File No. 2-33566
811-1886
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. __ |_|
Post-Effective Amendment No. 49 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 24 |X|
SELIGMAN CAPITAL FUND, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b) of rule 485
|X| on May 1, 1995 pursuant to paragraph (b) of rule 485
|_| 60 days after filing pursuant to paragraph (a)(i) of rule 485
|_| on (date) pursuant to paragraph (a)(i) of rule 485
|_| 75 days after filing pursuant to paragraph (a)(ii) of rule 485
|_| on (date) pursuant to paragraph (a)(ii) 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.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on February
27, 1995.
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SELIGMAN CAPITAL FUND, INC.
POST-EFFECTIVE AMENDMENT NO. 49
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
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Item in Part A of Form N-1A Location in Prospectus
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1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Organization and Capitalization
5. Management of the Fund Management Services
5a. Manager's Discussion of Fund Performance Management Services
6. Capital Stock and Other Securities Organization and Capitalization
7. Purchase of Securities Being Offered Alternative Distribution System; Purchase of Shares; Administration,
Shareholder Services and Distribution Plan
8. Redemption or Repurchase Telephone Transactions; Redemption of Shares; Exchange Privilege
9. Pending Legal Proceedings Not applicable
Item in Part B of Form N-1A Location in Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information; Organization and Capitalization (Prospectus);
Appendix
13. Investment Objectives and Policies Investment Objectives, Policies And Risks; Investment Limitations
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers
Holders of Securities
16. Investment Advisory and Other Services Management and Expenses; Distribution Services
17. Brokerage Allocation Portfolio Transactions; Administration, Shareholder Services and
Distribution Plan
18. Capital Stock and Other Securities General Information; Organization and Capitalization (Prospectus)
19. Purchase, Redemption and Pricing Purchase and Redemption of Fund Shares;
of Securities being Offered Valuation
20. Tax Status Federal Income Taxes (Prospectus)
21. Underwriters Distribution Services
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
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SELIGMAN CAPITAL FUND, INC.
100 Park Avenue
New York, NY 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450 all continental United States
For Retirement Plan Information -- Toll-Free Telephone: (800) 445-1777
May 1, 1995
Seligman Capital Fund, Inc. (the 'Fund') is a mutual fund which invests to
produce capital appreciation. Current income is not an objective. Investment
advisory and management services are provided to the Fund by J. & W. Seligman &
Co. Incorporated (the 'Manager'); the Fund's distributor is Seligman Financial
Services, Inc., an affiliate of the Manager. For a description of the Fund's
investment objective and policies, including the risk factors associated with an
investment in the Fund, see 'Investment Objective, Policies And Risks.' There
can be no assurance that the Fund's investment objective will be achieved.
The Fund offers two classes of shares. Class A shares are sold subject to
an initial sales load of up to 4.75% and an annual service fee currently charged
at a rate of up to .25 of 1% of the average daily net asset value of the Class A
shares. Class D shares are sold without an initial sales load but are subject to
a contingent deferred sales load ('CDSL') of 1% imposed on certain redemptions
within one year of purchase, an annual distribution fee of up to .75 of 1% and
an annual service fee of up to .25 of 1% of the average daily net asset value of
the Class D shares. See 'Alternative Distribution System.' Shares of the Fund
may be purchased through any authorized investment dealer.
This Prospectus sets forth concisely the information a prospective investor
should know about the Fund before investing. Please read it carefully before you
invest and keep it for future reference. Additional information about the Fund,
including a Statement of Additional Information, has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
available upon request and without charge by calling or writing the Fund at the
telephone numbers or the address set forth above. The Statement of Additional
Information is dated the same date as this Prospectus and is incorporated herein
by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
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PAGE
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Summary Of Fund Expenses............................. 2
Financial Highlights................................. 3
Alternative Distribution System...................... 4
Investment Objective, Policies And Risks............. 5
Management Services.................................. 7
Purchase Of Shares................................... 9
Telephone Transactions............................... 13
Redemption Of Shares................................. 14
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PAGE
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Administration, Shareholder Services And Distribution
Plan............................................... 16
Exchange Privilege................................... 17
Further Information About Transactions In The Fund... 19
Dividends And Distributions.......................... 19
Federal Income Taxes................................. 20
Shareholder Information.............................. 21
Advertising The Fund's Performance................... 22
Organization And Capitalization...................... 23
</TABLE>
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SUMMARY OF FUND EXPENSES
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CLASS A CLASS D
SHARES SHARES
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(INITIAL SALES (DEFERRED SALES
LOAD LOAD
SHAREHOLDER TRANSACTION EXPENSES ALTERNATIVE) ALTERNATIVE)
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Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......... 4.75% None
Sales Load on Reinvested Dividends.................................................. None None
Deferred Sales Load (as a percentage of original 1% during the
purchase price or redemption proceeds, first year;
whichever is lower)............................................................... None None thereafter
Redemption Fees..................................................................... None None
Exchange Fees....................................................................... None None
ANNUAL FUND OPERATING EXPENSES FOR 1994 CLASS A CLASS D
(as a percentage of average net assets)
Management Fees..................................................................... .53% .53%
12b-1 Fees.......................................................................... .20% 1.00%*
Other Expenses...................................................................... .40% 1.13%
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Total Fund Operating Expenses....................................................... 1.13% 2.66%
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The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of the Fund bear directly or
indirectly. The sales load on Class A shares is a one-time charge paid at the
time of purchase of shares. Reductions in sales loads are available in certain
circumstances. The contingent deferred sales load on Class D shares is a
one-time charge paid only if shares are redeemed within one year of purchase.
For more information concerning reduction in sales loads and for a more complete
description of the various costs and expenses, see 'Purchase Of Shares,'
'Redemption Of Shares' and 'Management Services' herein. The Fund's
Administration, Shareholder Services and Distribution Plan to which the caption
'12b-1 Fees' relates, is discussed under 'Administration, Shareholder Services
and Distribution Plan' herein.
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EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time
period..........................................................Class A $ 58 $82 $ 107 $178
Class D $ 37`D' $83 $ 141 $299
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THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5%
ANNUAL RETURN USED IN THIS EXAMPLE IS A HYPOTHETICAL RATE.
* Includes an annual distribution fee of .75 of 1% and an annual service fee of
.25 of 1%. Pursuant to the Rules of the National Association of Securities
Dealers, Inc., the aggregate deferred sales loads and annual distribution fees
on Class D shares of the Fund may not exceed 6.25% of total gross sales,
subject to certain exclusions. The 6.25% limitation is imposed on the Fund
rather than on a per shareholder basis. Therefore, a long-term Class D
shareholder of the Fund may pay more in total sales loads (including
distribution fees) than the economic equivalent of 6.25% of such shareholder's
investment in the shares.
`D' Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be $27.
2
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FINANCIAL HIGHLIGHTS
The Fund's financial highlights for the periods presented below have been
audited by Deloitte & Touche LLP, independent auditors. This information, which
is derived from the financial and accounting records of the Fund, should be read
in conjunction with the 1994 financial statements and notes contained in the
1994 Annual Report, which may be obtained by calling or writing the Fund at the
telephone numbers or address provided on the cover page of this Prospectus.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from the Fund's beginning
net asset value to its ending net asset value so that investors may understand
what effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amount.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at the net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value and then sold their shares at the net asset value per share on the last
day of the period. The total return computations do not reflect any sales loads
investors may incur in purchasing or selling shares of the Fund. Total returns
for periods of less than one year are not annualized.
