<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 25, 1997
REGISTRATION NO. 2-34329
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
----------------
REGISTRATION STATEMENT UNDER [X]
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [_]
[X]
POST-EFFECTIVE AMENDMENT NO. 41
AND/OR
REGISTRATION STATEMENT UNDER [X]
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 25
(Check appropriate box or boxes.)
----------------
SOGEN INTERNATIONAL FUND, 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 INTERNATIONAL FUND, 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 COMPANY 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 FISCAL YEAR ENDED
MARCH 31, 1997 WAS FILED ON MAY 23, 1997.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
CROSS-REFERENCE SHEET
PURSUANT TO RULE 495(A)
UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
FORM N-1A ITEM NO. PROSPECTUS CAPTION
------------------ ------------------
<C> <S> <C>
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Fee Table
Item 3. Condensed Financial Information Financial Highlights; Performance and
Yield Information
Item 4. General Description of Registrant Organization of the Company; Investment
Objective, Policy and Restrictions; Risk
Factors
Item 5. Management of the Fund 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 Being Management of the Companies; How to
Offered Purchase Shares; Net Asset Value
Item 8. Redemption or Repurchase How to Redeem Shares
Item 9. Legal Proceedings Not Applicable
<CAPTION>
FORM N-1A ITEM NO. STATEMENT OF ADDITIONAL INFORMATION CAPTION
------------------ -------------------------------------------
<C> <S> <C>
PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History Organization of the Fund
Item 13. Investment Objectives and Investment Objective, Policy and
Policies Restrictions
Item 14. Management of the Registrant Management of the Fund
Item 15. Control Persons and Principal Management of the Fund
Holders of Securities
Item 16. Investment Advisory and Other Investment Adviser and Other Services;
Services Distribution of the Fund's Shares;
Custody of Portfolio; Independent
Auditors
Item 17. Brokerage Allocation Brokerage Allocation
Item 18. Capital Stock and Other Not Applicable
Securities
Item 19. Purchase, Redemption and Pricing Distribution of the Fund's Shares;
of Securities Being Offered Computation of Net Asset Value
Item 20. Tax Status Tax Status
Item 21. Underwriters Distribution of the Fund's 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................................................................. 4
Financial Highlights...................................................... 5
Organization of the Company............................................... 6
Investment Objective, Policy and Restrictions............................. 6
Risk Factors.............................................................. 8
SoGen Funds, Inc. Prospectus
Fee Table................................................................. --
Financial Highlights...................................................... --
Organization of the Company............................................... --
Overseas Fund Investment Objective and Policies........................... --
Gold Fund Investment Objective and Policies............................... --
Money Fund Investment Objective and Policies.............................. --
Investment Restrictions................................................... --
Implementation of Policies and Risks...................................... --
Management of the Companies................................................ 10
Capital Stock.............................................................. 11
Dividends, Capital Gain Distributions and Taxes............................ 12
Performance and Yield Information.......................................... 14
Net Asset Value............................................................ 15
How to Purchase Shares..................................................... 15
How to Redeem Shares....................................................... 20
Shareholder Services....................................................... 23
Inquiries.................................................................. 26
</TABLE>
----------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION 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 SECURITIES IN ANY JURISDICTION TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
2
<PAGE>
PROSPECTUS
SOGEN INTERNATIONAL 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 International Fund (the "Fund") is the sole portfolio of SoGen Inter-
national Fund, Inc. (the "Company"), an open-end management investment compa-
ny. The Fund's investment objective is to provide long-term growth of capital.
The Fund will normally invest its assets primarily in common stocks (and in
securities convertible into common stocks) of United States and foreign compa-
nies.
SHARES IN THE FUND 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 Fund 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 Fund, 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.
----------------------
JULY 31, 1997
3
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
FEE TABLE
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of public
offering price)...................................................... 3.75%
====
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees........................................................ 0.75%
12b-1 Fees............................................................. 0.24%*
Other Expenses:
Legal, Audit and Insurance....................................... 0.01%
Custodial and Shareholder Servicing.............................. 0.19%
Printing, Registration, Directors' Fees and Miscellaneous........ 0.02%
----
Total Other Expenses.................................................. 0.22%
----
Total Fund Operating Expenses.......................................... 1.21%
====
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE ------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor in the Fund would pay the following
expenses on a $1,000 investment, assuming a
5% annual return, with or without redemption,
at the end of each time period:.............. $49 $74 $102 $179
</TABLE>
The information set forth above is to assist an investor in understanding the
various costs and expenses to which an investment in the Fund would be sub-
ject. For further information see "Management of the Companies" and "How to
Purchase Shares."
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 the Fund may cause long-term shareholders to pay more than
the economic equivalent of the maximum front-end sales charges permitted un-
der rules adopted by the National Association of Securities Dealers, Inc.
4
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
FINANCIAL HIGHLIGHTS
The following financial highlights and the related financial statements for
each of the years in the eight year period ended March 31, 1997 have been au-
dited by KPMG Peat Marwick LLP, independent auditors, whose report thereon is
unqualified and appears in the SoGen International Fund, Inc. March 31, 1997
Annual Report to Shareholders, which is incorporated by reference in the
Statement of Additional Information. The financial highlights and the related
financial statements for each of the years in the two year period ended March
31, 1989 have been audited by other auditors whose report thereon dated May 5,
1989 expressed an unqualified opinion. This information should be read in con-
junction with the Financial Statements and notes thereto, which also appear in
the Company's Annual Report to Shareholders.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991(A) 1990 1989 1988
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net asset value,
beginning of year...... $26.09 $23.20 $23.32 $20.12 $18.44 $17.51 $17.71 $17.31 $16.91 $21.47
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income... 1.03 1.06 0.10 0.53 0.64 0.69 0.78 0.64 0.71 0.58
Net realized and
unrealized gains
(losses) on
investments............ 1.39 3.37 0.49 3.37 2.02 1.45 0.20 1.48 1.26 (0.97)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations............. 2.42 4.43 0.59 3.90 2.66 2.14 0.98 2.12 1.97 (0.39)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (1.09) (0.81) (0.15) (0.47) (0.64) (0.84) (0.71) (0.71) (0.80) (0.84)
Distributions from
capital gains.......... (0.74) (0.73) (0.56) (0.23) (0.34) (0.37) (0.47) (1.01) (0.77) (3.33)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions..... (1.83) (1.54) (0.71) (0.70) (0.98) (1.21) (1.18) (1.72) (1.57) (4.17)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
year................... $26.68 $26.09 $23.20 $23.32 $20.12 $18.44 $17.51 $17.71 $17.31 $16.91
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN*........... 9.48% 19.57% 2.63% 19.50% 14.87% 12.53% 6.03% 12.18% 11.94% (0.70)%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of year
(millions)............. $3,908 $3,033 $1,922 $1,781 $ 650 $ 355 $ 240 $ 176 $ 126 $ 97
Ratio of operating
expenses to average net
assets................. 1.21%** 1.25%** 1.26% 1.28% 1.31% 1.37% 1.30% 1.38% 1.39% 1.36%
Ratio of net investment
income to average net
assets................. 3.08%** 3.71%** 2.70% 2.34% 3.69% 4.00% 4.84% 4.32% 4.23% 3.09%
Portfolio turnover
rate................... 12.85% 9.64% 12.96% 23.96% 17.94% 24.25% 24.14% 30.62% 33.05% 42.79%
Average commission rate
paid(o)................ $0.003 $0.013 -- -- -- -- -- -- -- --
</TABLE>
(Refer to following page for footnotes.)
5
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
ORGANIZATION OF THE COMPANY
The Company is an open-end diversified management investment company which
was incorporated in Delaware in August 1969 and reincorporated under Maryland
law in May 1985. The Company has a single portfolio, SoGen International Fund
(referred to herein as the "International Fund" or the "Fund").
INVESTMENT OBJECTIVE, POLICY AND RESTRICTIONS
INVESTMENT OBJECTIVE.
The investment objective of the Fund is to provide long-term growth of capi-
tal. In seeking to achieve this objective, the Fund will normally invest its
assets primarily in common stocks (and in securities convertible into common
stocks) of United States and foreign companies. However, the Fund reserves the
right to invest a portion of its assets in fixed-income securities of domestic
or foreign issuers which, in addition to the income they may provide, appear
to offer potential for long-term growth of capital. When deemed appropriate by
the Fund's investment adviser for short-term investment or defensive purposes,
the Fund may hold a portion of its assets (up to 100%) in short-term debt in-
struments including commercial paper and certificates of deposit.
INVESTMENT RESTRICTIONS.
The Statement of Additional Information contains more information on the
Fund's investment policies and identifies the restrictions on the Fund's in-
vestment activities, which provide that the Fund shall not, among other
things:
1. Purchase the securities of any issuer if such purchase would cause
more than 25% of the value of its total assets to be invested in secu-
rities of any one issuer or industry, with the exception of the secu-
rities of the United States government and its corporate instrumental-
ities and, under the cir-
- -----------
Footnotes from previous page
(a) Societe Generale Asset Management Corp. became the investment adviser on
April 26, 1990. From August 21, 1978 to April 25, 1990 the investment ad-
viser was Societe Generale Securities Corporation.
* Does not give effect to deduction of the sales load.
** The ratio of operating expenses to average net assets for the year ended
March 31, 1997 and 1996 would have remained the same without the effect of
earnings credits. However, the ratio of net investment income to average
net assets would have been 3.07% and 3.70% without the effect of earnings
credits for the years ended March 31, 1997 and 1996, 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.
6
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
cumstances described below, certificates of deposit and other short-
term bank instruments. In fact, the Fund intends to diversify its in-
vestments among various issuers and industries and will not purchase
certificates of deposit or other short-term bank instruments, except
to the extent deemed appropriate for the short-term investment of cash
or as a temporary defensive measure. The Fund will limit its purchases
of certificates of deposit and other short-term bank instruments to
those issued by United States banks and savings and loan associations,
including foreign branches of such banks, and United States branches
or agencies of foreign banks, which have total assets (as of the date
of their most recently published financial statements) of at least $1
billion.
