-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SoTXFuubTXosnSN058mqp8PPm8gzs0HdIBo5tf9ttdvDEgaBmn3uio82h2ZgAuip sgW22Q6yiH1ouljYe6huMg== 0000950117-01-501009.txt : 20010820 0000950117-01-501009.hdr.sgml : 20010820 ACCESSION NUMBER: 0000950117-01-501009 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20010817 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST EAGLE SOGEN FUNDS INC CENTRAL INDEX KEY: 0000906352 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-63560 FILM NUMBER: 1718050 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2126983133 MAIL ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: SOGEN FUNDS INC DATE OF NAME CHANGE: 19930714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST EAGLE SOGEN FUNDS INC CENTRAL INDEX KEY: 0000906352 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07762 FILM NUMBER: 1718051 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2126983133 MAIL ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: SOGEN FUNDS INC DATE OF NAME CHANGE: 19930714 485APOS 1 a29618.txt FIRST EAGLE SOGEN FUNDS, INC. 485APOS As filed with the Securities and Exchange Commission on August 17, 2001 REGISTRATION NO. 033-63560 and 811-7762 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x] PRE-EFFECTIVE AMENDMENT NO. [ ] POST-EFFECTIVE AMENDMENT NO. 15 [x] AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x] AMENDMENT NO. 17 [x] (CHECK APPROPRIATE BOX OR BOXES) ------------------- FIRST EAGLE SOGEN FUNDS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) ------------------- 1345 AVENUE OF THE AMERICAS NEW YORK, NY 10105 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 698-3000 ROBERT BRUNO FIRST EAGLE SOGEN FUNDS, INC. 1345 AVENUE OF THE AMERICAS NEW YORK, NY 10105 (NAME AND ADDRESS OF AGENT FOR SERVICE) ------------------- COPY TO: PAUL S. SCHREIBER, ESQ. SHEARMAN & STERLING 599 LEXINGTON AVENUE NEW YORK, NY 10022 ------------------- It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(1) [X] 75 days after filing pursuant to paragraph (a)(2) [ ] on (date) pursuant to paragraph (a)(2) of Rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment ------------------- First Eagle U.S. Value Fund A series of the First Eagle SoGen Funds PROSPECTUS August 17, 2001 Prospectus As with all mutual funds, these securities have not been approved or disapproved by the Securities and Exchange [LOGO] Commission nor has the SEC passed on the accuracy of this prospectus. It is a federal offense to claim otherwise. Thank you for your interest in First Eagle SoGen Funds Inc. (the 'Company'), managed by Arnhold and S. Bleichroeder Advisers, Inc. ('ASB Advisers' or the 'Adviser'), a wholly owned subsidiary of Arnhold and S. Bleichroeder, Inc. ('ASB'). The primary investment management team of Societe Generale Asset Management Corp. ('SGAM Corp.'), including Jean-Marie Eveillard and Charles de Vaulx, joined ASB Advisers in December 1999 and manages each portfolio of the Company. The Company consists of four portfolios, First Eagle SoGen Global Fund ('Global Fund'), First Eagle SoGen Overseas Fund ('Overseas Fund'), First Eagle SoGen Gold Fund ('Gold Fund') and First Eagle U.S. Value Fund ('U.S. Value Fund') (each, a 'Fund', collectively, the 'First Eagle SoGen Funds'). This prospectus contains information only about the U.S. Value Fund. Information about the other three First Eagle SoGen Funds is provided in a separate prospectus. Investment Objective of First Eagle U.S. Value Fund First Eagle U.S. Value Fund seeks long-term growth of capital by investing, under normal market conditions, at least 80% of its assets in equities issued by U.S. corporations. To achieve its objective, the U.S. Value Fund will invest primarily in small and medium size U.S. companies. The Company considers small companies to be companies with market capitalizations of less than $1 billion and medium size companies to have market capitalizations of less than $10 billion. Before you invest in a mutual fund, you need to know that all mutual funds have common attributes: Shares of the mutual fund can fall in value. There is no guarantee that a fund will achieve its objective. This prospectus provides important information about the U.S. Value Fund. We encourage you to read it carefully and keep it for future reference. Table of Contents
PAGE U.S. Value Fund.............................. 2 Investment Objective and Principal Investment Strategy.................... 2 Related Investment Strategies............ 3 Principal Investment Risks............... 3 Fund Performance and Fees and Expenses... 4 Our Management Team.......................... 7 The Adviser.............................. 7 Distribution and Shareholder Services Expenses............................... 7 About Your Investment........................ 8 How to Purchase Shares................... 9 How Fund Share Prices Are Calculated..... 10 Purchases Through Dealers................ 10 Bookshare Account Plan................... 16 Where to Send Your Application........... 17 Minimum Account Size..................... 17 Automatic Investment Program............. 17 Once You Become a Shareholder................ 18 Exchanging Your Shares................... 18 Redemption of Shares..................... 19 Information on Dividends, Distributions and Taxes...................................... 23 Privacy Notice for Individual Shareholders... 25 How to Reach First Eagle SoGen Funds......... 27 Useful Shareholder Information............... (Back Cover)
FIRST EAGLE U.S. VALUE FUND INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGY The investment objective of the U.S. Value Fund is long-term growth of capital through investment, under normal market conditions, of at least 80% of its assets in equities issued by U.S. corporations. To achieve its objective, the U.S. Value Fund will invest primarily in small and medium size U.S. companies. The Company considers small companies to be companies with market capitalizations of less than $1 billion and medium size companies to have market capitalizations of less than $2.5 billion. The U.S. Value Fund particularly seeks companies that have financial strength and stability, strong management and fundamental value. However, the U.S. Value Fund may invest in companies that do not have all of these characteristics. The equity securities in which the U.S. Value Fund may invest include common and preferred stocks, warrants or other similar rights, and convertible securities. The U.S. Value Fund may also invest up to 20% of its total assets in a combination of debt securities and securities of non-U.S. issuers. There are no restrictions as to the rating of debt securities that the Fund may acquire. Investment Philosophy. The investment philosophy and strategy of the U.S. Value Fund can be broadly characterized as a 'value' approach, in that the U.S. Value Fund loosely follows the teachings of Mr. Benjamin Graham, who is known as the founder of the 'value' school of investing. In particular, attention is paid to the ideas of 'intrinsic value,' which we define as what a rational investor would pay in cash for 100% of the company, and of 'margin of safety.' A stock is deemed attractive if there is a perceived positive difference between its 'intrinsic value' and the price of the stock in the market since such difference provides the 'margin of safety.' Stocks deemed attractive under this analysis will typically be identified for acquisition or retention by the Fund, while stocks deemed unattractive under this analysis will typically be disposed of by the Fund. 2 Changes in Investment Objective. Although no change is anticipated, the investment objective of the U.S. Value Fund can be changed without shareholder approval. Shareholders will be notified a minimum of 60 days in advance of any change in investment objective. RELATED INVESTMENT STRATEGIES The U.S. Value Fund has the flexibility to respond promptly to changes in market and economic conditions. Pursuant to a defensive strategy, the U.S. Value Fund may temporarily hold cash and/or invest up to 100% of its assets in high quality debt securities or money market instruments of U.S. issuers. In such a case, the U.S. Value Fund may not be able to pursue, and may not achieve its investment objectives. It is impossible to predict whether, when or for how long the U.S. Value Fund will employ defensive strategies. PRINCIPAL INVESTMENT RISKS Market Risk In general, the share price of the U.S. Value Fund moves up and down in reaction to stock market movements. This means that the value of the shares can fall in value. Recently Formed Fund Risk The U.S. Value Fund is a newly organized fund and has no operating or performance history as of the date of this Prospectus. In addition, special risks relating to the initial investment of assets may apply during a fund's start-up period, including diversification levels lower than expected in an established portfolio and the risk of commencing operations under inopportune market conditions. Debt Securities Risks Securities with the lowest investment grade ratings are considered to have speculative characteristics. Debt securities that are unrated are considered by the U.S. Value Fund to be equivalent to below investment grade (often referred to as 'junk bonds'). On balance, debt securities that are below investment grade are considered predominately speculative with respect to the issuer's capacity to pay 3 interest and repay principal according to the terms of the obligation and, therefore, carry greater investment risk, including the possibility of default and bankruptcy. They are likely to be less marketable and more adversely affected by economic downturns than higher-quality debt securities. The price of an investment in debt securities generally falls in value when interest rates rise. Small and Medium Size Companies Risks The U.S. Value Fund will invest in smaller companies, which historically have been more volatile in price than larger company securities, especially over the short-term. Among the reasons for the greater price volatility are the less certain growth prospects of smaller companies, the lower degree of liquidity in the markets for such securities and the greater sensitivity of smaller companies to changing economic conditions. In addition, smaller companies may lack depth of management, they may be unable to generate funds necessary for growth or development, or they may be developing or marketing new products or services for which markets are not yet established and may never become established. Foreign Investments Risks The U.S. Value Fund may from time to time invest a small portion of its total assets in securities issued by non-U.S. companies. These securities involve certain inherent risks that are different from those of domestic securities, including, among others, political or economic instability of the issuer or the country of issue, the possibility of adverse changes in foreign tax, investment or exchange control regulations, less public information about issuers, currency fluctuations, less liquidity, less stringent reporting requirements and greater volatility. FUND PERFORMANCE AND FEES AND EXPENSES PAST FUND PERFORMANCE The U.S. Value Fund is a newly organized fund and has no previous operating or performance history. 4 FEES AND EXPENSES The following information describes the fees and expenses you may pay if you buy and hold shares of the U.S. Value Fund. Shareholder fees are paid directly from your investment. Operating expenses are paid from the U.S. Value Fund's assets and are therefore incurred by shareholders indirectly. Class A Class C Class I Shareholder Fees Maximum Sales Charge (Load) on Purchases (as a percentage of public offering price)..... 5.00% 1.00% None Maximum Deferred Sales Charge (Load) as a percentage of the lesser of your purchase or redemption price........................ None 1.00% None Redemption Fee (as a percentage of the lesser of your purchase price or the amount redeemed within 60 days of purchase)....... 2.00% 2.00% 2.00% Annual Operating Expenses Management Fees............................. 0.75% 0.75% 0.75% Distribution (12b-1) Fees................... 0.25% 1.00% None Other Expenses*............................. 0.85% 0.85% 0.85% Total Annual Operating Expenses Before Expense Reimbursement*..................... 1.85% 2.60% 1.60% Less Expense Reimbursement*................. 0.35% 0.35% 0.35% Net Annual Operating Expenses**............. 1.50% 2.25% 1.25%
* Estimated based on expenses anticipated for the first year of the Fund's operations. Other expenses are allocated on a pro rata basis in relationship to the relative net assets of each share class of the Fund. Other expenses do not include the Fund's organizational expenses incurred prior to the initial offering of shares and would have been higher had such expenses been included. ** The Advisor has contractually agreed to limit net annual operating expenses of the U.S. Value Fund to an annual rate of 1.50% of average net assets with respect to Class A shares, 2.25% of average net assets with respect to Class B shares and 1.25% of average net assets with respect to Class I, in each case until March 1, 2002. Example This example is intended to help you compare the cost of investing in the U.S. Value Fund with the cost of investing in other mutual funds. This hypothetical example assumes that you invest $10,000 in the U.S. Value Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that the average annual return is 5% and that operating expenses remain the same. The example does not represent the U.S. Value Fund's actual past or future expenses and returns. 5 Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 1 Year 3 Years Class A shares........................................ $645 $950 Class C shares........................................ $326 $696 Class I shares........................................ $127 $397
Since only Class C shares of the U.S. Value Fund have a one year contingent deferred sales charge, you would pay the following expenses if you did not sell your Class C shares of the U.S. Value Fund at the end of the following periods: 1 Year 3 Years Class C shares........................................ $226 $696
6 OUR MANAGEMENT TEAM The Adviser The Adviser of the Company is Arnhold and S. Bleichroeder Advisers, Inc., a wholly owned subsidiary of Arnhold and S. Bleichroeder, Inc. ('ASB'). ASB is the successor firm to two German banking houses -- Gebr. Arnhold founded in Dresden in 1864 and S. Bleichroeder founded in Berlin in 1803. The firm moved to New York City in 1937 and conducts its activities under the current name of Arnhold and S. Bleichroeder, Inc. ASB has used its experience and worldwide contacts to provide asset management, global securities research and trading, and investment banking services to institutional clients throughout the world. Jean-Marie Eveillard, Co-President of the Company, and Charles de Vaulx, Senior Vice President of the Company, are primarily responsible for the day-to-day management of the Company's investment portfolios. Messrs. Eveillard and de Vaulx have acted in such capacity since the inception of the U.S. Value Fund. Mr. Eveillard is an officer of ASB and was formerly a Director and President or Executive Vice President of SGAM Corp. since 1990. Mr. de Vaulx is an officer of ASB and was formerly associated with SGAM Corp. since 1987. The Adviser is responsible for the management of the portfolio of the U.S. Value Fund and constantly reviews the Fund's holdings in the light of its own research analysis and those of other relevant sources. In return for its services, the Fund pays the Adviser a fee at the annual rate of 0.75% of the average daily value of its net assets. Distribution and Shareholder Services Expenses Shares of the U.S. Value Fund are offered, in states and countries in which such offer is lawful, to investors either through selected securities dealers or directly by ASB, the Fund's principal underwriter. Class A shares and level-load Class C Shares are subject to the sales charges described under 'About Your Investment -- Public Offering Price of Class A Shares' and ' -- Purchasing Level-Load Class C Shares,' respectively. 7 The U.S. Value Fund, has adopted a Distribution Plan and Agreement pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, the Fund pays ASB distribution related fees at an annual rate of 0.25% of the average daily net asset value of the U.S. Value Fund attributable to its Class A shares and distribution related fees as well as service fees at a combined annual rate of 1.00% of the average daily net asset value of the U.S. Value Fund attributable to its Class C shares. ASB has agreed, subject to its right to unilaterally require payments monthly, to accept the payments involved (whether distribution related or service fees) on a quarterly basis other than in certain exceptional cases. ASB is obligated to use the amounts received under the Plan for payments to qualifying dealers for their assistance in the distribution of the U.S. Value Fund's shares, 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. However, ASB will not pay dealers 12b-1, distribution related and service fees for any quarter in which they have less than $50,000 in First Eagle SoGen Fund accounts. ASB bears distribution expenses to the extent they are not covered by payments under the Plans. Any distribution expenses incurred by ASB in any fiscal year of the U.S. Value Fund that 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. Class I shares of the U.S. Value Fund do not participate in the Plan and are not charged with any portion of the payments made under the Plan. Because the fees are paid from U.S. Value Fund assets on an on-going basis, over time these fees will increase the cost of an investment in the Fund and may ultimately cost more than paying other types of sales charges. ABOUT YOUR INVESTMENT Investing well requires a plan. Whether you invest on your own or use the services of a financial professional, you should create a strategy that will best meet your financial goals over the longer term. 8 How to Purchase Shares The minimum initial and subsequent investment amounts generally required for each class of U.S. Value Fund shares are listed in the table below: Minimum Investments Initial Subsequent Class A.............................. $1,000 $100 Class C.............................. $1,000 $100 Class I*............................. $1 million $100
* The current aggregate net asset value of a shareholder's accounts in any of the First Eagle SoGen Funds may qualify for purposes of meeting the initial minimum investment amount for Class I shares of the U.S. Value Fund. The minimum may be waived for Class I shares for sponsors of 401(k) Plans and wrap fee programs if approved by ASB, the Fund's principal underwriter. The Automatic Investment Program and Automatic Exchange Program each requires a minimum initial investment of $100 per Fund. 'Starter' checks and third-party checks will not be accepted for purposes of opening a new account. The Company reserves the right to waive the initial minimum investment amounts, at the discretion of the principal underwriter, for certain investors, including Company employees and directors and officers of the Adviser. The Fund's shares may be purchased through authorized dealers or through ASB, the Fund's principal underwriter. A completed and signed application is required to open an initial account with the Fund. If there is no application accompanying this Prospectus, please call (800) 334-2143 to obtain one. The principal underwriter reserves the right to limit the purchase of the Fund's shares when it is in the best interest of the Fund. The Company and ASB each reserves the right to refuse any order for purchase of shares and to cancel any purchase due to nonpayment. Share purchases are not binding on the Company or ASB until they are confirmed by DST, the Fund's transfer agent, 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 Automated Clearing House ('ACH') transfer does not clear, the investor will be responsible for any loss the Fund may incur as a result thereof. 9 How Fund Share Prices Are Calculated Net asset value for the U.S. Value Fund is determined as of the close of trading on the New York Stock Exchange ('NYSE'), normally 4:00 p.m. E.S.T. on each day during which the NYSE is open for trading. The net asset value per share of each class of shares of the Fund is computed by dividing the total current value of the assets of the Fund, which are attributable to the share class, less the total liabilities of the Fund which are attributable to the share class, by the total number of shares of the share class outstanding at the time of such computation. Orders for shares received by the Fund's transfer agent, DST, prior to the close of trading on the NYSE, or orders received by dealers prior to such time and transmitted to ASB prior to the latter's close of business, will be effected based on the net asset value per share determined as of the close of trading on the NYSE that day. If an order is received by DST or by the dealer after the close of the NYSE, it will be priced on the next day that the NYSE is open for trading. Class I shares of the U.S. Value Fund are not subject to sales charges. Purchases Through Dealers Investors may purchase the Fund's shares through selected securities dealers with whom ASB has sales agreements. A prospective investor may obtain additional New Account Applications from such authorized dealers. For a list of authorized dealers, please contact ASB at (800) 747-2008. Authorized dealers and financial service firms are responsible for promptly transmitting purchase orders to ASB, the Fund's principal underwriter. Certain broker-dealers or financial services firms may purchase shares at their net asset value per share without a sales commission and charge investors a transaction charge or other advisory fee through a wrap fee or other similar program. Class A shares are sold with a front-end sales commission, Class C shares are sold with a 'level-load' (consisting of a front-end sales commission and an annual distribution (Rule 12b-1) fee) and Class I shares are sold principally to institutional investors purchasing in quantities of $1 million or more. 10 Public Offering Price of Class A Shares The public offering price at which share transactions will be effected will be equal to the net asset value per share plus, in the case of Class A shares of the U.S. Value Fund, a sales charge. The sales charges applicable to Class A shares currently in effect are as follows: Sales Charge as a percentage of Dealer Allowance Class A Shares ------------------------------------ as a percentage of Dollars Invested Offering Price Net Amount Invested Offering Price Less than $25,000.......... 5.00% 5.26% 4.50% $25,000 but less than $50,000..... 4.50 4.71 4.25 $50,000 but less than $100,000.... 4.00 4.17 3.75 $100,000 but less than $250,000.... 3.25 3.36 3.00 $250,000 but less than $500,000.... 2.50 2.56 2.25 $500,000 but less than $1,000,000....... 1.50 1.52 1.25 $1,000,000 and over*............ 0.00 0.00 0.00
Sales charges applicable to persons residing in countries outside the United States may vary from those listed above. ASB reallows discounts to selected dealers with whom it has sales agreements and is entitled to retain the balance over dealer discounts. ASB may from time to time reallow the entire sales load, and may provide additional promotional incentives, to dealers selling the Fund's shares. Such additional promotional incentive may include financial assistance in connection with pre-approved conferences or seminars, sales or training programs for invited sales personnel and payment for travel expenses for such seminars or training programs. In some instances the entire reallowance or incentives may be offered only to certain dealers which have sold or may sell significant amounts of First Eagle SoGen Fund 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. *Class A Contingent Deferred Sales Charge There is no initial sales charge on purchases of Class A shares of the U.S. Value Fund aggregating $1 million. ASB, as the Fund's principal underwriter, may pay dealers of record commissions in an amount 11 equal to 1.0% of purchases of $1 million or more on purchases of Class A shares that were not previously subject to a front-end sales charge and dealer commission. If you redeem any of those shares within 18 months of the end of the calendar month of their purchase, a contingent deferred sales charge (called the 'Class A contingent deferred sales charge') may be deducted from the redemption proceeds. That contingent deferred sales charge will be equal to 1.0% of the lesser of (1) the aggregate net asset value of the redeemed shares at the time of redemption (excluding shares purchased by reinvestment of dividends or capital gain distributions), or (2) the original net asset value of the redeemed shares. In determining whether a Class A contingent deferred sales charge is payable when shares are redeemed, shares that are not subject to the sales charge, including shares purchased by reinvestment of dividends and capital gains, will be redeemed first. Other shares will then be redeemed in the order in which you purchased them. The Class A contingent deferred sales charge is not charged on exchanges of Class A shares under the Fund's exchange privilege. However, if the shares acquired by exchange are redeemed within 18 calendar months of the end of the calendar month in which the exchanged shares were originally purchased, then the Class A contingent deferred sales charge will apply. Reducing the Sales Charge As shown in the table under 'Public Offering Price of Class A Shares', the size of the total investment in Class A shares of the U.S. Value Fund will affect the sales charge on the investment. Described below are several methods to reduce the applicable sales charge. In order to obtain a reduction in the sales charge, an investor must notify, at the time of purchase, his dealer, ASB or DST of the applicability of one of the following: Aggregation. The investment schedule applies to the total amount being invested in Class A shares by any 'person,' which term includes an individual, his spouse, parents and children; a trustee or other fiduciary purchasing for a single trust, estate or single fiduciary 12 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. Rights of Accumulation. Class A shares may be purchased at a reduced sales charge by a 'person' (as defined above in 'Aggregation') who is already a shareholder in the First Eagle SoGen Funds by calculating the amount being invested together with the current net asset value of the shares of any share class of any First Eagle SoGen Fund already 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 these 'Rights of Accumulation', the investor must notify his dealer, ASB 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 Company at (800) 334-2143. This enables the investor to aggregate purchases of shares of any share class of any First Eagle SoGen Fund during a thirteen-month period for purposes of calculating the applicable sales charge. Applicable shares of any First Eagle SoGen 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 13 adjustment will be made if purchases exceed the amount indicated in the Letter. For each investment made, the investor must notify his dealer, ASB or DST that a Letter is on file along with all account numbers associated with the Letter. The Letter is not a binding obligation on the investor. However, 5% of the amount specified in the Letter will be held in escrow, and if the investor's purchases are less than the amount specified, the investor will be requested to remit to the appropriate Fund an amount equal to the difference between the sales charge paid and the sales charge applicable to the aggregate purchases actually made. If not remitted within 20 days after written request, an appropriate number of escrowed shares will be redeemed in order to realize the difference. However, the sales charge applicable to the investment will in no event be higher than if the shareholder had not submitted a Letter. Either the shareholder or the Company may cancel the arrangement at will. Sales at Net Asset Value. Class A shares of the U.S. Value Fund may be sold at net asset value per share (i.e., without a sales charge) (i) to registered representatives or employees of authorized dealers, the spouse, parents or children of such persons 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 authorized to make investment decisions on behalf of a client, (iii) to investment advisers and financial planners who place trades for their own accounts or the accounts of their clients and who charge a management, consulting or other fee for their services, (iv) to clients of such investment advisers and financial planners who place trades for their own accounts if the accounts are linked to the master account of such investment adviser or financial planner on the books and records of the broker, agent, investment 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), 401(k), 403(b) or 457 of the Internal Revenue Code and 'rabbi trusts.' Investors may be charged a fee if they effect transactions in Class A shares through a broker or agent. Class A Shares may also be sold at net 14 asset value per share to current officers, directors and employees of the Company, ASB Advisers, ASB, employees of certain firms providing services to the First Eagle SoGen Funds (such as the custodian and the shareholder servicing agent), and to the spouse, parents and children of any such persons or to any trust, pension, profit-sharing or other benefit plan for only such persons. The U.S. Value Fund may also issue Class A shares at net asset value per share in connection with the acquisition of, or merger or consolidation with, another investment company. The sales of Class A shares at net asset value per share described in this section are made upon the written assurance of the purchaser that the purchase is made for investment purposes and that the shares will not be resold except through redemption. Such notice must be given to ASB or DST at the time of purchase on a form for this purpose as available from the Company. Reinstatement Privilege In addition, an investor is entitled to a one-time per account privilege to reinvest in Class A shares of any First Eagle SoGen Fund the proceeds of a full or partial redemption of shares from another First Eagle SoGen Fund at the then applicable net asset value per share without payment of a sales charge. To exercise this privilege the investor must submit to ASB or DST, within 60 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 First Eagle SoGen Fund to an IRA or other tax qualified retirement plan account in any other such Fund without payment of a sales charge. Such a transfer involves a redemption of shares and a reinvestment of the proceeds and, hence, may involve a taxable transaction for income tax purposes. Reinstatement will not prevent recognition of a gain realized on the redemption, 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 reinstatement privilege if the shares redeemed were held for 90 days or less, or if a shareholder reinvests in the First Eagle SoGen Funds within 30 days. 15 Purchasing Level-Load Class C Shares Level-load Class C shares of the U.S. Value Fund can be purchased through an investment professional at net asset value per share plus a sales charge. Investors pay a front-end sales commission on Class C shares equal to 1.00% of the purchase price, and may pay a contingent deferred sales charge ('Class C contingent deferred sales charge') equal to 1.00% of the original purchase price or the current market value, whichever is lower, on shares sold or redeemed within the first year of purchase. Class C shares are also available through 401(k) plans. Investors purchasing Class C shares in connection with wrap programs and participant directed retirement plans such as 401(k) plans, will not be subject to a front-end sales commission or a Class C contingent deferred sales charge. Level-load Class C shares carry an annual 1.00% Rule 12b-1 fee. Because the Rule 12b-1 fee is paid from your investment in the U.S. Value Fund on an ongoing basis, over time these fees may ultimately cost more than paying other types of sales charges. The Fund's Distribution Plan and Agreement pursuant to Rule 12b-1 under the Investment Company Act of 1940 is described above under 'Our Management Team - Distribution and Shareholder Services Expenses.' In addition to the fees described above, distributors of shares of the Fund are normally paid a separate initial 1.00% fee on the sale of Class C shares by the underwriter. Distributors of Class C shares that are not subject to a Class C contingent deferred sales charge will be paid this distribution fee and the service fee on a quarterly basis. Bookshare Account Plan To facilitate the handling of transactions with shareholders, the U.S. Value Fund uses a bookshare account plan for shareholder accounts. DST, as the Fund's transfer agent, automatically opens and maintains an account for the U.S. Value Fund's shareholders directly registered with the Fund. All interests in shares, full and fractional (rounded to three decimal places), are reflected in a shareholder's book account. After any purchase, a confirmation is mailed to the shareholder indicating the amount of full and fractional shares 16 purchased, the price per share and a statement of his account. Stock certificates will not be issued for the shares of the Fund. Where to Send Your Application Shares of the U.S. Value Fund may be purchased through ASB by mailing a check made payable to The First Eagle SoGen Funds along with the completed New Account Application to The First Eagle SoGen Funds, c/o DST, P.O. Box 219324, Kansas City, MO 64121-9324. Shares may also be purchased through ASB by 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. Investors may purchase the U.S. Value Fund's shares through selected securities dealers with whom ASB has sales agreements. A prospective investor may obtain additional New Account Applications from such authorized dealers. For a list of authorized dealers, please call ASB at (800) 747-2008. Authorized dealers and financial service firms may charge the investor a transaction fee in addition to any applicable sales load. Authorized dealers and financial service firms are responsible for promptly transmitting purchase orders to ASB, the Fund's principal underwriter. Minimum Account Size Due to the relatively high cost of maintaining smaller accounts, the Company reserves the right to redeem shares in any account if the value of that account drops below $500, except accounts for shareholders currently participating in the Automatic Investment Program. The Company also reserves the right to redeem shares in any Class I account of the U.S. Value Fund if the value of that Class I account drops below $100,000. A shareholder will be allowed at least 60 days to make an additional investment to bring his account value to the stated minimum before the redemption is processed. Automatic Investment Program Investors may make regular semi-monthly, monthly or quarterly investments of $100 (or more) in shares of the U.S. Value Fund 17 automatically from a checking or savings account. Upon written authorization, DST will debit the investor's designated bank account as indicated and use the proceeds to purchase shares of the 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 30 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 account is being established), savings account deposit slip or savings account statement must be forwarded to DST. Shares purchased through Automatic Investment Program payments are subject to the redemption restrictions for recent purchases described in 'Redemption of Shares.' The Company may amend or cease to offer the Automatic Investment Program at any time. ONCE YOU BECOME A SHAREHOLDER After you have opened an account with us, you can exchange or sell your shares to meet your changing investment goals or other needs. Exchanging Your Shares Shareholders or authorized parties are entitled to exchange some or all of their shares of any share class of one First Eagle SoGen Fund for shares of the same share class in any other First Eagle SoGen Fund. Such shares will be exchanged at their respective net asset values per share computed as of the close of trading on the NYSE on the day the exchange is requested. There is no charge for the exchange privilege. Any exchange, however, must meet the applicable minimum investment amount for the Fund into which the exchange is being made. For additional information concerning exchanges, or to effect exchanges, contact the Company at (800) 334-2143. The Company reserves the right to limit or terminate the exchange privilege as to any shareholder who makes exchanges more than four times a year (other than through the Automatic Exchange Program or a similar periodic investment program). 