanding anything herein to the contrary, with respect to "as
of" adjustments, DST will not assume one hundred percent (100%)
responsibility for losses resulting from "as ofs" due to clerical
errors or misinterpretations of shareholder instructions, but DST will
discuss with the Fund DST's accepting liability for an "as of" on a
case-by-case basis and may accept financial responsibility for a
particular situation resulting in a financial loss to the Fund where
DST in its discretion deems that to be appropriate;
G. The requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting the
opening of shareholder accounts, transfers, redemptions and other
shareholder account transactions, all in conformance with DST's
present procedures as set forth in its Legal Manual, Third Party Check
Procedures, Checkwriting Draft Procedures, and Signature Guarantee
Procedures (collectively the "Procedures") with such changes or
deviations therefrom as may be from time to time required or approved
by the Fund, its investment adviser or principal underwriter, or its
or DST's counsel and the rejection of orders or instructions not in
good order in accordance with the applicable prospectus or the
Procedures;
H. The maintenance of customary records in connection with its agency,
and particularly those records required to be maintained pursuant to
subparagraph (2)(iv) of paragraph (b) of Rule 31a-1 under the
Investment Company Act of 1940, if any; and
I. The maintenance of a current, duplicate set of the Fund's essential
records at a secure separate location, in a form available and usable
forthwith in the event of any breakdown or disaster disrupting its
main operation.
<PAGE>
8. Indemnification.
---------------
A. DST shall at all times use reasonable care, due diligence and act in
good faith in performing its duties under this Agreement. DST shall
provide its services as Transfer Agent in accordance with Section 17A
of the Securities Exchange Act of 1934, and the rules and regulations
thereunder. In the absence of bad faith, willful misconduct, knowing
violations of applicable law pertaining to the manner in which
transfer agency services are to be performed by DST (excluding any
violations arising directly or indirectly out of the actions or
omissions to act of third parties unaffiliated with DST), reckless
disregard of the performance of its duties, or negligence on its part,
DST shall not be liable for any action taken, suffered, or omitted by
it or for any error of judgment made by it in the performance of its
duties under this Agreement. For those activities or actions
delineated in the Procedures, DST shall be presumed to have used
reasonable care, due diligence and acted in good faith if it has acted
in accordance with the Procedures, copies of which have been provided
to the Fund and reviewed and approved by the Fund's counsel, as
amended from time to time with approval of counsel, or for any
deviation therefrom approved by the Fund or DST counsel.
B. DST shall not be responsible for, and the Fund shall indemnify and
hold DST harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability which
may be asserted against DST or for which DST may be held to be liable,
arising out of or attributable to:
(1) All actions of DST required to be taken by DST pursuant to this
Agreement, provided that DST has acted in good faith and with due
diligence and reasonable care;
(2) The Fund's refusal or failure to comply with the terms of this
Agreement, the Fund's negligence or willful misconduct, or the
breach of any representation or warranty of the Fund hereunder;
(3) The good faith reliance on, or the carrying out of, any written
or oral instructions or requests of persons designated by the
Fund in writing (see Exhibit B) from time to time as authorized
to give instructions on its behalf or representatives of an
Authorized Person or DST's good faith reliance on, or use of,
information, data, records and documents received from, or which
have been prepared and/or maintained by the Fund, its investment
advisor, its sponsor or its principal underwriter;
(4) Defaults by dealers or shareowners with respect to payment for
share orders previously entered;
(5) The offer or sale of the Fund's shares in violation of any
requirement under federal securities laws or regulations or the
securities laws or regulations of any state or in violation of
any stop order or other determination or ruling by any federal
agency or state with respect to the offer or sale of such shares
in such state (unless such violation results from DST's failure
to comply with written instructions of the Fund or of any officer
of the Fund that no offers or sales be input into the Fund's
securityholder records in or to residents of such state);
(6) The Fund's errors and mistakes in the use of the TA2000 System,
the data center, computer and related equipment used to access
the TA2000 System (the "DST Facilities"), and control procedures
relating thereto in the verification of output and in the remote
input of data;
(7) Errors, inaccuracies, and omissions in, or errors, inaccuracies
or omissions of DST arising out of or resulting from such errors,
inaccuracies and omissions in, the Fund's records, shareholder
and other records, delivered to DST hereunder by the Fund or its
prior agent(s);
(8) Actions or omissions to act by the Fund or agents designated by
the Fund with respect to duties assumed thereby as provided for
in Section 21 hereof; and
(9) DST's performance of Exception Services except where DST acted or
omitted to act in bad faith, with reckless disregard of its
obligations or with gross negligence.