2. Borrow money, except unsecured borrowings from banks as a temporary
measure in exceptional circumstances, and such borrowings may not ex-
ceed 10% of its net assets taken at market or other fair value at the
time of the borrowing. The Fund will not purchase securities while
borrowings exceed 5% of the Fund's total assets.
The foregoing investment objective and investment restrictions (not includ-
ing the percentage of the Fund's assets that may be invested in short-term
debt instruments for short-term defensive purposes) are part of the fundamen-
tal policy of the Fund and may not be changed without the approval of a major-
ity of the outstanding voting securities of the Fund (defined by the Invest-
ment Company Act of 1940 as (i) 67 percent or more of the voting securities
present at a meeting of stockholders, if the holders of more than 50 percent
of the outstanding voting securities of such company are present or repre-
sented by proxy; or (ii) more than 50 percent of the outstanding voting secu-
rities of such company, whichever is the less).
OTHER INVESTMENT POLICIES.
The Fund has adopted certain additional investment policies which have not
been deemed fundamental and may, therefore, be changed by the Board of Direc-
tors. Pursuant to these policies, the Fund, among other things, does not in-
tend, with respect to 100% of its assets, to purchase securities of any issu-
er, other than the United States government and its corporate instrumentali-
ties if, immediately after such purchase, more than 5% of the value of its to-
tal assets would be invested in the securities of such issuer; additionally,
the Fund does not intend to purchase 10% or more of the voting securities of
any one issuer. The Fund also does not intend to purchase illiquid securities
or securities the proceeds from the sale of which could not readily be repa-
triated to the United States if, immediately after such purchase, more than
10% of the value of its net assets would be invested in such securities. Under
normal circumstances, the Fund will invest in at least three foreign coun-
tries.
7
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
RISK FACTORS
Because the Fund's investments will be subject to the market fluctuations
and risks inherent in all investments, there can be no assurance that the
Fund's stated objective will be realized. Societe Generale Asset Management
Corp. ("SGAM Corp."), the Fund's investment adviser, will seek to minimize
these risks through professional management and investment diversification.
The Fund is designed for long-term investors who have the patience and per-
spective to accept the investment risks involved. As with any long-term in-
vestment, the value of shares when sold may be higher or lower than when pur-
chased.
FOREIGN INVESTMENTS.
While investment by the Fund on an international basis will permit share-
holders to participate in economic developments abroad, such investments in-
volve certain risks not ordinarily associated with investing in securities of
United States issuers. These may include political instability of some foreign
governments, fluctuation in foreign exchange rates, the imposition of exchange
control regulations, the possibility of expropriation decrees, more limited
information about foreign issuers, different accounting standards, higher bro-
kerage costs and foreign withholding taxes. Moreover, foreign securities and
their markets may not be as liquid as United States securities and their mar-
kets.
Investors should note that to the extent the Fund's investments are denomi-
nated in and pay interest or dividends in foreign currencies, the value of
their investment in the Fund, as measured in United States dollars, will be
affected favorably or unfavorably by movements in exchange rates between the
dollar and those foreign currencies. From time to time the Fund attempts to
hedge these risks by selling such foreign currencies forward. As a result of
such hedging transactions, it is possible that the Fund's portfolio would not,
in the event of a foreign currency devaluation, depreciate as much as a port-
folio of a fund holding similar investments which did not sell foreign curren-
cies forward. A forward currency contract is not, however, a perfect hedge
against devaluation. Moreover, foreign currency transactions involve a cost to
the Fund and would diminish the appreciation the Fund's portfolio would other-
wise experience should a foreign currency, which has been sold forward, there-
after be revalued upward.
RESTRICTED SECURITIES.
The Fund may, from time to time, invest in securities not registered for
sale to the general public but which may be resold to institutional investors.
Where a dealer or institutional trading market in such securities exists,
these restricted securities will not be treated as illiquid securities for
purposes of the Fund's investment policies. While purchases of restricted se-
curities may offer attractive investment opportunities, the Fund may experi-
ence delays in its attempt to dispose of such securities. Moreover,
8
<PAGE>
SOGEN INTERNATIONAL FUND, INC.
registration of such securities under the Securities Act of 1933 may be re-
quired for their sale, in which case the Fund may have to bear the expense of
such registration.
LOWER-RATED AND UNRATED DEBT SECURITIES.
The Fund is free to invest in debt securities without regard to credit rat-
ing and may therefore invest in instruments that could experience a default in
the payment of principal and interest. The Fund may also purchase debt securi-
ties upon which the issuer has defaulted.
Lower-rated or unrated high yield debt securities are commonly known as
"junk bonds" and are often considered to be of speculative grade. They involve
greater risk of default due to changes in economic conditions, changes in the
issuer's creditworthiness or other circumstances. The market for these securi-
ties is generally more limited and their prices may experience greater vola-
tility than in the case of debt securities in the higher rating categories.
COMMODITY LINKED SECURITIES.
The Fund may invest up to 5% of its net assets in structured notes and/or
preferred stock, the value of which is linked to the price of gold or other
commodities. Such structured securities have different characteristics and
risks than other types of securities in which the Fund may invest. For exam-
ple, not only the coupon and/or dividend but also the redemption amount may be
increased or decreased depending on the change in the price of the referenced
commodity. See "Commodity Linked Securities" in the Statement of Additional
Information for further information.
INVESTMENT IN OTHER INVESTMENT COMPANIES.
The Fund may invest up to 10% of its total assets in other investment compa-
nies, provided that no more than 5% of the Fund's total assets may be invested
in a single investment company and the Fund may not acquire more than 3% of
the outstanding voting securities of a single investment company. These re-
strictions do not apply to certain investment companies known as private in-
vestment companies and "qualified purchaser" 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 SGAM Corp., the potential benefits of such investment justify the
payment of any applicable premium or sales charge. As a shareholder in another
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.
9
<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 Director of each of the Companies,
is primarily responsible for the day-to-day management of the Companies' in-
vestment portfolios. Mr. Eveillard has been a Director and President or Execu-
tive 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.
10
<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.
11
<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.
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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.
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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 similiarly 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
14
<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 the SGSC at (212) 278-5800.
15
<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") transfer 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 Prospectus 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 trading on
the NYSE, or orders received by dealers prior to such time and transmitted 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 as-
set value per share is calculated as set forth in the section of this Prospec-
tus entitled "Net Asset Value." The sales charges currently in effect 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 agreements
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 additional promo-
tional incen-
16
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
tives, to dealers selling a Fund's shares. Such additional promotional incen-
tive may include financial assistance in connection with pre-approved confer-
ences 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 and Gold Fund and shares of other funds advised by SGAM Corp.,
offered 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
17
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
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 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 percentage, the entire current purchase is eligible for the reduced
charge. To be entitled to a reduced sales charge pursuant to the Rights of Ac-
cumulation, 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 accounts, 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 appro-
priate number of escrowed shares will be redeemed in order to realize the dif-
ference. 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
18
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
their own accounts or the accounts of their clients and who charge a manage-
ment, consulting or other fee for their services, (iv) to clients of such in-
vestment advisers and financial planners who place trades for their own ac-
counts if the accounts are linked to the master account of such investment ad-
viser or financial planner on the books and records of the broker, agent, in-
vestment adviser or financial 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 de-
scribed 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
19
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
directly registered with a Fund. All interests in shares, full and fractional
(rounded to three decimal places), are reflected in a shareholder's book ac-
count. After any purchase, a confirmation is mailed to the shareholder indicat-
ing 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 submits a written request to that effect to DST. (No stock certifi-
cates 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 pur-
chase 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
incurs 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 av-
erage 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 exceed 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 under 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 redemp-
tion request in proper form as further described below. Neither the Companies
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.
20
<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
21
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
will record a shareholder's instructions. TELEPHONE REDEMPTION PRIVILEGES MAY
BE MODIFIED OR TERMINATED AT ANY TIME BY THE COMPANIES UPON 60 DAYS' WRITTEN
NOTICE TO SHAREHOLDERS.
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 guarantee
is not required for any amount redeemed by ACH transfer or bank wire
when a pre-designated bank has been identified by the shareholder. Any
one of the following guarantors is normally acceptable: (a) a commer-
cial bank or trust company; (b) a member firm of a domestic stock ex-
change; (c) a foreign branch of any institution included in paragraph
(a) or (b); (d) a national securities exchange; or (e) a savings asso-
ciation. Guarantees from a notary public are not acceptable.
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.
22
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
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 period before the proceeds of any redemption will be released
to the new address. 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 fifteen-day holding period can also be avoided by establishing bank
wire redemption 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 gen-
erally be credited to a shareholder's account on the second business day after
the redemption. Proceeds sent by bank wire should be credited on the business
day following the redemption; however, a fee will be deducted from such pro-
ceeds.
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 a 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 resident 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.
23
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
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 Fund, Overseas Fund and 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 applicable 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 other conditions with respect to exchange transactions apply as
discussed in "Exchange Privilege" above.
TELEPHONE PRIVILEGES.
Unless contrary instructions are elected in the New Account Application or
Special Option 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
24
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
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.
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 16 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 pur -
25
<PAGE>
SOGEN INTERNATIONAL FUND, INC. SOGEN FUNDS, INC.
chases 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.
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 ben-
efits of these plans may not be available for all persons. Investors should
consult 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.
26
<PAGE>
SOGEN FUNDS, INC.
SOGEN INTERNATIONAL FUND, 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.
27
<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 INTERNATIONAL FUND, INC.
-------------------------
[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
International Fund, Inc. (the "Fund"), a diversified open-end management in-
vestment company, in addition to the information contained in the Prospectus
of the Fund dated July 31, 1997. This Statement of Additional Information is
not a prospectus. It relates to and should be read in conjunction with the
Prospectus of the Fund, a copy of which can be obtained by writing or by call-
ing the Fund at (800) 334-2143.