18 Automatic Exchange Program Shareholders who wish to automatically exchange shares of one First Eagle SoGen Fund for another 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 shareholder is exchanging from falls below the designated automatic exchange amount, all remaining shares will be exchanged and the program will be discontinued. All conditions with respect to exchange transactions apply as discussed in 'Exchanging Your Shares' above. Conversion Class A shares of the U.S. Value Fund having an aggregate value not less than $1 million may be converted into Class I shares of the Fund upon the election of the shareholder. Such conversions shall take place at net asset value, per share of these share classes shall not result in the realization of income or gain for Federal income tax purposes and shall be tax free to shareholders. For additional information concerning conversions, or to effect a conversion, contact your dealer, financial intermediary or the Company at (800) 334-2143. Dividend Direction Plan Shareholders may elect to have income dividends and capital gains distributions on their U.S. Value Fund shares invested without the payment of any applicable sales charge in shares of any share class of any First Eagle SoGen Fund in which they have an existing account and maintain a minimum account balance. All dividends and distributions so invested are taxable for U.S. federal income tax purposes as though received in cash. For further information about this privilege, contact DST by telephone at (800) 334-2143. Redemption of Shares Shareholders have the right to redeem all or any part of their shares of the U.S. Value Fund for cash at their net asset per share value next computed after receipt of the redemption request in the proper form. Shareholders may redeem either through authorized dealers, 19 through ASB or by telephone. Shares held in the dealer's 'street name' must be redeemed through the dealer. Redemption through Dealers Shareholders who have an account with an authorized dealer may submit a redemption request to such dealer. Authorized dealers are responsible for promptly transmitting redemption requests to ASB. Dealers may impose a charge for handling redemption transactions placed through them and may have particular requirements concerning redemptions. Accordingly, shareholders should contact their authorized dealers for more information. Redemptions through ASB Shareholders may redeem their U.S. Value Fund shares through their dealer or from ASB by transmitting written redemption instructions to The First Eagle SoGen Funds, c/o DST, P.O. Box 219324, Kansas City, MO 64121-9324. Redemption requests must meet all the following requirements to be considered in the proper form: 1. Written and signed instructions from the registered owner(s) must be received by DST 2. A letter or a stock power signed by the registered owner(s) must be signature guaranteed by an acceptable guarantor. A guarantee is required 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. 3. All certificates, if any, to be redeemed must be received by DST in negotiable form. 4. In the case of shares held of record in the name of a corporation, trust, fiduciary or partnership, evidence of 20 authority to sign and a stock power with signature(s) guaranteed must be received by DST. Redemption Proceeds Payment of the redemption price will generally be made within three business days after receipt of the redemption request in proper form. The Company 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 15 days. Investors who wish to avoid any such delay should purchase shares by bank wire. Redemption proceeds are normally paid in the form of a check. Proceeds can also be sent to a shareholder's bank account by ACH transfer or by bank wire when a pre-designated bank has been identified in the New Account Application or Special Options Form. Proceeds sent by ACH transfer should generally be credited to a shareholder's account on the second business day after the redemption. Proceeds sent by bank wire should be credited on the business day following the redemption; however, a fee of $7.50 will be deducted from such proceeds. Redemption Fee Class A, Class C and Class I shares of the U.S. Value Fund are assessed a 'redemption fee' of 2% of the current net asset value per share of the shares if sold or exchanged within 60 days of the original investment. This fee is intended to defray transaction and other expenses caused by early redemptions and to facilitate portfolio management. The fee is currently waived for qualified retirement plans, wrap programs and certain accounts investing through omnibus positions and the Company reserves the right to impose redemption fees on shares held by such shareholders. This fee may be modified or discontinued at any time. These fees do not represent a deferred sales charge nor a commission paid to ASB. Any fees collected will be retained by the Fund for the benefit of the remaining shareholders. Telephone Privileges Unless contrary instructions are elected in the New Account Application or Special Options Form, a shareholder will be entitled to make telephone redemptions, exchanges, conversions and account 21 maintenance requests if the shareholder has a preauthorized form on file with the transfer agent. Neither the Company nor its agents will be liable for following instructions communicated by telephone that are reasonably believed to be genuine. Reasonable procedures will be employed on behalf of the Company to confirm that the instructions are genuine. 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 account 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 include a combination of the following items: (i) the Fund and account number, (ii) the account registration, (iii) the social security or tax identification number on the account, (iv) the address of record, (v) designated bank account information and any other information deemed appropriate to allow access to the account. Telephone redemption requests received prior to the close of business on the NYSE on any 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 to a bank account number or mailed to an address other than the one previously designated by the shareholder. There is a $100,000 maximum on telephone redemptions by check. There is no limitation on redemptions by ACH transfer or by bank wire. Certain retirement accounts are not eligible for all the telephone privileges referenced above. Please call (800) 334-2143 with all inquiries pertaining to telephone privileges. Systematic Withdrawal Plan A shareholder who owns shares of the U.S. Value Fund with a current net asset value of $10,000 or more may use those shares to establish a Systematic Withdrawal Plan monthly or quarterly. A check in a stated amount of not less than $50 will be mailed to the 22 shareholder on or about the 3rd day, 15th day, or 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 per share. The U.S. Value Fund's shares will be redeemed as necessary to meet withdrawal payments. Withdrawals in excess 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 additional shares made concurrently with withdrawals of shares are undesirable because of sales charges incurred when purchases are made. Accordingly, a shareholder may not maintain a Systematic Withdrawal Plan while simultaneously making regular purchases. New accounts established by check within 15 days of their expected withdrawal date, will not begin distribution until the following month due to the 15-day hold on check purchases. The Company may amend or cease to offer the Systematic Withdrawal Plan at any time. Retirement Plans The Company offers a variety of retirement plans such as IRA, Roth-IRA, SEP, SIMPLE IRA and Education IRA and 403(b)(7) plans which allow investors to save for retirement and defer taxes on investment income, if any. The tax benefits of these plans may not be available for all persons. Investors should consult their tax advisers regarding their eligibility. Retirement plans may purchase U.S. Value Fund Class I shares provided they meet the minimum initial investment amount of $1 million or the plan has or expects to have 100 or more participants and will be domiciled in an omnibus or pooled account within the Fund and will not require the Fund to pay any type of administrative fee or payment per participant account to any third party. INFORMATION ON DIVIDENDS, DISTRIBUTIONS AND TAXES It is the policy of the U.S. Value Fund to make periodic distributions of net investment income and net realized capital gains, if any. Unless a shareholder otherwise elects, income dividends and 23 capital gains distributions will be reinvested in additional shares of the same share class of the Fund at net asset value per share calculated as of the payment date. The U.S. Value Fund pays both income dividends and capital 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 Fund will be reduced by the amount of such payment. The U.S. Value 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, the Fund must meet certain income, diversification and distribution requirements. As a regulated investment company, the 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 foreign source income received by the Fund may be subject to foreign withholding taxes. Shareholders normally will be taxed on the dividend and capital gains distributions they receive from the Fund whether received in additional shares or cash. Distributions of capital gains may be taxable at different rates depending on the length of time the Fund holds the assets to which such gains relate. A distribution will be treated as paid on December 31 of the current calendar year if it is declared by the 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. Tax issues can be complicated. Exchanges of shares of the U.S. Value Fund are treated as sales and purchases and subject to taxes. Please consult your tax adviser about federal, state, or local tax consequences or with any other tax questions you may have. By January 31st of each year, we will send you a statement showing the tax status of your dividends and distributions for the prior year. There may be tax consequences for shareholders who are nonresident aliens or foreign entities. Please see the Statement of Additional Information for more information. 24 PRIVACY NOTICE FOR INDIVIDUAL SHAREHOLDERS First Eagle Sogen Funds is committed to protecting your privacy. We are providing you with this privacy notice to inform you of how we handle your personal information that we collect and may disclose to our affiliates. If the Company changes its information practices, we will provide you with notice of any material changes. This privacy policy supersedes any of our previous policies relating to the information you disclose to us. Why This Privacy Policy Applies to You You are receiving this notice because you obtained a financial product or service from or through us for personal, family or household purposes when you opened a shareholder account with the Company. What We Do to Protect Your Personal Information We protect personal information provided to us by our individual shareholders according to strict standards of security and confidentiality. These standards apply to both our physical facilities and any online services we may provide. We maintain physical, electronic and procedural safeguards that comply with federal standards to guard consumer information. We permit only authorized individuals, who are trained in the proper handling of individual shareholder information and need to access this information to do their job, to have access to this information. Personal Information That We Collect and May Disclose As part of providing you with the Company's products and services, we may obtain nonpublic personal information about you from the following sources: Information we receive from you on subscription applications or other forms, such as your name, address, telephone number, Social Security number, occupation, assets and income; Information about your transactions with us, our affiliates, or unaffiliated third parties, such as your account balances, payment history and account activity; and 25 Information from public records we may access in the ordinary course of business. Categories of Affiliates to Whom We May Disclose Personal Information We may share personal information about you with affiliates. Our affiliates do business under names that include Arnhold and S. Bleichroeder, Inc. and Arnhold and S. Bleichroeder Advisers, Inc. When We May Disclose Your Personal Information to Unaffiliated Third Parties We will only share your personal information collected, as described above, with unaffiliated third parties: At your request; When you authorize us to process or service a transaction or product (unaffiliated third parties in this instance may include service providers such as the Company's distributors, registrar and transfer agent for shareholder transactions, and other parties providing individual shareholder servicing, accounting and recordkeeping services); With companies that perform sales and marketing services on our behalf with whom we have agreements to protect the confidentiality of your information and to use the information only for the purposes for which we disclose the information to them; or When required by law to disclose such information to appropriate authorities. We do not otherwise provide information about you to outside firms, organizations or individuals except to our attorneys, accountants and auditors and as permitted by law. What We Do With Personal Information about Our Former Customers If you decide to discontinue doing business with us, the Company will continue to adhere to this privacy policy with respect to the information we have in our possession about you and your account following the termination of our shareholder relationship. 26 HOW TO REACH FIRST EAGLE SOGEN FUNDS You can send all requests for information or transactions to: Regular Mail: First Eagle SoGen Funds P.O. Box 219324 Kansas City, MO 64121-9324 or Overnight Mail: First Eagle SoGen Funds c/o DST Systems, Inc. 330 West 9th Street Kansas City, MO 64105-1807 You can contact us by telephone at (800) 334-2143. 27 USEFUL SHAREHOLDER INFORMATION How to Obtain Our Shareholder Reports We will send you copies of our Annual and Semi-annual Reports on a regular basis once you become a shareholder. The Annual Report contains a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the last fiscal year. It also contains audited financial statements by the Fund's independent accountants. How to Obtain Our Statement of Additional Information The Statement of Additional Information (SAI), which is incorporated by reference in this prospectus, is available to you without charge from us. You may visit the SEC's Internet website (http://www.sec.gov) to view the SAI and other information. Also, you can obtain copies of the SAI and other information by sending your request and fee to the SEC's Public Reference Section, Washington, D.C. 20549-0102 or by e-mail to publicinfo@sec.gov. You also may review and copy information about the Fund, including the SAI, at the SEC's Public Reference Room in Washington, D.C. To find out more about the public reference room, call the SEC at 202-942-8090. How to Reach First Eagle SoGen Funds You can send all requests for information or transactions to: First Eagle SoGen Funds P.O. Box 219324 Kansas City, MO 64121-9324 You can contact us by telephone at (800) 334-2143. You can also reach us for any reason by visiting our website at: http://www.firsteaglesogen.com Distributor Arnhold and S. Bleichroeder, Inc. 1345 Avenue of the Americas New York, NY 10105 Investment Adviser Arnhold and S. Bleichroeder Advisers, Inc. 1345 Avenue of the Americas New York, NY 10105 Investment Company Act File Number: 811-7762 STATEMENT OF ADDITIONAL INFORMATION FIRST EAGLE SOGEN GLOBAL FUND FIRST EAGLE SOGEN OVERSEAS FUND FIRST EAGLE SOGEN GOLD FUND FIRST EAGLE U.S. VALUE FUND ------------------- 1345 AVENUE OF THE AMERICAS NEW YORK, NY 10105 (212) 698-3000 ------------------- ARNHOLD AND S. BLEICHROEDER ADVISERS, INC. 1345 AVENUE OF THE AMERICAS NEW YORK, NY 10105 INVESTMENT ADVISER ARNHOLD AND S. BLEICHROEDER, INC. 1345 AVENUE OF THE AMERICAS NEW YORK, NY 10105 DISTRIBUTOR ------------------- This Statement of Additional Information provides information about First Eagle SoGen Global Fund, First Eagle SoGen Overseas Fund, First Eagle SoGen Gold Fund and First Eagle U.S. Value Fund, four separate portfolios of First Eagle SoGen Funds, Inc. (the 'Company'), an open-end management investment company, in addition to the information contained in two Prospectuses of the Company dated March 1, 2001 and August 15, 2001, respectively. This Statement of Additional Information is not a prospectus. It relates to and should be read in conjunction with such Prospectuses of the Company, a copy of which can be obtained by writing or by calling the Company at (800) 334-2143. Certain disclosure has been incorporated by reference into this Statement of Additional Information from the Company's annual report. For a free copy of the annual report, please call (800) 334-2143. ------------------- August 17, 2001 TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION PAGE ------------ Organization of the Funds................................... 1 Investment Objective, Policies and Restrictions............. 2 Management of the Company................................... 10 Investment Advisory and Other Services...................... 13 Distributor of the Funds' Shares............................ 15 Capital Stock............................................... 15 Computation of Net Asset Value.............................. 15 How to Purchase Shares...................................... 16 Tax Status.................................................. 16 Portfolio Transactions and Brokerage........................ 20 Custody of Portfolio........................................ 21 Independent Auditors........................................ 21 Financial Statements........................................ 22 Appendix.................................................... A-1
ORGANIZATION OF THE FUNDS First Eagle SoGen Global Fund, First Eagle SoGen Overseas Fund, First Eagle SoGen Gold Fund and First Eagle U.S. Value Fund (each individually referred to as a 'Fund', collectively, the 'Funds' or, alternatively, the 'Global Fund,' the 'Overseas Fund,' the 'Gold Fund,' and the 'U.S. Value Fund,' respectively) are four separate portfolios of First Eagle SoGen Funds, Inc. (the 'Company'), an open-end investment management company incorporated under the laws of Maryland in May 1993. The Board of Directors of the Company approved changing the name of the company from 'SoGen Funds, Inc.' to 'First Eagle SoGen Funds, Inc.' effective December 31, 1999. Each Fund is a separate, diversified portfolio of assets and has a different investment objective which it pursues through separate investment policies, as described below. The Company's investment adviser is Arnhold and S. Bleichroeder Advisers, Inc. ('ASB Advisers' or the 'Adviser'), a registered investment adviser. The Company's principal underwriter is Arnhold and S. Bleichroeder, Inc. ('ASB'), a registered broker-dealer located in New York. Pursuant to the laws of Maryland, the Company's jurisdiction of incorporation, the Board of Directors of the Company has adopted By-Laws of the Company that do not require annual meetings of the Funds' shareholders. The absence of a requirement that the Company hold annual meetings of the Funds' shareholders reduces its expenses. Meetings of shareholders will continue to be held when required by the Investment Company Act of 1940 or Maryland law or when called by the Chairman of the Board of Directors, the President or shareholders owning 10% of a Fund's outstanding shares. The cost of any such notice and meeting will be borne by each Fund. Under the provisions of the Investment Company Act of 1940, a vacancy on the Board of Directors of the Company may be filled between meetings of the shareholders of the Company by vote of the Directors then in office if, immediately after filling such vacancy, at least two-thirds of the Directors then holding office have been elected to the office of Director by the shareholders of the Funds. In the event that at any time less than a majority of the Directors of the Company holding office at that time were elected by the shareholders of the Funds, the Board of Directors or the Chairman of the Board shall, within sixty days, cause a meeting of shareholders to be held for the purpose of electing directors to fill any vacancies in the Board of Directors. The staff of the Securities and Exchange Commission has advised the Funds that it interprets Section 16(c) of the Investment Company Act of 1940, which provides a means for dissident shareholders of common-law trusts to communicate 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 companies, such as the Company, that are incorporated under Maryland law. 1 INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS Investment Objective of the Funds GLOBAL FUND. The Global Fund's investment objective is to provide long-term growth of capital through investments in a range of asset classes from markets in the United States and around the world. 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. OVERSEAS FUND. The Overseas Fund seeks long-term growth of capital through investments primarily in equities issued by non-U.S. corporations. In seeking to achieve this objective, the Overseas Fund will invest primarily in small and medium size companies traded in mature markets and may invest in emerging markets. The Fund uses the techniques and invests in the types of securities described below and in the Fund's Prospectus. GOLD FUND. The Gold Fund seeks growth of capital by investing primarily in securities of companies engaged in mining, processing, dealing in or holding gold or other precious metals such as silver, platinum and palladium, both in the United States and in foreign countries. Gold-related investments have provided protection against loss of purchasing power during periods of extensive price inflation and/or following periods of extensive credit expansion. Under normal circumstances, at least 65% of the value of the Fund's total assets will be invested in securities (which may include both equity and, to a limited extent, debt securities) consisting of issuers engaged in gold operations, including securities of gold mining finance companies as well as operating companies with long, medium or short-life mines. U.S. VALUE FUND. The U.S. Value Fund seeks long-term growth of capital by investing, under normal market conditions, at least 80% of its assets in equities issued by U.S. corporations. To achieve its objective, the U.S. Value Fund will invest primarily in small and medium size U.S. companies. The Company considers small companies to be companies with market capitalizations of less than $1 billion and medium size companies to have market capitalizations of less than $10 billion. The Fund uses the techniques and invests in the types of securities described below and in the Fund's Prospectus. When deemed appropriate by a Fund's investment adviser for short-term investment or defensive purposes, a Fund may hold up to 100% of its assets in short-term debt instruments including commercial paper and certificates of deposits. Investors should refer to each Fund's Prospectus for further discussion of the Fund's investment objective and policy. There can be no assurance that a Fund's stated objective will be realized. Policies and Techniques Applicable to all Funds The investment objectives of the Funds describe each Fund's principal investment strategies. Except as otherwise described below, each of the investment techniques below are considered to be non-principal techniques for each Fund. Investment Policies, Techniques and Risks Structured Notes. The Global Fund and the U.S. Value Fund may invest up to 5% of its assets 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. The Overseas Fund may invest in structured notes and/or preferred stock, the value of which is linked to currencies, interest rates, other commodities, indices or other financial indicators, and the Gold Fund may invest in structured notes and/or preferred stock, the value of which is linked to the price of gold or other precious metals. Structured securities differ from other types of securities in which the Funds may invest in several respects. For example, the coupon dividend and/or redemption amount at maturity may be increased or decreased depending on changes in the value of the underlying instrument. Investment in structured securities involves certain risks. In addition to the credit risk of the security's issuer and the normal risks of price changes in response to changes in interest rates, the redemption amount may decrease as a result of changes in the price of the underlying instrument. Further, in the case of certain structured securities, 2 the coupon and/or dividend may be reduced to zero, and any further declines in the value of the underlying instrument may then reduce the redemption amount payable on maturity. Finally, structured securities may be more volatile than the price of the underlying instrument. Foreign Securities. Each Fund may (and the Global Fund and the Overseas Fund will) invest in foreign securities, which may entail a greater degree of risk (including risks relating to exchange rate fluctuations, tax provisions, or expropriation of assets) than does investment in securities of domestic issuers. Investing in foreign securities is a principal investment strategy of the Global Fund and the Overseas Fund. The Funds may invest in securities of foreign issuers directly or in the form of American Depository Receipts (ADRs), Global Depository Receipts (GDRs), European Depository Receipts (EDRs), or other securities representing underlying shares of foreign issuers. Positions in these securities are not necessarily denominated in the same currency as the common stocks into which they may be converted. ADRs are receipts typically issued by an American bank or trust company evidencing ownership of the underlying securities. EDRs are European receipts evidencing a similar arrangement. GDRs are global offerings where two securities are issued simultaneously in two markets, usually publicly in non-U.S. markets and privately in the U.S. market. Generally ADRs, in registered form, are designed for use in the U.S. securities markets, EDRs, in bearer form, are designed for use in European securities markets. GDR's are designed for use in the U.S. and European securities markets. Each of the Funds may invest in both 'sponsored' and 'unsponsored' ADRs. In a sponsored ADR, the issuer typically pays some or all of the expenses of the depository and agrees to provide its regular shareholder communications to ADR holders. An unsponsored ADR is created independently of the issuer of the underlying security. The ADR holders generally pay the expenses of the depository and do not have an undertaking from the issuer of the underlying security to furnish shareholder communications. Issuers of unsponsored ADRs are not obligated to disclose material information in the United States and, therefore, there may not be a correlation between such information and the market value of the ADRs. No Fund expects to invest more than 5% of its total assets in unsponsored ADRs. The U.S. Value Fund does not intend to invest more than a small portion of its total assets in foreign securities. With respect to portfolio securities that are issued by foreign issuers or denominated in foreign currencies, the investment performance of a Fund is affected by the strength or weakness of the U.S. dollar against these currencies. For example, if the dollar falls in value relative to the Japanese yen, the dollar value of a yen-denominated stock held in the portfolio will rise even though the price of the stock remains unchanged. Conversely, if the dollar rises in value relative to the yen, the dollar value of the yen-denominated stock will fall. (See discussion of transaction hedging and portfolio hedging under 'Currency Exchange Transactions.') Investors should understand and consider carefully the risks involved in foreign investing. Investing in foreign securities, positions which are generally denominated in foreign currencies, and utilization of forward foreign currency exchange contracts involve certain risks and opportunities not typically associated with investing in U.S. securities. These considerations include: fluctuations in the rates of exchange between the U.S. dollar and foreign currencies; possible imposition of exchange control regulations or currency restrictions that would prevent cash from being brought back to the United States; less public information with respect to issuers of securities; less governmental supervision of stock exchanges, securities brokers, and issuers of securities; different accounting, auditing and financial reporting standards; different settlement periods and trading practices; less liquidity and frequently greater price volatility in foreign markets than in the United States; imposition of foreign taxes; and sometimes less advantageous legal, operational and financial protections applicable to foreign sub-custodial arrangements. Although the Funds seek to invest in companies and governments of countries having stable political environments, there is the possibility of expropriation or confiscatory taxation, seizure or nationalization of foreign bank deposits or other assets, establishment of exchange controls, the adoption of foreign government restrictions, or other adverse political, social or diplomatic developments that could affect investment in these nations. The cost of investing in foreign securities is higher than the cost of investing in U.S. securities. Investing in each Fund (other than the U.S. Value Fund, which only invests in foreign securities on a de minimis basis) is an efficient way for an individual to participate in foreign markets, but its expenses, including advisory and custody fees, are higher than the expenses of a typical mutual fund that invests in domestic equities. Restricted and Illiquid Securities. Each Fund may invest up to 15% of its net assets (10% in the case of the Global Fund) in illiquid securities, including certain securities that are subject to legal or contractual restrictions on resale ('restricted securities'). 