C. Except where DST is entitled to indemnification under Section 8.B.
hereof and with respect to "as ofs" set forth in Section 7.F., DST
shall indemnify and hold the Fund harmless from and against any and
all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of DST's failure to comply with the terms of
this Agreement or arising out of or attributable to DST's negligence
or willful misconduct or breach of any representation or warranty of
DST hereunder.
D. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR
CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY
PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY
THEREOF.
E. Promptly after receipt by an indemnified person of notice of the
commencement of any action, such indemnified person will, if a claim
in respect thereto is to be made against an indemnifying party
hereunder, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying
party will not relieve an indemnifying party from any liability that
it may have to any indemnified person for contribution or otherwise
under the indemnity agreement contained herein except to the extent it
is prejudiced as a proximate result of such failure to timely notify.
In case any such action is brought against any indemnified person and
such indemnified person seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, assume the
defense thereof (in its own name or in the name and on behalf of any
indemnified party or both with counsel reasonably satisfactory to such
indemnified person); provided, however, if the defendants in any such
action include both the indemnified person and an indemnifying party
and the indemnified person shall have reasonably concluded that there
may be a conflict between the positions of the indemnified person and
an indemnifying party in conducting the defense of any such action or
<PAGE>
that there may be legal defenses available to it and/or other
indemnified persons which are inconsistent with those available to an
indemnifying party, the indemnified person or indemnified persons
shall have the right to select one separate counsel (in addition to
local counsel) to assume such legal defense and to otherwise
participate in the defense of such action on behalf of such
indemnified person or indemnified persons at such indemnified party's
sole expense. Upon receipt of notice from an indemnifying party to
such indemnified person of its election so to assume the defense of
such action and approval by the indemnified person of counsel, which
approval shall not be unreasonably withheld (and any disapproval shall
be accompanied by a written statement of the reasons therefor), the
indemnifying party will not be liable to such indemnified person
hereunder for any legal or other expenses subsequently incurred by
such indemnified person in connection with the defense thereof. An
indemnifying party will not settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
persons are actual or potential parties to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified person from all liability
arising out of such claim, action, suit or proceeding. An indemnified
party will not, without the prior written consent of the indemnifying
party settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder. If it does so, it waives its right to
indemnification therefor.
9. Certain Covenants of DST and the Fund.
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A. All requisite steps will be taken by the Fund from time to time when
and as necessary to register the Fund's shares for sale in all states
in which the Fund's shares shall at the time be offered for sale and
require registration. If at any time the Fund will receive notice of
any stop order or other proceeding in any such state affecting such
registration or the sale of the Fund's shares, or of any stop order or
other proceeding under the federal securities laws affecting the sale
of the Fund's shares, the Fund will give prompt notice thereof to DST.
B. DST hereby agrees to perform such transfer agency functions as are set
forth in Section 4.D. above and establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms, and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices, and to carry such insurance as
it considers adequate and reasonably available.
C. To the extent required by Section 31 of the Investment Company Act of
1940 as amended and Rules thereunder, DST agrees that all records
maintained by DST relating to the services to be performed by DST
under this Agreement are the property of the Fund and will be
preserved and will be surrendered promptly to the Fund on request.
D. DST agrees to furnish the Fund annual reports of its parent's
financial condition, consisting of a balance sheet, earnings statement
and any other financial information reasonably requested by the Fund.
The annual financial statements will be certified by DST's certified
public accountants.
E. DST represents and agrees that it will use its reasonable efforts to
keep current on the trends of the investment company industry relating
to shareholder services and will use its reasonable efforts to
continue to modernize and improve.
F. DST will permit the Fund and its authorized representatives to make
periodic inspections of its operations as such would involve the Fund
at reasonable times during business hours.
G. DST agrees to use its reasonable efforts to provide in Kansas City at
the Fund's expense two (2) man weeks of training for the Fund's
personnel in connection with use and operation of the TA2000 System.