----------------
July 31, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
CROSS-
STATEMENT OF REFERENCED
ADDITIONAL TO CAPTIONS IN
INFORMATION THE PROSPECTUS
PAGE PAGE
------------ --------------
<S> <C> <C>
ORGANIZATION OF THE FUND........................... 3 6
INVESTMENT OBJECTIVE, POLICY AND RESTRICTIONS...... 3 6
MANAGEMENT OF THE FUND............................. 8 10
INVESTMENT ADVISER AND OTHER SERVICES.............. 9 10
DISTRIBUTION OF THE FUND'S SHARES.................. 10 20
COMPUTATION OF NET ASSET VALUE..................... 12 15
HOW TO PURCHASE SHARES............................. 12 15
TAX STATUS......................................... 13 12
BROKERAGE ALLOCATION............................... 16 11
CUSTODY OF PORTFOLIO............................... 17 --
INDEPENDENT AUDITORS............................... 17 --
FINANCIAL STATEMENTS............................... 17 --
</TABLE>
2
<PAGE>
ORGANIZATION OF THE FUND
SoGen International Fund, Inc. (the "Fund"), an open-end diversified manage-
ment investment company, was incorporated under the laws of Delaware in August
1969 and reincorporated under Maryland law in May 1985. The Fund's investment
adviser is Societe Generale Asset Management Corp. ("SGAM Corp."), which was
incorporated in Delaware in February 1990. SGAM Corp. is a registered invest-
ment adviser. The Fund's principal underwriter is Societe Generale Securities
Corporation ("SGSC"), a registered broker dealer located in New York.
Pursuant to the laws of Maryland, the Fund's jurisdiction of incorporation,
the Board of Directors of the Fund has adopted By-Laws of the Fund that do not
require annual meetings of Fund shareholders. The absence of a requirement
that the Fund hold annual meetings of the Fund's shareholders reduces Fund ex-
penses. Meetings of shareholders will continue to be held when required by the
Investment Company Act of 1940 or Maryland law or when called by the Chairman
of the Board of Directors, the President or shareholders owning 10% of out-
standing Fund shares. The cost of any such notice and meeting will be borne by
the Fund.
Under the provisions of the Investment Company Act of 1940, a vacancy in the
office of director of the Fund may be filled between meetings of the share-
holders of the Fund by vote of the directors then in office if immediately af-
ter filling such vacancy at least two-thirds of the directors then holding of-
fice have been elected to the office of director by the shareholders of the
Fund. In the event that at any time less than a majority of the directors of
the Fund holding office at that time were elected by the shareholders of the
Fund, 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 Fund
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 Fund, that are incorporated under Maryland law.
INVESTMENT OBJECTIVE, POLICY AND RESTRICTIONS
The investment objective of the Fund is to provide long-term growth of capi-
tal. In seeking to achieve this objective, the Fund will normally invest its
assets primarily in common stocks (and in securities convertible into common
stocks) of United States and foreign companies. However, the Fund reserves the
right to invest a portion of its assets in fixed-income securities of domestic
or foreign issuers which, in addition to the income they may provide, appear
to offer potential for long-term growth of capital. When deemed appropriate by
the Fund's investment adviser for short-term investment or defensive purposes,
the Fund may hold a portion of its assets (up to 100%) in short-term debt in-
struments including commercial paper and certificates of deposit.
Investors should refer to the Fund's Prospectus for further discussion of
the Fund's investment objective and policy. There can be no assurance that the
Fund's stated objective will be realized.
HIGH-YIELD/HIGH-RISK SECURITIES. As stated in the Prospectus, the Fund may
invest in lower-rated or unrated high-yield debt securities. The Fund may also
purchase debt securities upon which the issuer has defaulted. In the past the
Fund has invested in lower-rated or unrated bonds for their generally higher
yields and will continue to do so to the extent compatible with acceptable
risk. In general the market for lower-rated or unrated bonds is more limited
than the market for higher-rated bonds, and because the market for lower-rated
or unrated bonds may be thinner and less active, such bonds may be less liquid
and their market prices may fluctuate more than those of higher-rated bonds,
particularly in times of economic change and market stress. In addition, be-
cause the market for lower-rated or unrated corporate debt securities has in
recent years experienced a dramatic increase in the large-scale use of such
securities to fund highly leveraged corporate acquisitions and restructurings,
past experience may not provide an accurate indication of the future perfor-
mance of that market or of the frequency of default, especially during periods
of economic recession. Reliable objective pricing data for lower-rated or
unrated bonds may tend to be more limited; in that event, valuation of such
securities in the Fund's portfolio may be more difficult and will require
greater reliance on judgment.
While the market for lower-rated or unrated bonds may in general tend to be
less sensitive to interest rate changes, the market prices of lower-rated or
unrated bonds structured as zero-coupon or pay-in-kind securities
3
<PAGE>
may nevertheless be affected to a greater extent by such changes and thus may
tend to be more volatile than those of lower-rated securities paying interest
periodically and in cash. The Fund may invest in zero coupon or pay-in-kind
bonds. Lower-rated or unrated bonds that include call or redemption provisions
may be more susceptible to prepayment during periods of falling interest
rates, requiring replacement by lower-yielding securities.
Since the risk of default is generally higher among lower-rated or unrated
bonds, SGAM Corp.'s research and analysis are especially important in the se-
lection of such bonds, which, if rated BB by Standard & Poor's or Ba by
Moody's or lower, are often described as "high yield bonds" because of their
generally higher yields and referred to figuratively as "junk bonds" because
of their greater risks. In selecting lower-rated bonds for investment by the
Fund, SGAM Corp. does not rely on ratings, which in any event evaluate only
the safety of principal and interest, not market value risk, and which, fur-
thermore, may not accurately reflect an issuer's current financial condition.
The Fund does not have any minimum rating criteria for its investments in
bonds. Through portfolio diversification, good credit analysis and attention
to current developments and trends in interest rates and economic conditions,
investment risk can be reduced, although there is no assurance that losses
will not occur.
Legislation may from time to time limit the use, and tax or other advan-
tages, of lower-rated or unrated securities and could adversely affect the
secondary market for such securities, their market values and the financial
condition of their issuers. However, the extent of these possible effects is
uncertain, as are the final form and probability of passage of any proposed
legislation that has not yet been enacted.
FOREIGN CURRENCY TRANSACTIONS. In an attempt to hedge an investment in an
issuer incorporated or operating in a foreign country or in a security denomi-
nated in the currency of a foreign country against a devaluation of that
country's currency, the Fund may make arrangements with banks to sell such
currency forward. That is, to hedge against a devaluation of a foreign curren-
cy, the Fund may enter into a forward market contract to sell to banks a set
amount of such currency at a fixed price and at a fixed time in the future.
If, in foreign currency transactions, the foreign currency sold forward by the
Fund is devalued below the price of the forward market contract and more than
any devaluation of the United States dollar during the period of the contract,
the Fund will realize a gain as a result of the currency transaction. In this
way, the Fund might reduce the impact of any decline in the market value of
its foreign investments attributable to devaluation of foreign currencies. The
Fund may sell foreign currency forward only as a means of protecting its for-
eign investments and may not otherwise trade in the currencies of foreign
countries. Accordingly, the Fund may not sell forward the currency of a par-
ticular country to an extent greater than the aggregate market value (at the
time of making such sale) of the securities held in its portfolio denominated
in that particular foreign currency or issued by companies incorporated or op-
erating in that particular foreign country.
As a result of hedging through selling foreign currencies forward, in the
event of a devaluation, it is possible that the value of the Fund's portfolio
would not depreciate as much as the portfolio of a fund holding similar in-
vestments which did not sell foreign currencies forward. Even so, the forward
market contract is not a perfect hedge against devaluation because the value
of the Fund's portfolio securities may decrease more than the amount realized
by reason of the foreign currency transaction. To the extent that the Fund
sells forward currencies which are thereafter revalued upward, the value of
the Fund's portfolio would appreciate to a lesser extent than the comparable
portfolio of a fund which did not sell those foreign currencies forward. If,
in anticipation of a devaluation of a foreign currency, the Fund sells the
currency forward at a price lower than the price of that currency on the date
of the contract, the Fund will suffer a loss on the contract if the currency
is not devalued, during the contract period, below the contract price. More-
over, it will not be possible for the Fund to hedge against devaluation that
is so generally anticipated that the Fund is not able to contract to sell the
currency in the future at a price above the devaluation level it anticipates.
It is possible that, under certain circumstances, the Fund may have to limit
its currency transactions to permit the Fund to qualify as a "regulated in-
vestment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). Foreign currency transactions would involve a cost to the Fund which
would vary with such factors as the currency involved, the length of the con-
tract period and the market conditions then prevailing.
The Fund will not attempt to hedge all its foreign investments by selling
foreign currencies forward and will do so only to the extent deemed appropri-
ate by SGAM Corp. The Fund may also hedge in connection with the purchase and
sale of foreign securities in which case the Fund's foreign subcustodian en-
ters into a forward contract to hedge the related currency between the trade
date and the settlement date for the purchase or sale transaction.
4
<PAGE>
RESTRICTED SECURITIES. The Fund may, from time to time, purchase securities
which are subject to restrictions on resale. While such purchases may be made
at an advantageous price and offer attractive opportunities for investment not
otherwise available on the open market, the Fund may not have the same freedom
to dispose of such securities as in the case of the purchase of securities in
the open market or in a public distribution. These securities may often be re-
sold in a liquid dealer or institutional trading market, but the Fund may ex-
perience delays in its attempts to dispose of such securities and in some
cases registration of such securities under the Securities Act of 1933 may be
required for their sale. In such a case, the Fund may have to bear the expense
of such registration if the issuer of such securities has not previously reg-
istered or agreed to register such securities at its own expense.
Where registration is required, a considerable period of time may elapse be-
tween the time when the decision may be made to sell securities and the time
when the Fund may be permitted to sell under an effective registration state-
ment. During such period, if adverse market conditions develop, the Fund may
not be able to obtain as favorable a price as that prevailing at the time the
decision is made to sell. In any case, where a thin market exists for a par-
ticular security, public knowledge of a proposed sale of a large block may
have the effect of depressing the market price of such securities. As stated
below, the Fund does not intend to invest more than 10% of its net assets in
illiquid securities or securities the proceeds from the sale of which could
not readily be repatriated to the United States. In addition to such securi-
ties, the Fund may also, from time to time, invest in securities for which
there is a limited trading market and which might not be resold by the Fund in
a short period of time without adversely affecting the market price of the se-
curity.