3 Generally, restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the Securities Act of 1933 (the '1933 Act'). Where registration is required, a Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. Restricted securities will be priced at fair value as determined in good faith by the Board of Directors. Notwithstanding the above, a Fund may purchase securities that have been privately placed but that are eligible for purchase and sale under Rule 144A under the 1933 Act. That rule permits certain qualified institutional buyers, such as the Funds, to trade in privately placed securities that have not been registered for sale under the 1933 Act. The Adviser, under the supervision of the Board of Directors of the Company, will consider whether securities purchased under Rule 144A are illiquid and thus subject to a Fund's restriction on investing in illiquid securities. A determination as to whether a Rule 144A security is liquid or not is a factual issue requiring an evaluation of a number of factors. In making this determination, the Adviser will consider the trading markets for the specific security, taking into account the unregistered nature of a Rule 144A security. In addition, the Adviser could consider (1) the frequency of trades and quotes, (2) the number of dealers and potential purchasers, (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, a Fund's holdings of illiquid securities would be reviewed to determine what steps, if any, are required to assure that the Fund does not invest more than the maximum percentage of its assets in illiquid securities. Investing in Rule 144A securities could have the effect of increasing the amount of a Fund's assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase such securities. Bank Obligations. Each Fund may invest in bank obligations, which may include bank certificates of deposit, time deposits or bankers' acceptances. Certificates of deposit and time deposits are negotiable certificates issued against funds deposited in a commercial bank for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are 'accepted' by a bank, meaning in effect that the bank unconditionally agrees to pay the face value of the instrument on maturity. Investments in these instruments are limited to obligations of domestic banks (including their foreign branches) and U.S. and foreign branches of foreign banks having capital surplus and undivided profits in excess of $100 million. Lower-Rated Debt Securities. Each of the Funds may invest in debt securities, including lower-rated securities (i.e., securities rated BB or lower by Standard & Poor's Corporation ('S&P') or Ba or lower by Moody's Investors Service, Inc. ('Moody's'), commonly called 'junk bonds') and securities that are not rated. There are no restrictions as to the ratings of debt securities acquired by a Fund or the portion of a Fund's assets that may be invested in debt securities in a particular rating category, except that the Overseas Fund and the Gold Fund will not invest more than 20% of its assets in securities rated below investment grade or unrated securities considered by the investment adviser to be of comparable credit quality. Securities rated BBB by S&P or Baa by Moody's (the lowest investment grade ratings) are considered to be of medium grade and to have speculative characteristics. Debt securities rated below investment grade are predominantly speculative with respect to the issuer's capacity to pay interest and repay principal. Although lower-rated debt and comparable unrated debt securities may offer higher yields than do higher rated securities, they generally involve greater volatility of price and risk of principal and income, including the possibility of default by, or bankruptcy of, the issuers of the securities. In addition, the markets in which lower-rated and unrated debt securities are traded are more limited than those in which higher rated securities are traded. Adverse publicity and investors' perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of lower-rated debt securities, especially in a thinly traded market. During periods of thin trading in these markets, the spread between bid and asked prices is likely to increase significantly, and a Fund may have greater difficulty selling its portfolio securities. See 'Computation of Net Asset Value.' Analyses of the creditworthiness of issuers of lower-rated debt securities may be more complex than for issuers of higher rated securities, and the ability of the Fund to achieve its investment objective may, to the extent of investment in lower-rated debt securities, be more dependent upon such creditworthiness analyses than would be the case if the Fund were investing in higher rated securities. 4 Lower-rated debt securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than investment grade securities. The prices of lower-rated debt securities have been found to be less sensitive to interest rate changes than higher rated investments, but more sensitive to adverse economic downturns or individual corporate developments. A projection of an economic downturn or of a period of rising interest rates, for example, could cause a decline in lower-rated debt securities' prices because the advent of a recession could lessen the ability of a highly-leveraged company to make principal and interest payments on its debt securities. If the issuer of lower-rated debt securities defaults, a Fund may incur additional expenses seeking recovery. A more complete description of the characteristics of bonds in each rating category is included in the appendix to this Statement of Additional Information. Currency Exchange Transactions. A currency exchange transaction may be conducted either on a spot (i.e., cash) basis at the spot rate for purchasing or selling currency prevailing in the foreign exchange market or through a forward currency exchange contract ('Forward Contract'). A Forward Contract is an agreement to purchase or sell a specified currency at a specified future date (or within a specified time period) and price set at the time of the contract. Forward Contracts are usually entered into with banks and broker/dealers, are not exchange traded and are usually for less than one year, but may be renewed. Currency exchange transactions may involve currencies of the different countries in which the Funds may invest, and serve as hedges against possible variations in the exchange rates between these currencies and the U.S. dollar. A Fund's currency transactions are limited to transaction hedging and portfolio hedging involving either specific transactions or portfolio positions. Transaction hedging is the purchase or sale of a Forward Contract with respect to specific payables or receivables of a Fund accruing in connection with the purchase or sale of portfolio securities. Portfolio hedging is the use of a Forward Contract with respect to a portfolio security position denominated or quoted in a particular currency. A Fund may engage in portfolio hedging with respect to the currency of a particular country in amounts approximating actual or anticipated positions in securities denominated in that currency. At the maturity of a Forward Contract to deliver a particular currency, a Fund may either sell the portfolio security related to such contract and make delivery of the currency, or it may retain the security and either acquire the currency on the spot market or terminate its contractual obligation to deliver the currency by purchasing an offsetting contract with the same currency trader obligating it to purchase on the same maturity date the same amount of the currency. It is impossible to forecast with absolute precision the market value of portfolio securities at the expiration of a Forward Contract. Accordingly, it may be necessary for a Fund to purchase additional currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of currency the Fund is obligated to deliver, and if a decision is made to sell the security and make delivery of the currency. Conversely, it may be necessary to sell on the spot market some of the currency received upon the sale of the portfolio security if its market value exceeds the amount of currency the Fund is obligated to deliver. If a Fund retains the portfolio security and engages in an offsetting transaction, the Fund will incur a gain or a loss to the extent that there has been movement in Forward Contract prices. If a Fund engages in an offsetting transaction, it may subsequently enter into a new Forward Contract to sell the currency. Should forward prices decline during the period between the date a Fund enters into a Forward Contract for the sale of a currency and the date it enters into an offsetting contract for the purchase of the currency, the Fund will realize a gain to the extent the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the Fund will suffer a loss to the extent the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. A default on the contract would deprive the Fund of unrealized profits or force the Fund to cover its commitments for purchase or sale of currency, if any, at the current market price. Hedging against a decline in the value of a currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Such transactions also preclude the opportunity for gain if the value of the hedged currency should rise. Moreover, it may not be possible for a Fund to hedge against a devaluation that is so generally anticipated that the Fund is not able to contract to sell the currency at a price above the devaluation level it anticipates. The cost to a Fund of engaging in currency exchange transactions varies with such factors as the currency involved, the length of the contract period and prevailing market conditions. Since currency exchange transactions are usually conducted on a principal basis, no fees or commissions are involved. 5 When-Issued or Delayed-Delivery Securities. Each Fund may purchase securities on a 'when-issued' or 'delayed delivery' basis. Although the payment and interest terms of these securities are established at the time a Fund enters into the commitment, the securities may be delivered and paid for a month or more after the date of purchase, when their value may have changed. A Fund makes such commitments only with the intention of actually acquiring the securities, but may sell the securities before settlement date if the investment adviser deems it advisable for investment reasons. At the time a Fund enters into a binding obligation to purchase securities on a when-issued basis, liquid assets of the Fund having a value at least as great as the purchase price of the securities to be purchased will be segregated on the books of the Fund and held by the custodian throughout the period of the obligation. The use of these investment strategies, as well as any borrowing by a Fund, may increase net asset value fluctuation. Securities purchased on a when-issued or delayed delivery basis are recorded as assets on the day following the purchase and are marked-to-market daily. A Fund will not invest more than 25% of its assets in when-issued or delayed delivery securities, does not intend to purchase such securities for speculative purposes and will make commitments to purchase securities on a when-issued or delayed delivery basis with the intention of actually acquiring the securities. However, the Funds reserve the right to sell acquired when-issued or delayed delivery securities before their settlement dates if deemed advisable. Policies Applicable to the Global Fund, Overseas Fund and the U.S. Value Fund Investment in Other Investment Companies. Certain markets are closed in whole or in part to equity investments by foreigners. The Global Fund, the Overseas Fund and the U.S. Value Fund may be able to invest in such markets solely or primarily through governmentally-authorized investment companies. Each Fund generally may invest up to 10% of its assets in shares of other investment companies and up to 5% of its assets in any one investment company (in each case measured at the time of investment), as long as no investment represents more than 3% of the outstanding voting stock of the acquired investment company at the time of investment. These restrictions do not apply to certain investment companies known as private investment companies and 'qualified purchaser' investment companies. Investment in another investment company may involve the payment of a premium 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 Funds do not intend to invest in such an investment company unless, in the judgment of the Funds' investment adviser, the potential benefits of such investment justify the payment of any applicable premium or sales charge. As a shareholder in an investment company, the Funds would bear its ratable share of that investment company's expenses, including its advisory and administration fees. At the same time, the Funds would continue to pay their own management fees and other expenses. Investment Risks Applicable to the Gold Fund Fluctuations in the price of Gold. The price of gold has been subject to substantial upward and downward price movements over short periods of time and may be affected by unpredictable international monetary and political policies, such as currency devaluations or revaluations, economic conditions within an individual country, trade imbalances or trade or currency restrictions between countries and world inflation rates and interest rates. The price of gold, in turn, is likely to affect the market prices of securities of companies mining, processing or dealing in gold, and accordingly, the value of the Fund's investments in such securities also may be affected. Change of Objective The investment objective of the Overseas Fund, the Gold Fund and the U.S. Value Fund are not fundamental policies of the Funds and, accordingly, may be changed by the Board of Directors without shareholder approval. Shareholders will be notified a minimum of 60 days in advance of any change in investment objective. The investment objective of the Global Fund, on the other hand, is a fundamental policy of the Fund and may not be changed without shareholder approval. 6 Investment Restrictions In pursuing its investment objective, each Fund (except as otherwise noted) will not: 1. With respect to 75% of the value of a Fund's total assets, invest more than 5% of its total assets (valued at time of investment) in securities of any one issuer, except securities issued or guaranteed by the government of the United States, or any of its agencies or instrumentalities, or acquire securities of any one issuer which, at the time of investment, represent more than 10% of the voting securities of the issuer; 2. Issue senior securities or borrow money except unsecured borrowings from banks as a temporary measure in exceptional circumstances, and such borrowings may not exceed 10% of a Fund's net assets at the time of the borrowing. A Fund will not purchase securities while borrowings exceed 5% of its total assets; 3. (Overseas Fund and Gold Fund) -- Invest more than 25% of its assets (valued at time of investment) in securities of companies in any one industry other than U.S. Government Securities (except that the Gold Fund will, as a matter of fundamental policy, concentrate its investments in the precious metals industry); 4. (Global Fund and U.S. Value Fund) -- 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 securities of the United States government and its corporate instrumentalities. The Fund will not purchase certificates of deposit or other short-term bank instruments except to the extent deemed appropriate for short-term investment purposes 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; 5. (Global Fund and U.S. Value Fund) -- 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; 6. Make loans, but this restriction shall not prevent a Fund from (a) buying a part of an issue of bonds, debentures, or other obligations that are publicly distributed, or from investing up to an aggregate of 15% of its total assets (taken at market value at the time of each purchase) in parts of issues of bonds, debentures or other obligations of a type privately placed with financial institutions or (b) lending portfolio securities, provided that a Fund may not lend securities if, as a result, the aggregate value of all securities loaned would exceed 33% of its total assets (taken at market value at the time of such loan);* 7. (Overseas Fund and Gold Fund) -- Underwrite the distribution of securities of other issuers; however, a Fund may acquire 'restricted' securities which, in the event of a resale, might be required to be registered under the 1933 Act on the grounds that the Fund could be regarded as an underwriter as defined by the 1933 Act with respect to such resale; 8. (Global Fund and U.S. Value Fund) -- Engage in the underwriting of securities of other issuers, except to the extent it may be deemed to be an underwriter in selling portfolio securities as part of an offering registered under the 1933 Act; 9. (Overseas Fund and Gold Fund) -- Purchase and sell real estate or interests in real estate, although it may invest in marketable securities of enterprises that invest in real estate or interests in real estate; 10. (Global Fund and U.S. Value Fund) -- Purchase or sell real estate or interests therein, commodities or commodity contracts. The Fund may, however, invest in real estate investment trusts and companies holding real estate and may sell commodities 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 commodity); 11. (Overseas Fund and Gold Fund) -- Make margin purchases of securities, except for the use of such short term credits as are needed for clearance of transactions; and - --------- * The Funds have no present intention of lending their portfolio securities. 7 12. Sell securities short or maintain a short position, except, in the case of the Overseas Fund, the Gold Fund and the U.S. Value Fund, short sales against-the-box. Restrictions 1 through 12 above (except the portions in parentheses) are 'fundamental,' which means that they cannot be changed without the vote of a majority of the outstanding voting securities of a Fund (defined by the Investment Company Act of 1940, as amended ('1940 Act'), as the lesser of (i) 67% of a Fund's shares present at a meeting if more than 50% of the shares outstanding are present or (ii) more than 50% of a Fund's outstanding shares). In addition, each Fund is subject to a number of restrictions that may be changed by the Board of Directors without shareholder approval. Under those non-fundamental restrictions, a Fund will not: a. Invest in companies for the purpose of management or the exercise of control; b. (Global Fund and U.S. Value Fund) -- Purchase securities on margin, except for the use of such short term credits as are needed for clearance of transaction; c. (Overseas Fund and Gold Fund) -- Invest in oil, gas or other mineral leases or exploration or development programs, although it may invest in marketable securities of enterprises engaged in oil, gas or mineral exploration; d. (Global Fund and U.S. Value Fund) -- Purchase interests in oil, gas or other mineral exploration programs or leases; however, this policy will not prohibit the acquisition of securities of companies engaged in the production or transmission of oil, gas or other minerals; e. (Overseas Fund and Gold Fund) -- Invest more than 10% of its net assets (valued at time of investment) in warrants, valued at the lower of cost or market; provided that warrants acquired in units or attached to securities shall be deemed to be without value for purposes of this restriction; f. (Global Fund and U.S. Value Fund) -- 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 unattached warrants not listed on the New York or American Stock Exchange if, immediately after such purchase, more than 2% of the Fund's net assets would be invested in such unattached, unlisted warrants; g. (Overseas Fund and Gold Fund) -- Pledge, mortgage or hypothecate its assets, except as may be necessary in connection with permitted borrowings or in connection with short sales; h. (Overseas Fund and Gold Fund) -- Purchase or sell commodities or commodity contracts, except that it may enter into forward contracts and may sell commodities received by it as distributions on portfolio investments; i. Purchase or sell put and call options on securities or on futures contracts; and j. (Global Fund and U.S. Value Fund) -- Purchase illiquid securities or securities the proceeds from the sale of which could not readily be repatriated 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. In addition, under normal circumstances the Global Fund will invest in at least three foreign countries. Among the types of fixed income securities in which the Global Fund may invest from time to time are United States government obligations. United States government obligations include Treasury Notes, Bonds and Bills which are direct obligations 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 borrower from the Treasury 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. Notwithstanding the foregoing investment restrictions, the Overseas Fund and the Gold Fund may purchase securities pursuant to the exercise of subscription rights, provided that such purchase will not result a Fund's ceasing to be a diversified investment company. Japanese and European corporations frequently issue additional capital stock by means of subscription rights offerings to existing shareholders at a price substantially below the market price of the shares. The failure to exercise such rights would result in a Fund's interest in the issuing company being diluted. The market for such rights is not well developed in all cases and, accordingly, a Fund may not always realize full value on the sale of rights. The exception applies in cases where the limits set forth in the investment restrictions 8 would otherwise be exceeded by exercising rights or would have already been exceeded as a result of fluctuations in the market value of a Fund's portfolio securities with the result that a Fund would be forced either to sell securities at a time when it might not otherwise have done so, or to forego exercising the rights. Total Return. From time to time each Fund advertises its average annual total return. During the one year period ended October 31, 2000, average annual rates of return were 5.25%, 5.25% and (31.29)%, for the Global Fund Class A shares, the Overseas Fund Class A shares and the Gold Fund, respectively. Quotations of average annual returns for each Fund will be expressed in terms of the average annual compounded rates of return of a hypothetical investment in each Fund over periods of 1, 5 and 10 years (up to the life of the Fund), calculated pursuant to the following formula: P(1+T)(n)=ERV (where P = a hypothetical initial payment of $1000, T = the average annual return, n = the number of years, and ERV = the ending redeemable value of a hypothetical $1000 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 Global Fund Class A shares over the ten year period from October 31, 1990 to October 31, 2000 would have increased at an average annual compounded rate of return of 11.11%, an investment in the Overseas Fund Class A shares over the five year period from October 31, 1995 to October 31, 2000 would have increased at an average annual compounded rate of return of 10.17%, and an investment in the Gold Fund shares over the five year period from October 31, 1995 to October 31, 2000 would have decreased at an average annual compounded rate of 14.50%. As a newly organized Fund, the U.S. Value Fund currently does not have a performance history for which such returns can be calculated. Comparison of Portfolio Performance. From time to time the Company may discuss in sales literature and advertisements, specific performance grades or rankings or other information as published by recognized grades or rankings or other information as published by recognized mutual fund statistical services, such as Morningstar, Inc. or Lipper Analytical Services, Inc., or by publications of general interest such as Barron's, Business Week, Financial World, Forbes, Fortune, Kiplinger's Personal Finance, Money, Morningstar Mutual Funds, Smart Money, The Wall Street Journal or Worth. Portfolio Turnover. Although the Funds will not make a practice of short-term trading, purchases and sales of securities will be made whenever appropriate, in the investment adviser's view, to achieve a Fund's investment objective. The rate of portfolio turnover is calculated by dividing the lesser of the cost of purchases or the proceeds from sales of portfolio securities (excluding short-term U.S. government obligations and other short-term investments) for the particular fiscal year by the monthly average of the value of the portfolio securities (excluding short-term U.S. government obligations and short-term investments) owned by a Fund during the particular fiscal year. The rate of portfolio turnover is not a limiting factor when management deems portfolio changes appropriate to achieve a Fund's stated objective. However, it is possible that, under certain circumstances, a Fund may have to limit its short-term portfolio turnover to permit it to qualify as a 'regulated investment company' under the Internal Revenue Code of 1986, as amended (the 'Code'). 9 MANAGEMENT OF THE COMPANY The business of the Company is managed by its Board of Directors which elects officers responsible for the day to day operations of the Funds and for the execution of the policies formulated by the Board of Directors. The following table sets forth the principal occupation or employment of the members of the Board of Directors and principal officers of the Company. Each of the following persons is also a Director and/or officers of First Eagle SoGen Variable Funds, Inc.
POSITION HELD PRINCIPAL OCCUPATION NAME, ADDRESS AND AGE WITH THE COMPANY DURING PAST FIVE (5) YEARS - --------------------- ---------------- -------------------------- John P. Arnhold (47)* ......... Co-President Co-President and Director, Arnhold and S. 1345 Avenue of the Americas and Director Bleichroeder Advisers, Inc.; President and Director, New York, New York 10105 Arnhold and S. Bleichroeder UK Ltd.; Co-President and Director, ASB Securities, Inc.; Director, Aquila International Fund, Ltd.; President, Worldvest, Inc.; Co-President and Trustee, First Eagle Funds. Candace K. Beinecke (54) ...... Director Chair, Hughes Hubbard & Reed; Director, Jacob's One Battery Park Plaza Pillow Dance Festival, Inc. and Merce Cunningham New York, NY 10004 Dance Foundation, Inc.; Trustee, First Eagle Funds. Edwin J. Ehrlich (70) ......... Director President, Ehrlich Capital Management; Advisory Board 2976 Lonni Lane Member, Emerging World Investors Limited; Trustee, Merrick, NY 11566 First Eagle Funds Robert J. Gellert (70) ........ Director Manager and Director, United Continental Corporation; 122 East 42nd Street General Partner, Windcrest Partners; Trustee, First New York, NY 10168 Eagle Funds. James E. Jordan (55) .......... Director Private investor; Consultant to The Jordan Company 354 Broome Street (private investment banking company); Director, New New York, NY 10013 York, NY 10013 Leucadia National Corporation, Empire Insurance Company, and J.Z. Equity Partners, Plc. (a British investment trust company); Director, School of International and Public Affairs of Columbia University; Vice Chairman, New York State Board of The Nature Conservancy; Trustee, First Eagle Funds; prior to June 1997, President and Chief Investment Officer, The William Penn Company (a registered investment adviser). William M. Kelly (56) ......... Director Senior Associate, Lingold Association; Independent 500 Fifth Avenue -- 50th General Partner, ML Venture Partners II, L.P.; floor Trustee, New York Foundation; Treasurer and New York, NY 10110 Trustee, New York, NY 10110 Black Rock Forest Consortium; Trustee, First Eagle Funds. Donald G. McCouch (58) ........ Director Prior to October 1996, Senior Managing Director of 67 West Hills Road, Chemical Bank. New Canaan, CT 06840 Fred J. Meyer (70) ............ Director Vice Chairman of Omnicom Group, Inc. since 1998 and 437 Madison Avenue prior thereto, Chief Financial Officer; Director, New York, NY 10022 Novartis Corporation; Advisory Director, Zurich Financial Services Group; Director, Actelion Ltd.; Trustee, National Park Trust; Trustee, Earthjustice Legal Defense Fund. Dominique Raillard (62) ....... Director Managing Director of Act 2 International (Consulting) 15, Boulevard Dellessert since July 1995; prior thereto Group Executive Vice 75016 Paris, France President, Promodes (Food Retailing) since 1978. Nathan Snyder (66) ............ Director Independent Consultant. 1345 Avenue of Americas New York, NY 10105
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POSITION HELD PRINCIPAL OCCUPATION NAME, ADDRESS AND AGE WITH THE COMPANY DURING PAST FIVE (5) YEARS - --------------------- ---------------- -------------------------- Stanford S. Warshawsky (63)*.. Chairman of the Co-President, Secretary and Director, Arnhold 1345 Avenue of the Americas Board and and S. Bleichroeder, Inc.; Co-President and New York, NY 10105 Director Director, Arnhold and S. Bleichroeder Advisers, Inc.; Chairman and Director, Arnhold and S. Bleichroeder UK Ltd.; Co-President and Director, ASB Securities, Inc.; Director, German-American Chamber of Commerce; Chairman and Trustee, First Eagle Funds. Jean-Marie Eveillard (61) ..... Co-President Senior Vice President, Arnhold and S. 1345 Avenue of the Americas Bleichroeder, Inc.; Vice President, Arnhold New York, NY 10105 and S. Bleichroeder Advisers, Inc.; prior to 1999, Director and President of SGAM Corp. Charles de Vaulx (39) ......... Senior Vice Senior , Vice President, Arnhold and S. 1345 Avenue of the Americas President Bleichroeder, Inc.; Vice President, Arnhold New York, NY 10105 and S. Bleichroeder Advisers, Inc.; Senior Vice President (since 1998), Associate Portfolio Manager (from December 1996 to 1997) and Securities Analyst (prior to December 1996), SGAM Corp. Robert Bruno (36) ............. Vice President, Senior Vice President, Arnhold and S. 1345 Avenue of the Americas Secretary and Bleichroeder, Inc.; Vice President, Arnhold New York, NY 10105 Treasurer and S. Bleichroeder Advisers, Inc.; Vice President and Secretary, First Eagle Funds; prior to 1997, President and Chief Operating Officer, Coelho Associates LLC; Senior Vice President and Chief Administrative Officer, Schroder Wertheim Investment Services, Inc. Andrew DeCurtis (31) .......... Vice President Vice President, Arnhold and S. Bleichroeder, 1345 Avenue of the Americas Inc.; Vice President, First Eagle Funds; New York, NY 10105 Assistant Vice President, SG Cowen Securities Corp. prior to 1999. Edwin Olsen (61) .............. Vice President Vice President, Arnhold and S. Bleichroeder, 1345 Avenue of the Americas Inc.; Vice President, First Eagle Funds; Vice New York, NY 10105 President, SG Cowen Securities Corporation prior to 1994. Tracy L. Saltwick (42) ........ Vice President Senior Vice President, Arnhold and S. 1345 Avenue of the Americas and Compliance Bleichroeder, Inc.; Vice President, ASB New York, NY 10105 Officer Securities, Inc.; Vice President and Compliance Officer, First Eagle Funds. Stefanie Spritzler (27) ....... Assistant Assistant Vice President, Arnhold and S. 1345 Avenue of the Americas Treasurer Bleichroeder, Inc.; Assistant Treasurer, New York, NY 10105 First Eagle Funds; prior to May 1998, Senior Accountant, The Bank of New York; prior to September 1994, Senior Accountant, Prudential Insurance Company of America. Suzan J. Afifi (48) ........... Assistant Vice President, Arnhold and S. Bleichroeder, 1345 Avenue of the Americas Secretary Inc.; Assistant Secretary, First Eagle Funds; New York, NY 10105 prior to 1997, Managing Director, Effectinvest Bank, Vienna, Austria.