All travel and reimbursable expenses incurred by the Fund's personnel
in connection with and during training at DST's Facility shall be
borne by the Fund. At the Fund's option and expense, DST also agrees
to use its reasonable efforts to provide an additional two (2) man
weeks of training at the Fund's facility for the Fund's personnel in
connection with the conversion to the TA2000 System. Reasonable
travel, per diem and reimbursable expenses incurred by DST personnel
in connection with and during training at the Fund's facility or in
connection with the conversion shall be borne by the Fund.
10. Recapitalization or Readjustment.
--------------------------------
In case of any recapitalization, readjustment or other change in the
capital structure of the Fund requiring a change in the form of stock
certificates, DST will issue or register certificates in the new form in
exchange for, or in transfer of, the outstanding certificates in the old
form, upon receiving:
A. Written instructions from an officer of the Fund;
B. Certified copy of the amendment to the Articles of Incorporation or
other document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the stock in
the new form, and an opinion of counsel that the order or consent of
no other government or regulatory authority is required;
D. Specimens of the new certificates in the form approved by the Board of
Directors of the Fund, with a certificate of the Secretary of the Fund
as to such approval;
<PAGE>
E. Opinion of counsel for the Fund stating:
(1) The status of the shares of stock of the Fund in the new form
under the Securities Act of 1933, as amended and any other
applicable federal or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be, when issued, validly issued, fully paid and
nonassessable.
11. Stock Certificates. [STRIKE IF THE FUND WILL NOT ISSUE STOCK CERTIFICATES]
------------------
The Fund will furnish DST with a sufficient supply of blank stock
certificates and from time to time will renew such supply upon the request
of DST. Such certificates will be signed manually or by facsimile
signatures of the officers of the Fund authorized by law and by bylaws to
sign stock certificates, and if required, will bear the corporate seal or
facsimile thereof.
12. Death, Resignation or Removal of Signing Officer.
------------------------------------------------
The Fund will file promptly with DST written notice of any change in the
officers authorized to sign stock certificates, written instructions or
requests, together with two signature cards bearing the specimen signature
of each newly authorized officer. In case any officer of the Fund who will
have signed manually or whose facsimile signature will have been affixed to
blank stock certificates will die, resign, or be removed prior to the
issuance of such certificates, DST may issue or register such stock
certificates as the stock certificates of the Fund notwithstanding such
death, resignation, or removal, until specifically directed to the contrary
by the Fund in writing. In the absence of such direction, the Fund will
file promptly with DST such approval, adoption, or ratification as may be
required by law.
13. Future Amendments of Charter and Bylaws.
---------------------------------------
The Fund will promptly file with DST copies of all material amendments to
its Articles of Incorporation or Bylaws made after the date of this
Agreement.
14. Instructions, Opinion of Counsel and Signatures.
-----------------------------------------------
At any time DST may apply to any person authorized by the Fund to give
instructions to DST, and may with the approval of a Fund officer consult
with legal counsel for the Fund, or DST's own legal counsel at the expense
of the Fund, with respect to any matter arising in connection with the
agency and it will not be liable for any action taken or omitted by it in
good faith in reliance upon such instructions or upon the opinion of such
counsel. DST will be protected in acting upon any paper or document
reasonably believed by it to be genuine and to have been signed by the
proper person or persons and will not be held to have notice of any change
of authority of any person, until receipt of written notice thereof from
the Fund. It will also be protected in recognizing stock certificates
which it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper countersignature of
any former Transfer Agent or Registrar, or of a co-Transfer Agent or co-
Registrar.
15. Force Majeure and Disaster Recovery Plans.
------------------------------------------
A. DST shall not be responsible or liable for its failure or delay in
performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation: any interruption, loss or
malfunction or any utility, transportation, computer (hardware or
software) or communication service; inability to obtain labor,
material, equipment or transportation, or a delay in mails;
governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornados, acts of God or public enemy,
revolutions, or insurrection; or any other cause, contingency,
circumstance or delay not subject to DST's reasonable control which
prevents or hinders DST's performance hereunder.
B. DST currently maintains an agreement with a third party whereby DST is
to be permitted to use on a "shared use" basis a "hot site" (the
"Recovery Facility") maintained by such party in event of a disaster
rendering the DST Facilities inoperable. DST has developed and is
continually revising a business contingency plan (the "Business
Contingency Plan") detailing which, how, when, and by whom data
maintained by DST at the DST Facilities will be installed and operated
at the Recovery Facility. Provided the Fund is paying its pro rata
portion of the charge therefor, DST would, in event of a disaster
rendering the DST Facilities inoperable, use reasonable efforts to
convert the TA2000 System containing the designated the Fund data to
the computers at the Recovery Facility in accordance with the then
current Business Contingency Plan.