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CLASS A
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YEAR ENDED DECEMBER 31
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1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period........................ $15.95 $17.04 $16.66 $12.45 $12.38 $10.41 $11.02 $12.72 $12.82 $9.80
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss).... (.06) (.03) .02 .03 .06 .08 .04 (.03) .03 .11
Net realized and unrealized
investment gain (loss)........ (1.12) .84 1.89 6.66 .11 3.25 .22 (.29) 2.30 2.91
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Increase (decrease) from
investment operations......... (1.18) .81 1.91 6.69 .17 3.33 .26 (.32) 2.33 3.02
Distributions from net gain
realized...................... (1.60) (1.90) (1.53) (2.48) (.10) (1.36) (.87) (1.38) (2.43) --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in net
asset value................... (2.78) (1.09) .38 4.21 .07 1.97 (.61) (1.70) (.10) 3.02
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period........................ $13.17 $15.95 $17.04 $16.66 $12.45 $12.38 $10.41 $11.02 $12.72 $12.82
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN BASED ON NET ASSET
VALUE......................... (7.06)% 4.80% 11.56% 54.67% 1.38% 32.44% 2.47% (2.59)% 17.81% 30.82%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets**...................... 1.13% 1.13% .96% 1.01% .92% .88% .99% .83% .78% .82%
Net investment income (loss) to
average net assets............ (.39)% (.17)% .11% .25% .47% .67% .36% (.69)% 1.01% 1.04%
Portfolio turnover.............. 70.72% 46.84% 42.32% 42.20% 23.05% 49.51% 92.07% 72.61% 32.06% 92.69%
Net assets, end of period (000's
omitted)...................... $162,556 $196,212 $198,063 $172,676 $120,759 $124,623 $114,564 $151,965 $186,732 $190,264
<CAPTION>
CLASS D
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YEAR ENDED 5/3/93*
12/31/94 TO 12/31/93
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PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period........................ $15.86 $16.43
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Net investment income (loss).... (.33) (.08)
Net realized and unrealized
investment gain (loss)........ (1.11) 1.41
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Increase (decrease) from
investment operations......... (1.44) 1.33
Distributions from net gain
realized...................... (1.60) (1.90)
----- -----
Net increase (decrease) in net
asset value................... (3.04) (.57)
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Net asset value, end of
period........................ $12.82 $15.86
----- -----
----- -----
TOTAL RETURN BASED ON NET ASSET
VALUE......................... (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets**...................... 2.66% 2.26%`D'
Net investment income (loss) to
average net assets............ (2.28)% (1.32)%`D'
Portfolio turnover.............. 70.72% 46.84%`D'`D'
Net assets, end of period (000's
omitted)...................... $ 3,179 $ 2,749
</TABLE>
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Per share amounts for the year ended December 31, 1994, are calculated based
on average shares outstanding.
* Commencement of offering of Class D shares.
** Excludes interest expense of $262,586 in 1987, $320,583 in 1986 and $81,439
in 1985.
`D' Annualized.
`D'`D' For the year ended December 31, 1993.
The data provided above reflects historical information and therefore through
April 10, 1991 has not been adjusted to reflect the effect of the increased
management fee approved by shareholders on April 10, 1991 and through December
31, 1992, does not reflect the effect of the Administration, Shareholder
Services and Distribution Plan which was approved on November 23, 1992 and
effective January 1, 1993.
3
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ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers two classes of shares. Class A shares are sold to investors
who have concluded that they would prefer to pay an initial sales load and have
the benefit of lower continuing charges. Class D shares are sold to investors
choosing to pay no initial sales load, a higher distribution fee and, with
respect to redemptions within one year of purchase, a CDSL. The Alternative
Distribution System allows investors to choose the method of purchasing shares
that is most beneficial in light of the amount of the purchase, the length of
time the shares are expected to be held and other relevant circumstances.
Investors should determine whether under their particular circumstances it is
more advantageous to incur an initial sales load and be subject to lower ongoing
charges, as discussed below, or to have the entire initial purchase price
invested in the Fund with the investment thereafter being subject to higher
ongoing charges and, for a one-year period, a CDSL.
Investors who qualify for reduced sales loads, as described under 'Purchase
Of Shares' below, might choose to purchase Class A shares because Class A shares
would be subject to lower ongoing fees. The amount invested in the Fund,
however, is reduced by the initial sales load deducted at the time of purchase.
Investors who do not qualify for reduced initial sales loads but expect to
maintain their investment for an extended period of time might also choose to
purchase Class A shares because over time the accumulated continuing
distribution fee of Class D shares may exceed the initial sales load and lower
distribution fee of Class A shares. This consideration must be weighed against
the fact that the amount invested in the Fund will be reduced by the initial
sales load deducted at the time of purchase. Furthermore the distribution fees
will be offset to the extent any return is realized on the additional funds
initially invested under the Class D alternative.
Alternatively, some investors might choose to have all of their funds
invested initially in Class D shares, although remaining subject to a higher
continuing distribution fee and, for a one-year period, a CDSL as described
below. For example, an investor who does not qualify for reduced sales loads
would have to hold Class A shares for more than 6.33 years for the Class D
distribution fee to exceed the initial sales load plus the distribution fee on
Class A shares. This example does not take into account the time value of money,
which further reduces the impact of the Class D shares' 1% distribution fee,
other expenses charged to each class, fluctuations in net asset value or the
effect of the return on the investment over this period of time.
The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required by the Investment Company Act of 1940, as
amended (the '1940 Act'), or Maryland law. The net income attributable to each
class and dividends payable on the shares of each class will be reduced by the
amount of distribution and other expenses of each class. Class D shares bear
higher distribution fees, which will cause the Class D shares to pay lower
dividends than the Class A shares. The two classes also have separate exchange
privileges.
The Directors of the Fund believe that no conflict of interest currently
exists between the Class A and Class D shares. On an ongoing basis, the
Directors, in the exercise of their fiduciary duties under the 1940 Act and
Maryland law, will seek to ensure that no such conflict arises. For this
purpose, the Directors will monitor the Fund for the existence of any material
conflict among the classes and will take such action as is reasonably necessary
to eliminate any such conflicts that may develop.
DIFFERENCES BETWEEN CLASSES. The primary distinctions between Class A and
Class D shares are their sales load structures and ongoing expenses as set forth
below. Each class has advantages and
4
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disadvantages for different investors, and investors should choose the class
that best suits their circumstances and their objectives.
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ANNUAL 12b-1 FEES
INITIAL (AS A % OF AVERAGE OTHER
SALES LOAD DAILY NET ASSETS) INFORMATION
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CLASS A Maximum initial Service fee of Initial sales load
sales load of .25%. waived or
4.75% of the reduced for
public offering certain
price. purchases.
CLASS D None Service fee of CDSL of 1% on
.25%; redemptions
Distribution fee within one year
of .75%. of purchase.
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INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund is an open-end diversified management investment company, as
defined in the 1940 Act, or mutual fund, incorporated in Maryland in 1968.
The Fund seeks to produce capital appreciation for its shareholders by
investing primarily in common stock. Current income is not an objective. It may
invest in securities convertible into or exchangeable for common stocks, common
stock purchase warrants and rights, debt securities and preferred stocks
believed to provide capital appreciation opportunities. The Fund may also hold
cash, U.S. Government securities, commercial paper or other investment grade
debt securities. The Fund may borrow money to increase its portfolio of
securities. Investing for capital appreciation and borrowing ordinarily expose
capital to added risk. Shares of the Fund are intended for you only if you are
able and willing to take such risk. There can be no assurance that the Fund's
investment objective will be attained.
Common stocks, for the most part, are selected for their near or
intermediate-term prospects. They may be stocks believed to be underpriced or
stocks of growth companies, cyclical companies or companies believed to be
undergoing a basic change for the better. They may be stocks of established,
well-known companies or of newer, less-seasoned companies believed to have
better-than-average prospects. The principal criterion for choice of investments
is capital appreciation possibilities. Risk is tempered by diversification of
investments, and concentration of investments in any one industry is avoided,
except under unusual circumstances.