- --------- * An 'interested person' of the Company as defined in the 1940 Act. The Company makes no payments to any of its officers for services. However, those Directors of the Company who are not officers or employees of the Adviser or ASB are paid by the Company and First Eagle SoGen Variable Funds, Inc. an annual fee of $12,000 and a fee of $2,000 for each meeting of the Company's Board of Directors and a fee of $1,000 for each meeting of any Committee of the Board that they attend (other than those held by telephone conference call). Such fees are allocated, generally, between the Company and First Eagle SoGen Variable Funds, Inc. on a pro rata basis in relationship to their relative net assets. Each Director is reimbursed by the Company for any expenses he may incur by reason of attending such meetings or in connection with services he may 11 perform for the Company. During the fiscal year ended October 31, 2000, an aggregate of about $147,900 was paid, accrued or owed for Directors' fees and expenses by the Company. COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS. The following table sets forth information regarding compensation of Directors by the Company and by the fund complex of which the Company is a part for the fiscal year ended October 31, 2000. Officers of the Company and Directors who are interested persons of the Company do not receive any compensation from the Company of any other fund in the fund complex which is a U.S. registered investment company. COMPENSATION TABLE FISCAL YEAR ENDED OCTOBER 31, 2000*
TOTAL PENSION COMPENSATION OR PAID OR RETIREMENT OWED FROM AGGREGATE BENEFITS ESTIMATED REGISTRANT COMPENSATION ACCRUED ANNUAL AND FUND PAID OR AS PART OF BENEFITS COMPLEX OWED FROM FUND UPON PAID TO NAME OF PERSON, POSITION REGISTRANT EXPENSES RETIREMENT DIRECTORS**** - ------------------------ ---------- -------- ---------- ------------- John P. Arnhold, Director***.................... $ 0 N/A N/A $ 0(2) Candace K. Beinecke, Director................... $14,990 N/A N/A $25,250(2) Edwin J. Ehrlich, Director...................... $10,990 N/A N/A $20,000(2) Robert J. Gellert, Director**................... $12,990 N/A N/A $23,000(2) James E. Jordan, Director....................... $14,990 N/A N/A $26,000(2) William M. Kelly, Director**.................... $12,990 N/A N/A $23,000(2) Donald G. McCouch, Director..................... $10,990 N/A N/A $14,500(1) Fred J. Meyer, Director**....................... $21,990 N/A N/A $31,000(1) Dominique Raillard, Director.................... $23,990 N/A N/A $34,000(1) Nathan Snyder, Director......................... $23,983 N/A N/A $32,000(1) Stanford Warshawsky, Director***................ $ 0 N/A N/A $ 0(2)
- --------- * For the period from April 1, 2000 to October 31, 2000. ** Member of the Audit Committee. *** 'Interested person' of the Company as defined in the 1940 Act because of the affiliation with ASB Advisers, the Fund's investment adviser. **** For this purpose, the fund complex consists of four portfolios of the Company (Global Fund, Overseas Fund and Gold Fund, plus the First Eagle SoGen Money Fund, which was liquidated on or about April 30, 2001), the First Eagle SoGen Overseas Variable Fund and the two portfolios of the First Eagle Funds. The U.S. Value Fund had not yet been organized and paid no compensation to the Directors for this period. The number in parentheses indicates the total number of other boards in the fund complex on which the Director served as of October 31, 2000. ------------------- The Company, the Adviser, and its principal distributor, Arnold and S. Bleichroeder, Inc. have adopted code of ethics under the rule 17j-1 of the 1940 Act. This code of ethics permits personnel subject to the code to invest in securities, including securities that may be purchased or held by the Funds of the Company, with certain exceptions. As of January 31, 2001, the Directors and officers of the Company, as a group, owned beneficially approximately 6.27% of the outstanding common stock of the Gold Fund. As of such date, the Directors and officers of the Company, as a group, owned less than 1% of the outstanding shares of capital stock of each of the Global Fund and Overseas Fund. No shares of the U.S. Value Fund had been issued as of such date. As of January 31, 2001, the following shareholders owned 5.00% or more of the Funds securities: First Eagle SoGen Global Fund: CLASS A -- Charles Schwab & Co., Inc., 101 Montgomery St., San Francisco, CA 94101, 7.05%; The Manufacturers Life Insurance Co., 250 Bloor St. East 73 Fl, Toronto Ontario, Canada M4W-1E5, 5.74%. 12 CLASS I -- Charles Schwab & Co., Inc., 101 Montgomery St., San Francisco, CA 94101, 26.23%; Advanced Clearing Corp., PO Box 2226, Omaha, NE 68103, 8.55%; International Brotherhood of Electrical Workers, PO Box 8217, Columbus, OH 43201, 47.13%; Robert Ehman, 925 Chacery Lane, Nashville, TN 37205, 14.83%. CLASS C -- Evil Eye Music Inc. Profit Sharing Plan, 4010 Meyer Ave., Madison, WI 53711, 12.41%; Donaldson Lufkin Jenrette Securities Corp., PO Box 2052, NJ 07303, 7.78%; Donaldson Lufkin Jenrette Securities Corp., PO Box 2052, Jersey City, NJ 07303, 5.33%; William O'Keefe, 1610 Bronco Ln, St. Louis, MD 63146, 6.46%. First Eagle SoGen Overseas Fund: CLASS A -- Charles Schwab & Co., Inc., 101 Montgomery St., San Francisco, CA 94101, 19.76%. CLASS I -- Charles Schwab & Co., Inc., 101 Montgomery St., San Francisco, CA 94101, 17.45%; Mac & Co., PO Box 534005, Pittsburgh, PA 15253, 9.69%; Bancorp South Bank, PO Box 1605, Jackson, MS 39215, 40.32%; Mutual Selection Fund, PO Box 209, Muscataine, LA 52761, 22.18%. CLASS C -- Evil Eye Music Inc. Profit Sharing Plan, 4010 Meyer Ave., Madison, WI 53711, 8.64%; Salomon Smith Barney, 333 West 34th St., New York, NY 10001, 7.86%; Bear Stearns Securities Corp., 1 Metrotech Center North, Brooklyn, NY 11201, 11.33%. First Eagle SoGen Gold Fund: Jean Marie Eveillard & Elizabeth M. Eveillard, 3 East 84th St., New York, NY 10028, 6.30%. While the Company is a Maryland corporation, certain of its Directors and officers are non-residents of the United States and may have all, or a substantial part, of their assets located outside the United States. None of the officers or Directors has authorized an agent for service of process in the United States. As a result, it may be difficult for U.S. investors to effect service of process upon non-U.S. Directors or officers within the United States or effectively to enforce judgments of courts of the United States predicated upon civil liabilities of such officers or Directors under the federal securities laws of the United States. INVESTMENT ADVISORY AND OTHER SERVICES As described in the Company's Prospectuses, ASB Advisers is the Company's investment adviser and, as such, manages the Global Fund, the Overseas Fund, the Gold Fund and the U.S. Value Fund. ASB Advisers is a wholly-owned subsidiary of ASB, a privately owned investment firm. Under its investment advisory contracts with Company on behalf of the Global Fund, the Overseas Fund and the Gold Fund, which became effective December 31, 1999, ASB Advisers furnishes each Fund with investment advice consistent with its stated investment objective. Prior to December 31, 1999, the Global Fund, the Overseas Fund and the Gold Fund had an advisory contract with Societe Generale Asset Management Corp. ('SGAM Corp.'). ASB Advisers also furnishes the Company with office space and certain facilities required for the business of the Funds, and statistical and research data, and pays any compensation and expenses of the Company's officers. On December 22, 1999, the shareholders of the Global Fund, the Overseas Fund and the Gold Fund, and on October 20, 1999, the Board of Directors of the Company approved the Advisory Agreement between the Company and the Adviser applicable to the three Funds. On [date], the shareholders of the U.S. Value Fund, and on [May 24, 2001], the Board of Directors of the Company approved amending this Advisory Agreement so as to extend coverage to the U.S. Value Fund. As to each Fund, the Advisory Agreement will continue in effect for a period of more than two years from the date of execution only so long as such continuance is specifically approved at least annually in conformity with the Investment Company Act. The Advisory Agreement provides that the Adviser will not be liable for any error of judgment or for any loss suffered by the Funds in connection with the matters to which the Advisory Agreement relates, except a loss resulting from willful misfeasance, bad faith, gross negligence or reckless disregard of duty. The Advisory Agreement provides that it will terminate automatically if assigned, within the meaning of the Investment Company Act, and that it may be terminated without penalty by either party upon not more than 60 days nor less than 30 days written notice. 13 In return for the services listed above, each Fund pays ASB Advisers a fee at the annual rate of the average daily value of the Fund's net assets as follows: Global Fund.............................. 1.00% of the first $25 million and 0.75% of the excess over $25 million Overseas Fund............................ 0.75% Gold Fund................................ 0.75% U.S.Value Fund........................... 0.75%
Advisory fees are paid monthly. The annual fee rates listed above for the Global Fund, the Overseas Fund and the Gold Fund, respectively, are higher than the rate of fees paid by most U.S. mutual funds that invest primarily in domestic equity securities. The Company believes, however, that the advisory fee rates are not higher than the rate of fees paid by most other mutual funds that invest significantly in foreign equity securities. For the period from April 1, 2000 to October 31, 2000, Global Fund, Overseas Fund and Gold Fund paid investment advisory fees in the amount of $7,542,110, $1,955,560 and $53,715, respectively. The U.S. Value Fund had not yet been organized and paid no such fees during this period. Until March 1, 2002, ASB Advisers has agreed to limit the total expenses of the U.S. Value Fund to an annual rate of 1.50%, 2.25% and 1.20% of the Fund's average net assets for Class A, Class C and Class I Shares, respectively. For the fiscal year ended March 31, 2000, Global Fund, Overseas Fund and Gold Fund paid investment advisory fees in the amount of $14,567,013, $3,619,450 and $121,470, respectively. The U.S. Value Fund had not yet been organized and paid no such fees during this period. For the fiscal year ended March 31, 1999, Global Fund, Overseas Fund, and Gold Fund paid investment advisory fees in the amount of $23,196,530, $5,519,451 and $201,757, respectively. Although no advisory fee waiver or expense reimbursement was required for the year ended March 31, 1999, SGAM Corp. voluntarily reimbursed Class I shares of Global Fund and Overseas Fund in the amount of $30,997 and $9,036, respectively. The U.S. Value Fund had not yet been organized and paid no such fees during this period. A Fund may, with the approval of the Company's Board of Directors, from time to time enter into arrangements with institutions to provide sub-transfer agent services and other related services where a number of persons hold Fund shares through one account registered with the Fund's transfer agent, DST Systems, Inc. ('DST') in the name of that institution. Under those arrangements, a Fund may compensate the institution rendering such services on a per sub-account basis. 14 DISTRIBUTOR OF THE FUNDS' SHARES Arnhold and S. Bleichroeder, Inc. (the 'Distributor'), a registered broker-dealer, investment adviser and a member of the New York Stock Exchange and the National Association of Securities Dealers ('NASD'), serves as the Distributor of the Global Fund's Class A and Class C shares, the Overseas Fund's Class A and Class C shares, the U.S. Value Fund's Class A and Class C Shares, and the Gold Fund. The Funds pay the Distributor a Rule 12b-1 fee to cover expenses incurred by the Distributor for providing shareholder liaison services, including assistance with subscriptions, redemptions and other shareholder questions on Class A shares at the annual rate of up to 0.25% of the average daily net assets of each Fund's outstanding Class A shares and a Rule 12b-1 fee on Class C shares at the annual rate of up to 1.00% of the average daily net assets of each Fund's outstanding Class C shares. These payments may also be used to cover expenses incurred by the Distributor for providing sales and promotional activities under the Funds' Rule 12b-1 Plan, including the printing and distribution of sales literature and prospectuses. The Distributor also normally retains part of the initial sales charge as its underwriter's allowance on sales of Class A shares, and when it does broker-dealers may be deemed to be underwriters as that term is defined under the Securities Act of 1933. Pursuant to the Distribution and Services Agreement between ASB and the Company, the Funds agree to indemnify the Distributor against certain liabilities under the Securities Act of 1933, as amended. The Funds' Rule 12b-1 Plan is a compensation plan which means that the Funds pay the Distributor for distributor services based on the net assets of Class C and Class A shares. The Distributor pays financial services firms fees for distributing the Class C and Class A shares. For the period from April 1, 2000 to October 31, 2000, the Company paid $3,109,127. For the fiscal year ended March 31, 2000, the Company paid $5,925,946. The Class I shares of the Global Fund, the Overseas Fund and the U.S. Value Fund do not participate in the Plan. For the period from April 1, 2000 to October 31, 2000, and during the two years ended March 31, 2000 and 1999, the aggregate amount of sales charges on sales of the Company's shares was $384,855, $785,037 and $1,969,898, respectively. CAPITAL STOCK The capital stock of the Company consists of shares of common stock, which are currently classified as Class A shares, Class C shares and Class I shares of the Global Fund, Class A shares, Class C shares and Class I shares of the Overseas Fund, Class A Shares, Class C Shares and Class I Shares of the U.S. Value Fund, and shares of the Gold Fund. All shares issued and outstanding are redeemable at net asset value at the options of shareholders. Shares have no preemptive or conversion rights. The Board of Directors is authorized to reclassify and issue any shares of the Company without shareholder approval. Accordingly, in the future, the directors may create additional series or class of shares with different investment objectives, policies or restrictions. Any issuance of shares of another series or class would be governed by the 1940 Act and Maryland law. Each share of common stock of each Fund is entitled to one vote for each dollar of net asset value and a proportionate fraction of a vote for each fraction of a dollar of net asset value. Generally, shares of each Fund vote together on any matter submitted to shareholders, except when otherwise required by the 1940 Act or when a matter does not affect any interest of a particular class, in which case only shareholders of such other class or classes whose interests may be affected shall be entitled to vote. Shareholders shall not be entitled to cumulative voting in the election of Directors or on any other matter. COMPUTATION OF NET ASSET VALUE Each Fund computes its net asset value once daily as of the close of trading on each day the New York Stock Exchange is open for trading. The Exchange is closed on the following days: New Year's Day, Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share is computed by dividing the total current value of the assets of a Fund, less its 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 U.S. national securities exchange or a securities exchange abroad is normally valued at the price of the last sale on the exchange as of the close of business on the date on which assets are valued. If there are no sales on such date, such portfolio securities will be valued at the mean between the closing bid and asked prices. Securities, other than bonds, traded in the over-the-counter market are 15 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 interest earned, which approximates value. Securities for which current market quotations are not readily available are valued at fair value as determined in good faith by the Company's Board of Directors or their delegates. A make-up sheet showing the computation of the total offering price, using as a basis the value of the Company's portfolio securities and other assets and its outstanding securities as of October 31, 2000, appears as the Statement of Assets and Liabilities for the Company. HOW TO PURCHASE SHARES The methods of buying and selling shares and the sales charges applicable to purchases of shares of a Fund are described in the Company's Prospectuses. As stated in their Prospectus, shares of the each Fund may be purchased at net asset value by various persons associated with the Company, the Adviser, ASB, certain firms providing services to the Company or affiliates thereof for the purpose of promoting good will with employees and others with whom the Company has business relationships, as well as in other special circumstances. Shares are offered to other persons at net asset value in circumstances where there are economies of selling efforts and sales related expenses with respect to offers to certain investors. TAX STATUS Each Fund intends to qualify annually as a 'regulated investment company' under the Internal Revenue Code of 1986, as amended (the 'Code'). In order to qualify as a regulated investment company for a taxable year, a Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies and other income derived with respect to the business of investing in such stock, securities or currencies; (b) diversify its holdings so that, at the end of each fiscal quarter, (i) at least 50% of the market value of its assets is represented by cash, cash items, U.S. government 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 limited to an amount not greater than 5% of the Fund's assets and 10% of the voting securities of the issuer, and (ii) not more than 25% of the value of its assets is invested in the securities of any one issuer (other than U.S. government securities or securities of other regulated investment companies) or of two or more issuers which the Fund controls and which are determined, under Treasury regulations, to be engaged in the same or similar trades or businesses or related trades or businesses; and (c) 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) for the year. As a regulated investment company, each Fund generally will not be subject to U.S. federal income tax on its investment company taxable income and net capital gains (the excess of net long-term capital gains over net short-term capital losses), if any, that it distributes to shareholders. Each Fund intends to distribute to its shareholders, at least annually, substantially all of its investment 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 excise tax, each Fund must distribute during each calendar year an amount equal to the sum of (1) at least 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (2) at least 98% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for the one-year period ending on October 31 of the calendar year, and (3) any ordinary income and capital gains for previous years that were not 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 shareholders in the calendar year in which the distributions are declared, rather than the calendar year in which the distributions are received. To prevent application of the excise tax, each Fund intends to make its distributions in accordance with the calendar year distribution requirement. 16 Different tax treatment is accorded accounts maintained as IRAs, including a penalty on pre-retirement distributions that are not properly rolled over to other IRAs. Shareholders should consult their tax advisers for more information. Dividends paid out of a Fund's investment company taxable income will be taxable to a U.S. shareholder as ordinary income. To the extent that a portion of a Fund's income consists of dividends paid by U.S. corporations, a portion of the dividends paid by the Fund may be eligible for the corporate dividends-received deduction if so designated by the Fund in a written note to shareholders. For the fiscal year ended October 31, 2000, the percentages of net investment income that qualified for the dividends-received deduction for the Global Fund, the Overseas Fund and the Gold Fund were 33.24%, 22.78% and 0.00%, respectively. The U.S. Value Fund had not yet been organized. Distributions of net capital gains, if any, designated as capital gains distributions are taxable to individual shareholders at a maximum 20% capital gains rate, regardless of whether the shareholder has held the Fund's shares for more or less than one year, and are not eligible for the dividends-received deduction. Shareholders receiving distributions in the form of additional shares, rather than cash, generally will recognize income and have a cost basis in each such share equal to the net asset value of a share of the Fund on the reinvestment date. Shareholders will be notified annually as to the U.S. federal tax status of distributions, and shareholders receiving distributions in the form of additional shares will receive a report as to the net asset value of those shares. Investments by a Fund in securities issued or acquired at a discount, or providing for deferred interest or payment of interest in the form of additional obligations could result in income to the Fund equal to a portion of the excess of the face value of the securities over their issue or acquisition price (the 'original issue discount') each year that the securities are held, even though the Fund receives no interest payments. Such income must be included in determining the amount of income which the Fund must distribute to maintain its status as a regulated investment company and to avoid the imposition of federal income tax and the 4% excise tax. In such case, the Fund could be required to dispose of securities which it might otherwise have continued to hold to generate cash to satisfy its distribution requirements. If a Fund invests in certain high yield original issue discount obligations issued by U.S. corporations, a portion of the original issue discount accruing on such an obligation may be eligible for the corporate dividends-received deduction. In such event, a portion of the dividends from investment company taxable income paid by the Fund by its corporate shareholders may be eligible for this corporate dividends-received deduction if so designated by the Fund in a written notice to shareholders. Certain foreign currency contracts in which the Funds may invest are 'section 1256 contracts.' Gains or losses on section 1256 contracts generally are considered 60% long-term and 40% short-term capital gains or losses; however, foreign currency gains or losses (as discussed below) arising from certain section 1256 contracts may be treated as ordinary income or loss. Also, section 1256 contracts held by a Fund at the end of each taxable year (and, generally, for purposes of the 4% excise tax, on October 31 of each year) are 'marked-to-market' (that is, treated as sold at fair market value), resulting in unrealized gains or losses being treated as though they were realized. Generally, the hedging transactions undertaken by the Funds may result in 'straddles' for U.S. federal income tax purposes. The straddle rules may affect the character of gains (or losses) realized by a Fund. In addition, losses realized by these Funds on positions that are part of a straddle may be deferred under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses are realized. Because only a few regulations implementing the straddle rules have been promulgated, the tax consequences to these Funds of engaging in hedging transactions are not entirely clear. Hedging transactions may increase the amount of short-term capital gains realized by a Fund which is taxed as ordinary income when distributed to shareholders. Each Fund may make one or more of the elections available under the Code which are applicable to straddles. If any of these Funds makes any of the elections, the amount, character and timing of the recognition of gains or losses from the affected straddle positions will be determined 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 the affected straddle positions. Because the straddle rules may affect the character of gains or losses, defer losses and/or accelerate the recognition of gain or losses from the affected straddle positions, the amount which may be distributed to shareholders, and which will be taxed to them as ordinary income or long-term capital gains, may be increased or decreased as compared to a fund that did not engage in such hedging transactions. 17 Notwithstanding any of the foregoing, a Fund may recognize gain (but not loss) from a constructive sale of certain 'appreciated financial positions' if the Fund enters into a short sale, offsetting notional principal contract or a futures or a forward contract transaction with respect to the appreciated financial position or substantially identical property or, in the case of an appreciated financial position that is a short sale, an offsetting notional principal contract or a futures or forward contract, if the Fund acquires the same property as the underlying property for the position. Appreciated financial positions subject to this constructive sale treatment are interests (including options and forward contracts and short sales) in stock, partnership interests, certain actively traded trust instruments and certain debt instruments. Constructive sale treatment does not apply to certain transactions that are closed before the end of the 30th day after the end of the taxable year in which the transaction was entered into if the taxpayer holds the appreciated financial position throughout the 60 day period beginning on the date the transaction is closed and at no time during this 60 day period is the taxpayer's risk of loss with respect to the appreciated securities reduced by certain circumstances. If a Fund has long-term capital gain from a 'constructive ownership transaction', the amount of such gain which may be treated as long-term capital gain by the Fund is limited to the amount which the Fund would have recognized if it had been holding the financial asset directly, rather than through a constructive ownership transaction, with any gain in excess of this amount being treated as ordinary income. In addition, an interest charge is imposed with respect to any amount recharacterized as ordinary income on the underpayment of tax for each year that the constructive ownership transaction was open. A constructive ownership transaction includes holding a long position under a notional principal contract or entering into a forward or futures contract with respect to certain financial assets, or both holding a call option and granting a put option with respect to certain financial assets where such options have substantially equal strike prices and contemporaneous maturity dates. Under the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues receivables or liabilities denominated in a foreign currency or determined with reference to one or more foreign currencies 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 or determined with reference to one or more foreign currencies 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. Generally gains or losses with respect to forward contracts, futures contracts, options or similar financial instruments which are denominated in terms of a foreign currency or determined with reference to one or more foreign currencies are treated as ordinary gains or ordinary losses, as the case may be. These gains or losses, referred to under the Code as 'section 988' gains or losses, may increase or decrease the amount of a Fund's investment company taxable income to be distributed to its shareholders as ordinary income. However, in certain circumstances, it may be possible to make an election to treat the gain or loss as capital gain or loss or as subject to the rules applicable to section 1256 contracts, rather than subject to section 988 treatment. Upon the sale or other disposition of shares of a Fund, a shareholder may realize a capital gain or loss which may be eligible for reduced federal tax rates, generally depending upon the shareholder's holding period for the shares. Any loss realized on a sale or exchange will be disallowed to the extent the shares disposed of are replaced (including shares acquired pursuant to a dividend reinvestment plan) within a period of 61 days beginning 30 days before and ending 30 days after disposition of the shares. In such a case, the basis of the shares acquired will be adjusted to reflect the disallowed loss. Any loss realized by a shareholder on a disposition of Fund shares held by the shareholder for six months or less will be treated as a long-term capital loss to the extent of any distributions of net capital gains received by the shareholder and any undistributed capital gain included by such shareholder with respect to such shares. Under certain circumstances the sales charge incurred in acquiring shares of a Fund may not be taken into account in determining the gain or loss on the disposition of those shares. This rule applies if shares of a Fund are exchanged within 90 days after the date they were purchased and the new shares are acquired without a sales charge or at a reduced sales charge. In that case, the gain or loss recognized on the exchange will generally be determined by excluding from the tax basis of the shares exchanged, the sales charge that was imposed on the acquisition of those shares to the extent of such reduction to the sales charge upon the exchange. This exclusion applies to the extent that the otherwise applicable sales charge with respect to the newly acquired shares is reduced as a result of having incurred the initial sales charge. The portion of the initial sales charge that is excluded from the basis of the exchanged shares is instead treated as an amount paid for the new shares. 