C. DST also currently maintains, separate from the area in which the
operations which provides the services to the Fund hereunder are
located, a Crisis Management Center consisting of phones, computers
and the other equipment necessary to operate a full service transfer
agency business in the event one of its operations areas is rendered
inoperable. The transfer of operations to other operating areas or to
the Crisis Management Center is also covered in DST's Business
Contingency Plan.
16. Certification of Documents.
--------------------------
The required copy of the Articles of Incorporation of the Fund and copies
of all amendments thereto will be certified by the Secretary of State (or
other appropriate official) of the State of Incorporation, and if such
Articles of Incorporation and amendments are required by law to be also
filed with a county, city or other officer of official body, a certificate
of such filing will appear on the certified copy submitted to DST. A copy
of the order or consent of each governmental or regulatory authority
required by law to the issuance of the stock will be certified by the
Secretary or Clerk of such governmental or regulatory authority, under
proper seal of such authority. The copy of the Bylaws and copies of all
amendments thereto, and copies of resolutions of the Board of Directors of
the Fund, will be certified by the Secretary or an Assistant Secretary of
the Fund under the Fund's seal.
<PAGE>
17. Records.
-------
DST will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained pursuant
to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under the
Investment Company Act of 1940, if any.
18. Disposition of Books, Records and Canceled Certificates.
-------------------------------------------------------
DST may send periodically to the Fund, or to where designated by the
Secretary or an Assistant Secretary of the Fund, all books, documents, and
all records no longer deemed needed for current purposes and stock
certificates which have been canceled in transfer or in exchange, upon the
understanding that such books, documents, records, and stock certificates
will be maintained by the Fund under and in accordance with the
requirements of Section 17Ad-7 adopted under the Securities Exchange Act of
1934. Such materials will not be destroyed by the Fund without the consent
of DST (which consent will not be unreasonably withheld), but will be
safely stored for possible future reference.
19. Provisions Relating to DST as Transfer Agent.
--------------------------------------------
A. DST will make original issues of stock certificates upon written
request of an officer of the Fund and upon being furnished with a
certified copy of a resolution of the Board of Directors authorizing
such original issue, an opinion of counsel as outlined in
subparagraphs 1.D. and G. of this Agreement, any documents required by
Sections 5. or 10. of this Agreement, and necessary funds for the
payment of any original issue tax.
B. Before making any original issue of certificates the Fund will furnish
DST with sufficient funds to pay all required taxes on the original
issue of the stock, if any. The Fund will furnish DST such evidence
as may be required by DST to show the actual value of the stock. If
no taxes are payable DST will be furnished with an opinion of outside
counsel to that effect.
C. Shares of stock will be transferred and new certificates issued in
transfer, or shares of stock accepted for redemption and funds
remitted therefor, or book entry transfer be effected, upon surrender
of the old certificates in form or receipt by DST of instructions
deemed by DST properly endorsed for transfer or redemption accompanied
by such documents as DST may deem necessary to evidence the authority
of the person making the transfer or redemption. DST reserves the
right to refuse to transfer or redeem shares until it is satisfied
that the endorsement or signature on the certificate or any other
document is valid and genuine, and for that purpose it may require a
guaranty of signature in accordance with the Signature Guarantee
Procedures. DST also reserves the right to refuse to transfer or
redeem shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it will incur no liability for
the refusal in good faith to make transfers or redemptions which, in
its judgment, are improper or unauthorized. DST may, in effecting
transfers or redemptions, rely upon Simplification Acts, Uniform
-------
Commercial Code or other statutes which protect it and the Fund in not
---------------
requiring complete fiduciary documentation. In cases in which DST is
not directed or otherwise required to maintain the consolidated
records of shareholder's accounts, DST will not be liable for any loss
which may arise by reason of not having such records.
D. When mail is used for delivery of stock certificates, DST will forward
stock certificates in "nonnegotiable" form by first class or
registered mail and stock certificates in "negotiable" form by
registered mail, all such mail deliveries to be covered while in
transit to the addressee by insurance arranged for by DST.