Notwithstanding the above, the Fund may purchase securities that have been
privately placed but that are eligible for purchase and sale under Rule 144A
under the 1933 Act. That rule permits certain qualified institutional buyers,
such as the Fund to trade in privately placed securities that have not been
registered for sale under the 1933 Act. SGAM Corp., under the supervision of
the Board of Directors of the Fund, will consider whether securities purchased
under Rule 144A are illiquid and thus subject to the Fund restriction on in-
vesting in illiquid securities. A determination as to whether a Rule 144A se-
curity is liquid or not is a factual issue requiring an evaluation of a number
of factors. In making this determination, SGAM Corp. will consider the trading
markets for the specific security, taking into account the unregistered nature
of a Rule 144A security. In addition, SGAM Corp., could consider (1) the fre-
quency of trades and quotes, (2) the number of dealers and potential purchas-
ers, (3) the dealer undertakings to make a market, and (4) the nature of the
security and of market place trades (e.g. the time needed to dispose of the
security, the method of soliciting offers and the mechanics of transfer). The
liquidity of Rule 144A securities would be monitored and if, as a result of
changed conditions, it is determined that a Rule 144A security is no longer
liquid, the Fund's holdings of illiquid securities would be reviewed to deter-
mine 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. Invest-
ing in Rule 144A securities could have the effect of increasing the amount of
the Fund's assets invested in illiquid securities, if qualified institutional
buyers are unwilling to purchase such securities.
COMMODITY LINKED SECURITIES. The Fund may invest in structured notes and/or
preferred stock, the value of which is linked to the price of a referenced
commodity. Structured notes and/or preferred stock differ from other types of
securities in which the fund may invest in several respects. For example, not
only the coupon but also the redemption amount at maturity may be increased or
decreased depending on the change in the price of the referenced commodity.
Investment in commodity linked securities involves certain risks. In addi-
tion 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 referenced commodity. Fur-
ther, in certain cases, the coupon and/or dividend may be reduced to zero, and
any further decline in the value of the security may then reduce the redemp-
tion amount payable on maturity. Finally, commodity linked securities may be
more volatile than the price of the referenced commodity.
FUNDAMENTAL RESTRICTIONS. In carrying out its investment objective, the Fund
will be subject to the following fundamental restrictions. Fundamental re-
strictions cannot be changed without the vote of a majority of the outstanding
voting securities of the Fund (defined by the Investment Company Act of 1940
as (A) 67 percent or more of the voting securities present at a meeting of
stockholders, if the holders of more than 50 percent of
5
<PAGE>
the outstanding voting securities of such company are present or represented
by proxy; or (B) more than 50 percent of the outstanding voting securities of
such company, whichever is the less).
1. It may not purchase the securities of any issuer if such purchase would
cause more than 25% of the value of its total assets to be invested in
securities of any one issuer or industry, with the exception of the se-
curities of the United States government and its corporate instrumental-
ities and, under the circumstances described below, certificates of de-
posit and other short-term bank instruments. In fact, the Fund intends
to diversify its investments among various issuers and industries and
will not purchase certificates of deposit or other short-term bank in-
struments except to the extent deemed appropriate for the short-term in-
vestment of cash or as a temporary defensive measure. The Fund will
limit its purchases of certificates of deposit and other short-term bank
instruments to those issued by United States banks and savings and loan
associations, including foreign branches of such banks, and United
States branches or agencies of foreign banks, which have total assets
(as of the date of their most recently published financial statements)
of at least $1 billion.
2. It may not purchase or sell its portfolio securities from or to any of
its officers, directors or employees, its investment adviser or its
principal underwriter, except to the extent that such purchase or sale
may be permitted by an order, rule or regulation of the Securities and
Exchange Commission.
3. It may not borrow money, except unsecured borrowings from banks as a
temporary measure in exceptional circumstances, and such borrowings may
not exceed 10% of its net assets taken at market or other fair value at
the time of the borrowing. The Fund will not purchase securities while
borrowings are in excess of 5% of the Fund's total assets.
4. It may not engage in the underwriting of securities of other issuers,
except to the extent that it may be deemed to be an underwriter in sell-
ing portfolio securities as part of an offering registered under the Se-
curities Act of 1933.
5. It may not purchase or sell real estate or interests therein, commodi-
ties or commodity contracts. It may, however, invest in real estate in-
vestment trusts and companies holding real estate and may sell commodi-
ties received by it as distributions on portfolio investments. (To the
extent the Fund's portfolio includes a commodity distributed to it, the
Fund will be subject to the risk of change in the value of such commodi-
ty.)
6. It may not make loans, but this restriction shall not prevent the Fund
from (a) buying a part of an issue of bonds, debentures, or other obli-
gations that are publicly distributed, or from investing up to an aggre-
gate 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 obliga-
tions of a type privately placed with financial institutions or (b)
lending portfolio securities, provided that the Fund may not lend secu-
rities if, as a result, the aggregate value of all securities loaned
would exceed 33% of its total assets (taken at market value at the time
of such loan).*
7. It may not effect a short sale of any security.
Further, as a diversified investment company, 75% of the Fund's assets are
subject to the following limitations: the Fund may not (a) invest more than 5%
of its total assets in the securities of any one issuer, except obligations of
the United States government, its agencies and its instrumentalities, and (b)
own more than 10% of the outstanding voting securities of any one issuer.
These restrictions may also be amended only by the vote of a majority of the
outstanding voting securities of the Fund.
ADDITIONAL INVESTMENT POLICIES. With respect to 100% of its assets, the Fund
intends to follow the additional investment policies described below. Unlike
the fundamental restrictions, the policies described below may be changed when
deemed appropriate by the Board of Directors of the Fund without shareholder
approval. Certain of the policies have been adopted to permit the Fund to
qualify its shares for sale under state securities or "Blue Sky" laws. The
Fund does not intend to:
1. Purchase securities of any issuer, other than the United States govern-
ment and its corporate instrumentalities if, immediately after such pur-
chase, more than 5% of the value of its total assets would be invested
in the securities of such issuer.
2. Purchase 10% or more of the voting securities of any one issuer.
3. Purchase illiquid securities or securities the proceeds from the sale of
which could not readily be repatriated to the United States if, immedi-
ately after such purchase, more than 10% of the value of its net assets
would be invested in such securities.
- --------
* The Fund has no present intention of lending portfolio securities.
6
<PAGE>
4. Invest in the securities of a company for the purpose of exercising con-
trol over or management of such company.
5. Purchase securities on margin.
6. Write put and call options.
7. Purchase warrants which are not offered in units or attached to other
portfolio securities if, immediately after such purchase, more than 5%
of the Fund's net assets would be invested in such unattached warrants,
valued at the lower of cost or market. The Fund will not purchase unat-
tached warrants not listed on the New York or American Stock Exchange
if, immediately after such purchase, more than 2% of the Fund's net as-
sets would be invested in such unattached, unlisted warrants.
8. Purchase interests in oil, gas or other mineral exploration programs or
leases; however, this policy will not prohibit the acquisition of secu-
rities of companies engaged in the production or transmission of oil,
gas or other minerals.
In addition, under normal circumstances the Fund will invest in at least
three foreign countries.
Among the types of fixed income securities in which the Fund may invest from
time to time are United States government obligations. United States govern-
ment obligations include Treasury Notes, Bonds and Bills which are direct ob-
ligations of the United States government backed by the full faith and credit
of the United States, and securities issued by agencies and instrumentalities
of the United States government, which may be (i) guaranteed by the United
States Treasury, such as the securities of the Government National Mortgage
Association, or (ii) supported by the issuer's right to borrow from the Trea-
sury and backed by the credit of the federal agency or instrumentality itself,
such as securities of the Federal Intermediate Land Banks, Federal Land Banks,
Bank of Cooperatives, Federal Home Loan Banks, Tennessee Valley Authority and
Farmers Home Administration.
TOTAL RETURN. From time to time the Fund advertises its average annual total
return. An investment in the Fund over the ten-year period from March 31, 1987
to March 31, 1997 would have increased at an average annual compounded rate of
return of 10.19%. Quotations of average annual returns for each fund will be
expressed in terms of the average annual compounded rates of return of a hypo-
thetical investment in the fund over periods of 1, 5 and 10 years, calculated
pursuant to the following formula: P(1 + T)n = ERV (where P = a hypothetical
initial payment of $1,000, T = the average annual return, n = the number of
years, and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the 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. Under the same assumptions utilized in the preceding calculation,
an investment in the Fund over the five year period from March 31, 1992 to
March 31, 1997 would have increased at an average annual compounded rate of
return of 12.16% and an investment in the Fund over the period from March 31,
1996 to March 31, 1997 would have increased at an average annual rate of
5.37%.
COMPARISON OF PORTFOLIO PERFORMANCE. From time to time the Fund may discuss
in sales literature and advertisements specific performance grades or rankings
or other information as published by recognized mutual fund statistical serv-
ices, such as Morningstar, Inc. or Lipper Analytical Services, Inc., or by
publications of general interest such as Barron's, Business Week, Financial
World, Forbes, Fortune, Kiplinger's Personal Finance, Money, Morningstar Mu-
tual Funds, Smart Money, The Wall Street Journal or Worth.
PORTFOLIO TURNOVER. Although the Fund will not make a practice of short-term
trading, purchases and sales of securities will be made whenever appropriate,
in management's view, to achieve the objective of the Fund to provide long-
term growth of capital. The rate of portfolio turnover is calculated by divid-
ing the lesser of the cost of purchases or the proceeds from sales of portfo-
lio securities (excluding short-term United States 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 United
States government obligations and other short-term investments) owned by the
Fund during the particular fiscal year. The Fund's rates of portfolio turnover
during the fiscal years ended March 31, 1996 and 1997 were 9.64%, and 12.85%,
respectively. The rate of portfolio turnover is not a limiting factor when
management deems portfolio changes appropriate to achieve the Fund's stated
objective. However, it is possible that, under certain circumstances, the Fund
may have to limit its short-term portfolio turnover to permit it to qualify as
a "regulated investment company" under the Code.