18 Each Fund may be subject to foreign withholding taxes on income and gains derived from their investments outside the United States. Such taxes would reduce the yield on the Funds' investments. Tax treaties between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of a Fund's total assets at the close of any taxable year consists of stocks or securities of foreign 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 U.S. income tax principles, as paid by its shareholders. For any year that a Fund makes such an election, each of its shareholders will be required to include in its income (in addition to taxable dividends actually received) its allocable share of such taxes paid by the Fund, and will be entitled, subject to certain limitations, to credit its portion of these foreign taxes against its U.S. federal income tax due, if any, or to deduct it (as an itemized deduction) from its 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 its foreign source taxable income. With respect to the Global Fund, the Overseas Fund and Gold Fund, if the pass through election described above is made, the source of the electing Fund's income flows through to its shareholders. Certain gains from the sale of securities and certain currency fluctuation gains will not be treated as foreign source taxable income. In addition, this foreign tax credit limitation must be applied separately to certain categories of foreign source income, one of which is foreign source 'passive income.' For this purpose, foreign 'passive income' generally includes dividends (other than dividends from controlled foreign corporations, non-controlled section 902 corporations, and certain other corporations), interest, capital gains and certain foreign currency gains. As a consequence, some 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 limitation rules do not apply to certain electing individual taxpayers who have limited creditable foreign taxes and no foreign source income other than passive investment-type income. The foreign tax credit is eliminated with respect to foreign taxes withheld on dividends if the dividend paying shares are held by the Fund for less than 16 days (46 days in the case of preferred shares) during the 30-day period (90-day period for preferred shares) beginning 15 days (45 days for preferred shares) before the shares become ex-dividend. The foreign tax credit can be used to offset only 90% of the alternative minimum tax (as computed under the Code for purposes of this limitation) imposed on corporations and individuals. If a Fund is not eligible to make the pass-through election described above, the foreign taxes it pays will reduce its income, if any, and distributions by the Fund will be treated as U.S. source income. Each shareholder will be notified within 60 days after the close of the Fund's taxable year whether, pursuant to the election described above, the foreign taxes paid by the Fund will be treated as paid by its shareholders for that year and, if so, such notification will designate (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 a Fund in stock of certain foreign corporations which generate largely passive investment-type income, or which hold a significant percentage 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 basis, 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 income. This ordinary income would be allocated ratably to a Fund's holding period for the stock. Any amounts allocated to prior taxable years would be taxable to the Fund at the highest rate of tax applicable in that year, increased by an interest charge determined as though the amounts were underpayments of tax. Amounts allocated to the year of the distribution or disposition would be included in a Fund's net investment income for that year and, to the extent distributed as a dividend to the Fund's shareholders, would not be taxable to the Fund. A Fund may elect to mark to market its PFIC stock, resulting in the stock being treated as sold at fair market value on the last business day of each taxable year. Any resulting gain would be reported as ordinary income; any resulting loss and any loss from an actual disposition of the stock would be reported as ordinary loss to the extent of any net gains reported in prior years. Alternatively, the Fund may be able to make an election, in lieu of being taxable in the manner described above, to include annually in income its pro rata share of the ordinary earnings and net capital gain of the PFIC, regardless of whether it actually received any distributions from the PFIC. These amounts would be included in the Fund's investment company taxable income and net capital gain which, to the extent distributed by the Fund as ordinary or capital gain dividends, as the case may be, would not be taxable to the Fund (but would be taxable to shareholders). In order to make this election, the Fund would be required to obtain certain annual information from the foreign investment companies in which it invests, which in many cases may be difficult to obtain. 19 Each Fund may be required to withhold U.S. federal income tax at the rate of 31% of all taxable distributions payable to shareholders who fail to provide the Fund with their correct taxpayer identification number or to make required certifications, or who have been notified by the IRS that they are subject to backup withholding. Corporate shareholders and certain shareholders specified in the Code generally are exempt from such backup withholding. Backup withholding is not an additional tax. Any amounts withheld may be credited against the shareholder's U.S. federal income tax liability. Since, at the time of an investor's purchase of a Fund's shares, a portion of the per share net asset value by which the purchase price is determined may be represented by realized or unrealized appreciation in the Fund's portfolio or undistributed income of the Fund, subsequent distributions (or a portion thereof) on such shares may in economic reality represent a return of his capital. However, 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 investor should carefully consider such tax liability which he might incur by reason of any subsequent distributions of net investment income and capital gains. Fund shareholders may be subject to state, local and foreign taxes on their Fund distributions and redemptions of Fund shares. Also, the tax consequences to a foreign shareholder of an investment in a Fund may be different from those described above. Shareholders are advised to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund. PORTFOLIO TRANSACTIONS AND BROKERAGE The Adviser is responsible for decisions to buy and sell securities, futures and options on securities, on indices and on futures for the Funds, the selection of brokers, dealers and futures commission merchants to effect those transactions and the negotiations of brokerage commissions, if any. Broker-dealers and futures commission merchants may receive brokerage commissions on Fund portfolio transactions, including options and the purchase and sale of underlying securities or futures positions upon the exercise of options. Orders may be directed to any broker or futures commission merchant including, to the extent and in the manner permitted by applicable law. Equity securities traded in over-the-counter market and bonds, including convertible bonds, are generally traded on a 'net' basis with dealers acting as principal for their own accounts without a stated commission, although the price of the security usually includes a profit to the dealer. In underwritten offerings, securities are purchased at a fixed price which includes an amount of compensation to the underwriters, generally referred to as the underwriter's concession or discount. On occasion, certain money market instruments and U.S. government agency securities may be purchased directly from the issuer, in which case no commissions or discounts are paid. Each Fund will not deal with the Distributor in any transaction in which the Distributor acts as principal. Thus, it will not deal with the Distributor acting as market maker, and it will not execute a negotiated trade with the Distributor if execution involves the Distributor acting as principal with respect to any part of a Fund's order. Portfolio securities may not be purchased from any underwriting or selling group of which the Distributor, during the existence of the group, is a member, except in accordance with rules of the Securities and Exchange Commission. This limitation, in the opinion of the Company, will not significantly affect a Fund's ability to pursue its present investment objective. In placing orders for portfolio securities or futures, the Adviser is required to give primary consideration to obtaining the most favorable price and efficient execution. Within the framework of this policy, the Adviser will consider the research and investment services provided by brokers, dealers or futures commission merchants who effect or are parties to portfolio transactions of a Fund, the Adviser or the Adviser's other clients. Such research and investment services are those which brokerage houses customarily provide to institutional investors and include statistical and economic data and research reports on particular companies and industries. Such services are used by the Adviser in connection with all of its investment activities, and some of such services obtain in connection with the execution of transactions for a Fund may be used in managing other investment accounts. Conversely, brokers, dealers or futures commission merchants furnishing such services may be selected for the execution of transactions of such other accounts, whose aggregate assets are far larger than the Funds, and the services furnished by such brokers, dealers or futures commission merchants may be used by the Adviser in providing investment management for a Fund. Commission rates are established pursuant to negotiations with the broker, dealer or futures commission merchant based on the quality and quantity of execution services provided by the executing party in the light of generally prevailing rates. In addition, the Adviser is authorized to pay higher commissions on brokerage transactions for the Fund to brokers other than the Distributor in order to secure the research and investment services described 20 above, subject to review by the Board of Directors from time to time as to the extent and continuation of this practice. The allocation of orders among brokers and the commission rates paid are reviewed periodically by the Board of Directors. Subject to the above considerations, the Distributor may act as a securities broker for a Fund. In order for the Distributor to effect any portfolio transactions for a Fund, the commissions, fees or other remuneration received by the Distributor must be reasonable and fair compared to the commissions, fees or other remuneration paid to other brokers in connection with comparable transactions involving similar securities being purchased or sold on an Exchange during a comparable period of time. This standard would allow the Distributor to receive no more than the remuneration which would be expected to be received by an unaffiliated broker in a commensurate arms-length transaction. Furthermore, the Board of Directors, including a majority of the Directors who are not 'interested' directors, has adopted procedures which are reasonably designed to provide that any commissions, fees or other remuneration paid to the Distributor is consistent with the foregoing standard. Brokerage transactions with the Distributor also are subject to such fiduciary standards as may be imposed by applicable law. From time to time a Fund may engage in agency cross transactions with respect to securities that meet its investment objective and policies. An agency cross transaction occurs when a broker sells securities from one client's account to another client's account. Cross transactions are executed with written permission from a Fund. This authorization permits cross transactions only between a Fund on one side and clients for which the Distributor acts as broker, but does not act as investment adviser, on the other side. The authorization can be terminated at any time by written notice to the Distributor. A Fund may from time to time sell or purchase securities to or from companies or persons who are considered to be affiliated with that Fund solely because they are investment advisory clients of the Distributor or the Adviser. No consideration other than cash payment against prompt delivery at the then current market price of the securities will be paid to any person involved in those transactions. Additionally, all such transactions will be consistent with procedures adopted by the Board of Directors. In accordance with Section 11(a) under the Securities Exchange Act of 1934, the Distributor may not retain compensation for effecting transactions on a national securities exchange for a Fund unless that Fund has expressly authorized the retention of such compensation in a written agreement executed by a Fund and the Distributor. Each Fund has provided the Distributor with such authorization. Section 11(a) provides that the Distributor must furnish to each Fund at least annually a statement disclosing the aggregate compensation received by the exchange member in effecting such transactions. According to the Company's records, the amount of brokerage commissions paid by the Company during the period from April 1, 2000 to October 31, 2000 and for the fiscal years ended March 31, 2000 and 1999, which was attributable to research services was $1,599,266, $3,211,027 and $3,265,441, respectively, in connection with transactions amounting to $718,070,154, $1,590,808,974 and $2,138,310,479, respectively. For the period from April 1, 2000 to October 31, 2000 and during the fiscal years ended March 31, 2000 and 1999, the Company paid total brokerage commissions of $1,599,266, $3,211,027 and $3,632,838, respectively of which $21,810 (representing 1.36% of total brokerage commissions), $285,343 (representing 8.89% of total brokerage commissions) and $232,451 (representing 6.40% of total brokerage commissions) was paid to broker-dealer affiliates of the Adviser. For the same periods, the percentage of brokerage transactions involving payment of commissions to broker-dealer affiliates of the Adviser was 1.89% of total transactions, 2.50% of total transactions and 0.62% of total transactions, respectively. CUSTODY OF PORTFOLIO The Company has appointed The Bank of New York, One Wall Street, New York, NY 10286, as custodian and as foreign custody manager for the Funds' assets. INDEPENDENT AUDITORS The Company's independent auditors are KPMG LLP, Certified Public Accountants, 757 Third Avenue, New York, NY 10017. KPMG LLP audits each Fund's annual financial statements and renders its report thereon, which is included in the Annual Report to Shareholders. 21 FINANCIAL STATEMENTS The Company's financial statements and notes thereto appearing in the October 31, 2000 Annual Report to Shareholders and the report thereon of KPMG LLP, Certified Public Accountants, appearing therein, and the Company's unaudited financial statements and notes thereto appearing in the April 30, 2001 Semi-Annual Report to shareholders, are incorporated by reference in this Statement of Additional Information. The Fund will furnish, without charge, a copy of the Annual Report to Shareholders on request. All such requests should be directed to First Eagle SoGen Funds, P.O. Box 219324, Kansas City, MO 64121-9324. 22 APPENDIX RATINGS OF INVESTMENT SECURITIES The rating of a rating service represents the service's opinion as to the credit quality of the security being rated. However, the ratings are general and are not absolute standards of quality or guarantees as to the creditworthiness of an issuer. Consequently, the Funds' investment adviser believes that the quality of debt securities in which a Fund invests should be continuously reviewed. A rating is not a recommendation to purchase, sell or hold a security, because it does not take into account market value or suitability for a particular investor. When a security has received a rating from more than one service, each rating should be evaluated independently. Ratings are based on current information furnished by the issuer or obtained by the ratings services from other sources which they consider reliable. Ratings may be changed, suspended or withdrawn as a result of changes in or unavailability of such information, or for other reasons. The following is a description of the characteristics of ratings used by Moody's Investors Service, Inc. ('Moody's') and Standard & Poor's Corporation ('S&P'). Moody's Ratings Aaa -- Bonds rated Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as 'giltedge.' Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. Although the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such bonds. Aa -- Bonds rated Aa are judged to be high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa bonds or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than in Aaa bonds. A -- Bonds rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa -- Bonds rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba -- Bonds rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B -- Bonds rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa -- Bonds rated Caa are of poor standing. Such bonds may be in default or there may be present elements of danger with respect to principal or interest. Ca -- Bonds rated Ca represent obligations which are speculative in a high degree. Such bonds are often in default or have other marked shortcomings. S&P Ratings AAA -- Bonds rated AAA have the highest rating. Capacity to pay principal and interest is extremely strong. AA -- Bonds rated AA have a very strong capacity to pay principal and interest and differ from AAA bonds only in small degree. A -- Bonds rated A have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit protection parameters, adverse economic conditions or changing circumstances are more likely A-1 to lead to a weakened capacity to pay principal and interest for bonds in this capacity than for bonds in higher rated categories. BB -- B -- CCC -- CC -- BONDS A-1 -- A-RATED BB, B, CCC AND CC are regarded, on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation among such bonds and CC the highest degree of speculation. Although such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. A-2 FIRST EAGLE SOGEN FUNDS, INC. PART C OTHER INFORMATION Item 23. Exhibits
EXHIBIT - ------- (a)(1) -- Articles of Incorporation of the Registrant.* (a)(2) -- Articles of Amendment and Restatement.** (a)(3) -- Articles Supplementary are filed herewith. (a)(4) -- Articles of Amendment are filed herewith. (b) -- By-Laws of the Registrant as amended through August 17, 1993.** (c) -- Specimen Certificates representing shares of Common Stock ($.001 par value).** (d)(1) -- Amended and Restated Investment Advisory Contract between the Registrant and Arnhold and S. Bleichroeder Advisers, Inc. ('ASB Advisers') is filed herewith. (e)(1) -- Amended and Restated Underwriting Agreement between the Registrant and Arnhold and S. Bleichroeder, Inc. ('ASB') is filed herewith. (e)(2) -- Form of Selling Group Agreement.**** (f) -- Not applicable. (g)(1) -- Custody Agreement between the Registrant and The Bank of New York.**** (g)(2) -- Transfer Agency and Registrar Agreement between the Registrant and DST Systems, Inc.*** (g)(3) -- Foreign Custody Manager Agreement between the Registrant and The Bank of New York.**** (g)(4) -- Investment Accounting Agreement between the Registrant and State Street Bank and Trust Company.**** (h) -- Not applicable. (i) -- Not applicable. (j) -- Consent of KPMG LLP is filed herewith. (k) -- Not applicable. (l) -- Not applicable. (m) -- Amended and Restated Rule 12b-1 Distribution Plan and Agreement between the Registrant and ASB is filed herewith. (n) -- Amended and Restated Multiple Class Plan pursuant to Rule 18f-3 is filed herewith. (o) -- Not applicable. (p) -- Code of Ethics is filed herewith.
- --------- * Incorporated herein by reference to the Registration Statement filed on or about May 28, 1993. ** Incorporated herein by reference to Pre-Effective Amendment No. 2 filed on or about August 30, 1993. *** Incorporated herein by reference to Post-Effective Amendment No. 4 filed on or about July 25, 1997. **** Incorporated herein by reference to Post-Effective Amendment No. 13 filed on or about February 28, 2001. Item 24. Person Controlled or Under Common Control With Registrant None. Item 25. 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 indemnification of directors and officers. Since Registrant has its executive offices in the State of New York, and is C-1 qualified as a foreign corporation doing business 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, employees and agents of the Registrant against legal liability and expenses incurred 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 permitted. 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 September 4, 1980. In referring in its By-Laws to, and making indemnification of directors subject 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, as amended (the '1940 Act'), the Registrant intends that conditions and limitations on the extent of the indemnification of directors and officers imposed by the provisions of either Section 2-418 or Section 17(h) shall apply and that any inconsistency between the two will be resolved by applying the provisions of said Section 17(h) if the condition or limitation imposed by Section 17(h) is the more stringent. In referring in its By-Laws to SEC Release No. IC-11330 as the source for interpretation and implementation of said Section 17(h), the Registrant understands that it would be required under its By-Laws to use reasonable and fair means in determining whether indemnification of a director or officer should be made and undertakes to use either (1) a final decision on the merits by a court or other body before whom the proceeding was brought that the person to be indemnified ('indemnitee') was not liable to the Registrant 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 decision, a reasonable determination, based upon a review of the facts, that the indemnitee was not liable by reason of such disabling conduct, by (a) the vote of a majority of a quorum of 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 attorney's fees or other expenses incurred by a director or officer in his or her defense only if (in addition to his or her undertaking to repay the advance if he or she is not ultimately entitled to indemnification) (1) the indemnitee provides a security for his or her undertaking, (2) the Registrant shall be insured against losses arising by reason of any lawful advances, or (3) a majority of a quorum of the non-interested, non-party directors of the Registrant, or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts, that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification. In addition, the Registrant will maintain a directors' and officers' errors and omissions liability insurance policy protecting directors and officers against liability for claims made by reason of any acts, errors or omissions committed in their capacity as directors of officers. The policy will contain certain exclusions, among which is exclusion from coverage for active or deliberate dishonest or fraudulent acts and exclusion for fines or penalties imposed by law or other matters deemed uninsurable. Item 26. Business and Other Connections of Investment Adviser ASB Advisers is the Registrant's investment adviser. In addition to the Registrant, ASB Advisers acts as investment adviser to First Eagle SoGen Variable Funds, Inc., First Eagle Funds and Aetos Corporation. ASB Advisers is a wholly owned subsidiary of ASB which has a substantial amount of assets under management in the form of pension funds and individual and fund accounts. ASB is a registered broker-dealer and maintains a substantial involvement in the securities brokerage and underwriting businesses. The business and other connections of the Adviser's directors and officers are as follows: C-2
POSITION WITH THE BUSINESS AND OTHER NAME ADVISER CONNECTIONS ---- ------- ----------- Henry H. Arnhold...... Director Co-Chairman of the Board of Arnhold and S. Bleichroeder, Inc.; Director, Aquila International Fund Limited; Trustee, The New School for Social Research; Director, Conservation International John P. Arnhold....... Co-President and Director Co-President and Director Arnhold and S. Bleichroeder, Inc.; President and Director, Arnhold and S. Bleichroeder, UK Ltd.; Co-President and Director, ASB Securities, Inc.; Director, Aquila International Fund Limited; President, WorldVest, Inc.; Co-President and Trustee, First Eagle Funds; Co-President and Director, First Eagle SoGen Funds, Inc. and First Eagle SoGen Variable Funds, Inc. Stanford S. Co-President and Director Co-President, Secretary and Director, Arnhold and S. Warshawsky.......... Bleichroeder, Inc./Co-President and Director, ASB Securities, Inc.; Director, German-American Chamber of Commerce; Chairman and Director, Arnhold and S. Bleichroeder, UK Ltd.; Chairman of the Board and Trustee, First Eagle Trust; Trustee, First Eagle Funds, Director, First Eagle SoGen Funds, Inc. and First Eagle SoGen Variable Funds, Inc. Stephen M. Kellen..... Director Co-Chairman of the Board of Arnhold and S. Bleichroeder Inc.; Trustee, The Carnegie Society and WNET/Thirteen; Trustees Council of The National Gallery of Art Robert Miller......... Vice President, Secretary Senior Vice President, and Director, Arnhold and S. and Treasurer Bleichroeder, Inc.; Director, Arnhold and S. Bleichroeder, UK Ltd.; Treasurer, First Eagle Funds Gary Lee Fuhrman...... Director Senior Vice President and Director, Arnhold and S. Bleichroeder, Inc.; Director, Medical Resources, Inc. Ronald A. Bendelius... Vice President Senior Vice President and Chief Financial Officer, Arnhold and S. Bleichroeder, Inc. Robert Bruno.......... Vice President Senior Vice President, Arnhold and S. Bleichroeder, Inc.; Vice President and Secretary, First Eagle Funds; Vice President, Secretary and Treasurer, First Eagle SoGen Funds, Inc. and First Eagle SoGen Variable Funds, Inc. William P. Casciani... Vice President Senior Vice President and Compliance Officer, Arnhold and S. Bleichroeder, Inc. Charles de Vaulx...... Vice President Senior Vice President, Arnhold and S. Bleichroeder, Inc.; Senior Vice President, First Eagle SoGen Funds, Inc. Jean-Marie Vice President Senior Vice President, Arnhold and S. Bleichroeder, Eveillard........... Inc.; Co-President, First Eagle SoGen Funds, Inc. Michael G. Klemballa.. Vice President Senior Vice President and Comptroller, Arnhold and S. Bleichroeder, Inc. Allan Langman......... Vice President Senior Vice President, Treasurer and Director, Arnhold and S. Bleichroeder, Inc. Vincent S. Viglione... Vice President Senior Vice President and Assistant Treasurer, Arnhold and S. Bleichroeder, Inc.