E. DST will issue and mail subscription warrants, certificates
representing stock dividends, exchanges or split ups, or act as
Conversion Agent upon receiving written instructions from any officer
of the Fund and such other documents as DST deems necessary.
F. DST will issue, transfer, and split up certificates and will issue
certificates of stock representing full shares upon surrender of scrip
certificates aggregating one full share or more when presented to DST
for that purpose upon receiving written instructions from an officer
of the Fund and such other documents as DST may deem necessary.
G. DST may issue new certificates in place of certificates represented to
have been lost, destroyed, stolen or otherwise wrongfully taken upon
receiving instructions from the Fund and indemnity satisfactory to DST
and the Fund, and may issue new certificates in exchange for, and upon
surrender of, mutilated certificates. Such instructions from the Fund
will be in such form as will be approved by the Board of Directors of
the Fund and will be in accordance with the provisions of law and the
bylaws of the Fund governing such matter.
H. DST will supply a shareholder's list to the Fund for its annual
meeting upon receiving a request from an officer of the Fund. It will
also, at the expense of the Fund, supply lists at such other times as
may be requested by an officer of the Fund.
I. Upon receipt of written instructions of an officer of the Fund, DST
will, at the expense of the Fund, address and mail notices to
shareholders.
J. In case of any request or demand for the inspection of the stock books
of the Fund or any other books in the possession of DST, DST will
endeavor to notify the Fund and to secure instructions as to
permitting or refusing such inspection. DST reserves the right,
however, to exhibit the stock books or other books to any person in
case it is advised by its counsel that it may be held responsible for
the failure to exhibit the stock books or other books to such person.
<PAGE>
20. Provisions Relating to Dividend Disbursing Agency.
-------------------------------------------------
A. DST will, at the expense of the Fund, provide a special form of check
containing the imprint of any device or other matter desired by the
Fund. Said checks must, however, be of a form and size convenient for
use by DST.
B. If the Fund desires to include additional printed matter, financial
statements, etc., with the dividend checks, the same will be furnished
DST within a reasonable time prior to the date of mailing of the
dividend checks, at the expense of the Fund.
C. If the Fund desires its distributions mailed in any special form of
envelopes, sufficient supply of the same will be furnished to DST but
the size and form of said envelopes will be subject to the approval of
DST. If stamped envelopes are used, they must be furnished by the
Fund; or if postage stamps are to be affixed to the envelopes, the
stamps or the cash necessary for such stamps must be furnished by the
Fund.
D. DST shall establish and maintain on behalf of the Fund one or more
deposit accounts as Agent for the Fund, into which DST shall deposit
the funds DST receives for payment of dividends, distributions,
redemptions or other disbursements provided for hereunder and to draw
checks against such accounts.
E. DST is authorized and directed to stop payment of checks theretofore
issued hereunder, but not presented for payment, when the payees
thereof allege either that they have not received the checks or that
such checks have been mislaid, lost, stolen, destroyed or through no
fault of theirs, are otherwise beyond their control, and cannot be
produced by them for presentation and collection, and, to issue and
deliver duplicate checks in replacement thereof.
21. Assumption of Duties By the Fund or Agents Designated By the Fund.
-----------------------------------------------------------------
A. The Fund or its designated agents other than DST may assume certain
duties and responsibilities of DST or those services of Transfer
Agent and Dividend Disbursing Agent as those terms are referred to in
Section 4.D. of this Agreement including but not limited to answering
and responding to telephone inquiries from shareholders and brokers,
accepting shareholder and broker instructions (either or both oral and
written) and transmitting orders based on such instructions to DST,
preparing and mailing confirmations, obtaining certified TIN numbers,
classifying the status of shareholders and shareholder accounts under
applicable tax law, establishing shareholder accounts on the TA2000
System and assigning social codes and Taxpayer Identification Number
codes thereof, and disbursing monies of the Fund, said assumption to
be embodied in writing to be signed by both parties.
B. To the extent the Fund or its agent or affiliate assumes such duties
and responsibilities, DST shall be relieved from all responsibility
and liability therefor and is hereby indemnified and held harmless
against any liability therefrom and in the same manner and degree as
provided for in Section 8 hereof.