7
<PAGE>
MANAGEMENT OF THE FUND
The business of the Fund is managed by its Board of Directors which elects
officers responsible for the day-to-day operations of the Fund and for the ex-
ecution of the policies formulated by the Board of Directors. Several of the
directors and officers of the Fund are directors or officers of SGAM Corp.,
SGSC or Societe Generale, Paris, France, the indirect owner of one hundred
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 Fund, 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 Fund. Each of
the following persons is also a director and/or officer of SoGen Funds, Inc.
and SoGen Variable Funds, Inc.
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUND 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.
Jean-Marie President and Director Director and President or
Eveillard*,(1) Executive Vice President of SGAM
1221 Avenue of the Corp. from prior to 1992.
Americas
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, France Group Executive Vice President
of Promodes (consumer
products) -- U.S. Companies
Divisions 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
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE (5) YEARS
---------------- ------------- --------------------------
<S> <C> <C>
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 Fund 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.
The Fund makes no payments to any of its officers for services. However,
currently each of the Fund's directors who is not an officer or employee of
SGAM Corp., SGSC or Societe Generale is paid by the Fund an annual fee of
$6,000 and a fee of $1,000 for each meeting of the Fund's Board of Directors
and for each meeting of any Committee of the Board attended (other than those
held by telephone conference call). Each director is reimbursed by the Fund
for any expenses he may incur by reason of attending such meetings or in con-
nection with services he may perform for the Fund. During the fiscal year
ended March 31, 1997, an aggregate of $36,000 was paid or accrued for direc-
tors' fees and expenses. See Note 2 of Notes to Financial Statements on page
29 of the Fund's Annual Report to Shareholders for a description of various
transactions during the Fund's most recent fiscal year between the Fund 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 Fund and by the
fund complex of which the Fund is a part for the fiscal year ended March 31,
1997. Officers of the Fund and directors who are interested persons of the
Fund do not receive any compensation from the Fund or any other fund in the
fund complex which is a U.S. registered investment company. In the column
headed "Total Compensation From Registrant and Fund Complex Paid to Direc-
tors," 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 Fund, as defined in the Act, because of the af-
filiation with SGAM Corp., the Fund's investment adviser.
As of June 30, 1997, the officers and directors of the Fund owned less than
1% of the outstanding shares of capital stock of the Fund. The following per-
sons 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. 18.07%
101 Montgomery Street
San Francisco, CA 94104-4122
</TABLE>
INVESTMENT ADVISER AND OTHER SERVICES
As described in the Fund's Prospectus, SGAM Corp. is the Fund's investment
adviser and, as such, manages the Fund's portfolio. SGAM Corp. was incorpo-
rated in Delaware in February 1990, and is indirectly wholly owned by Societe
Generale, one of France's largest banks. SGAM Corp. employs certain individu-
als who
9
<PAGE>
previously served as key personnel performing securities analysis for the in-
vestment advisory division of SGSC, the Fund's principal underwriter and for-
mer investment adviser.
The persons named below are affiliated with the Fund and are also affiliated
persons of SGAM Corp., SGSC or Societe Generale. The capacity in which such
persons are affiliated with the Fund and SGAM Corp., SGSC or Societe Generale
is also indicated.
<TABLE>
<CAPTION>
OFFICE HELD WITH SGAM CORP.,
NAME OFFICE HELD WITH THE FUND 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 Secretary and Treasurer, SGAM Corp.
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
Assistant Secretary Securities Analyst, SGAM Corp.
Charles de Vaulx Vice President Securities Analyst, SGAM Corp.
</TABLE>
Under its investment advisory contract with the Fund which became effective
April 26, 1990 and was amended on July 10, 1992, SGAM Corp. furnishes the Fund
with investment advice consistent with the Fund's stated investment objective.
SGAM Corp. also furnishes the Fund with office space and certain facilities
required for the business of the Fund, and statistical and research data, and
pays any compensation and expenses of the Fund's officers. In return, the Fund
pays SGAM Corp. an annual fee equal to the sum of 1.0% of the first
$25,000,000 of the average daily value of the Fund's net assets and 0.75% of
the average daily value of the Fund's net assets in excess of $25,000,000, in
each case payable quarterly in amounts equal to 0.25% and 0.1875%, respective-
ly, of the average daily value of the net assets of the Fund during the pre-
ceding quarter. The 1.0% annual fee rate listed above is higher than the rate
of fees paid by most United States mutual funds. The Fund believes, however,
that the effective rate of the advisory fee it pays is not higher than the
rate of fees paid by most other mutual funds that invest significantly in for-
eign equity securities. The Advisory Contract has been approved by the Board
of Directors of the Fund after considering, among other things, the Fund's
past investment performance.
For the Fund's fiscal years ended March 31, 1995, 1996 and 1997, the Fund
paid investment advisory fees of $13,822,229, $18,408,301 and $26,404,805, re-
spectively.
Under the investment advisory contract between the Fund and SGAM Corp., the
adviser is responsible for the management of the Fund's portfolio and con-
stantly reviews its holdings in the light of its own research analyses and
those of other relevant sources. Reports of portfolio transactions are given
regularly to the directors of the Fund, who review the Fund's portfolio at
meetings held four times a year.
The Fund's Articles of Incorporation acknowledge that the Fund adopted its
corporate name through permission of Societe Generale and that the non-exclu-
sive right to use the name "SoGen International Fund, Inc." or "SoGen" or any
similar name may be granted by Societe Generale to others.
The Fund may, with the approval of the Fund's Board of Directors, from time
to time enter into arrangements with institutions to provide subtransfer 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 Systems,
Inc. ("DST") in the name of that institution. Under those arrangements, the
Fund may compensate the institution rendering such services on a per sub-ac-
count basis.
DISTRIBUTION OF THE FUND'S SHARES
The Fund and SGSC have entered into an underwriting contract pursuant to
which SGSC offers, as agent, shares of the Fund to investors, either directly
or through selected securities dealers, in states and countries in which the
Fund's shares are qualified and in which SGSC is qualified as a dealer or
where such qualification is not required.
10
<PAGE>
Pursuant to the Distribution Plan and Agreement (the "Plan") between the Fund
and SGSC, adopted by the Fund in accordance with the provisions of Rule 12b-1
under the Investment Company Act of 1940, the Fund may pay SGSC, quarterly, a
distribution fee of up to, on an annual basis, 0.25% of the average daily net
asset value of the Fund subject to the limitation described below. Under the
Plan, SGSC must apply the full amount of fees received from the Fund to actual
distribution expenses incurred during the fiscal year including the payment of
fees to dealers for their assistance in the sale of shares of the Fund and for
the provision to shareholder services and for other distribution related ex-
penses such as the payment of advertising costs and the payment for the prepa-
ration, printing and distribution of prospectuses to investors. The Plan, which
became effective on November 14, 1985, excludes for the purposes of calculating
the net asset value for payment of the fee, Fund assets attributable to Fund
shares outstanding before that date and any subsequent dividends and distribu-
tions thereon. For the fiscal year ended March 31, 1997, the Fund paid SGSC
$8,571,548 pursuant to the Plan, $104,809 of which was paid by SGSC to Societe
Generale and subsidiaries of Societe Generale. SGSC and SGAM Corp. bear the
Fund's distribution 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 Fund, including Societe Generale and certain of
its subsidiaries, for their assistance in selling shares of the Fund. A dealer
selling shares normally receives a fee, calculated on a quarterly basis, sub-
ject to the limitation described above, equal to 0.25% of the average daily net
asset value of the shares of the Fund held by the dealer's customers. SGSC has
retained $2,180,099 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 Fund shares, including printing and distribution of
prospectuses and sales literature and 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 Fund, and by the
directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
relating to the Plan (the "Independent Directors"). In the case of an agreement
relating to the Plan, the Plan provides that such agreement may be terminated,
without penalty, by a vote of a majority of the Independent Directors or by a
majority of the Fund's outstanding voting securities on 60 days' written notice
to SGSC, and provides further that such agreement will automatically terminate
in the event of its assignment. The Plan also states that it may not be amended
to increase the maximum amount of the payments thereunder without the approval
of a majority of the outstanding voting securities of the Fund (as defined on
page 5). No material amendment to the Plan will, in any event, be effective un-
less it is approved by a vote of the directors and the Independent Directors of
the Fund.
When the Fund seeks an Independent Director to fill a vacancy on or as an ad-
dition 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.
SGSC, as principal underwriter of the Fund's shares, agrees to use its best
efforts (in states where it may lawfully do so) to obtain orders for the Fund's
shares. With respect to the fiscal year ended March 31, 1997, SGSC, Societe
Generale (including its subsidiaries) and SGAM Corp. received commissions and
other compensation in connection with the operations of the Fund as follows:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
NAME OF NET UNDERWRITING COMMISSIONS ON
PRINCIPAL UNDERWRITER DISCOUNTS AND DEALER REPURCHASES OR BROKERAGE OTHER
OR AFFILIATE COMMISSIONS REDEMPTIONS COMMISSIONS COMPENSATION
--------------------- -------------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
SGSC.................... $2,670,354 $-- $107,519 $ 8,571,548*
Societe Generale
(including
subsidiaries).......... $ 126,060 $-- $ 17,153 $ 104,809**
SGAM Corp............... $ -- $-- $ -- $26,404,805***
</TABLE>
- --------
* For the period reported, the Fund'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 Fund.
** Amounts paid to Societe Generale as a dealer of Fund shares pursuant to the
Plan, which amount is included in the $8,571,548 paid to SGSC under the
Plan.
*** The Fund's investment advisory fee paid or payable to SGAM Corp. for the
fiscal year ended March 31, 1997.