C-3 Item 27. Principal Underwriters (a) Arnhold and S. Bleichroeder, Inc. acts as an investment advisor to First Eagle Fund, N.V., Aquila International Fund Limited, DEF Associates, N.V., Eagle Select Fund Limited, Oceanus Global Fund Ltd. Global Beverage Fund Limited and Arnhold and S. Bleichroeder Institutional Funds LLC. (b) The positions and offices of the Distributor's directors and officers who serve the Registrant are as follows:
NAME AND POSITION AND OFFICES POSITION AND OFFICES WITH BUSINESS ADDRESS* WITH UNDERWRITER REGISTRANT ----------------- ---------------- ---------- Stanford S. Warshawsky............... Co-President, Director and Chairman of the Board Secretary John P. Arnhold...................... Co-President and Director Co-President Jean-Marie Eveillard................. Senior Vice President Co-President Charles de Vaulx..................... Senior Vice President Senior Vice President Tracey L. Saltwick................... Senior Vice President Vice President and Compliance Officer Robert Bruno......................... Senior Vice President Vice President, Secretary and Treasurer Edwin Olsen.......................... Vice President Vice President Andrew DeCurtis...................... Vice President Vice President Stefanie Spritzler................... Assistant Vice President Assistant Treasurer Suzan Afifi.......................... Vice President Assistant Secretary
- --------- * The address of each person named above is 1345 Avenue of the Americas, New York, New York 10105. (c) The Registrant has no principal underwriter which is not an affiliated person of the Registrant. Item 28. 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 thereunder are maintained at the offices of the Registrant, 1345 Avenue of the Americas, New York, NY 10105 with the exception of certain accounts, books and other documents which are kept by the Registrant's custodian, The Bank of New York, One Wall Street, New York, New York 10286 and registrar and shareholder servicing agent, DST Systems, Inc., P.O. Box 419324, Kansas City, Missouri, 64141-6324. Item 29. Management Services Not applicable. Item 30. Undertakings The Registrant undertakes to call a meeting of shareholders for the purpose of voting upon the question of removal of a director, if requested to do so by the holders of at least 10% of a Fund's outstanding shares, and that it will assist communication with other shareholders as required by Section 16(c) of the Investment Company Act of 1940. C-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registration has duly caused this Post-Effective Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and State of New York, as of the 15th day of August, 2001. FIRST EAGLE SOGEN FUNDS, INC. By: /S/ JOHN P. ARNHOLD .................................. JOHN P. ARNHOLD, CO-PRESIDENT Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURE CAPACITY DATE --------- -------- ---- /s/ JOHN P. ARNHOLD Director August 15, 2001 ......................................... (JOHN P. ARNHOLD) /s/ CANDACE K. BEINECKE* Director August 15, 2001 ......................................... (CANDACE K. BEINECKE) /s/ EDWIN J. EHRLICH* Director August 15, 2001 ......................................... (EDWIN J. EHRLICH) /s/ ROBERT J. GELLERT* Director August 15, 2001 ......................................... (ROBERT J. GELLERT) /s/ JAMES E. JORDAN* Director August 15, 2001 ......................................... (JAMES E. JORDAN) /s/ WILLIAM M. KELLY* Director August 15, 2001 ......................................... (WILLIAM M. KELLY) /s/ DONALD G. MCCOUCH* Director August 15, 2001 ......................................... (DONALD G. MCCOUCH) /s/ FRED J. MEYER* Director August 15, 2001 ......................................... (FRED J. MEYER) /s/ DOMINIQUE RAILLARD* Director August 15, 2001 ......................................... (DOMINIQUE RAILLARD) /s/ NATHAN SNYDER* Director August 15, 2001 ......................................... (NATHAN SNYDER) /s/ STANFORD S. WARSHAWSKY* Director August 15, 2001 ......................................... (STANFORD S. WARSHAWSKY) /s/ ROBERT BRUNO Vice President, Secretary, Treasurer August 15, 2001 ......................................... (Principal Financial and Accounting (ROBERT BRUNO) Officer) *By /S/ ROBERT BRUNO ......................................... ROBERT BRUNO POWER-OF-ATTORNEY
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE - ------- ----------- ---- (a)(3) -- Articles Supplementary................................... (a)(4) -- Articles of Amendment.................................... (d)(1) -- Amended and Restated Investment Advisory Contract between the Registrant and Arnhold and S. Bleichroeder Advisers, Inc. ('ASB Advisers')..................................... (e)(1) -- Amended and Restated Underwriting Agreement between the Registrant and Arnhold and S. Bleichroeder, Inc. ('ASB')................................................... (j) -- Consent of KPMG LLP...................................... (m) -- Amended and Restated Rule 12b-1 Distribution Plan and Agreement between the Registrant and ASB.................. (n) -- Amended and Restated Multiple Class Plan pursuant to Rule 18f-3..................................................... (p) -- Code of Ethics...........................................
EX-99.A 3 ex99a-3.txt EXHIBIT 99(A)(3) FIRST EAGLE SOGEN FUNDS, INC. ARTICLES SUPPLEMENTARY First Eagle SoGen Funds, Inc., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: ARTICLES SUPPLEMENTARY The charter of First Eagle SoGen Funds, Inc. (the "Corporation") is hereby amended as follows: FIRST: Immediately prior to the adoption and filing of these Articles Supplementary, the number of authorized shares of stock of the Corporation was three billion five hundred million (3,500,000,000) shares having a par value of one tenth of one cent ($0.001) per share and an aggregate par value of three million five hundred thousand dollars ($3,500,000). These authorized shares were designated and classified as follows: (1) two hundred million (200,000,000) shares were designated and classified as First Eagle SoGen Global Fund Class A Common Stock; (2) three hundred million (300,000,000) shares were designated and classified as First Eagle SoGen Global Fund Class I Common Stock; (3) two hundred million (200,000,000) shares were designated and classified as First Eagle SoGen Global Fund Class C Common Stock; (4) two hundred million (200,000,000) shares were designated and classified as First Eagle SoGen Overseas Fund Class A Common Stock; (5) two hundred million (200,000,000) shares were designated and classified as First Eagle SoGen Overseas Fund Class I Common Stock; (6) two hundred million (200,000,000) shares were designated and classified as First Eagle SoGen Overseas Fund Class C Common Stock; (7) two hundred million (200,000,000) shares were designated and classified as First Eagle SoGen Gold Fund Common Stock, and; (8) two billion (2,000,000,000) shares were designated and classified as First Eagle SoGen Money Fund Common Stock. 1 SECOND: The Board of Directors of the Corporation, at a meeting duly convened and held on May 24th, 2001, adopted these Articles of Amendment (1) withdrawing that series of shares of the Corporation designated as the First Eagle SoGen Money Fund in order that such shares be redesignated and reclassified, and (2) designating and classifying a series of shares of the Corporation as the First Eagle U.S. Value Fund, as follows: two hundred million (200,000,000) shares as First Eagle U.S. Value Fund Class A Common Stock, two hundred million (200,000,000) shares as First Eagle U.S. Value Fund Class I Common Stock and two hundred million (200,000,000) shares as First Eagle U.S. Value Fund Class C Common Stock. THIRD: As amended hereby, until such time as the Board of Directors shall provide otherwise in accordance with paragraph (f) of article FIFTH of the Corporation's Articles of Incorporation, the three billion five hundred million (3,500,000,000) authorized shares of the Corporation's capital stock are designated and classified as follows: (1) two hundred million (200,000,000) shares are designated and classified as First Eagle SoGen Global Fund Class A Common Stock; (2) three hundred million (300,000,000) shares are designated and classified as First Eagle SoGen Global Fund Class I Common Stock; (3) two hundred million (200,000,000) shares are designated and classified as First Eagle SoGen Global Fund Class C Common Stock; (4) two hundred million (200,000,000) shares are designated and classified as First Eagle SoGen Overseas Fund Class A Common Stock; (5) two hundred million (200,000,000) shares are designated and classified as First Eagle SoGen Overseas Fund Class I Common Stock; (6) two hundred million (200,000,000) shares are designated and classified as First Eagle SoGen Overseas Fund Class C Common Stock; (7) two hundred million (200,000,000) shares are designated and classified as First Eagle SoGen Gold Fund Common Stock; (8) two hundred million (200,000,000) shares are designated and classified as First Eagle U.S. Value Fund Class A Common Stock; (9) two hundred million (200,000,000) shares are designated and classified as First Eagle U.S. Value Fund Class I Common Stock; (10) two hundred million (200,000,000) shares are designated and classified as First Eagle U.S. Value Fund Class C Common Stock; and (11) one billion four hundred million (1,400,000,000) shares 2 remain undesignated and unclassified. The Board of Directors' power to designate and redesignate or classify and reclassify any unissued shares of equal stock is not changed hereby. The foregoing amendment to such Articles Supplementary of the Corporation was approved by a majority of the entire Board of Directors of the Corporation. The undersigned Vice President of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the matters and facts set forth in these Articles with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury. IN WITNESS WHEREOF, First Eagle SoGen Funds, Inc. has caused this instrument to be signed in its name and on its behalf by its Vice President, Robert Bruno, and attested by its Assistant Secretary, Suzan J. Afifi, on the 9th day of August, 2001. ATTEST: FIRST EAGLE SOGEN FUNDS, INC. - ------------------------------ -------------------------------- Suzan J. Afifi Robert Bruno Assistant Secretary Vice President, Secretary and Treasurer 3 EX-99.A 4 ex99a-4.txt EXHIBIT 99(A)(4) FIRST EAGLE SOGEN FUNDS, INC. ARTICLES OF AMENDMENT First Eagle SoGen Funds, Inc., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: The Articles of Incorporation of the Corporation are hereby amended: (1) by inserting the following new paragraph (1)(a)(i) of Article FIFTH at the end of paragraph (1) of Article FIFTH before the beginning of paragraph (1)(a) of Article FIFTH "(a)(i) The Corporation may redeem shares of its Common Stock designated and classified as First Eagle SoGen Money Fund Common Stock from any stockholder, upon notice given to the holder of such shares, at the net asset value of such shares of Common Stock next determined following such notice. The notice shall be in writing personally delivered or deposited in the mail, at least 10 days (or such other number of days as any appropriate officer shall determine) prior to such redemption. If mailed, the notice shall be addressed to the stockholder at the post office address as shown on the books of the Corporation, and sent by first class mail, postage prepaid."; and (2) by renumbering paragraph (1)(a) of Article FIFTH as (1)(a)(ii). The foregoing amendment to such Articles of Incorporation of the Corporation was approved by a majority of the entire Board of Directors of the Corporation and a majority of the stockholders of First Eagle SoGen Money Fund. 1 The undersigned Vice President of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the matters and facts set forth in these Articles with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury. IN WITNESS WHEREOF, First Eagle SoGen Funds, Inc. has caused this instrument to be signed in its name and on its behalf by its Vice President, Robert Bruno, and attested by its Assistant Secretary, Suzan J. Afifi, on the 30th day of April, 2001. ATTEST: FIRST EAGLE SOGEN FUNDS, INC. - ------------------------------ -------------------------------- Suzan J. Afifi Robert Bruno Assistant Secretary Vice President, Secretary and Treasurer 2 EX-99.D 5 ex99d-1.txt EXHIBIT 99(D)(1) Amended and Restated Investment Advisory Contract FIRST EAGLE SOGEN FUNDS, INC. 1345 Avenue of the Americas New York, New York 10105 August 13, 2001 Arnhold and S. Bleichroeder Advisers, Inc. 1345 Avenue of the Americas New York, New York 10105 Dear Sirs: This amends and restates the Investment Advisory Contract between the parties dated December 1999. First Eagle SoGen Funds, Inc. (the "Company"), a Maryland corporation consisting of four portfolios, First Eagle SoGen Global Fund, First Eagle SoGen Overseas Fund, First Eagle SoGen Gold Fund and First Eagle U.S. Value Fund (referred to herein individually as a "Fund" or collectively as the "Funds"), is engaged in the business of an investment company. The Company's Board of Directors has selected you to act as the investment adviser of the Company, as more fully set forth below, and you are willing to act as such investment adviser and to perform such services under the terms and conditions hereinafter set forth. Accordingly, the Company agrees with you as follows: 1. Delivery of Corporate Documents. The Company has furnished you with copies properly certified or authenticated of each of the following: (a) Articles of Incorporation of the Company. (b) By-Laws of the Company as in effect on the date hereof. (c) Statement of Rules adopted by the Board of Directors of the Company. (d) Current Registration Statement of the Company with copies of Exhibits. (e) Resolutions of the Board of Directors of the Company selecting you as investment adviser and approving the form of this Agreement. The Company will furnish you from time to time with copies properly certified or authenticated, of any amendments of or supplements to the foregoing, if any. 2. Advisory Services. You will regularly provide the Company with investment research, advice and supervision and will furnish continuously an investment program for the Company's Portfolio consistent with the Fund's investment objective, policies and restrictions set forth in the Company's Registration Statement under the Securities Act of 1 1933, as amended (the "Registration Statement"), and the current prospectus and statement of additional information included therein (the "Prospectus"). You will recommend what securities shall be purchased for each of the Funds, what portfolio securities shall be sold by each Fund, and what portion of each Fund's assets shall be held uninvested, subject always to such investment objectives, policies and restrictions and to the provisions of the Company's Articles of Incorporation, By-Laws, Statement of Rules, and the requirements of the Investment Company Act of 1940, as amended (the "1940 Act"), as each of the same shall be from time to time in effect. You shall advise and assist the officers of the Company in taking such steps as are necessary or appropriate to carry out the decisions of its Board of Directors and any appropriate committees of such Board regarding the foregoing matters and general conduct of the investment business of the Company. 3. Allocation of Charges and Expenses. You will pay the compensation and expenses of all officers of the Company and will furnish, without expense to the Company, the services of such of your officers and employees as may duly be elected officers or directors of the Company, subject to their individual consent to serve and to any limitations imposed by law. You will pay the Company's office rent and ordinary office expenses and will provide investment, advisory, research and statistical facilities and all clerical services relating to research, statistical and investment work. (It is understood that the foregoing provision does not obligate you to pay for the maintenance of the Company's general ledger and securities cost ledger or for daily pricing of the Company's securities, but that it does obligate you, without expense to the Company, to oversee the provision of such services by the Company's agent.) You will not be required hereunder to pay any expenses of the Company other than those above enumerated in this paragraph 3. In particular, but without limiting the generality of the foregoing, you will not be required to pay hereunder: brokers' commissions; legal or auditing expenses; taxes or governmental fees; any direct expenses of issue, sale, underwriting, distribution, redemption or repurchase of the Company's securities; the expenses of registering or qualifying securities for sale; the cost of preparing and distributing reports and notices to stockholders; the fees or disbursements of dividend, disbursing, shareholder, transfer or other agent; or the fees or disbursements of custodians of the Company's assets. 4. Compensation of the Adviser. For all services to be rendered and payments made as provided in paragraphs 2 and 3 hereof, you will receive a monthly fee after the last day of each month, in accordance with Schedule A attached hereto. If this Agreement is terminated with respect to a Fund as of any day not the last day of a month, such Fund's fee shall be paid as promptly as possible after such date of termination. If this Agreement shall be effective for less than the whole of any month, such fee shall be based on the average daily value of the net assets of each Fund in the part of the month for which this Agreement shall be effective and shall be that proportion of such fee as the number of business days (days on which the New York Stock Exchange is open all or part of the day for unrestricted trading) in such period bears to the number of business days in such month. The average daily value of the net assets of each Fund shall in all cases be based only on business days for the period or month and shall be computed in accordance with applicable provisions of the Articles of Incorporation of the Company. 2 5. Purchase and Sale of Securities. You shall purchase securities from or through and sell securities to or through such persons, brokers or dealers (including any of your affiliates) as you shall deem appropriate in order to carry out the Company's brokerage policy as set forth from time to time in the Registration Statement and Prospectus, or as the Board of Directors of the Company may require from time to time. You acknowledge that you will comply with all applicable provisions of the 1940 Act, Investment Advisers Act of 1940, as amended (the "Investment Advisers Act") and the Securities Exchange Act of 1934, as amended, including, without limitation, the provisions of Section 28(3) thereof, with respect to the allocation of portfolio transactions. When purchasing securities from or through, and selling securities to or through, any such persons, brokers or dealers that may be affiliated with you, you shall comply with all applicable provisions of the 1940 Act, including, without limitation, Section 17 thereof and the rules and regulations thereunder, and Section 206 of the Investment Advisers Act and the rules and regulations thereunder. In providing the Company with investment management and supervision, it is recognized that you will seek the best combination of price (inclusive of brokerage commissions) and execution, and, consistent with such policy, may give consideration to the research, statistical and other services furnished by brokers or dealers as such Board may direct or authorize from time to time. Notwithstanding the above, it is understood that it is desirable for the Company that you have access to research services provided by brokers who execute brokerage transactions at a higher cost to the Company than may result when allocating brokerage to other brokers on the basis of seeking the best combination of price (inclusive of brokerage commissions) and execution. Such research services include written reports, responses to specific inquiries, interviews with analysts, invitations to meetings arranged by brokers with the managements of companies in the Company's portfolio or in which the Company may invest and may include other types of research from time to time approved by the Board of Directors of the Company. Only research services provided to you for the benefit of the Company will be considered in selecting brokers to effect portfolio transactions for the Company unless otherwise authorized by such Board. You are authorized to place orders for the purchase and sale of securities for the Company with brokers who provide such research services, subject to review by the Board of Directors of the Company from time to time, but not less frequently than quarterly, with respect to the extent and continuation of this practice. It is understood that the services provided by such brokers may be useful to you and your affiliates in connection with their services to other clients as well as the Company. You acknowledge that you will comply with all applicable provisions of the 1940 Act, the Investment Advisers Act and the Securities Exchange Act of 1934, as amended, including, without limitation, the provisions of Section 28(e) thereof, with respect to the allocation of portfolio transactions. Nothing herein shall prohibit the Board of Directors of the Company from approving the payment by the Company of additional compensation to others for consulting services, supplemental research and security and economic analysis. 6. Services to Other Accounts. The Company understands that you and your affiliates now act, will continue to act, and may in the future act as investment adviser to fiduciary and other managed accounts, and the Company has no objection to you and your affiliates so acting, provided that whenever a Fund and one or more other accounts advised by you (the "Managed Accounts") are prepared to purchase, or desire to sell, the same security, 3 available investments or opportunities for sales will be allocated in a manner that is equitable to each entity. In such situations, you may place orders for a Fund and each Managed Account simultaneously, and if all such orders are not filled at the same price, you may cause the Fund and each Managed Account to pay or receive the average of the prices at which the orders were filled for the Fund and all Managed Accounts. If all such orders cannot be executed fully under prevailing market conditions, you may allocate the traded securities between the Fund and the Managed Accounts in a manner you consider appropriate, taking into account the size of the order placed for the Fund and each such Managed Account and, in the event of a sale, the size of the pre-sale position of the Fund and each such Managed Account, as well as any other factors you deem relevant. The Company recognizes that in some cases this procedure may affect adversely the price paid or received by a Fund or the size of the position purchased or sold by such Fund. In addition, the Company understands that the persons employed by you to provide service to the Company in connection with the performance of your duties under this Agreement will not devote their full time to that service. Moreover, nothing contained in this Agreement will be deemed to limit or restrict your right or the right of any of your affiliates to engage in and devote time and attention to other businesses or to render services of whatever kind or nature including serving as investment adviser to, or employee, officer, director or trustee of, other investment companies. 7. Avoidance of Inconsistent Position. If any occasion should arise in which you give any advice to clients of yours concerning the shares of the Company, you will act solely as investment counsel for such clients and not in any way on behalf of the Company except to the extent that you are acting as principal underwriter of the Shares of the Funds. In connection with purchases or sales of portfolio securities for the account of a Fund, neither you nor any of your directors, officers or employees will act as a principal. 8. Limitation of Liability of Adviser. You shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Company in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on your part in the performance of your duties or from reckless disregard by you of your obligations and duties under this Agreement. 9. Use of Name. If you cease to act as the Company's investment adviser, or, in any event, if you so request in writing, the Company agrees to take all necessary action to change the name of the Company and the Funds to a name not including the term "First Eagle". You may from time to time make available without charge to the Company for its use such marks or symbols not owned by you, including the logo in the form of a stylized globe or marks or symbols containing the term "First Eagle" or any variation thereof, as you may consider appropriate. Any such marks or symbols so made available will remain your property and you shall have the right, upon notice in writing, to require the Company to cease the use of such mark or symbol at any time. 10. Duration and Termination of this Agreement. This Agreement shall remain in force until December __, 2001, and from year to year thereafter with respect to each Fund, but only so long as such continuance is specifically approved at least annually by the Board of Directors of the Company with respect to each Fund or by vote of a majority of the outstanding voting securities of such Fund. In addition, the Company may not renew or perform 4 this Agreement unless the terms thereof and any renewal thereof have been approved with respect to each Fund by the vote of a majority of directors of the Company who are not interested persons of you or of the Company cast in person at a meeting called for the purpose of voting on such approval. This Agreement may, on 60 days' written notice, be terminated with respect to each Fund at any time without the payment of any penalty, by the Board of Directors of the Company, by vote of a majority of the outstanding voting securities of the Company, or by you. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this paragraph 10, the definitions contained in Section 2(a) of the 1940 Act, as amended, and any rules thereunder (particularly the definitions of "interested person", "assignment", "voting security" and "vote of a majority of the outstanding voting securities") shall be applied. 11. Amendment of this Agreement. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the "party" against which enforcement of the change, waiver, discharge or termination is sought. 12. Notices. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, to you or to the Company at 1345 Avenue of the Americas, New York, New York 10105. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Anything herein to the contrary notwithstanding, this Agreement shall not be construed to require, or to impose any duty upon, either of the parties to do anything in violation of any applicable laws or regulations. 14. Captions; Counterparts. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. If you are in agreement with the foregoing, please sign the form of acceptance on the accompanying counterpart of this letter and return such counterpart to the Company, whereupon this letter shall become a binding contract. Yours very truly, FIRST EAGLE SOGEN FUNDS, INC. By: -------------------------------------- Name: Title: 5 The foregoing Agreement is hereby accepted. ARNHOLD AND S. BLEICHROEDER ADVISERS, INC. By: -------------------------------- Name: Title: 6 SCHEDULE A FIRST EAGLE SOGEN FUNDS, INC. Pursuant to Section 4 of the investment advisory agreement between First Eagle SoGen Funds, Inc. and Arnhold and S. Bleichroeder Advisers, Inc. ("A&SB Advisers"), the parties agree that A&SB Advisers shall be paid on a monthly basis an investment advisory fee at the annual rate for each of the Funds as set forth below: First Eagle SoGen Overseas Fund: 0.75 of 1% of the average daily value of the First Eagle SoGen Overseas Fund's net assets First Eagle SoGen Gold Fund: 0.75 of 1% of the average daily value of the First Eagle SoGen Gold Fund's net assets First Eagle U.S. Value Fund: 0.75 of 1% of the average daily value of the First Eagle U.S. Value Fund's net assets First Eagle SoGen Global Fund: 1% of the average daily value of the First Eagle SoGen Global Fund's net assets on the first $25,000,000 and 0.75% of the average daily value of the First Eagle SoGen Global Fund's net assets in excess of $25,000,000