Securities owned are kept under continuing supervision, and changes may be
made whenever such securities no longer seem to meet the Fund's appreciation
objective. Portfolio changes also may be made to increase or decrease
investments in anticipation of changes in security prices in general or to
provide funds required for redemptions, distributions to shareholders or other
corporate purposes. Neither the length of time a security has been held nor the
rate of turnover of the Fund's portfolio is considered a limiting factor on such
changes. The Fund's rate of portfolio turnover may vary with such changes. A
high rate of portfolio turnover in any year will result in the payment by the
Fund from capital of above-average amounts of brokerage commissions and may
result in the payment by shareholders of above-average amounts of taxes on
realized investment gain. Any short-term gain realized on securities sold will
be taxed to shareholders as ordinary income.
BORROWING. The Fund may from time to time borrow money to increase its
portfolio of securities. It may borrow only from banks and may not borrow in
excess of one-third of the market value of its assets, less liabilities other
than such borrowing, or pledge more than 10% of its total assets, taken at cost,
to secure the borrowing. These limits may be changed only by a vote of the
shareholders. Current asset value coverage of three times any amount borrowed is
required at all times.
Borrowed money creates an opportunity for greater capital appreciation, but
at the same time increases exposure to capital risk. The net cost of any money
borrowed would be an expense that otherwise would not be incurred, and this
expense
5
<PAGE>
will limit the Fund's net investment income in any given period.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
brokers or dealers, banks or other institutional borrowers of securities. The
borrower must maintain with the Fund cash or equivalent collateral equal to at
least 100% of the market value of the securities loaned. During the time
portfolio securities are on loan, the borrower pays the Fund an amount
equivalent to any dividends or interest paid on the securities and the Fund may
invest the cash collateral and earn additional income or may receive an agreed
upon amount of interest income from the borrower.
RESTRICTED SECURITIES. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933 (the
'1933 Act')) and other securities that are not readily marketable. The Fund may
purchase restricted securities that can be offered and sold to 'qualified
institutional buyers' under Rule 144A of the 1993 Act, and the Fund's Board of
Directors may determine, when appropriate, that specific Rule 144A securities
are liquid and not subject to the 15% limitation on illiquid securities. Should
the Board of Directors make this determination, it will carefully monitor the
security (focusing on such factors, among others, as trading activity and
availability of information) to determine that the Rule 144A security continues
to be liquid. It is not possible to predict with assurance exactly how the
market for restricted securities offered and sold under Rule 144A will develop.
This investment practice could have the effect of increasing the level of
illiquidity in the Fund to the extent that qualified institutional buyers become
for a time uninterested in purchasing Rule 144A securities.
FOREIGN SECURITIES. The Fund may invest in commercial paper and
certificates of deposit issued by foreign banks and may invest in other
securities of foreign issuers, directly or through American Depository Receipts
('ADRs'), European Depository Receipts ('EDRs') or Global Depository Receipts
('GDRs') (collectively, 'Depository Receipts'). Foreign investments may be
affected favorably or unfavorably by changes in currency rates and exchange
control regulations. There may be less information available about a foreign
company than about a U.S. company and foreign companies may not be subject to
reporting standards and requirements comparable to those applicable to U.S.
companies. Foreign securities may not be as liquid as U.S. securities.
Securities of foreign companies may involve greater market risk than securities
of U.S. companies, and foreign brokerage commissions and custody fees are
generally higher than those in the United States. Investments in foreign
securities may also be subject to local economic or political risks, political
instability and possible nationalization of issuers. Depository Receipts are
instruments generally issued by domestic banks or trust companies that represent
the deposits of a security of a foreign issuer. ADRs may be publicly traded on
exchanges or over-the-counter in the United States and are quoted and settled in
dollars at a price that generally reflects the dollar equivalent of the home
country share price. EDRs and GDRs are typically traded in Europe and in both
Europe and the United States, respectively. Depository Receipts may be issued
under sponsored or unsponsored programs. In sponsored programs, the issuer has
made arrangements to have its securities traded in the form of a Depository
Receipt. In unsponsored programs, the issuers may not be directly involved in
the creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored Depository Receipt programs are generally similar, the
issuers of securities represented by unsponsored Depository Receipts are not
obligated to disclose material information in the United States, and therefore,
the import of such information may not be reflected in the market value of such
receipts. The Fund may invest up to 10% of its total assets in foreign
securities that it holds directly, but this 10% limit does not apply to foreign
securities held through Depository Receipts which are traded in the United
States or to commercial
6
<PAGE>
paper and certificates of deposit issued by foreign banks.
Except as noted above, the foregoing investment policies are not
fundamental and the Board of Directors of the Fund may change such policies
without the vote of a majority of its outstanding voting securities. As a matter
of policy, the Board would not change the Fund's investment objective of seeking
to produce capital appreciation without such a vote. A more detailed description
of the Fund's investment policies, including a list of those restrictions on the
Fund's investment activities which cannot be changed without such a vote,
appears in the Statement of Additional Information. Under the 1940 Act, a 'vote
of a majority of the outstanding voting securities' of the Fund means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the Fund or (2) 67% or more of the shares present at a shareholder's meeting if
more than 50% of the outstanding shares are represented at the meeting in person
or by proxy.
MANAGEMENT SERVICES
THE MANAGER. The Board of Directors provides broad supervision over the
affairs of the Fund. Pursuant to a Management Agreement approved by the Board
and the shareholders of the Fund, the Manager manages the investments of the
Fund and administers the business and other affairs of the Fund. The address of
the Manager is 100 Park Avenue, New York, NY 10017.
The Manager also serves as manager of sixteen other investment companies
which, together with the Fund, comprise the 'Seligman Group.' These companies
are: Seligman Cash Management Fund, Inc., Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Inc., Seligman Frontier Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman High Income Fund Series, Seligman Income Fund, Inc., Seligman New
Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt Fund Series,
Seligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman
Select Municipal Fund, Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman
Tax-Exempt Series Trust and Tri-Continental Corporation. The aggregate assets of
the Seligman Group are approximately $7.3 billion. The Manager also provides
investment management or advice to institutional accounts having an aggregate
value of approximately $3.3 billion.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Fund. Mr. Morris owns a majority
of the outstanding voting securities of the Manager.
The Manager provides senior management for Seligman Data Corp., a
wholly-owned subsidiary of the Fund and certain other investment companies in
the Seligman Group, which performs, at cost, certain recordkeeping functions for
the Fund, maintains the records of shareholder accounts and furnishes dividend
paying, redemption and related services.
The Manager is entitled to receive a management fee, calculated daily and
payable monthly, based on a percentage of the daily net assets of the Fund. In
1994, the management fee paid by the Fund was equal to an annual rate of .53% of
the average daily net assets of the Fund. The method for determining the
management fee is set forth in the Appendix.
The Fund pays all of its expenses other than those assumed by the Manager.
Total expenses of the Fund's Class A and Class D shares, respectively, for the
year ended December 31, 1994 amounted to 1.13% and 2.66%, respectively, of the
average daily net assets of each class.
THE SUBADVISER. On May 19, 1994, shareholders of the Fund approved a
Subadvisory Agreement between the Manager and Seligman Henderson Co. (the
'Subadviser') that provides that the Subadviser shall act as Subadviser to the
Fund with respect to a portion of the Fund's assets as designated by the
Manager, which shall include all or a portion of the
7
<PAGE>
Fund's foreign investments ('Qualifying Assets'). The Fund has a non-fundamental
policy under which it may invest up to 10% of its total assets in foreign
securities that are held directly. The 10% limit does not apply to foreign
securities held through Depository Receipts which are traded in the United
States or to commercial paper or certificates of deposit issued by foreign
banks. The Subadviser serves the Fund pursuant to a Subadvisory Agreement with
the Manager (the 'Subadvisory Agreement'), dated June 1, 1994. The Subadvisory
Agreement provides that the Subadviser provides investment management services
with respect to the Qualifying Assets, including investment research, advice and
supervision, determines which securities will be purchased or sold, makes
purchases and sales on behalf of the Fund and determines how voting and other
rights with respect to securities held by the Fund shall be exercised, subject
in each case to the control of the Board of Directors and in accordance with the
Fund's investment objectives, policies and principles. For this service, the
Subadviser receives a fee from the Manager, calculated pursuant to the method
set forth in the Appendix. For the period June 1, 1994 through December 31,
1994, the Fund did not require the services of the Subadviser.