11
<PAGE>
During the three years ended March 31, 1995, 1996, and 1997, the aggregate
amounts of sales charges on sales of Fund shares were $4,790,032, $16,232,673
and $14,840,187, respectively. During the years ended March 31, 1995 and 1996,
SGSC received net underwriting discounts and dealer commissions of $941,813
and $3,005,037, respectively, and Societe Generale received dealer discounts
of $44,234 and $36,119, respectively.
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 Fund, 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 Fund amounted to $5,056,361, and the re-
lated reimbursement for services amounted to $74,523.
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 the Fund (as defined on page 5). 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 Fund. 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 the Fund.
COMPUTATION OF NET ASSET VALUE
The Fund computes its net asset value once daily on days the New York Stock
Exchange is open for trading. The Exchange is closed on the following days:
New Year's Day, Rev. Dr. Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The net asset value per share is computed by dividing the total
current value of the assets of the Fund, less its liabilities, by the total
number of shares outstanding at the time of such computation.
A portfolio security, other than a bond, which is traded on a United States
national securities exchange or a securities exchange abroad is normally val-
ued at the price of the last sale on the exchange as of the close of business
on the date on which assets are valued. If there are no sales on such date,
such portfolio securities will be valued at the mean between the closing bid
and asked prices. Securities, other than bonds, traded in the over-the-counter
market are valued at the mean between the last bid and asked prices prior to
the time of valuation, except if such unlisted security is among the NASDAQ
designated "Tier 1" securities in which case it is valued at its last sale
price. All bonds, whether listed on an exchange or traded in the over-the-
counter market, for which market quotations are readily available are valued
at the mean between the last bid and asked prices received from dealers in the
over-the-counter market in the United States or abroad, except that when no
asked price is available, bonds are valued at the last bid price alone. Short-
term investments maturing in sixty days or less are valued at cost plus inter-
est earned, which approximates value. Securities for which current market quo-
tations are not readily available and any securities subject to restrictions
on resale are valued at fair value as determined in good faith by the Fund's
Board of Directors. A make-up sheet showing the computation of the total of-
fering price, using as a basis the value of the Fund's portfolio securities
and other assets and its outstanding securities as of March 31, 1997, appears
as the Statement of Assets and Liabilities on page 24 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 the Fund are described in the Fund's Prospectus.
As stated in the Prospectus, the Fund's shares may be purchased at net asset
value by various persons associated with the Fund, SGSC, SGAM Corp., branches
of Societe Generale, certain firms providing services to the Fund or affili-
ates thereof for the purpose of promoting good will with employees and others
with whom the Fund has business relationships, as well as in other special
circumstances. Shares are offered to other persons at net asset value in cir-
cumstances where there are economies of selling efforts and sales related ex-
penses with respect to offers to certain investors.
12
<PAGE>
TAX STATUS
The Fund intends to qualify as a "regulated investment company" under the In-
ternal Revenue Code of 1986, as amended (the "Code") for each taxable year.
Such qualification does not involve governmental supervision of management or
investment practices or policies. By complying with the applicable provisions
of the Code, the Fund will not be subject to Federal income tax on taxable in-
come (including realized capital gains) to the extent distributed to sharehold-
ers within the allowable time limit.
In order to qualify as a regulated investment company for a taxable year un-
der the laws in effect as of the date of this Statement of Additional Informa-
tion and to avoid paying taxes on income the Fund distributes to its sharehold-
ers, the Fund must, among other things, (a) derive at least 90% of its gross
income from dividends, interest, payments with respect to loans of stock or se-
curities, gains from the sale or other disposition of stock or securities, for-
eign currency gains related to investments in stock or securities and other in-
come (including, but not limited to, gains from options, futures or forward
contracts) derived with respect to the business of investing in stock, securi-
ties or currency; (b) derive less than 30% of its gross income from the sale or
other disposition of stock or securities and options, futures, forward con-
tracts and foreign currencies held for less than three months (excluding gains
from certain hedging transactions and from foreign currencies (and options,
futures and forward contracts on foreign currencies) that are directly related
to the Fund's principal business of investing in stocks or securities or op-
tions 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 rep-
resented by cash, cash items, United States government securities, securities
of other regulated investment companies and other securities, with such other
securities of any one issuer qualifying only if the Fund's investment is lim-
ited 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 United States gov-
ernment securities or other regulated investment companies); and (d) distribute
at least 90% of its investment company taxable income (which includes, among
other items, dividends, interest and net short-term capital gains in excess of
net long-term capital losses and any capital loss carry-overs, net of expenses)
for the year.
As a regulated investment company, the Fund generally will not be subject to
U.S. federal income tax on its investment company taxable income and net 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. The 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, the Fund must distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, (2) at least 98% of its capital
gains in excess of its capital losses (adjusted for certain ordinary losses)
for the one-year period ending on October 31 of the calendar year, and (3) any
ordinary income and capital gains for previous years that were not distributed
during those years. A distribution will be treated as paid on December 31 of
the current calendar year if it is declared by 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. Such distributions will be taxable to share-
holders in the calendar year in which the distributions are declared, rather
than the calendar year in which the distributions are received. To prevent ap-
plication of the excise tax, the Fund intends to make its distributions in ac-
cordance with the calendar year distribution requirement.
All dividends from net investment income and all distributions of net real-
ized capital gains are paid in shares of the Fund at net asset value calculated
as of the payment date unless a shareholder elects to receive cash. Sharehold-
ers may elect to receive cash in the amount of the dividend or distribution by
notifying DST through the appropriate form or by telephone in accordance with
the procedures detailed in the Prospectus. Once an election has been made all
future dividends and distributions will be paid in accordance with such elec-
tion unless shareholders notify DST otherwise. Shareholders incur no sales
charges on Fund shares reinvested. All dividends or distributions are taxable
for United States federal income tax purposes as though received in cash. To
the extent that they are derived from dividends received from domestic corpora-
tions, dividends paid by the Fund may qualify for the dividends-received deduc-
tion for corporations. For the fiscal year ended March 31, 1997, 6.75% of the
Fund's net investment income qualified for the dividends-received deduction.
Certain foreign currency contracts in which the Fund may invest are "section
1256 contracts." Gains or losses on section 1256 contracts generally are con-
sidered 60% long-term and 40% short-term capital gains or losses; however, for-
eign currency gains or losses (as discussed below) arising from certain section
1256 contracts
13
<PAGE>
may be treated as ordinary income or loss. Also, section 1256 contracts held by
the Fund at the end of each taxable year (and, generally, for purposes of the
4% excise tax, on October 31 of each year) are "marked-to-market" (that is,
treated as sold at fair market value), resulting in unrealized gains or losses
being treated as though they were realized.
Generally, the hedging transactions undertaken by the Fund may result in
"straddles" for United States federal income tax purposes. The straddle rules
may affect the character of gains (or losses) realized by the Fund. In addi-
tion, losses realized by the Fund on positions that are part of a straddle may
be deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which the losses are re-
alized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences to the Fund of engaging in hedging
transactions are not entirely clear. Hedging transactions may increase the
amount of short-term capital gains realized by the Fund which is taxed as ordi-
nary income when distributed to shareholders.
The Fund may make one or more of the elections available under the Code which
are applicable to certain foreign currency contracts or certain hedging trans-
actions which may be acquired or undertaken by the Fund. If the Fund makes any
of the elections, the amount, character and timing of the recognition of gains
or losses from such contracts or transactions will be determined under rules
that vary according to the election(s) made. The rules applicable under certain
of the elections may operate to accelerate the recognition of gains or losses
from such contracts or transactions.
Because the above tax rules may affect the character of gains or losses, de-
fer losses and/or accelerate the recognition of gains or losses from the af-
fected contracts or transactions, the amount which may be distributed to share-
holders, and which will be taxed to them as ordinary income or long-term capi-
tal gain, may be increased or decreased as compared to a fund that did not en-
gage in such hedging transactions the Fund may undertake.
The 30% limitation and the diversification requirements applicable to the
Fund's assets may limit the extent to which the 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 the 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 income
or ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of certain foreign currency contracts,
gains or losses attributable to fluctuations in the value of foreign currency
between the date of acquisition of the security or contract and the date of
disposition also are treated as ordinary gain or loss. These gains or losses,
referred to under the Code as "section 988" gains or losses, will increase or
decrease the amount of the Fund's investment company taxable income to be dis-
tributed to its shareholders as ordinary income.
If more than 50% of the value of the Fund's total assets at the close of any
taxable year consists of stocks or securities of foreign corporations, the Fund
may elect, for U.S. federal income tax purposes, to treat any foreign country
income or withholding taxes paid by the Fund that can be treated as income
taxes under United States income tax principles, as paid by its shareholders.
For any year that the Fund makes such an election, each of its shareholders
will be required to include in his income (in addition to taxable dividends ac-
tually 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. If the pass-through election described above is made, the por-
tion of distribution paid by the Fund from its foreign source income will be
treated as foreign source income. Certain of the Fund's gains from the sale of
securities and certain currency fluctuation gains will be treated as derived
from U.S. sources. In addition, this foreign tax credit limitation must be ap-
plied 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, certain 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 the Fund is not eligi-
ble 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
14
<PAGE>
election described above, the foreign taxes paid by the Fund will be treated as
paid by its shareholders for that year and, if so, such notification will des-
ignate (i) such shareholder's portion of the foreign taxes paid to such country
and (ii) the portion of the Fund's dividends and distributions that represents
income derived from sources within such country.
Investments by the 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 earnings.
In the absence of certain elections to report these earnings on a current ba-
sis, regardless of whether the Fund actually receives any distributions from
the PFIC, a Fund would be required to report certain "excess distributions"
from, and any gain from the disposition of stock of, the PFIC, as ordinary in-
come. This ordinary income would be allocated ratably to the Fund's holding pe-
riod for the stock. Any amount allocated to prior taxable years would be tax-
able to the Fund at the highest rate of tax applicable in that year (even if
distributed to the Fund shareholders), increased by an interest charge deter-
mined as though the amounts were underpayments of tax. Amounts allocated to the
year of the distribution or disposition would be included in the Fund's net in-
vestment income for that year and, to the extent distributed as a dividend to
the Fund's shareholders, would not be taxable to the Fund.