IN WITNESS WHEREOF, the undersigned have approved this schedule effective as of the 13 day of August, 2001. FIRST EAGLE SOGEN FUNDS, INC. By: -------------------------------------- Name: Title: ARNHOLD AND S. BLEICHROEDER ADVISERS, INC. By: -------------------------------------- Name: Title: 7 EX-99.E 6 ex99e-1.txt EXHIBIT 99(E)(1) FIRST EAGLE SOGEN FUNDS, INC. 1345 Avenue of the Americas New York, New York 10105 Amended and Restated Underwriting Agreement August 13, 2001 Arnhold and S. Bleichroeder, Inc. 1345 Avenue of the Americas, 44th Floor New York, New York 10105 Dear Sirs: This Agreement amends and restates the Underwriting Agreement between the parties dated February 18, 2000. First Eagle SoGen Funds, Inc. (the "Company"), a Maryland corporation currently consisting of the portfolios listed on Schedule A, attached hereto, together with all other portfolios subsequently established and made subject to this Agreement, is engaged in the business of an investment company. Its Board of Directors has selected you to act as principal underwriter (as such term is defined in Section 2(a)(29) of the Investment Company Act of 1940, as amended (the "1940 Act")) of the shares of Capital Stock of the Company and you are willing to act as such principal underwriter and to perform the duties and functions of underwriter in the manner and on the conditions hereinafter set forth. Accordingly, the Company hereby agrees with you as follows: 1. Copies of Corporate Documents. The Company will furnish you promptly with copies of any registration statements filed by it with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act, together with any financial statements and exhibits included therein, and all amendments or supplements thereto hereafter filed. 2. Registration and Sale of Additional Shares. The Company will from time to time use its best efforts to register under the 1933 Act such authorized shares of Capital Stock not already so registered as you may reasonably be expected to sell as agent on behalf of the Company. To the extent that there will be available for sale such number of shares as you may reasonably be expected to sell, the Company, subject to the necessary approval of its shareholders, will, from time to time as may be necessary, increase the number of authorized shares. This Agreement relates to the issue and sale of shares that are duly authorized and registered and available for sale by the Company, including repurchased and redeemed shares if and to the extent that they may be legally sold and if, but only if, the Company sees fit to sell them. You and the Company will cooperate in taking such action as may be necessary from time to time to qualify shares of the Company for sale in New York and in any other states mutually agreeable to you and the Company, and to maintain such qualification, provided that such shares are duly registered under the 1933 Act. 1 The Company represents to you that all registration statements and prospectuses filed by the Company with the SEC under the 1933 Act and under the 1940 Act with respect to the shares have been prepared in conformity with the requirements of said Acts and the rules and regulations of the SEC thereunder. As used in this Agreement, the terms "registration statement" and "prospectus" shall mean any registration statement and prospectus, including the statement of additional information incorporated by reference therein, filed with the SEC and any amendments and supplements thereto which at any time shall have been filed with the SEC. The Company represents and warrants to you that any registration statement and prospectus, when such registration statement becomes effective, will contain all statements required to be stated therein in conformity with said Acts and the rules and regulations of the SEC; that all statements of fact contained in any such registration statement and prospectus will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus when such registration statement becomes effective will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Company may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus as, in the light of future developments, may, in the opinion of the Company's counsel, be necessary or advisable. If the Company shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Company of a written request from you to do so with respect to a material change, you may, at your option, terminate this Agreement or decline to make offers of the Company's securities until such amendments are made. The Company shall not file any amendment to any registration statement or supplement to any prospectus without giving you reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Company's right to file at any time such amendments to any registration statement and/or supplements to any prospectus, of whatever character, as the Company may deem advisable, such right being in all respects absolute and unconditional. 3. Solicitation of Orders. You will use your best efforts (but only in states in which you may lawfully do so) to obtain from investors orders for shares of the Capital Stock of the Company authorized for issue by the Company and registered under the 1933 Act, provided that you may in your discretion refuse to accept orders for shares from any particular applicant. You may, as agent for the Company, solicit dealers for orders to purchase shares of the Capital Stock of the Company and may enter into selling agreements with any such dealers, the form of such agreements to be as mutually agreed upon, from time to time, by you and the Company. Each dealer must be a member of the National Association of Securities Dealers, Inc. (the "NASD") or a foreign dealer not eligible for membership in the NASD who has agreed in acting under the selling agreement to abide by the rules and regulations of the NASD and not to use the United States mails or any means of interstate commerce in connection with the sales of such shares unless such foreign dealer is registered under the Securities Exchange Act of 1934, as amended, or such registration is not required. 4. Sale of Shares. Subject to the provisions of paragraph 5 hereof and to such minimum purchase requirements as may from time to time be currently indicated in the Company's prospectus, you are authorized to sell as agent on behalf of the Company authorized and unissued shares of the Capital Stock of the Company registered under the 1933 Act. Such sales may be made by you on behalf of the Company by transmitting promptly any orders 2 received by you for the purchase and redemption of shares to the Company's transfer agent. The sales price to the public of such shares shall be the public offering price as defined in paragraph 6 hereof. Whenever in their judgment such action is warranted by unusual market, economic or political conditions, or by abnormal circumstances of any kind deemed by the parties hereto to render sales of the Company's shares not in the best interest of the Company, the parties hereto may decline to accept any orders for, or make any sales of, any shares until such time as those parties deem it advisable to accept such orders and to make such sales, and both parties shall mutually agree to any such determination. 5. Sale of Shares to Investors by the Company. Any right granted to you to accept orders for shares or make sales on behalf of the Company will not apply to shares issued in connection with the merger or consolidation of any other investment company with the Company or its acquisition, by purchase or otherwise, of all or substantially all the assets of any investment company or substantially all the outstanding shares of any such company, and such right shall not apply to shares that may be offered by the Company to shareholders by virtue of their being shareholders of the Company, including shares issued in payment of any dividend or distribution by the Company. 6. Public Offering Price. All shares of the Company sold to investors by you as agent for the Company will be sold at the public offering price. The public offering price for all accepted orders will be the net asset value per share next computed after receipt of such an order, plus any applicable sales charge adjusted to the nearest full cent, as may from time to time be currently indicated in the Company's prospectus with respect to such order. Net asset value per share shall be computed in the manner provided in the Company's Articles of Incorporation, as now in effect or as it may be amended. The time of receipt of such an order shall be the time of its receipt by you or by a dealer selected by you as provided in paragraph 3 if transmitted on the day of receipt by such dealer to you prior to the close of your business on that day. The Company will not, without notifying you in advance, change the sales charges or dealer discounts applicable to the sales of its shares from those set forth in its then-current prospectus. You may also purchase as principal shares of the Company's Capital Stock at net asset value and sell such shares at the public offering price. 7. Underwriting Discount. The Company shall receive from you the applicable net asset value on all orders for sales of shares of Capital Stock accepted by you as agent of the Company if the net sale price thereof has been deemed, in accordance with the Company's Articles of Incorporation, to be an asset of the Company in connection with a computation of net asset value for the sale of any other shares or the purchase or redemption of any shares. You shall be entitled to retain so much of the difference between the public offering price and the applicable net asset value as is not reallowed by you as a discount to dealers. Such reallowance shall be the same for all dealers and shall conform to such dealer discounts, if any, as may from time to time be currently indicated in the Company's prospectus. You will reimburse the Company for any increase in any issue tax paid by it which is attributable to such sales charge. 3 8. Notice of Sale; Delivery of Payments. You will promptly notify the Company's transfer agent or shareholders' servicing agent of any orders for sales of shares of Capital Stock accepted by you, and you will deliver to the Company's shareholders' servicing agent all payments pursuant to orders for sales accepted by you no later than the first business day following the receipt by you in your home office of such payments, and, unless payment is not required under paragraph 7, in no event later than seven days after the receipt by you of such order, or, in case an extension of time is granted by the NASD, to the dealer submitting the order, in no event later than the expiration of such extension of time. 9. Purchase of Shares. You are authorized to purchase as agent on behalf of the Company shares of the Capital Stock of the Company from record holders thereof. Such purchases may be made by you on behalf of the Company by accepting orders placed with you by such holders. The purchase price per share for all accepted orders will be the net asset value per share next computed after receipt of such an order, in the manner provided in the Company's Articles of Incorporation, as now in effect or as it may be amended. The time of receipt of such an order shall be the time of its receipt by you or by a dealer selected by you as provided in paragraph 3 if transmitted on the day of receipt by such dealer to you prior to the close of your business on that day. You will promptly notify the Company's transfer agent or shareholders' servicing agent of any such order accepted by you and will, if the shares subject to such order have been deemed to be no longer outstanding in connection with a computation of net asset value for the sale of any shares by the Company or the purchase or redemption of any shares by it, deliver to such agent a proper request for purchase of such shares by the Company and any stock certificates for such shares not later than the first business day following the receipt by you in your home office of such request and certificates, and in no event later than seven days after the receipt by you of such order. 10. Suspension of Sales and Purchases. If and whenever the determination of asset value is suspended pursuant to the Company's Articles of Incorporation, and such suspension has become effective, until such suspension is terminated, no further orders for the sale or purchase of shares shall be accepted by you except such orders placed with you before you had knowledge of the suspension. In addition, the Company reserves the right to suspend sales and purchases and your authority to accept orders for sales and purchases of shares on behalf of the Company if, in the judgment of a majority of its Board of Directors or a majority of the Executive Committee of its Board of Directors, if such Committee exists, it is in the best interests of the Company to do so, such suspension to continue for such period as may be determined by such majority; and in that event, no shares will be sold or purchased by the Company or by you on behalf of the Company while such suspension remains in effect except for shares necessary to cover orders accepted by you before you had knowledge of the suspension. The Company will notify you promptly of any such suspension of the determination of net asset value or of any such suspension of sales and purchases of shares. The Company agrees to advise you immediately in writing: (a) of any request by the SEC for amendments to the registration statement or prospectus then in effect or for additional information; 4 (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or prospectus then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event, to the best of its knowledge, which makes untrue any statement of a material fact made in the registration statement or prospectus then in effect or which requires the making of a change in such registration statement or prospectus in order to make the statements therein not misleading; and (d) of all actions of the SEC with respect to any amendments to any registration statement or prospectus which may from time to time be filed with the SEC that materially affect the performance of your services under this Agreement. 11. Expenses. The Company will pay all fees and expenses in connection with the preparation and filing of any registration statement and prospectus or amendments thereto under the 1933 Act covering the issue and sale of its shares and in connection with the qualification of shares for sale in the various states and countries in which the Company shall determine it advisable to qualify such shares for sale, the costs of all stock certificates and the fees and expenses of its transfer agent or shareholders' servicing agent or registrar. It will also pay any issue taxes (subject to partial reimbursement under paragraph 7 hereof). You will pay all expenses of printing prospectuses and other sales literature (except copies of prospectuses and other sales literature which may from time to time be sent to existing shareholders of the Fund), all fees and expenses in connection with your qualification as a dealer in the various states and countries, and all other expenses in connection with the sale and offering for sale of the shares of the Company which are not payable by the Company pursuant to the provisions of this paragraph 11. 12. Conformity with Law. You agree that in selling and purchasing the shares of the Company you will duly conform in all respects with the laws of the United States and any state or country in which such shares may be offered for sale by you pursuant to this Agreement. 13. Indemnification. You agree to indemnify and hold harmless the Company and each of its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act against any and all losses, claims, damages, liabilities or litigation expenses (including legal and other expenses) to which the Company or such directors, officers or controlling person may become subject under such Act or under any other statute, at common law or otherwise, arising out of the acquisition of any shares by any person or the sale of any shares by any person to the Company through you which (i) may be based upon any wrongful act by you or any of your employees or representatives or (ii) may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement or prospectus covering shares of the Company or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished or confirmed in writing to the Company by you; provided, however, that in no case is your indemnity in favor of a director or officer or any other person deemed to protect such director or officer or other person against any liability to which any such person would otherwise be subject by reason of willful misfeasance, 5 bad faith, or gross negligence in the performance of his duties or by reason of his reckless disregard of obligations and duties under this Agreement. The Company agrees to indemnify and hold harmless you and each of your directors and officers and each person, if any, who controls you within the meaning of Section 15 of the 1933 Act against any and all losses, claims, damages, liabilities or litigation expenses (including legal and other expenses) to which you or such directors, officers or controlling person may become subject under such Act or under any other statute, at common law or otherwise, arising out of the acquisition of any shares by any person or the sale of any shares by any person to the Company through you which (i) may be based upon any wrongful act by the Company or any of its employees or representatives, or (ii) except as described in clause (ii) of the preceding paragraph, may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement or prospectus covering shares of the Company or any amendment thereof or supplement thereto or omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that in no case is the Company's indemnity in favor of a director or officer or any other person deemed to protect such director or officer or other person against any liability to which any such person would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his duties or by reason of his reckless disregard of obligations and duties under this Agreement. You hereby waive any rights to indemnification concerning your obligations and duties hereunder to which you might be entitled under the Company's By-Laws. You are not authorized to give any information or to make any representations on behalf of the Company in connection with the sale or purchase of shares of the Company other than the information and representations contained in a registration statement or prospectus covering shares of the Company, as such registration statement and prospectus may be amended or supplemented from time to time. No person other than you is authorized to act as agent for the Company in connection with the offering or sale of shares of the Company to the public or otherwise. 14. Duration and Termination of this Agreement. This Agreement shall become effective as of the date hereof and will continue for an initial two-year term and will continue from year to year thereafter, but only so long as such continuance is specifically approved at least annually by the Board of Directors of the Company or by vote of a majority of the outstanding voting securities of the Company. In addition, the Company may not renew or perform this Agreement unless the terms thereof and any renewal thereof have been approved by the vote of a majority of directors of the Company who are not interested persons of you or of the Company cast in person at a meeting called for the purpose of voting on such approval. This Agreement may, on 60 days' written notice, be terminated at any time without the payment of any penalty by the Board of Directors of the Company, by vote of a majority of the outstanding voting securities of the Company, or by you. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this paragraph 14, the definitions contained in Section 2(a) of the 1940 Act and rules thereunder (particularly the definitions of "interested person", "assignment", "voting security" and "vote of a majority of the outstanding voting securities") shall be applied. 6 15. Amendment of this Agreement. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. If the Company should at any time deem it necessary or advisable in the best interests of the Company that any amendment of this Agreement be made in order to comply with the recommendations or requirements of the SEC or other governmental authority or to obtain any advantage under state or federal tax laws, it should notify you of the form of such amendment, and the reasons therefor, and if you should decline to assent to such amendment, the Company may terminate this Agreement forthwith. If you should at any time request that a change be made in the Company's Articles of Incorporation or By-Laws, or in its methods of doing business, in order to comply with any requirements of federal law or regulations of the SEC or of a national securities association of which you are or may be a member, relating to the sale of the shares of the Company, and the Company should not make such necessary change within a reasonable time, you may terminate this Agreement forthwith. 16. Miscellaneous. (a) The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (b) The Company recognizes that, except to the extent otherwise agreed to by the parties hereto, your directors, officers and employees may from time to time serve as directors, trustees, officers and employees of corporations and business trusts (including other investment companies), and that you or your affiliates may enter into distribution or other agreements with other corporations and trusts. (c) In the event that the Board of Directors of any additional portfolios indicates by vote that such portfolios are to be made parties to this Agreement, whether such portfolios were in existence at the time of the effective date of this Agreement or subsequently formed, Schedule A hereto shall be amended to reflect the addition of such new portfolios and such new portfolios shall thereafter become parties hereto. In the event that any of the portfolios on Schedule A terminates its registration as a management investment company, or otherwise ceases operations, Schedule A shall be amended to reflect the deletion of such portfolio and its various classes. (d) This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts without giving effect to principles of conflicts of laws. (e) If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 7 You also agree that if, as a result of your breach of this warranty, the Company is subjected to any fine, penalty, or other regulatory sanction or damages, you will reimburse the Company for such fine, penalty or damages and any related costs and expenses, including but not limited to attorney fees and expenses. If you are in agreement with the foregoing, please sign the form of acceptance and the accompanying counterpart of this letter and return such counterpart to the Company, whereupon this letter shall become a binding contract. Yours very truly, First Eagle SoGen Funds, Inc. By: ---------------------------------- Name: Title: Secretary The foregoing Agreement is hereby accepted as of the date thereof. Arnhold and S. Bleichroeder, Inc. By: -------------------------------- Name: Title: Co-President 8 SCHEDULE A FIRST EAGLE SOGEN FUNDS, INC. First Eagle SoGen Global Fund First Eagle SoGen Overseas Fund First Eagle SoGen Gold Fund First Eagle U.S. Value Fund 9 EX-99.J 7 ex99-j.txt EXHIBIT (J) Independent Auditors' Consent To the Shareholders and Board of Directors of First Eagle SoGen Funds, Inc.: We consent to the incorporation by reference, in this Statements of Additional Information, of our report dated Decemeber 19, 2000, on the statements of assets and liabilities for the First Eagle SoGen Global Fund, First Eagle SoGen Overseas Fund, and First Eagle SoGen Gold Fund (the "Funds"), including the schedules of investments, as of October 31, 2000 and the related statements of operations for the period from April 1, 2000 to October 31, 2000 and the year ended March 31, 2000, the statements of changes in net assets for the period from April 1, 2000 to October 31, 2000 and in the two years ended March 31, 2000, and the financial highlights for the period from April 1, 2000 to October 31, 2000 and for each of the years ended in the five-year period ended March 31, 2000. These financial statements and financial highlights and our report thereon are included in the Annual Report of the Funds as filed on Form N-30D. We also consent to the references to our firm under the headings "Independent Auditors" and "Financial Statements" in the Statement of Additional Information. KPMG LLP New York, New York August 14, 2001 EX-99.M 8 ex99-m.txt EXHIBIT 99(M) FIRST EAGLE SOGEN FUNDS, INC. AMENDED AND RESTATED RULE 12b-1 DISTRIBUTION SERVICE PLAN AND AGREEMENT CLASS A AND CLASS C SHARES AMENDED AND RESTATED Rule 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated August 13, 2001 (the "Plan") between First Eagle SoGen Funds, Inc., a Maryland corporation (the "Company"), and Arnhold and S. Bleichroeder, Inc., a New York corporation ("ASB"). The Company is an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company currently offers shares of four separate portfolios: First Eagle SoGen Global Fund, ("Global Fund"), First Eagle SoGen Overseas Fund, ("Overseas Fund"), First Eagle SoGen Gold Fund ("Gold Fund") and First Eagle U.S. Value Fund ("Value Fund" and collectively, the "Fund(s)"). ASB acts as the principal underwriter of the Company pursuant to an Underwriting Agreement dated as of February 18, 2000. As permitted by Rule 12b-1 (the "Rule") under the 1940 Act, the Company adopted a Distribution and Service Plan and Agreement for Class A shares, as defined below (the "Class A Plan") dated as of February 18, 2000 pursuant to which Global Fund, Overseas Fund and Gold Fund may make certain payments to ASB for expenses incurred in connection with the distribution and service of the Class A shares of the Global Fund and the Overseas Fund and shares of the Gold Fund (with Class A shares of Value Fund, the "Class A" shares). The Company also adopted a Distribution and Service Plan and Agreement for Class C shares, (the "Class C Plan") dated as of February 18, 2000 pursuant to which the Global Fund and the Overseas Fund may make certain payments to ASB for expenses incurred in connection with the distribution and service of the Class C shares of the Global Fund and the Overseas Fund (with Class C shares of Value Fund, the "Class C shares"). The Company's Board of Directors determined that there was a reasonable likelihood that both Class A Plan and Class C Plan would benefit each of Global Fund, Overseas Fund and Gold Fund and their shareholders. The Company's Board of directors has made a similar determination with respect to Value Fund and its shareholders. The Company subsequently adopted on February 18, 2001 one distribution and service plan and agreement in connection with both Class A and Class C shares which integrated and restated Class A Plan and Class C Plan. The Company now desires to extend the coverage of the integrated Plan to the Class A and Class C shares of Value Fund. Accordingly, the Company hereby adopts this Plan, and the parties hereto enter into this Plan, on the following terms and conditions: 1. Each of the Funds shall pay ASB a distribution-related fee as well as service fees, if any, on the first business day of each month based upon the average daily value of such Fund's net assets attributable to such Fund's Class A and Class C shares, 1 respectively (as determined on each business day at the time set forth in such Fund's currently effective prospectus for determining net asset value per share) during the preceding month and shall be calculated at an annual rate of 0.25% in the case of Class A shares and at a combined annual rate of 1.00% in the case of Class C shares. For purposes of calculating each such monthly fees, the value of a Fund's net assets attributable to Class A and Class C shares, respectively, shall be computed in the manner specified in that Fund's currently effective Prospectus and Statement of Additional Information for the computation of the value of such Fund's net assets in connection with the determination of the net asset value of shares of the Fund. For purposes of this Plan, a "business day" is any day the New York Stock Exchange is open for trading. 2. ASB shall be obligated to use all amounts received from each Fund under this Plan for (i) payments to broker-dealers and other financial intermediaries for their assistance in the distribution of the Fund's Class A and Class C shares and (ii) otherwise promoting the sale of the Fund's Class A and Class C shares and servicing the Fund's Class A and Class C shareholders, such as by paying the printing and distribution of prospectuses sent to prospective investors, the preparation, printing and distribution of sales literature, the expenses associated with media advertisements and telephone correspondence, and the expenses relating to servicing efforts, including answering questions of shareholders. No broker-dealer shall receive payments under the Plan which, on an annualized basis, exceed, in the case of Class A shares, 0.25% of net asset value of Fund Class A accounts originated by the broker-dealer and, in the case of Class C shares, in aggregate 1.00% of net asset value of Fund Class C accounts originated by the broker-dealer. All other agreements relating to the implementation of this Plan (the "related agreements") shall be in writing, and such agreements shall be subject to termination, without penalty, on not more than sixty days' written notice to any other party to the agreement, in accordance with the provisions of clauses (a) and (b) of paragraph 6 hereof. 3. This Plan, together with any related agreements, has been approved by a vote of the Board of Directors of the Company and of the directors who are not interested persons of the Company and have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan, cast in person at a meeting called for the purpose of voting on such plan or agreements. 4. This Plan and any related agreements shall continue in effect with respect to a Fund for a period of more than one year from the date of their adoption or execution only so long as such continuance is approved at least annually by a majority of the Board of Directors of the Company, including a majority of Independent Directors, pursuant to a vote cast in person at a meeting called for the purpose of voting on the continuance of this Plan and any related agreements. 5. This Plan may be amended at time with respect to a Fund with the approval of a majority of the Board of Directors of the Company, provided that (a) any material of this Plan must be approved by the Company's Board of Directors in accordance with procedures set forth in paragraph 4 hereof, and (b) any amendment to increase materially the amount to be expended by a Fund pursuant to this Plan must also 2 be approved by the vote of the holders of a majority of the outstanding voting securities of each affected class of shares of that Fund (as defined in the 1940 Act). 6. This Plan may be terminated with respect to a class or a Fund at any time, without the payment of any penalty, by (a) the vote of a majority of the Board of Directors of the Company, (b) the vote of a majority of the Independent Directors or (c) the vote of the holders of a majority of the outstanding voting securities of each affected class of shares of that Fund (as defined in the 1940 Act). 7. While this Plan is in effect, the selection and nomination of the Independent Directors shall be committed to the discretion of the Independent Directors then in office. 8. To the extent that this Plan constitutes a plan of distribution adopted pursuant to the Rule, it shall remain in effect as such so as to authorize the use of the Fund's assets in the amounts and for the purposes set forth herein, notwithstanding the occurrence of the Plan's assignment (as defined in the 1940 Act). To the extent this Plan concurrently constitutes an agreement relating to the implementation of the plan of distribution, it shall terminate automatically in the event of its assignment, and a Fund may continue to make payments pursuant to this Plan only (a) upon the approval of the Board of Directors of the Company in accordance with the procedures set forth in paragraph 4 hereof, and (b) if the obligations of ASB under this Plan are to be performed by any organization other than ASB, upon such organization's adoption and assumption in writing of all provisions of this plan as a party hereto. 9. ASB shall give the Company the benefit of ASB's best judgment and efforts in rendering services under this Plan. As an inducement to ASB's undertaking to render these services, the Company agrees that ASB shall not be liable under this Plan for any mistakes in judgment or in any other event whatsoever except for lack of good faith, provided that nothing in this Plan shall be deemed to protect or purport to protect ASB against any liability to the Company or its stockholders to which ASB would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of ASB's duties under this Plan or by reason of ASB's reckless disregard of its obligations and duties hereunder. 10. ASB may also make payments out of its own funds for costs and expenses associated with the distribution and sale of a Fund's Class A and Class C shares, including payments to the persons and for the purposes set forth in paragraph 2 hereof. 11. ASB shall prepare and furnish to the Company's Board of Directors, and the Company's Board of Directors shall review at least quarterly, a written report setting forth all amounts expended pursuant to this Plan and any related agreements and the purposes for which such expenditures were made. 12. The Company shall preserve copies of this Plan, any related agreements and any reports made pursuant to this Plan for a period of not less than six years from the 3 date of this Plan or any such related agreement or report. For the first two years, copies of such documents shall be preserved in an easily accessible place. 13. The provisions of this Plan are severable for each class of shares and each Fund and if provisions of the Plan applicable to a particular class or Fund are terminated, the remainder of the Plan provisions applicable to the other remaining classes or Funds shall not be invalidated thereby and shall be given full force and effect. IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and on its behalf by its duly authorized representative as of the date first above written. FIRST EAGLE SOGEN FUNDS, INC. By _____________________________ Title: Secretary ARNHOLD AND S. BLEICHROEDER, INC. By ______________________________ Title: Co-President 4 EX-99.N 9 ex99-n.txt EXHIBIT 99(N) FIRST EAGLE SOGEN FUNDS, INC. First Eagle SoGen Global Fund First Eagle SoGen Overseas Fund First Eagle SoGen Gold Fund First Eagle U.S. Value Fund AMENDED AND RESTATED MULTIPLE CLASS PLAN PURSUANT TO RULE 18f-3 WHEREAS, First Eagle SoGen Funds, Inc. (the "Corporation") engages in business as an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the "1940 Act"); WHEREAS, shares of beneficial interest of the Corporation are currently divided into four series: First Eagle SoGen Global Fund ("Global Fund"), First Eagle SoGen Overseas Fund ("Overseas Fund"), First Eagle SoGen Gold Fund ("Gold Fund") and First Eagle U.S. Value Fund ("U.S. Value Fund"); WHEREAS, the Corporation employs Arnhold and S. Bleichroeder Advisers, Inc. (the "Adviser") as its investment adviser, and Arnhold and S. Bleichroeder, Inc. ("Underwriter") as underwriter and distributor of the securities of which it is the issuer; and WHEREAS, the Corporation has previously adopted a Multiple Class Plan pursuant to Rule 18f-3 under the 1940 Act (the "Plan") with respect to each of the Global Fund and Overseas Fund and wishes to amend and restate the Plan to provide for coverage of the Class A, Class C and Class I Shares of Common Stock of the U.S. Value Fund. NOW, THEREFORE, the Corporation hereby adopts, on behalf of the Global Fund, Overseas Fund and U.S. Value Fund (each, a "Fund" and collectively, the "Funds"), an Amended and Restated Plan, in accordance with Rule 18f-3 under the 1940 Act, as set forth below: 1. Features of the Classes. The Global Fund, Overseas Fund and U.S. Value Fund shall each issue their shares of common stock in three classes: "Class A Common Stock", "Class C Common Stock" and "Class I Common Stock". Shares of each class of a Fund shall represent an equal pro rata interest in that Fund and, generally, shall have identical voting, dividend, liquidation, and other rights, preferences, powers, restrictions, limitations, qualifications, and terms and conditions, except that: (a) each class of a Fund shall have a different designation; (b) each class of a Fund shall bear any Class Expenses, as defined in Section 3 below; (c) each class of a Fund shall have exclusive voting rights on any matter submitted to shareholders that relates solely to its distribution arrangement; and (d) each class of a Fund shall have separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class of the Fund. In addition, shares of each class of a Fund shall have the features described in Paragraphs 2, 3, 4 and 5 below. 