C. Initially the Fund or its designees shall be responsible for the
following: [LIST RESPONSIBILITIES OR DELETE AS APPROPRIATE.] (i)
answer and respond to phone calls from shareholders and broker-
dealers, and (ii) scan items into DST's AWD/TM/ System as such calls
or items are received by the Fund, and (iii) enter and confirm wire
order trades.
22. Termination of Agreement.
------------------------
A. This Agreement shall be in effect for an initial period of five (5)
years and thereafter may be terminated by either party upon receipt of
one (1) year's written notice from the other party, provided, however,
that the effective date of any termination shall not occur during the
period from December 15 through March 30 of any year to avoid
adversely impacting year end.
B. Each party, in addition to any other rights and remedies, shall have
the right to terminate this Agreement forthwith upon the occurrence at
any time of any of the following events with respect to the other
party:
(1) The bankruptcy of the other party or its assigns or the
appointment of a receiver for the other party or its assigns; or
(2) Failure by the other party or its assigns to perform its duties
in accordance with the Agreement, which failure materially
adversely affects the business operations of the first party and
which failure continues for thirty (30) days after receipt of
written notice from the first party.
C. In the event of termination, the Fund will promptly pay DST all
amounts due to DST hereunder. In addition, if this Agreement is
terminated by the Fund for any reason other than those set forth in
Section 22.B. hereof, then the Fund shall pay to DST a termination fee
equal to the lesser of (i) the aggregate of the fees charged to the
Fund during the previous six (6) calendar months preceding receipt of
the notice or (ii) the average monthly fee over the preceding six (6)
months times the number of months remaining in the then current term
after termination. If the Fund shall not have been billed for six (6)
months before termination, the average monthly fee shall be calculated
by dividing the aggregate fees charged to the Fund during whatever
period it was billed by the number of months in that period and that
average monthly fee shall be multiplied by six (6) in order to
determine the aggregate fees in subparagraph 22.C.(i). In any event,
the effective date of any deconversion as a result of termination
hereof shall not occur during the period from December 15th through
March 30th of any year to avoid adversely impacting year end.
D. In the event of termination, DST will use its reasonable efforts to
transfer the records of the Fund to the designated successor transfer
agent, to provide reasonable assistance to the Fund and its designated
successor transfer agent, and to provide other information relating to
its services provided hereunder (subject to the recompense of DST for
such assistance at its standard rates and fees for personnel then in
effect at that time); provided, however, as used herein "reasonable
assistance" and "other information" shall not include assisting any
new service or system provider to modify, alter, enhance, or improve,
or to provide any new functionality for, such successor transfer
agent's current system, or to require DST to disclose any DST
Confidential Information, as hereinafter defined, or any information
which is otherwise confidential to DST.
<PAGE>
23. Confidentiality.
---------------
A. DST agrees that, except as provided in the last sentence of Section
19.J. hereof, or as otherwise required by law, DST will keep
confidential all records of and information in its possession relating
to the Fund or its shareholders or shareholder accounts and will not
disclose the same to any person except at the request or with the
consent of the Fund.
B. The Fund agrees to keep confidential all financial statements and
other financial records received from DST, the terms and provisions of
this Agreement, all accountant's reports relating to DST, and all
manuals, systems and other technical information and data, not
publicly disclosed, relating to DST's operations and programs
furnished to it by DST pursuant to this Agreement and will not
disclose the same to any person except at the request or with the
consent of DST.
C. (1) The Fund acknowledges that DST has proprietary rights in and to
the TA2000 System used to perform services hereunder including,
but not limited to the maintenance of shareholder accounts and
records, processing of related information and generation of
output, including, without limitation any changes or
modifications of the TA2000 System and any other DST programs,
data bases, supporting documentation, or procedures (collectively
"DST Confidential Information") which the Fund's access to the
TA2000 System or computer hardware or software may permit the
Fund or its employees or agents to become aware of or to access
and that the DST Confidential Information constitutes
confidential material and trade secrets of DST. The Fund agrees
to maintain the confidentiality of the DST Confidential
Information.
(2) The Fund acknowledges that any unauthorized use, misuse,
disclosure or taking of DST Confidential Information which is
confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer, computer
system, or computer network, or the knowing and unauthorized
accessing or causing to be accessed of any computer, computer
system, or computer network, may be subject to civil liabilities
and criminal penalties under applicable state law. The Fund will
advise all of its employees and agents who have access to any DST
Confidential Information or to any computer equipment capable of
accessing DST or DST hardware or software of the foregoing.