The Subadviser was founded in 1991 as a joint venture between the Manager
and Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. The Subadviser, headquartered in New York, was created
to provide international and global investment advice to institutional and
individual investors and investment companies in the United States. The
Subadviser currently serves as subadviser to Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Inc., Seligman Frontier Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman Income Fund, Inc., the Global Portfolio and Global Smaller Companies
Portfolio of Seligman Portfolios, Inc., Tri-Continental Corporation, the
International Equity Fund of The Compass Capital Group, and the Seligman
Henderson International Small Capital Portfolio and Seligman Henderson
International Equity Portfolio of the American Skandia Trust. The address of the
Subadviser is 100 Park Avenue, New York, NY 10017.
PORTFOLIO MANAGER. Loris D. Muzzatti, Managing Director of the Manager
since January 1991, has been Vice President of the Fund since October 1987 and
Portfolio Manager since December 1988. He also is Vice President and Portfolio
Manager of the Seligman Capital Portfolio of Seligman Portfolios, Inc. Mr.
Muzzatti, who joined the Manager in 1985, also manages a portion of the
Manager's leading institutional accounts.
The Subadviser's International Policy Group will have overall
responsibility for directing and overseeing all aspects of foreign investment
activity for the Fund and will provide international investment policy,
including country weightings, asset allocations and industry sector guidelines,
as appropriate. Mr. Iain C. Clark, a Managing Director and Chief Investment
Officer of the Subadviser, will be responsible for the day-to-day foreign
investment activity of the Fund, to the extent there are Qualifying Assets. Mr.
Clark, who joined the Subadviser in 1992, has been a Director of Henderson
Administration Group plc and Henderson International, Ltd. and Secretary,
Treasurer and Vice President of Henderson International, Inc. since 1985.
The Manager's discussion of the Fund's performance as well as a line graph
illustrating comparative performance information between the Fund, the Standard
& Poor's 500 Composite Stock Price Index and the Lipper Capital Appreciation
Fund Average is included in the Fund's 1994 Annual Report to Shareholders.
Copies of the 1994 Annual Report may be obtained, without charge, by calling or
writing the Fund at the telephone numbers or address listed on the front page of
this Prospectus.
PORTFOLIO TRANSACTIONS. The Management Agreement and Subadvisory Agreement
recognize that in the purchase and sale of portfolio securities, the Manager
will seek the most favorable price and
8
<PAGE>
execution, and, consistent with that policy, may give consideration to the
research, statistical and other services furnished by brokers or dealers to the
Manager and Subadviser. The use of brokers who provide investment and market
research and securities and economic analysis may result in higher brokerage
charges than the use of brokers selected on the basis of the most favorable
brokerage commission rates and research and analysis received may be useful to
the Manager and Subadviser in connection with its services to other clients as
well as to the Fund. In over-the-counter markets, orders are placed with
responsible primary market makers unless a more favorable execution or price is
believed to be obtainable.
Consistent with the rules of the National Association of Securities
Dealers, Inc., and subject to seeking the most favorable price and execution
available and such other policies as the Directors may determine, the Manager
and Subadviser may consider sales of shares of the Fund and, if permitted by
applicable laws, may consider sales of shares of the other funds in the Seligman
Group as a factor in the selection of brokers or dealers to execute portfolio
transactions for the Fund.
PORTFOLIO TURNOVER
A change in securities held by the Fund is known as 'portfolio turnover'
which may result in the payment by the Fund of dealer spreads or underwriting
commissions and other transactions costs on the sale of securities as well as on
the reinvestment of the proceeds in other securities. Although it is the policy
of the Fund to hold securities for investment, changes in the securities held by
the Fund will be made from time to time when the Manager and Subadviser believe
such changes will strengthen the Fund's portfolio. The portfolio turnover of the
Fund is not expected to exceed 100%.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ('SFSI'), an affiliate of the Manager,
acts as general distributor of the Fund's shares. Its address is 100 Park
Avenue, New York, New York 10017.
The Fund issues two classes of shares: Class A shares are sold to investors
choosing the initial sales load alternative; and Class D shares are sold to
investors choosing no initial sales load, a higher distribution fee and a CDSL
on redemptions within one year of purchase. See 'Alternative Distribution
System' above.
Shares of the Fund may be purchased through any authorized investment
dealer. All orders will be executed at the net asset value per share next
computed after receipt of the purchase order plus, in the case of Class A
shares, a sales load which, except for shares purchased under one of the reduced
sales load plans, will vary with the size of the purchase as shown in the
schedule under 'Class A Shares -- Initial Sales Load' below.
THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE FUND IS $1,000 (EXCEPT FOR
AN ACCOUNT BEING ESTABLISHED PURSUANT TO THE INVEST-A-CHECK'r' SERVICE);
SUBSEQUENT INVESTMENTS MUST BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR
INVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE
RIGHT TO RETURN INVESTMENTS THAT DO NOT SATISFY THESE MINIMUMS.
Orders received by an authorized dealer before the close of the New York
Stock Exchange ('NYSE') (4:00 p.m. Eastern time) and accepted by SFSI before the
close of business (5:00 p.m. Eastern time) on the same day will be executed at
the Fund's net asset value determined as of the close of the NYSE on that day
plus, in the case of Class A shares, the applicable sales load. Orders accepted
by dealers after the close of the NYSE, or received by SFSI after the close of
business, will be executed at the Fund's net asset value as next determined
plus, in the case of Class A shares, the applicable sales load. The authorized
dealer through which a shareholder
9
<PAGE>
purchases shares is responsible for forwarding the order to SFSI promptly.
Payment for dealer purchases may be made by check or by wire. To wire
payments, dealer orders must first be placed through SFSI's order desk and
assigned a purchase confirmation number. Funds in payment of the purchase may
then be wired to Mellon Bank, N.A., ABA #043000261, A/C Seligman Capital Fund,
Inc. (A or D), A/C #107-1011. WIRE TRANSFERS MUST INCLUDE THE PURCHASE
CONFIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT NUMBER. Persons
other than dealers who wish to wire payment should contact Seligman Data Corp.
for specific wire instructions. Although the Fund makes no charge for this
service, the transmitting bank may impose a wire service fee.
Existing shareholders may purchase additional shares at any time through
any authorized dealer or by sending a check payable to the 'Seligman Group of
Mutual Funds,' directly to P.O. BOX 3936, NEW YORK, NY 10008-3936. Checks for
investment must be in U.S. dollars drawn on a domestic bank. The check should
include the shareholder's name, address, account number, name of Fund and class
of shares. If a shareholder does not indicate the required information, Seligman
Data Corp. will seek further clarification and may be forced to return the check
to the shareholder. If only the class designation is missing, the investment
will automatically be made in Class A shares. Orders sent directly to Seligman
Data Corp. will be executed at the Fund's net asset value next determined after
the order is accepted plus, in the case of Class A shares, the applicable sales
load.
Seligman Data Corp. will charge a $10.00 service fee for checks returned to
it marked 'unpaid.' This charge may be deducted from the account that requested
the purchase. For the protection of the Fund and its shareholders, no redemption
proceeds will be remitted to a shareholder with respect to shares purchased by
check (unless certified) until Seligman Data Corp. receives notice that the
check has cleared, which may be up to 15 days from the credit of the shares to
the shareholder's account.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Friday, as of the close of trading on the NYSE (usually 4:00 p.m.
Eastern time) on each day that the NYSE is open for business. Net asset value is
calculated separately for each class. Securities traded on a U.S. or foreign
exchange or over-the-counter market are valued at the last sales price on the
primary exchange or market on which they are traded. United Kingdom securities
and securities for which there are no recent sales transactions are valued based
on quotations provided by primary market makers in such securities. Any
securities for which recent market quotations are not readily available are
valued at fair value determined in accordance with procedures approved by the
Board of Directors. Short-term holdings maturing in 60 days or less are
generally valued at amortized cost if their original maturity was 60 days or
less. Short-term holdings with more than 60 days remaining to maturity will be
valued at current market value until the 61st day prior to maturity, and will
then be valued on an amortized cost basis based on the value as of such date
unless the Board determines that amortized cost value does not represent fair
market value.