1 2. Distribution Plan. The Corporation has adopted a Distribution Plan with respect to each of the Class A Common Stock and Class C Common Stock of Global Fund, Overseas Fund and U.S. Value Fund pursuant to Rule 12b-1 promulgated under the 1940 Act. The Class A Distribution Plan authorizes the Corporation to make payments to the Underwriter for distribution and shareholder services, and for otherwise promoting the sale of the Class A shares of each Fund, at an annual rate of up to .25% of the average daily net asset value of the assets attributable to the Class A shares of that Fund. The Class C Distribution Plan authorizes the Corporation to make payment to the Underwriter for distribution and shareholder services, and for otherwise promoting the sale of Class C shares of Global Fund, Overseas Fund and U.S. Value Fund, at an annual rate of up to 1.00% of the average daily net asset value of the assets attributable to the Class C shares of that Fund, provided that up to 0.25% of such average daily net assets may be designated out of such payment as a "service fee", as defined in the rules and policy statements of the National Association of Securities Dealers, Inc. Each Plan further authorizes the Adviser to make assistance payments out of the Adviser's own resources to brokers, financial institutions and other financial intermediaries for shareholder accounts as to which a payee has rendered distribution services to the Corporation. The Class I shares of each Fund shall not participate in either Distribution Plan, nor shall any amounts payable under either Distribution Plan be used to make payments for distribution or other services incurred in connection with the sale of Class I shares. As used herein, the term "distribution and shareholder services" shall include, without limitation, paying for the printing and distribution of prospectuses sent to prospective investors, the preparation, printing and distribution of sales literature and the expenses associated with media advertisements and telephone and written correspondence with investors or prospective investors. 3. Allocation of Income and Expenses. (a) The gross income of each Fund shall, generally, be allocated among the classes of that Fund on the basis of the relative net assets attributable to each Fund's classes. To the extent practicable, certain expenses (other than Class Expenses, as defined below, which shall be allocated more specifically) shall be subtracted from the gross income on the basis of the relative net assets of each class of the Fund. These expenses include: (1) Expenses incurred by the Corporation (for example, fees of Directors, auditors and legal counsel) not attributable to a particular Fund or to a particular class of shares of a Fund ("Corporation Level Expenses") that are allocated to the Fund; and (2) Expenses incurred by a Fund not attributable to any particular class of the Fund's shares (for example, advisory fees, custodial fees, or other expenses relating to the management of the Fund's assets) ("Fund Expenses"). (b) Expenses attributable to a particular class ("Class Expenses") shall be limited to: (i) payments made pursuant to a distribution plan and/or a service plan; (ii) transfer agent fees attributable to a specific class; (iii) printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses and proxies to current shareholders of a specific class; (iv) Blue Sky registration fees incurred by a class; (v) SEC registration fees incurred by a class; (vi) the expense of administrative personnel and services to 2 support the shareholders of a specific class; (vii) litigation or other legal expenses relating solely to one class; and (viii) directors' fees incurred as a result of issues relating to one class. Expenses in category (i) above must be allocated to the class for which covered distribution expenses are incurred. All other "Class Expenses" listed in categories (ii)-(viii) above may be allocated to a class but only if the President or Chief Financial Officer has determined, subject to Board approval or ratification, that such categories of expenses may be treated as Class Expenses consistent with applicable legal principles under the 1940 Act and the Internal Revenue Code of 1986, as amended. Accordingly, expenses of a Fund shall be apportioned to each class of shares depending on the nature of the expense item. Corporation Level Expenses and Fund Expenses will be allocated among the classes of shares of such Fund based on their relative net asset values. Class Expenses shall be allocated to the particular class to which they are attributable. In addition, certain expenses may be allocated differently if their method of imposition changes. Thus, if a Class Expense can no longer be attributed to a class, it shall be charged to a Fund for allocation among the classes, as determined by the Board of Directors. Any additional Class Expenses not specifically identified above which are subsequently identified and determined to be properly allocated to one class of shares shall not be so allocated until approved by the Board of Directors of the Company in light of the requirements of the 1940 Act and the Internal Revenue Code of 1986, as amended. 4. Exchange Privileges. Subject to certain limitations disclosed in a Fund's prospectus or statement of additional information, the shares of each Fund may be exchanged for the shares of each of the other funds comprising the SoGen family of funds without payment of additional sales charges. The exchange privileges may be modified or terminated at any time, or from time to time, upon 60 days' notice to shareholders. 5. Conversion Features. Class A shares of the Global Fund, the Overseas Fund or the U.S. Value Fund having an aggregate value not less than $1 million may be converted into Class I shares of the same Fund upon the election of the shareholder. Such conversions shall take place at net asset value, shall not result in the realization of income or gain for federal income tax purposes and shall be tax free to shareholders. 6. Waiver or Reimbursement of Expenses. Expenses may be voluntarily waived or reimbursed by the Adviser or any other provider of services to the Corporation without the prior approval of the Corporation's Board of Directors. Voluntary waivers or reimbursements may be discontinued at any time, without prior notice, unless notice is required by disclosures made in the Fund's prospectus or statement of additional information. 7. Effectiveness of Plan. This Plan shall take effect upon approval by votes of a majority of both (a) the Directors of the Corporation and (b) the Directors of the Corporation who are not "interested persons" (as defined in the 1940 Act) of the Corporation, such Directors having determined that the Plan as proposed to be adopted or amended, including the allocation of expenses, is in the best interests of each class individually and the Corporation as a whole. 3 8. Material Modifications. This Plan may be amended to modify materially its terms, provided that any such amendment will become effective only upon approval in the manner provided for initial approval in Paragraph 7 hereof. IN WITNESS WHEREOF, the Corporation, on behalf of the Funds, has adopted this Amended and Restated Multiple Class Plan as of the 13th day of August, 2001. FIRST EAGLE SOGEN FUNDS, INC. By: ---------------------------- Name: Title: Secretary 4 EX-99.P 10 ex99-p.txt EXHIBIT 99(P) CODE OF ETHICS 1. Statement of General Principles This Code of Ethics ("Code") expresses the policy and procedures of Arnhold and S. Bleichroeder, Inc. ("A&SB") and Arnhold and S. Bleichroeder Advisers, Inc. ("A&SB Advisers") (collectively, the "Adviser") and First Eagle Funds, First Eagle SoGen Funds, Inc. and First Eagle Sogen Variable Funds, Inc. (collectively, the "First Eagle Funds"). The Code is enforced to insure that no one is taking advantage of his or her position, or even giving the appearance of placing his or her own interests above those of the Funds. Investment company personnel must at all levels act as fiduciaries, and as such must place the interests of the shareholders of the Funds before their own. Rule 17j-1 under the Investment Company Act of 1940, as amended (the "Act"), makes it unlawful for certain persons, in connection with the purchase or sale of securities, to, among other things, engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon a registered investment company. In compliance with Rule 17j-1, this Code contains provisions that are reasonably necessary to eliminate the possibility of any such conduct. Access Persons of Funds other than the First Eagle Funds are presumed to be subject to separate codes of ethics applicable to such other Funds and are not subject to the Code, provided that such Access Persons are not otherwise affiliated with the Adviser or the First Eagle Funds. 2. Definitions "Access Person" shall mean any director, trustee, officer, general partner, or Advisory Person of the Funds or of A&SB Advisers. A director, trustee, officer, general partner, or Advisory Person of A&SB (if not also in such a position with respect to the Funds or A&SB Advisers) shall be an Access Person only if in the ordinary course of his or her business such person makes, participates in or obtains information regarding the purchase or sale of securities for the Funds or whose functions or duties as part of the ordinary course of his or her business relate to the making of any recommendation to the Funds regarding the purchase or sale of securities. "Advisory Person" of the Funds means any employee of the Funds or the Adviser (or any company in a control relationship to the Funds or the Adviser) who, in connection with his regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a security by the Funds, or whose functions relate to the making of any recommendations with respect to such purchases or sales, and shall include any natural person in a control relationship with the Funds or the Adviser who obtains information concerning recommendations made to the Funds with regard to the purchase or sale of a security. The term "beneficial ownership" shall have the same meaning as set forth in Rule 16a-1(a)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Subject to the specific provisions of that Rule, beneficial ownership generally means having or sharing, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, a direct or indirect pecuniary interest in a security. "Pecuniary interest" means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security. "Indirect pecuniary interest" includes, but is not limited to, an interest in a security held by members of your immediate family who share your household, including your spouse, children and stepchildren, parents, grandparents, brothers and sisters, and in-laws. "Board" shall mean the board of directors or board of trustees of a Fund. "Compliance Officer" shall mean the compliance officer appointed by the Board of the applicable Fund. "Control" shall have the same meaning as that set forth in Section 2(a)(9) of the Act. The term "Covered Security" shall mean a security defined in Section 2(a)(36) of the Act and shall include options, but shall not include direct obligations of the United States, bankers' acceptances, bank certificates of deposit, commercial paper, other money market instruments including repurchase agreements, and shares of registered open-end investment companies. "Disinterested Director" of the Funds shall mean a director or trustee thereof who is not an "interested person" of the Funds within the meaning of Section 2(a)(19) of the Act. "Fund" or "Funds" shall mean First Eagle Funds, First Eagle SoGen Funds, Inc. and First Eagle Sogen Variable Funds, Inc. and any other registered investment company to which the Adviser acts as adviser or subadviser. "Initial Public Offering" means an offering of securities registered under the Securities Act of 1933, as amended (the "Securities Act"), by or for an issuer of such securities which, immediately before the registration, was not subject to the reporting requirements of Section 13 or 15d of the Exchange Act. "Investment Compliance Committee" shall mean the applicable committee appointed by the management of A&SB. "Investment Personnel" of the Funds or the Adviser generally includes Portfolio Managers and those persons who provide information and advice to the Portfolio Managers or who help execute the Portfolio Managers' investment decisions (e.g., securities analysts and traders) and shall also include any natural person in a control relationship with the Funds or the Adviser who obtains information concerning recommendations made to the Funds with regard to the purchase or sale of a security. "Limited Offering" shall mean an offering that is exempt from registration under the Securities Act pursuant to Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 thereunder. "Portfolio Managers" shall mean those persons who have direct responsibility and authority to make investment decisions for a Fund. 2 "Principal Underwriter" shall mean A&SB. The "purchase or sale of a security" includes, among other things, the writing of an option to purchase or sell a security. 3. Prohibited Securities Transactions The prohibitions described below will only apply to a transaction in a Covered Security in which the designated person has, or by reason of such transaction acquires or disposes, any direct or indirect beneficial ownership in such Covered Security ("Securities Transaction"). A. Blackout Trading Periods - Access Persons No Access Person shall execute a Securities Transaction on a day during which Funds in the Access Person's fund complex have a pending buy or sell order in that same Covered Security until that order is executed or withdrawn. Any profits realized on trades within the proscribed periods are required to be disgorged to a charity selected by the Adviser. B. Blackout Trading Periods - Portfolio Managers No Portfolio Manager shall buy or sell a Covered Security within seven calendar days before and after the Fund that he or she manages trades in that Covered Security. Any profits realized on trades within the proscribed periods are required to be disgorged to a charity selected by the Adviser. C. Ban on Short-Term Trading Profits - Investment Personnel Investment Personnel may not profit in the purchase and sale, or sale and purchase, of the same (or equivalent) Covered Securities within 60 calendar days. Any profits realized on such short-term trades are required to be disgorged to a charity selected by the Adviser. D. Ban on Securities Purchases of an Initial Public Offering - Investment Personnel Investment Personnel may not acquire any securities in an Initial Public Offering. E. Securities Offered in a Limited Offering - Investment Personnel Investment Personnel may not acquire any securities in a Limited Offering without the prior written consent of the Compliance Officer. Furthermore, should written consent be given, Investment Personnel are required to disclose such investment when participating in the Fund's subsequent consideration of an investment in such issuer. In such circumstances, the Fund's decision to purchase securities of such issuer shall be subject to an independent review by the Investment Compliance Committee. Any member of such committee having a personal interest in the issuer shall disqualify himself or herself from participation in this review. 3 4. Exempted Transactions A. Subject to compliance with preclearance procedures in accordance with Section 5 below, the prohibitions of Sections 3A, 3B and 3C of this Code shall not apply to: (i) Purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control, or in any account of the Access Person which is managed on a discretionary basis by a person other than such Access Person and with respect to which such Access Person does not in fact influence or control such transactions. (ii) Purchases or sales of securities which are not eligible for purchase or sale by the Funds. (iii) Purchases or sales which are non-volitional on the part of either the Access Person or the Funds. (iv) Purchases which are part of an automatic dividend reinvestment plan. (v) Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired. (vi) Any equity securities transaction involving 500 shares or less or amounting to $10,000 or less, in the aggregate, if (i) the Access Person has no prior knowledge of transactions in such Covered Security by the Funds and (ii) if the issuer has a market capitalization (outstanding shares multiplied by the current price per share) greater than $1 billion at the time of purchase. For purposes of calculating the number of shares or dollar amount involved in any such transaction, related transactions shall be integrated and considered to be a single transaction. (vii) Any fixed income securities transaction involving $50,000 principal amount or less if the Access Person has no prior knowledge of transactions in such Covered Security by the Funds. (viii) All other transactions contemplated by an Access Person which receive the prior approval of the Investment Compliance Committee in accordance with the preclearance procedures described in Section 5 below. Purchases or sales of a specific Covered Security may receive the prior approval of the Investment Compliance Committee because the Committee has determined that no abuse is involved and that such purchases and sales would be very unlikely to have any economic impact on the Funds or on the Fund's ability to purchase or sell such Covered Securities. B. The prohibition in Section 3A shall not apply to Disinterested Directors of the Funds, unless a Disinterested Director, at the time of a transaction, knew or, in the ordinary course of fulfilling his or her official duties as a Disinterested Director of the Funds, should have known that the Funds had a pending buy or sell order in that same Covered Security, which order had not yet been executed or withdrawn. 4 C. A transaction by an Access Person (other than Investment Personnel) effected during the period proscribed in Section 3A will not be considered a violation of the Code and disgorgement will not be required so long as the transaction was effected in good faith in accordance with the preclearance procedures described in Section 5 and without prior knowledge on the part of such Access Person of any pending Fund buy or sell order involving the same security. D. The prohibition in Section 3C shall not apply to profits earned from Securities Transactions in which the Covered Securities involved are not the same (or equivalent) to those owned, shorted or in any way traded by the Funds in the applicable person's fund complex during the 60 day period; provided, however, that if the Investment Compliance Committee determines that a review of Investment Personnel reported personal securities transactions indicates an abusive pattern of short-term trading, the Committee may prohibit either specific persons or all Investment Personnel from profiting in the purchase and sale, or sale and purchase, of the same (or equivalent) securities within 60 calendar days whether or not such Covered Security is the same (or equivalent) to that owned, shorted or in any way traded by the Funds in the applicable person's fund complex. 5. Preclearance Access Persons (other than Disinterested Directors, as described below) must preclear all Securities Transactions. All requests for preclearance must be submitted to the Investment Compliance Committee. Such requests shall be made by submitting a Personal Investment Request Form, in the form annexed hereto as Appendix A. All approved orders must be executed by the close of business on the day preclearance is granted. If any order is not timely executed, a request for preclearance must be resubmitted. Disinterested Directors need not preclear their personal investments in Covered Securities unless a Disinterested Director knows, or in the course of fulfilling his or her official duties as a Disinterested Director should know, that, within the most recent 15 days, any of the Funds has purchased or sold, or considered for purchase or sale, such Covered Security or is proposing to purchase or sell, directly or indirectly, any Covered Security in which the Disinterested Director has, or by reason of such Securities Transaction would acquire, any direct or indirect beneficial ownership. 6. Reporting A. The Compliance Officer shall periodically identify all Access Persons subject to the Code and inform such Access Persons of their reporting and compliance obligations thereunder. B. Access Persons (other than Disinterested Directors) are required to direct their broker(s) to supply to the Compliance Officer on a timely basis duplicate copies of confirmations of all personal Securities Transactions and copies of periodic statements for all securities accounts, whether existing currently or to be established in the future. A sample letter for this purpose is attached as Appendix B. The Securities Transaction reports and/or duplicate confirmations should be addressed "Personal and Confidential." Compliance with this Code 5 requirement will be deemed to satisfy the quarterly reporting requirements imposed on Access Persons under Rule 17j-1. C. A Disinterested Director shall report to the Compliance Officer, no later than ten days after the end of the calendar quarter in which the transaction to which the report relates was effected, the information required in Appendix C hereto with respect to any Securities Transaction in which such Disinterested Director has, or by reason of such transaction acquires, any direct or indirect beneficial ownership in a Covered Security that such Disinterested Director knew, or in the course of fulfilling his or her official duties as a director should have known, during the 15-day period immediately preceding or after the date of the Securities Transaction by the Disinterested Director, to have been purchased or sold by the Funds or considered for purchase or sale by the Funds. With respect to those transactions executed through a broker, a Disinterested Director of the Funds may fulfill this requirement by directing the broker(s) to transmit to the Compliance Officer a duplicate of confirmations of such transactions, and copies of the statements of such brokerage accounts, whether existing currently or to be established in the future. The transaction reports and/or duplicates should be addressed "Personal and Confidential" and submitted to the Compliance Officer and may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect beneficial ownership in the Covered Security to which the report relates. Securities Transactions effected for any account over which a Disinterested Director does not have any direct or indirect influence or control, or which is managed on a discretionary basis by a person other than the Disinterested Director and with respect to which such Disinterested Director does not in fact influence or control such transactions, need not be reported. D. Whenever a person designated as Investment Personnel recommends that the Funds purchase or sell a Covered Security, he or she shall disclose to the person to whom the recommendation is made, as well as to the Compliance Officer, whether he or she presently owns such Covered Security, or whether he or she is considering the purchase or sale of such Covered Security. E. Not later than ten days after a person becomes an Access Person, and thereafter on an annual basis Access Persons (other than Disinterested Directors) will disclose all personal securities holdings and all their accounts with any broker or dealer. On an annual basis Access Persons (other than Disinterested Directors) will be sent a copy of the list of such Access Person's securities accounts in which he or she has a beneficial ownership interest to verify its accuracy and make any necessary additions or deletions. The Access Person shall immediately notify the Compliance Officer upon establishing any account with a securities or derivatives broker or dealer. F. All personal matters discussed with the Compliance Officer, or members of the Investment Compliance Committee, and all preclearance materials, confirmations, account statements and personal investment reports shall be kept in confidence, but will be available for inspection by the Boards of the Funds and the Adviser and by the appropriate regulatory agencies. 6 7. Annual Certification On an annual basis Access Persons will be sent a copy of this Code for their review. Access Persons will be asked to certify that they have read and understand this Code and recognize that they are subject hereto. Access Persons will be further asked to certify annually that they have complied with the requirements of this Code and that they have disclosed or reported all personal securities transactions and holdings required to be disclosed or reported pursuant to this Code. A sample of the certification is attached as Appendix D. 8. Confidential Status of the Fund's Portfolio The current portfolio positions of the Funds managed, advised and/or administered by the Adviser and current portfolio transactions, programs and analyses must be kept confidential. If non-public information regarding the Fund's portfolio should become known to any Access Person, whether in the line of duty or otherwise, he or she should not reveal it to anyone unless it is properly part of his or her work to do so. 9. Material Non-Public Information No Access Person may purchase or sell any Covered Security, or be involved in any way in the purchase or sale of a Covered Security, while in possession of material nonpublic information about the Covered Security or its issuer, regardless of the manner in which such information was obtained. This prohibition covers transactions for clients, as well as transactions for personal accounts. Furthermore, no Access Person possessing material non-public information may disclose such information to any person other than the Compliance Officer, except to the extent authorized by the Compliance Officer. Disclosing non-public material information to others is known as "tipping" and is prohibited. An Access Person who believes that he or she is in possession of material non-public information should promptly contact the Compliance Officer to discuss the issue and should take appropriate steps (e.g., sealing files, limiting computer access) to secure such information. Material information is information which an investor would consider important in making an investment decision and which would substantially affect the market price of a security if disclosed. Non-public information includes corporate information, such as undisclosed financial information about a corporation, and market information, such as a soon-to-be-published article about a corporation. 10. Gifts - Investment Personnel Investment Personnel may not receive any gift or other benefit (including entertainment) of more than de minimis value from any person or entity that does business with or on behalf of the Funds. For purposes of this Code, "more than de minimis value" shall mean any gift in excess of a value of $100 per year. 7 11. Services as a Director in a Publicly Traded Company - Investment Personnel Investment Personnel shall not serve on the boards of directors of publicly traded companies, absent prior authorization by the Board(s) of the applicable Fund(s), based upon a determination that the board service would be consistent with the interests of the Fund(s) and its/their shareholders. When such authorization is provided, the Investment Personnel serving as a director will be isolated from making investment decisions with respect to the pertinent company through "Chinese Wall" or other procedures. 12. Outside Employment No Access Person may render investment advice to persons other than the Adviser's clients, unless the advisory relationship, including the identity of those involved and any fee arrangements, has been disclosed to and approved by the Adviser. All transactions for such outside advisory clients of the Access Person are subject to the substantive restrictions of Sections 3 and 4 above and the reporting and pre-clearance requirements of Sections 5 and 6 above. 13. Compliance Review The Compliance Officer shall compare the reported personal Securities Transactions with completed and contemplated portfolio transactions of the Funds to determine whether a violation of this Code may have occurred. The Compliance Officer shall bring any questionable transactions to the attention of the Investment Compliance Committee. Before making any determination that a violation has been committed by any person, the Investment Compliance Committee shall give such person an opportunity to supply additional information regarding the Securities Transaction in question. 14. Sanctions The Board of each Fund and the Board of Directors of the Adviser will be informed of Code violations of this Code on a quarterly basis and the relevant Board may impose such sanctions as they deem appropriate, including inter alia, a letter of censure or suspension or termination of employment of the Access Person or a request for disgorgement of any profits received from a Securities Transaction done in violation of this Code. 15. Board Review The Board of each Fund shall annually receive a copy of the existing Code, along with a list of recommendations, if any, to change the existing Code based upon experience, evolving industry practices or developments in applicable laws or regulations. No less frequently than annually, the Compliance Officer shall submit to the Board of each Fund a written report that: (A) Describes any issues arising under this Code or its procedures since the last report to the Board, including, but not limited to, information about material violations of this Code or its procedures and sanctions imposed in response to the material violations; and, 8 (B) Certifies that the Funds, and the Adviser have adopted procedures reasonably necessary to prevent Access Persons from violating this Code. 16. Recordkeeping The Compliance Officer shall maintain, at the Funds' and the Adviser's principal place of business, the following record and shall make these records available to the Securities and Exchange Commission and its representatives: A. A copy of each Code in effect during the past five years. B. A record of any violation and the actions taken in response thereto during the past five years. C. A copy of each Access Person's reports. D. A record of all Access Persons. E. A copy of the written reports to the Board(s). F. A record of the reasons for preapproving any purchase of securities issued in an Initial Public Offering or Limited Offering. 9 Appendix A This trade approval request is the form used on A&SB's intranet website. All Securities Transactions should receive preclearance through the intranet site. Trade Approval Request To: Investment Compliance Committee From:__________________________________ Date:__________________________________ Permission is requested to (BUY)/(SELL) _________________________ shares of ______________________________________________________________. The securities (ARE)/(ARE NOT) being purchased as part of an Initial Public Offering or Limited Offering. The trade is to be executed at (ASB)/(Other Firm:______________________________) I have no material, non-public information regarding the above referenced security. I have checked our trading desk to ensure that there are no pending customer orders. Employee Signature:_______________________________ Note: This form will not be approved without the employee first signing. Filling out this form is the responsibility of the person requesting approval, not the person granting approval! Approved By:_________________________________________ Date:________________ Trades may only be made on the date that approval is granted. Appendix B Date XYZ Broker Dealer Re: Dear Sir/Madam: Please accept this letter as permission, pursuant to NYSE Rule 407, to allow __________, an employee of our firm, to maintain an account(s) with your firm. In regards to the above, please send duplicate confirmations and statements on all transactions to the following: Arnhold and S. Bleichroeder, Inc. Ms. Tracy L. Saltwick Senior Vice President 1345 Avenue of the Americas New York, New York 10105-4300 Thank you for your prompt attention to this matter. Sincerely, ARNHOLD AND S. BLEICHROEDER, INC. By:_______________________________ Appendix C Information required to be reported: (1) The date of the transaction, the title, the interest rate and maturity date (if applicable), the number of shares and the principal amount of each Covered Security involved; (2) The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); (3) The price of the Covered Security at which the transaction was effected; (4) The name of the broker, dealer or bank with or through which the transaction was effected; and (5) The date that the report is submitted by the Access Person. Appendix D Certification I hereby certify that: o I have received a current copy of the Code of Ethics, and have read and understand the Code. o I recognize that I am subject to the Code and certify that have complied with the requirements of the Code. o I have disclosed or reported all my personal securities transactions and holdings required to be disclosed or reported pursuant to this Code. --------------------------------- Name: Date: ---------------------------- -----END PRIVACY-ENHANCED MESSAGE-----