(3) The Fund acknowledges that disclosure of the DST Confidential
Information may give rise to an irreparable injury to DST
inadequately compensable in damages. Accordingly, DST may seek
(without the posting of any bond or other security) injunctive
relief against the breach of the foregoing undertaking of
confidentiality and nondisclosure, in addition to any other legal
remedies which may be available, and the Fund consents to the
obtaining of such injunctive relief. All of the undertakings and
obligations relating to confidentiality and nondisclosure,
whether contained in this Section or elsewhere in this Agreement
shall survive the termination or expiration of this Agreement for
a period of ten (10) years.
24. Changes and Modifications.
-------------------------
A. During the term of this Agreement DST will use on behalf of the Fund
without additional cost all modifications, enhancements, or changes
which DST may make to the TA2000 System in the normal course of its
business and which are applicable to functions and features offered by
the Fund, unless substantially all DST clients are charged separately
for such modifications, enhancements or changes, including, without
limitation, substantial system revisions or modifications necessitated
by changes in existing laws, rules or regulations. The Fund agrees to
pay DST promptly for modifications and improvements which are charged
for separately at the rate provided for in DST's standard pricing
schedule which shall be identical for substantially all clients, if a
standard pricing schedule shall exist. If there is no standard
pricing schedule, the parties shall mutually agree upon the rates to
be charged.
B. DST shall have the right, at any time and from time to time, to alter
and modify any systems, programs, procedures or facilities used or
employed in performing its duties and obligations hereunder; provided
that the Fund will be notified as promptly as possible prior to
implementation of such alterations and modifications and that no such
alteration or modification or deletion shall materially adversely
change or affect the operations and procedures of the Fund in using or
employing the TA2000 System or DST Facilities hereunder or the reports
to be generated by such system and facilities hereunder, unless the
Fund is given thirty (30) days prior notice to allow the Fund to
change its procedures and DST provides the Fund with revised operating
procedures and controls.
C. All enhancements, improvements, changes, modifications or new features
added to the TA2000 System however developed or paid for shall be, and
shall remain, the confidential and exclusive property of, and
proprietary to, DST.
<PAGE>
25. Subcontractors.
---------------
Nothing herein shall impose any duty upon DST in connection with or make
DST liable for the actions or omissions to act of unaffiliated third
parties such as, by way of example and not limitation, Airborne Services,
the U.S. mails and telecommunication companies, provided, if DST selected
such company, DST shall have exercised due care in selecting the same.
26. Limitations on Liability.
-------------------------
A. If the Fund is comprised of more than one Portfolio, each Portfolio
shall be regarded for all purposes hereunder as a separate party apart
from each other Portfolio. Unless the context otherwise requires,
with respect to every transaction covered by this Agreement, every
reference herein to the Fund shall be deemed to relate solely to the
particular Portfolio to which such transaction relates. Under no
circumstances shall the rights, obligations or remedies with respect
to a particular Portfolio constitute a right, obligation or remedy
applicable to any other Portfolio. The use of this single document to
memorialize the separate agreement of each Portfolio is understood to
be for clerical convenience only and shall not constitute any basis
for joining the Portfolios for any reason. [DELETE IF NOT APPLICABLE]
B. Notice is hereby given that a copy of the Fund's Trust Agreement and
all amendments thereto is on file with the Secretary of State of the
state of its organization; that this Agreement has been executed on
behalf of the Fund by the undersigned duly authorized representative
of the Fund in his/her capacity as such and not individually; and that
the obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
trustee, officer or shareholder of the Fund individually. [DELETE IF
NOT APPLICABLE]
27. Miscellaneous.
-------------
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Missouri, excluding that body of law applicable to choice
of law.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, and the indemnification extended
hereunder, if any, are intended to and shall continue after and
survive the expiration, termination or cancellation of this Agreement.
D. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
F. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
H. This Agreement may not be assigned by the Fund or DST without the
prior written consent of the other.
I. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between the
Fund and DST. It is understood and agreed that all services performed
hereunder by DST shall be as an independent contractor and not as an
employee of the Fund. This Agreement is between DST and the Fund and
neither this Agreement nor the performance of services under it shall
create any rights in any third parties. There are no third party
beneficiaries hereto.
J. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by any party hereunder shall not
affect any rights or obligations of any other party hereunder.
K. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed as
a continuing or permanent waiver of any such terms, conditions, rights
or privileges, but the same shall continue and remain in full force
and effect as if no such forbearance or waiver had occurred.
<PAGE>
L. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement, draft or agreement or
proposal with respect to the subject matter hereof, whether oral or
written, and this Agreement may not be modified except by written
instrument executed by both parties.
M. All notices to be given hereunder shall be deemed properly given if
delivered in person or if sent by U.S. mail, first class, postage
prepaid, or if sent by facsimile and thereafter confirmed by mail as
follows:
If to DST:
DST Systems, Inc.
1055 Broadway, 7th Fl.
Kansas City, Missouri 64105
Attn: Senior Vice President-Full Service
Facsimile No.: 816-435-3455
With a copy of non-operational notices to:
DST Systems, Inc.
1055 Broadway, 9th Fl.
Kansas City, Missouri 64105
Attn: Legal Department
Facsimile No.: 816-435-8630
If to the Fund:
SoGen Funds, Inc.
1221 Avenue of the Americas
New York, NY 10020
Attn: Philip J. Bafundo, Vice President
Facsimile No.: ________________
or to such other address as shall have been specified in writing by
the party to whom such notice is to be given.
N. The representations and warranties contained herein shall survive the
execution of this Agreement. The representations and warranties
contained herein and the provisions of Section 8 hereof shall survive
the termination of the Agreement and the performance of services
hereunder until any statute of limitations applicable to the matter at
issues shall have expired.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers, to be effective as of the day and
year first above written.
DST SYSTEMS, INC.
By:_____________________________________
Title:__________________________________
SOGEN FUNDS, INC.
By:____________________________________
Title:__________________________________
<PAGE>
EXHIBIT 99.11(A)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders
SoGen Funds, Inc.
We consent to the use of our report dated May 16, 1997 for the SoGen Funds,
Inc. incorporated herein by reference in this registration statement on Form
N-1A and to the references to our Firm under the headings "Financial High-
lights" in the Prospectus, and "Independent Auditors" and "Financial State-
ments" in the Statement of Additional Information.
KPMG Peat Marwick LLP
New York, New York
July 18, 1997
<PAGE>
EXHIBIT 99.11(B)
DECHERT PRICE & RHOADS
30 Rockefeller Plaza
New York, New York 10112
Tel: (212) 698-3500
Fax: (212) 698-3599
July 25, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SoGen Funds, Inc. (File No. 33-63560)
Dear Sirs:
The undersigned counsel for SoGen Funds, Inc. (the "Fund") has reviewed
Post-Effective Amendment No. 4 to the Fund's Registration Statement on Form
N-1A, and hereby represents that such Post-Effective Amendment No. 4 does not
contain disclosures that would render it ineligible to become effective pursuant
to Rule 485(b).
Very truly yours,
/s/ William Goodwin
William Goodwin
<PAGE>
EXHIBIT 99.16
SOGEN FUNDS, INC.
CALCULATION OF PERFORMANCE DATA
IN STATEMENT OF ADDITIONAL INFORMATION
AVERAGE TOTAL RATE OF RETURN FOR
THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
SOGEN SOGEN
OVERSEAS FUND GOLD FUND
------------------------ ----------------------
<S> <C> <C>
Initial Investment = P..................... $1,000 $1,000
Ending Redeemable Value @ 3/31/97 = ERV.... $1,079 $ 845
Calculations:
T = the nth root of (ERV/P) - 1............ T = the 1st T = the 1st
root of (1,079/1000) - 1 root of (845/1000) - 1
= 1.079 - 1 = 0.845 - 1
= 0.0793 = (0.1552)
= 7.93% = (15.52)%
</TABLE>
SOGEN FUNDS, INC.
CALCULATION OF CURRENT YIELD AND
EFFECTIVE YIELD FOR SOGEN MONEY FUND
FOR THE SEVEN DAYS
ENDED MARCH 31, 1997
<TABLE>
<S> <C>
Base Period Return March 31, 1997 0.000917092
Current Yield
Base Period Return/7) x 365 x 100
(0.000917092/7) x 365 x 100 = 4.78%
Effective Yield
[(Base Period Return + 1) /to the power of (365 divided by 7)/] - 1
[(0.000917092 + 1) /to the power of (365 divided by 7)/] - 1 = 4.90%
</TABLE>