Although the legal rights of Class A and Class D shares are substantially
identical, the different expenses borne by each class will result in different
net asset values and dividends. The net asset value of Class D shares will
generally be lower than the net asset value of Class A shares as a result of the
larger distribution fee charged to Class D shares. In addition, net asset value
per share of the two classes will be affected to the extent any other class
expense differs among classes.
CLASS A SHARES -- INITIAL SALES LOAD. Class A shares are subject to an
initial sales load which varies with the size of the purchase as shown in the
following schedule, and an annual service fee of up to .25% of the average daily
net asset value of Class
10
<PAGE>
A shares. See 'Administration, Shareholder Services and Distribution Plan'
below.
<TABLE>
<CAPTION>
CLASS A SHARES -- SALES LOAD SCHEDULE
SALES LOAD AS A
PERCENTAGE OF REGULAR
--------------------- DEALER
NET AMOUNT DISCOUNT
INVESTED AS A % OF
AMOUNT OF OFFERING (NET ASSET OFFERING
PURCHASE PRICE VALUE) PRICE
- ----------------------- -------- ---------- ---------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.25%
$ 50,000 - 99,999 4.00 4.17 3.50
100,000 - 249,999 3.50 3.63 3.00
250,000 - 499,999 2.50 2.56 2.25
500,000 - 999,999 2.00 2.04 1.75
1,000,000 - 3,999,999 1.00 1.01 .90
4,000,000 - or
more* 0 0 0
- ------------
* Dealers will receive a fee of .15% on sales of
$4,000,000 or more.
</TABLE>
REDUCED SALES LOADS. Reductions in sales loads apply to purchases of Class
A shares by a 'single person,' including an individual, members of a family unit
comprising husband, wife and minor children purchasing securities for their own
account, or a trustee or other fiduciary purchasing for a single fiduciary
account or single trust. Purchases made by a trustee or other fiduciary for a
fiduciary account may not be aggregated with purchases made on behalf of any
other fiduciary or individual account.
VOLUME DISCOUNTS are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other funds in
the Seligman Group that are sold with a sales load reaches levels indicated in
the above sales load schedule.
THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in Class A shares of the other mutual funds in the Seligman Group sold
with a sales load with the total net asset value of shares of those funds
already owned that were sold with a sales load and the total net asset value of
shares of Seligman Cash Management Fund that were acquired by the investor
through an exchange of shares of another mutual fund in the Seligman Group on
which there was a sales load to determine reduced sales loads in accordance with
the sales load schedule. An investor or a dealer purchasing shares on behalf of
an investor must indicate that the investor has existing accounts when making
investments or opening new accounts.
A LETTER OF INTENT allows an investor to purchase Class A shares over a
13-month period at reduced sales loads, based upon the total amount the investor
intends to purchase plus the total net asset value of shares of the other mutual
funds in the Seligman Group already owned that were sold with a sales load and
the total net asset value of shares of Seligman Cash Management Fund that were
acquired through an exchange of shares of another mutual fund in the Seligman
Group on which there was a sales load. An investor or a dealer purchasing shares
on behalf of an investor must indicate that the investor has existing accounts
when making investments or opening new accounts. For more information concerning
terms of Letters of Intent, see 'Terms and Conditions' on page 25.
SPECIAL PROGRAMS. The Fund may sell Class A shares at net asset value to
present and retired directors, trustees, officers, employees (and their spouses
and minor children) of the Fund, the other investment companies in the Seligman
Group, the Manager and other companies affiliated with the Manager. Such sales
also may be made to employee benefit and thrift plans for such persons and to
any investment advisory, custodial, trust or other fiduciary account managed or
advised by the Manager or any affiliate.
Class A shares also may be issued without a sales load in connection with
the acquisition of cash and securities owned by other investment companies and
personal holding companies; to any registered unit investment trust which is the
issuer of periodic payment plan certificates, the net proceeds of which are
invested in Fund shares; to separate accounts established and maintained by an
insurance company which are exempt from registration under Section 3(c)(11) of
the 1940 Act; to registered representatives and employees (and their spouses
11
<PAGE>
and minor children) of any dealer that has a sales agreement with SFSI; to
shareholders of mutual funds with objectives and policies similar to the Fund
who purchase shares with redemption proceeds of such funds; to financial
institution trust departments; to registered investment advisers exercising
discretionary investment authority with respect to the purchase of Fund shares;
to accounts of financial institutions or broker/dealers that charge account
management fees, provided the Manager or one of its affiliates has entered into
an agreement with respect to such accounts; pursuant to sponsored arrangements
with organizations which make recommendations to or permit group solicitations
of, its employees, members or participants in connection with the purchase of
shares of the Fund; and to 'eligible employee benefit plans' of employers who
have at least 2,000 U.S. employees to whom such plan is made available and,
regardless of the number of employees, if such plan is established and
maintained by any dealer that has a sales agreement with SFSI. 'Eligible
employee benefit plans' means any plan or arrangement, whether or not tax
qualified, which provides for the purchase of Fund shares. Sales of shares to
such plans must be made in connection with a payroll deduction system of plan
funding or other system acceptable to Seligman Data Corp.
CLASS D SHARES. Class D shares are sold without an initial sales load but
are subject to a CDSL if the shares are redeemed within one year, an annual
distribution fee of up to .75 of 1% and an annual service fee of up to .25 of
1%, of the average daily net asset value of the Class D shares. SFSI will make a
1% payment to dealers in respect of purchases of Class D shares.
A CDSL will be imposed on any redemption of Class D shares which were
purchased during the preceding twelve months; however, no such charge will be
imposed on shares acquired through the investment of dividends or distributions
from any Class D shares within the Seligman Group. The amount of any CDSL will
be paid to and retained by SFSI.
To minimize the application of CDSL to a redemption, shares acquired
pursuant to the investment of dividends and distributions will be redeemed
first; followed by shares purchased at least one year prior to the redemption.
Shares held for the longest period of time within the applicable one year period
will then be redeemed. Additionally, for those shares determined to be subject
to the CDSL, the application of the 1% CDSL will be made to the current net
asset value or original purchase price, whichever is less.
For example, assume an investor purchased 100 shares in January at a price
of $10.00 per share. During the first year, 5 additional shares were acquired
through investment of dividends and distributions. In January of the following
year, an additional 50 shares are purchased at a price of $12.00 per share. In
March of that year, the investor chooses to redeem $1,500.00 from the account
which now holds 155 shares with a total value of $1,898.75 ($12.25 per share).
The CDSL for this transaction would be calculated as follows:
<TABLE>
<S> <C>
Total shares to be redeemed
(122.449 @ $12.25) as follows:.............. $1,500.00
---------
---------
Dividend/Distribution shares
(5 @ $12.25)................................ $ 61.25
Shares held more than 1 year (100 @ $12.25)... 1,225.00
Shares held less than 1 year subject to CDSL
(17.449 @ $12.25)........................... 213.75
---------
Gross proceeds of redemption................ $1,500.00
Less CDSL (17.449 shares @
$12.00 = $209.39 X 1% = $2.09)........... (2.09)
---------
Net proceeds of redemption.................. $1,497.91
---------
---------
</TABLE>
For Federal income tax purposes, the amount of the CDSL will reduce the
gain or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.