The Fund may be subject to foreign withholding taxes on income and gains de-
rived from its investments outside the United States. Such taxes would reduce
the yield on the Fund's investments. Tax treaties between certain countries and
the United States may reduce or eliminate such taxes.
Different tax treatment, including a penalty on pre-retirement distributions,
is accorded accounts maintained as IRAs. Shareholders should consult their tax
advisers for more information.
Any loss realized by a shareholder on the redemption or other disposition of
Fund shares which he has held for six months or less will be treated for United
States federal income tax purposes as a long-term capital loss to the extent of
any long-term capital gains distributions received by the shareholder (and any
amount retained by the Fund which were designated as undistributed long-term
capital gains) with respect to such shares. Any loss realized on a sale or ex-
change of Fund shares will be disallowed to the extent that the shares disposed
of are replaced (including, for example, by receipt of dividends paid in
shares) within a 61-day period beginning 30 days before and ending 30 days af-
ter the date the shares are disposed of. In such a case, a shareholder will ad-
just the basis of the shares acquired to reflect the disallowed loss. Any cor-
porate shareholder should consult its tax adviser regarding the possibility
that its basis in its shares may be reduced, by reason of "extraordinary divi-
dends" received with respect to the shares, for the purpose of computing its
gain or loss on the shares. Corporate shareholders which borrow to acquire or
retain Fund shares may be denied a portion of the dividends-received deduction.
If shares sold and reinvested pursuant to the reinstatement privilege or ex-
change privilege have been held for 90 days or less, the sales load incurred as
to those shares will not be taken into account in determining any taxable gain
or loss on the exchange or sale to the extent of the reduction in the sales
load on the shares acquired in the exchange or reinstatement.
Since, at the time of an investor's purchase of the 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, reduced
below his cost for such shares. Prior to purchasing shares of the Fund, an in-
vestor should carefully consider such tax liability which he might incur by
reason of any subsequent distributions of net investment income and capital
gains.
The 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 withhold-
ing is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability.
In addition to federal income taxes, shareholders of the Fund may be subject
to state, local or foreign taxes on distributions from the Fund and redemptions
of Fund shares. Shareholders should consult their tax advisers as to the appli-
cation of such taxes and as to the tax status of distributions from the Fund
and redemptions of Fund shares in their own states and localities. Non-United
States shareholders, present in the United States for sub-
15
<PAGE>
stantial periods of time during a taxable year, maintaining an office or "tax
home" in the United States, or conducting business in the United States with
which their Fund shares may be "effectively connected," should consult their
tax advisers as to whether such presence or such activities may subject them to
United States tax as a United States shareholder or otherwise. If the income
from the Fund is not treated as "effectively connected", distribution to non-
U.S. shareholders will be subject to a U.S. tax of 30% (or lower treaty rate),
which is generally withheld from such distribution. Each shareholder who is not
a United States person should also consult his tax adviser regarding the United
States and foreign tax consequences of ownership of shares of the Fund.
BROKERAGE ALLOCATION
The Fund's brokerage policy is to place orders for the purchase and sale of
its portfolio securities in such a manner that it will receive the best price
and execution for each transaction, after taking into account research services
provided for the Fund's benefit that are furnished by brokers. Determination as
to the brokers with whom the Fund's orders shall be placed are made by officers
of SGAM Corp. While there is no commitment or understanding to do so, subject
to its policy of obtaining the best price and execution available, the Fund may
use SGSC or affiliates of Societe Generale as brokers in the purchase and sale
of securities. For the fiscal years ended March 31, 1995, March 31, 1996 and
March 31, 1997, the Fund paid SGSC and affiliates of Societe Generale $70,290,
$108,724 and $124,672, respectively, in such brokerage commissions for transac-
tions effected on various exchanges. Such commissions paid for the fiscal year
ended March 31, 1997 represented 5.8% of the aggregate brokerage commissions
paid by the Fund during such year and were paid in connection with transactions
representing 4.1% of the aggregate dollar amount of all transactions effected
by the Fund during such year (including principal transactions for which no di-
rect 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, the Fund during such year, except to the extent that such purchase or
sale may be permitted by an order, rule or regulation of the Securities and Ex-
change Commission.
In implementing its policy of obtaining the best price and execution, the
Fund may from time to time use the over-the-counter market in effecting trans-
actions in securities listed on an exchange.
Consistent with the Rules of Fair Practice of the National Association of Se-
curities Dealers, Inc. and subject to obtaining prices and execution at least
as favorable as those provided by other qualified brokers, SGAM Corp. may con-
sider sales of shares of the Fund as a factor in the selection of brokers to
execute portfolio transactions. SGAM Corp., in determining the best price and
execution for a particular transaction, considers the value of research serv-
ices provided to SGAM Corp., for the benefit of the Fund, by brokers and the
Fund may pay commissions to such brokers in excess of the commissions other
brokers would have charged for effecting the same transactions if an officer or
officers of SGAM Corp. determine in good faith that such higher commissions are
reasonable in relation to the value of the brokerage and research services pro-
vided by such brokers for the benefit of the Fund. Research services provided
by brokers include written reports, responses to specific inquiries and inter-
views with analysts. These services also include invitations to meetings ar-
ranged by such brokers with the managements of companies in the Fund's portfo-
lio or in which the Fund may invest. Although only research services provided
to SGAM Corp. for the benefit of the Fund will be considered in selecting bro-
kers to effect portfolio transactions for the Fund, these services may also be
used by SGAM Corp. in servicing its other clients. Similarly, research informa-
tion obtained by SGAM Corp. from brokers executing transactions on behalf of
SGAM Corp's other clients may be used by SGAM Corp. in advising the Fund. SGAM
Corp. also considers the furnishing of comparative performance reports and
other informational reports as a factor in the selection of brokers to execute
portfolio transactions.
The Fund has been advised by SGAM Corp. that it may combine brokerage orders
for the Fund with orders from its other customers when placing such orders with
brokers for execution. In the event orders are placed for the Fund and one or
more other customers for the purchase or sale of the same security the Fund and
each such other customer may share in each transaction in the proportion that
each customer's order bears to the aggregate of such orders. The Fund's orders
are accorded priority over those received from SGAM Corp. for its own account
or from any of its officers, directors or employees.
While SGAM Corp. is primarily responsible for the allocation of the brokerage
business on the Fund's portfolio transactions, its policies and practices in
this regard must be consistent with the foregoing and are periodically reviewed
by the Fund's Board of Directors. In this connection, the Directors periodi-
cally review and discuss with SGAM Corp. the commissions paid by the Fund and,
in transactions where the Fund pays commissions which are in excess of the com-
missions 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
16
<PAGE>
services provided for the benefit of the Fund. According to the Fund's records,
the amount of brokerage commissions paid by the Fund during the fiscal year
ended March 31, 1997, which was partially attributable to research services,
was $2,121,994 in connection with transactions amounting to $1,127,569,932.
During the fiscal years ended March 31, 1995, 1996 and 1997, the Fund paid to-
tal brokerage commissions of $1,387,206, $2,468,233 and $2,138,878, respective-
ly.
CUSTODY OF PORTFOLIO
Domestic portfolio securities of the Fund are held pursuant to a custodian
agreement between the Fund and Investors Fiduciary Trust Company, 127 West 10th
Street, Kansas City, MO 64105. Certain of such securities may be deposited in
the book-entry system operated by the Federal Reserve System or with Depository
Trust Company. The Fund's sub-custodian, State Street Bank and Trust, holds do-
mestic securities issued in physical form. Pursuant to a Global Custody Agree-
ment between the Fund and The Chase Manhattan Bank ("Chase"), 4
Chase MetroTech Center, Brooklyn, NY 11245, foreign securities owned by the
Fund 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 independent auditors of the Fund are KPMG Peat Marwick LLP, Certified
Public Accountants, 345 Park Avenue New York, NY 10154. KPMG Peat Marwick LLP
audits the Fund's annual financial statements and renders its report thereon,
which is included in the Annual Report to Shareholders.
FINANCIAL STATEMENTS
The Fund's financial statements and notes thereto appearing in the March 31,
1997 Annual Report to Shareholders and the report thereon of KPMG Peat Marwick
LLP, Certified Public Accountants, appearing therein are incorporated by refer-
ence in this Statement of Additional Information. The Fund will furnish, with-
out 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 Avenue of the
Americas, New York, NY 10020.
17
<PAGE>
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18
<PAGE>
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19
<PAGE>
(This Page Left Blank Intentionally)
20
<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...................... 5-23
Statement of Assets and Liabilities -- March 31, 1997.......... 24
Statement of Operations -- Year ended March 31, 1997........... 25
Statements of Changes in Net Assets -- Years ended March 31,
1996 and 1997................................................. 26
Notes to Financial Statements.................................. 27-30
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 --Articles of Incorporation of the Registrant. (Filed as Exhibit 1 to
Post-Effective Amendment
No. 28 to this Registration Statement.)
1(a) --Articles of Amendment of the Registrant as filed with the Maryland
State Department of Assessments and Taxation on February 15, 1990.
(Filed as Exhibit 1(a) to Post-Effective Amendment No. 34 to this
Registration Statement.)
1(b) --Articles of Amendment of the Registrant as filed with the Maryland
State Department of Assessments and Taxation on March 29, 1993.
(Filed as Exhibit 1(b) to Post-Effective Amendment No. 37 to this
Registration Statement.)
1(c) --Articles of Amendment of the Registrant as filed with the Maryland
State Department of Assessments and Taxation on September 20, 1993.
(Filed as Exhibit 1(c) to Post-Effective Amendment No. 38 to this
Registration Statement.)
1(d) --Articles of Amendment of the Registrant as filed with the Maryland
State Department of Assessments and Taxation on March 3, 1995.
(Filed as Exhibit 1(d) to Post-Effective Amendment No. 39 to this
Registration Statement.)