12
<PAGE>
The CDSL will be waived or reduced in the following instances:
(a) on redemptions following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended
(the 'Code'); (b) in connection with (i) distributions from retirement plans
qualified under section 401(a) of the Code when such redemptions are necessary
to make distributions to plan participants (such payments include, but are not
limited to death, disability, retirement, or separation of service), (ii)
distributions from a custodial account under Code section 403(b)(7) or an
individual retirement account ('IRA') due to death, disability, or attainment of
age 59 1/2, and (iii) a tax-free return of an excess contribution to an IRA; (c)
in whole or in part, in connection with shares sold to current and retired
Directors of the Fund; (d) in whole or in part, in connection with shares sold
to any state, county, or city or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable investment laws from paying a
sales load or commission in connection with the purchase of shares of any
registered investment management company; (e) pursuant to an automatic cash
withdrawal service; (f) in connection with the redemption of Class D shares of
the Fund if it is combined with another mutual fund in the Seligman Group, or
another similar reorganization transaction; and (g) in connection with the
Fund's right to redeem or liquidate an account that holds below a certain
minimum number or dollar amount of shares (currently $500).
If, with respect to a redemption of any Class D shares sold by a dealer,
the CDSL is waived because the redemption qualifies for a waiver as set forth
above, the dealer shall remit to SFSI promptly upon notice an amount equal to
the 1% payment or a portion of the 1% payment paid on such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the mutual funds in the Seligman Group. SFSI may from time to time pay
a bonus or other incentive to dealers that sell shares of the Seligman Mutual
Funds. In some instances, these bonuses or incentives may be offered only to
certain dealers which employ registered representatives who have sold or may
sell a significant amount of shares of the Fund and/or certain other funds
managed by the Manager during a specified period of time. Such bonus or other
incentive may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered representatives
and members of their families to places within or outside the United States. The
cost to SFSI of such promotional activities and payments shall be consistent
with the rules of the National Association of Securities Dealers, Inc., as then
in effect.
TELEPHONE TRANSACTIONS
A shareholder whose account has either an individual or joint tenancy
registration may elect to effect the following transactions via telephone by
completing the Telephone Service Election portion of the Account Application or
a separate Telephone Service Election Form: (i) redemption of Fund shares, (ii)
exchange of Fund shares for shares of another Seligman Mutual Fund, (iii) change
of a dividend and/or capital gain distribution option, and (iv) change of
address. IRA accounts may only elect to effect exchanges or address changes. By
completing the appropriate section of the Account Application or separate
Election Form, all Seligman Mutual Funds with the same account number (i.e.,
registered in exactly the same names), including any new fund in which the
shareholders invests in the future, will automatically have telephone services.
All telephone transactions are effected through Seligman Data Corp. at (800)
221-2450.
For accounts registered as joint tenancies, each joint tenant, by electing
telephone transaction ser-
13
<PAGE>
vices, authorizes each of the other tenants to effect telephone transactions on
his or her behalf.
During times of drastic economic or market changes, a shareholder may
experience difficulty in contracting Seligman Data Corp. to request a redemption
or exchange of Fund shares. In these circumstances, the shareholder should
consider using other redemption or exchange procedures. (See 'Redemption Of
Shares' below.) Use of these other redemption or exchange procedures will result
in the redemption request being processed at a later time than if telephone
transactions had been used, and the Fund's net asset value may fluctuate during
such periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These will
include: recording all telephone calls requesting account activity, requiring
that the caller provide certain requested personal and/or account information at
the time of the call for the purpose of establishing the caller's identity, and
sending a written confirmation of redemptions, exchanges or address changes to
the address of record each time activity is initiated by telephone. As long as
the Fund and Seligman Data Corp. follow instructions communicated by telephone
that were reasonably believed to be genuine at the time of their receipt,
neither they nor any of their affiliates will be liable for any loss to the
shareholder caused by an unauthorized transaction. Shareholders are, of course,
under no obligation to apply for telephone transaction services. In any instance
where the Fund or Seligman Data Corp. is not reasonably satisfied that
instructions received by telephone are genuine, the requested transaction will
not be executed, and neither they nor any of their affiliates will be liable for
any losses which may occur due to a delay in implementing the transaction. If
the Fund or Seligman Data Corp. does not follow the procedures described above,
the Fund or Seligman Data Corp. may be liable for any losses due to unauthorized
or fraudulent instructions. Telephone services must be effected through a
representative of Seligman Data Corp., i.e., requests may not be communicated
via Seligman Data Corp.'s automated telephone answering system. Telephone
transaction services may be terminated by a shareholder at any time by sending a
written request to Seligman Data Corp. Written acknowledgment of termination of
telephone transaction services will be sent to the shareholder.
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit form without charge
(except a CDSL, if applicable) at any time by SENDING A WRITTEN REQUEST to
Seligman Data Corp., 100 Park Avenue, New York, New York, 10017. The redemption
request must be signed by all persons in whose name the shares are registered. A
shareholder may redeem shares that are not in book credit form, by surrendering
certificates in proper form to the same address. Certificates should be sent by
registered mail. Share certificates must be endorsed for transfer or accompanied
by an endorsed stock power signed by all share owners exactly as their name(s)
appear(s) on the account registration. The shareholder's letter of instruction
or endorsed stock power should specify the account number, class of shares (A or
D) and the number of shares or dollar amount to be redeemed. The Fund cannot
accept conditional redemption requests. If the redemption proceeds are (i)
$50,000 or more, (ii) to be paid to someone other than the shareholder of record
(regardless of the amount) or (iii) to be mailed to other than the address of
record (regardless of the amount), the signature(s) of the shareholder(s) must
be guaranteed by an eligible financial institution including, but not limited
to, the following: banks, trust companies, credit unions, securities brokers and
dealers, savings and loan associations and participants in the Securities
Transfer Association Medallion Program (STAMP), the Stock Exchanges Medallion
Program (SEMP) or the New York Stock Exchange Medallion Signature Program (MSP).
The Fund reserves the right to reject a signature guarantee where it is believed
that the
14
<PAGE>
Fund will be placed at risk by accepting such guarantee. A signature guarantee
is also necessary in order to change the account registration. Notarization by a
notary public is not an acceptable signature guarantee. ADDITIONAL DOCUMENTATION
MAY ALSO BE REQUIRED BY SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY
CORPORATIONS, EXECUTORS, ADMINISTRATORS, TRUSTEES, CUSTODIANS OR RETIREMENT
PLANS. FOR FURTHER INFORMATION WITH RESPECT TO NECESSARY REDEMPTION
REQUIREMENTS, PLEASE CONTACT THE SHAREHOLDER SERVICES DEPARTMENT OF SELIGMAN
DATA CORP. FOR ASSISTANCE. In the case of Class A shares, and in the case of
Class D shares redeemed after one year, a shareholder will receive the net asset
value per share next determined after receipt of a request in good order. If
Class D shares are redeemed within one year of purchase, a shareholder will
receive the net asset value per share next determined after receipt of a request
in good order, less a CDSL of 1% as described under 'Purchase Of Shares -- Class
D Shares' above.
A shareholder also may 'sell' shares to the Fund through an investment
dealer and, in that way, be certain, providing the order is timely, of receiving
the net asset value established at the end of the day on which the dealer is
given the repurchase order. The Fund makes no charge for this transaction, but
the dealer may charge a service fee. 'Sell' or repurchase orders received from
an authorized dealer before the close of the NYSE and received by SFSI, the
repurchase agent, before the close of business on the same day will be executed
at the net asset value per share determined as of the close of the NYSE on that
day. Repurchase orders received from authorized dealers after the close of the
NYSE or not received by SFSI prior to the close of business, will be executed at
the net asset value determined as of the close of the NYSE on the next trading
day. Shares held in a 'street name' account with a broker/dealer may be sold to
the Fund only through a broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares may
be made in an amount of up to $50,000 per day, per account. One telephone
redemption request per day is permitted. Telephone redemption requests must be
received by Seligman Data Corp. at (800) 221-2450 between 8:30 a.m. and 4:00
p.m. Eastern time, on any business day and will be processed as of the close of
business on that day. Redemption requests by telephone will not be accepted
within 30 days following an address change. Keogh Plans, IRAs or other
retirement plans are not eligible for telephone redemptions. The Fund reserves
the right to suspend or terminate its telephone redemption service at any time
without notice.
For more information about telephone redemptions, including the procedure
for electing such service and the circumstances under which shareholders may
bear the risk of loss for a fraudulent transaction, see 'Telephone Transactions'
above.
GENERAL. Whether shares are redeemed or repurchased, a check for the
proceeds will be sent to the address of record within seven calendar days after
acceptance of the redemption or repurchase order and will be made payable to all
of the registered owners on the account. The Fund will not permit redemptions of
shares purchased by check (unless certified) until Seligman Data Corp. receives
notice that the check has cleared, which may be up to 15 days from the credit of
the shares to the shareholder's account. The proceeds of a redemption or
repurchase, may be more or less than the shareholder's cost.
The Fund reserves the right to redeem shares owned by a shareholder whose
investment in the Fund has a value of less than a minimum amount specified by
the Fund's Board of Directors, which is presently $500. Shareholders are sent a
notice before the redemption is processed stating that the value of their
investment in the Fund is less than the specified minimum and that they have
sixty days to make an additional investment.
REINSTATEMENT PRIVILEGE. If a shareholder redeems Class A shares and then
decides not to
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redeem them, or to shift the investment to one of the other mutual funds in the
Seligman Group, the shareholder may, within 120 calendar days of the date of the
redemption, use all or any part of the proceeds of the redemption to reinstate,
free of sales load, all or any part of the investment in shares of the Fund or
in shares of any of the other mutual funds in the Seligman Group. If a
shareholder redeems Class D shares and the redemption was subject to a CDSL, the
shareholder may reinstate the investment in shares of the same class of the Fund
or of any of the other mutual funds in the Seligman Group within 120 calendar
days of the date of redemption and receive a credit for the CDSL paid. Such
investment will be reinstated at the net asset value per share established as of
the close of the NYSE on the day the request is received. Seligman Data Corp.
must be informed that the purchase represents a reinstated investment.
REINSTATED SHARES MUST BE REGISTERED EXACTLY AND BE OF THE SAME CLASS AS THE
SHARES PREVIOUSLY REDEEMED.
Generally, exercise of the Reinstatement Privilege does not alter the
Federal income tax status of any capital gain realized on a sale of Fund shares,
but to the extent that any shares are sold at a loss and the proceeds are
reinvested in shares of the same Fund, some or all of the loss will not be
allowed as a deduction, depending upon the percentage of the proceeds
reinvested.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
Under the Fund's Administration, Shareholder Services and Distribution Plan
(the 'Plan'), the Fund may pay to SFSI an administration, shareholder services
and distribution fee in respect of the Fund's Class A and Class D shares.
Payments under the Plan may include, but are not limited to: (i) compensation to
securities dealers and other organizations ('Service Organizations') for
providing distribution assistance with respect to assets invested in the Fund,
(ii) compensation to Service Organizations for providing administration,
accounting and other shareholder services with respect to Fund shareholders, and
(iii) otherwise promoting the sale of shares of the Fund, including paying for
the preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying SFSI's costs incurred in connection with its marketing
efforts with respect to shares of the Fund. The Manager, in its sole discretion,
may also make similar payments to SFSI from its own resources, which may include
the management fee that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
respect of Class A shares will be used primarily to compensate Service
Organizations which enter into agreements with SFSI. Such Service Organizations
will receive from SFSI a continuing fee of up to .25% on an annual basis,
payable quarterly, of the average daily net assets of Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors of the Fund.
The Plan as it relates to Class A shares, was approved by shareholders on
November 23, 1992 and became effective on January 1, 1993. The Plan is reviewed
by the Directors annually. The total amount paid for the year ended December 31,
1994 in respect of the Fund's Class A shares pursuant to the Plan was equal to
.20% of the Class A shares' average daily net assets.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class D shares at an annual rate of up to 1% of the average daily net asset
value of the Class D shares. Proceeds from the Class D distribution fee are used
primarily to compensate Service Organizations for administration, shareholder
services and distribution assistance (including a continuing fee of up to .25%
on an
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annual basis of the average daily net asset value of Class D shares attributable
to particular Service Organizations for providing personal service and/or the
maintenance of shareholder accounts) and will initially be used by SFSI to
defray the expense of the 1% payment made by it to Service Organizations at the
time of the sale of Class D shares. The amounts expended by SFSI in any one year
upon the initial purchase of Class D shares may exceed the amounts received by
it from Plan payments retained. Expenses of administration, shareholder services
and distribution of Class D shares in one fiscal year of the Fund may be paid
from Class D Plan fees received from the Fund in any other fiscal year.
The Plan as it relates to Class D shares, was approved by the Directors on
March 18, 1993 and became effective May 1, 1993. The Plan is reviewed by the
Directors annually. The total amount paid for the year ended December 31, 1994
by the Fund's Class D shares pursuant to the Plan was 1% per annum of the
average daily net assets of Class D shares.
Seligman Services, Inc. ('SSI'), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI shall act as broker/dealer of record for most
shareholder accounts that do not have a designated broker/dealer of record
including all such shareholder accounts established after April 1, 1995 and will
receive compensation for providing personal service and account maintenance to
its accounts of record.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any or all of an investment in the Fund for shares of any of the other mutual
funds in the Seligman Group. Exchanges may be made by mail, or by telephone, if
telephone services are elected by the shareholder.
Class A and Class D shares may be exchanged only for Class A and Class D
shares, respectively, of another mutual fund in the Seligman Group on the basis
of relative net asset value.
If Class D shares that are subject to a CDSL are exchanged for Class D
shares of another fund, for purposes of assessing the CDSL payable upon
disposition of the exchanged Class D shares, the one year holding period shall
be reduced by the holding period of the original Class D shares.
The mutual funds in the Seligman Group available under the Exchange
Privilege are:
SELIGMAN CASH MANAGEMENT FUND, INC: invests in high quality money market
instruments. Shares are sold at net asset value.
SELIGMAN COMMON STOCK FUND, INC: seeks favorable current income and
long-term growth of both income and capital value without exposing capital to
undue risk.
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC: invests in shares of
companies in the communications, information and related industries to produce
capital gain. Income is not an objective. The Fund will be closing to new
investors on June 30, 1995.
SELIGMAN FRONTIER FUND, INC: seeks to produce growth in capital value;
income may be considered but will only be incidental to the Fund's investment
objective.
SELIGMAN GROWTH FUND, INC: seeks longer-term growth in capital value and
an increase in future income.
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC: consists of the Seligman
Henderson International Fund, the Seligman Henderson Global Smaller Companies
Fund and the Seligman Henderson Global Technology Fund, which seek long-term
capital appreciation primarily by investing either in companies globally or
internationally.
SELIGMAN HIGH INCOME FUND SERIES: seeks high current income by investing
in debt securities. The Fund consists of the U.S. Government Securities Series
and the High-Yield Bond Series.
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SELIGMAN INCOME FUND, INC: seeks high current income and the possibility
of improvement of future income and capital value.
SELIGMAN NEW JERSEY TAX-EXEMPT FUND, INC: invests in investment grade New
Jersey tax-exempt securities.
SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES: invests in investment grade
Pennsylvania tax-exempt securities.
SELIGMAN TAX-EXEMPT FUND SERIES, INC: consists of several State Series and
a National Series. The National Tax-Exempt Series seeks to provide maximum
income exempt from Federal income taxes; individual state series, each seeking
to maximize income exempt from Federal income taxes and from personal income
taxes in designated states, are available for Colorado, Georgia, Louisiana,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon
and South Carolina.
SELIGMAN TAX-EXEMPT SERIES TRUST: includes California Tax-Exempt Quality
Series, a California Tax-Exempt High-Yield Series, a Florida Tax-Exempt Series
and a North Carolina Tax-Exempt Series, each of which invests in tax-exempt
securities of its designated state.