2 --By-Laws of the Registrant. (Filed as Exhibit 2 to Post-Effective
Amendment No. 36 to this Registration Statement.)
5 --Investment Advisory Contract, dated April 26, 1990, as amended and
restated July 10, 1992, of the Registrant with Societe Generale
Touche Remnant Corporation, now called Societe Generale Asset
Management Corp. (Filed as Exhibit 5 to Post-Effective Amendment No.
37 to this Registration Statement.)
6(a) --Form of Underwriting Agreement, dated as of August 21, 1978,
between the Registrant and Hudson Securities Corp., now called
Societe Generale Securities Corp. (Filed as Exhibit 1(g) to Post-
Effective Amendment No. 15 to this Registration Statement.)
6(b) --Form of Domestic Selling Group Agreement. (Filed as Exhibit 6(b) to
Post-Effective Amendment No. 38 to this Registration Statement.)
6(c) --Form of Foreign Selling Group Agreement. (Filed as Exhibit 1(h)(ii)
to Post-Effective Amendment No. 15 to this Registration Statement.)
8(a) --Custodial Agreement, dated as of April 1, 1987, between the
Registrant and Investors Fiduciary Trust Company. (Filed as Exhibit
8(a) to Post-Effective Amendment No. 31 to this Registration
Statement.)
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
8(b) --Transfer Agency and Registrar Agreement, dated as of November 25,
1996, between the Registrant and DST Systems, Inc.
8(c) --Global Custody Agreement, dated as of November 1, 1995 between the
Registrant and The Chase Manhattan Bank, N.A. (Filed as Exhibit 8(c)
to Post-Effective Amendment No. 40 to this Registration Statement.)
8(d) --Form of Subcustodial Agreement. (Filed as Exhibit 8(d) to Post-
Effective Amendment No. 34 to this Registration Statement.)
10 --Opinion and Consent of Dechert Price & Rhoads (Previously filed with
the Registrants 24f-2 Notice.)
11(a) --Consent of KPMG Peat Marwick LLP.
11(b) --Report and consent of the Registrant's previous auditors with
respect to the Statement of Changes in Net Assets for the year ended
March 31, 1989 and selected per share data and ratios for each of the
nine years prior to the period ended March 31, 1989. (Filed as
Exhibit 11(b) to Post-Effective Amendment No. 34 to this Registration
Statement.)
11(c) --Representation Letter of Dechert Price & Rhoads.
13 --Power of Attorney. (Filed as Exhibit 13 to Post-Effective Amendment
No. 40 to this Registration Statement.)
15 --Form of Rule 12b-1 Distribution Plan and Agreement as amended
through February 4, 1994. (Filed as Exhibit 15 to Post-Effective
Amendment No. 38 to this Registration Statement.)
16 --Calculation of Performance Data in Statement of Additional
Information. (Average Annual Total Rate of Return for 1 year and
Average Annual Compounded Total Rates of Return for 5 and 10 years.)
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF RECORD HOLDERS
TITLE OF CLASS AS OF JUNE 30, 1997
-------------- ------------------------
<S> <C>
Capital Stock, $0.001 par value....................... 168,379
</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
C-2
<PAGE>
source for interpretation and implementation of said Section 17(h), the Regis-
trant understands that it would be required under its By-Laws to use reason-
able and fair means in determining whether indemnification of a director or
officer should be made and undertakes to use either (1) a final decision on
the merits by a court or other body before whom the proceeding was brought
that the person to be indemnified ("indemnitee") was not liable to the Regis-
trant or to its security holders by reason of willful malfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct
of his or her office ("disabling conduct") or (2) in the absence of such a de-
cision, a reasonable determination, based upon a review of the facts, that the
indemnitee was not liable by reason of such disabling conduct, by (a) the vote
of a majority of a quorum of directors who are neither "interested persons"
(as defined in the 1940 Act) of the Registrant nor parties to the proceeding,
or (b) an independent legal counsel in a written opinion. Also, the Registrant
will make advances of attorneys' fees or other expenses incurred by a director
or officer in his or her defense only if (in addition to his or her undertak-
ing to repay the advance if he or she is not ultimately entitled to indemnifi-
cation) (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 di-
rectors of the Registrant, or an independent legal counsel in a written opin-
ion, 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 maintains 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 or officers. The policy contains certain exclu-
sions, among which is exclusion from coverage for active or deliberate dishon-
est or fraudulent acts and exclusion for fines or penalties imposed 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 Funds, Inc., SoGen
Variable Funds, Inc. and pension funds and sub-adviser to non-affiliated in-
vestment funds.
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 Management
92972 Paris,
France
Jean Roger Huet.................... President, New York Branch, Societe Generale
1221 Avenue of the Americas
New York, NY 10020
</TABLE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) SGSC, the Registrant's principal underwriter, also acts as principal un-
derwriter for SoGen Funds, Inc., and SoGen Variable Fund, Inc., each a regis-
tered investment company.
(b) The directors and officers of SGSC are as follows:
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH 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
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
- -------------------------- ------------------------------ ---------------------
<S> <C> <C>
Gerard de la Riviere.... Director --
17, Cours Valmy
92972 Paris
France
Jean-Bernard Director --
Guillebert.............
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
Alain Tave.............. Director --
17, Cours Valmy
92972, Paris
France
Yves Tuloup............. Director --
43, rue Taitbout
75009 Paris,
France
Curtis Welling.......... Director, President and CEO --
1221 Avenue of the
Americas
New York, NY 10020
James Walsh............. Chief Operating Officer --
1221 Avenue of the
Americas
New York, NY 10020
Marc Poirier............ Deputy Chief Operating Officer --
1221 Avenue of the
Americas
New York, NY 10020
Jeffrey Fox............. Chief Financial Officer --
1221 Avenue of the
Americas
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
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
-------------------------- -------------------------- ---------------------
<S> <C> <C>
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 POSITIONS AND OFFICES POSITIONS AND OFFICES
PRICIPAL BUSINESS ADDRESSN WITH PRINCIPAL UNDERWRITER 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 --
Robert H. Despirito........... Director --
Katharine Hazard Flynn........ Director --
David Getzler................. Director --
Geoffrey Alexander Gimber..... Director --
Lars Hanan.................... Director --
Anna Hayes Connard............ Director --
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 --
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
-------------------------- -------------------------- ---------------------
<S> <C> <C>
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 --
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 --
</TABLE>
C-6
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
-------------------------- -------------------------- ---------------------
<S> <C> <C>
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, New York 10020 with the exception of certain accounts, books
and other documents which are kept by the Registrant's custodian, Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, MO 64105 and reg-
istrar 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 the 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-7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1993 ACT"), AND THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, THE REGIS-
TRANT, SOGEN INTERNATIONAL FUND, INC., CERTIFIES THAT THIS POST-EFFECTIVE
AMENDMENT TO ITS REGISTRATION STATEMENT (NO. 2-34329) MEETS ALL OF THE RE-
QUIREMENTS FOR EFFECTIVENESS PURSUANT TO PARAGRAPH (B) OF RULE 485 UNDER THE
1933 ACT, AND HAS DULY CAUSED IT TO BE SIGNED ON ITS BEHALF BY THE UNDER-
SIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, AND STATE OF NEW
YORK, ON THE 25TH DAY OF JULY, 1997.
SoGen International Fund, Inc.
/s/ Jean-Marie Eveillard
By: _________________________________
(JEAN-MARIE EVEILLARD, PRESIDENT)
PURSUANT TO THE REQUIREMENTS OF THE 1933 ACT, THIS POST-EFFECTIVE AMENDMENT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Jean-Marie Eveillard President and
- ------------------------------------- Director (principal July 25, 1997
(JEAN-MARIE EVEILLARD) 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-8
<PAGE>
EXHIBIT 99.8(b)
AGENCY AGREEMENT
THIS AGREEMENT made the 25th of November, 1996, by and between SOGEN
INTERNATIONAL FUND, 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.
--------------------------------------
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.
---------------------------------------------
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.
--------------------------------------------------
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.
--------------------
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.
------------------
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.
-------------------------------------
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
its system or to improve, enhance, or alter its current system, or to
provide any new, functionality 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 International Fund, 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 INTERNATIONAL FUND, INC.
By:____________________________________
Title:__________________________________
<PAGE>
EXHIBIT 99.11(A)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders of
SoGen International Funds, Inc.
We consent to the use of our report dated May 16, 1997 for the SoGen Interna-
tional Fund, Inc. incorporated herein by reference in this registration state-
ment on Form N-1A and to the references to our Firm under the headings "Finan-
cial Highlights" in the Prospectus and "Independent Auditors" and "Financial
Statements" in the Statement of Additional Information.
KPMG Peat Marwick LLP
New York, New York
July 18, 1997
<PAGE>
EXHIBIT 11(C)
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 International Fund, Inc. (File No. 2-34329)
Dear Sirs:
The undersigned counsel for SoGen International Fund, Inc. (the "Fund")
has reviewed Post-Effective Amendment No. 41 to the Fund's Registration
Statement on Form N-1A, and hereby represents that such Post-Effective Amendment
No. 41 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 INTERNATIONAL FUND, INC.
CALCULATION OF PERFORMANCE DATA
IN STATEMENT OF ADDITIONAL INFORMATION
AVERAGE ANNUAL TOTAL RATE OF RETURN FOR
1 YEAR AND AVERAGE ANNUAL COMPOUNDED
TOTAL RATES OF RETURN FOR 5 AND 10 YEARS
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
(3/31/96) (3/31/92) (3/31/87)
------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
Initial Investment = P.. $1,000 $1,000 $1,000
Ending Redeemable Value
@ 3/31/97 = ERV........ $1,054 $1,775 $2,639
Calculations:
T = the nth root of T = the 1st T = the fifth T = the tenth
(ERV/P) - 1............ root of (1,054/1,000) - 1 root of (1,775/1,000) - 1 root of (2,639/1,000) - 1
= 1.054-1 = 1.1216-1 = 1.1019-1
= 0.0537 = 0.1216 = 0.1019
= 5.37% = 12.16% = 10.19%
</TABLE>