All permitted exchanges will be based on the then current net asset values
of the respective funds. Telephone requests for exchanges must be received
between 8:30 a.m. and 4:00 p.m. Eastern time, on any business day, by Seligman
Data Corp. at (800) 221-2450, and will be processed as of the close of business
on that day. The registration of an account into which an exchange is made must
be identical to the registration of the account from which shares are exchanged.
When establishing a new account by an exchange of shares, the shares being
exchanged must have a value of at least the minimum initial investment required
by the mutual fund into which the exchange is being made. The method of
receiving distributions, unless otherwise indicated, will be carried over to the
new Fund account. Account services, such as Invest-A-Check'r' Service, Directed
Dividends and Automatic Cash Withdrawal Service will not be carried over to the
new Fund account unless specifically requested and permitted by the new Fund.
Exchange orders may be placed to effect an exchange of a specific number of
shares, an exchange of shares equal to a specific dollar amount or an exchange
of all shares held. Shares for which certificates have been issued may not be
exchanged via telephone and may be exchanged only upon receipt of a written
exchange request together with certificates representing shares to be exchanged
in form for transfer.
Telephone exchanges are only available to shareholders whose accounts are
registered individually, as joint tenancies or IRAs. The Exchange Privilege via
mail is generally applicable to investments in an IRA and other retirement
plans, although some restrictions may apply and may be applicable to other
mutual funds in the Seligman Group that may be organized by the Manager in the
future. The terms of the exchange offer described herein may be modified at any
time; and not all of the mutual funds in the Seligman Group are available to
residents of all states. Before making any exchange, a shareholder should
contact an authorized investment dealer or Seligman Data Corp. to obtain
prospectuses of any of the mutual funds in the Seligman Group.
A broker/dealer of record will be able to effect exchanges on behalf of a
shareholder only if the broker/dealer has entered into a Telephone Exchange
Agreement with SFSI wherein the broker/
dealer must agree to indemnify SFSI and the mutual funds in the Seligman Group
from any loss or liability incurred as a result of the acceptance of telephone
exchange orders.
Written confirmation of all exchanges will be forwarded to the shareholder
to whom the exchanged shares are registered and a duplicate confirmation will be
sent to the dealer of record listed on the account. SFSI reserves the right to
reject a telephone exchange request. The Fund reserves the right to reject any
telephone requests for transactions with a share value exceeding $250,000. Any
rejected tele-
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phone exchange order may be processed by mail. For more information about
telephone exchanges, including the procedure for electing such service and the
circumstances under which shareholders may bear the risk of loss for a
fraudulent transaction, see 'Telephone Transactions' above.
Exchanges of shares are sales, and may result in a gain or loss for Federal
income tax purposes.
FURTHER INFORMATION ABOUT TRANSACTIONS IN THE FUND
Because excessive trading (including short-term 'market timing' trading)
can hurt the Fund's performance, the Fund may refuse any exchange (1) from any
shareholder account from which there have been two exchanges in the preceding
three month period, or (2) where the exchanged shares equal in value the lesser
of $1,000,000 or 1% of the Fund's net assets. The Fund may also refuse any
exchange or purchase order from any shareholder account if the shareholder or
the shareholder's broker/dealer has been advised that previous patterns of
purchases and redemptions or exchanges have been considered excessive. Accounts
under common ownership or control, including those with the same taxpayer ID
number and those administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered one account for this
purpose. Additionally, the Fund reserves the right to refuse any order for the
purchase of shares.
DIVIDENDS AND DISTRIBUTIONS
Any distribution of the Fund's net investment income, required by Federal
income tax law in order to avoid all Federal income tax liability, is generally
paid to shareholders in dividends in December. Payments vary in amount depending
on income received from portfolio securities and the costs of operations. The
Fund distributes substantially all of any taxable net long-term and short-term
gain realized on investments to shareholders at least annually. Such
distributions will generally be taxable to shareholders in the year in which
they are declared by the Fund if paid before February 1 of the following year.
Shareholders may elect: (1) to receive both dividends and gain
distributions in shares; (2) to receive dividends in cash and gain distributions
in shares; (3) to receive both dividends and gain distributions in cash. In the
case of prototype retirement plans, dividends and gain distributions are
reinvested in additional shares. Unless another election is made, dividends and
capital gain distributions will be credited to the shareholder accounts in
additional shares. Shares acquired through a dividend or gain distribution and
credited to a shareholder's account are not subject to an initial sales load or
a CDSL. Dividends and gain distributions paid in shares are invested at the net
asset value on the ex-dividend date. Shareholders may elect to change their
dividend and gain distribution options by writing Seligman Data Corp. at the
address listed below. If the shareholder has elected telephone services, changes
may also be telephoned to Seligman Data Corp. between 8:00 a.m. and 5:30 p.m.
Eastern time, by either the shareholder or the broker/dealer of record on the
account. For information about electing telephone services, see 'Telephone
Transactions.'
These elections must be received by Seligman Data Corp. before the record
date for the dividend or distribution in order to be effective for such dividend
or distribution, otherwise payment will be made in accordance with the current
option on the shareholder's account.
The per share dividends from net investment income on Class D shares will
be lower than the per share dividends on Class A shares as a result of the
higher distribution fee applicable with respect to Class D shares. Per share
dividends of the two classes may also differ as a result of differing class
expenses. Distributions of net capital gains, if any, will be paid in the same
amount for Class A and Class D shares. See 'Purchase Of Shares -- Valuation.'
Shareholders exchanging shares of one mutual fund for shares of another
mutual fund in the
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Seligman Group will continue to receive dividends and gains as elected prior to
such exchange unless otherwise specified. In the event that a shareholder
redeems all shares in an account between the record date and the payable date,
the value of dividends or gain distributions declared will be paid in cash
regardless of the existing election.
FEDERAL INCOME TAXES
The Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended. For each year so qualified,
the Fund will not be subject to Federal income taxes on its net investment
income and capital gains, if any, realized during any taxable year, which it
distributes to its shareholders, provided that at least 90% of its net
investment income and net short-term capital gains are distributed to
shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to the shareholders, whether
received in cash or reinvested in additional shares and, to the extent
designated as derived from the Fund's dividend income that would be eligible for
the dividends received deduction if the Fund were not a regulated investment
company, they are eligible, subject to certain restrictions, for the 70%
dividends received deduction for corporations.
Distributions of net capital gain, i.e., the excess of net long-term
capital gains over any net short-term losses, are taxable as long-term capital
gain, whether received in cash or invested in additional shares, regardless of
how long shares have been held by the shareholders; such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Any gain or loss realized upon a sale or redemption of shares in the Fund
by a shareholder who is not a dealer in securities will generally be treated as
a long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less, any loss
realized will be treated as long-term capital loss to the extent that it offsets
the long-term capital gain distribution. In addition, no loss will be allowed on
the sale or other disposition of shares of the Fund if, within a period
beginning 30 days before the date of such sale or disposition and ending 30 days
after such date, the holder acquires (such as through dividend reinvestment)
securities that are substantially identical to the shares of the Fund.
In determining gain or loss on shares of the Fund that are sold or
exchanged within 90 days after acquisition, a shareholder generally will not be
permitted to include in the tax basis attributable to such shares the sales load
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales load by reason of the Exchange or Reinstatement Privilege offered by
the Fund. Any sales load not taken into account in determining the tax basis of
shares sold or exchanged within 90 days after acquisition will be added to the
shareholder's tax basis in the shares acquired pursuant to the Exchange or
Reinstatement Privilege.
The Fund will generally be subject to an excise tax of 4% on the amount of
any income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned. Furthermore, dividends
declared in October, November or December payable to shareholders of record on a
specified date in such a month and paid in the following January will be treated
as having been paid by the Fund and received by each shareholder in December.
Under this rule, therefore, shareholders may be taxed in one year on dividends
or distributions actually received in January of the following year.
Shareholders are urged to consult their tax advisers concerning the effect
of Federal income taxes on their individual circumstances.
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UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
(SOCIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND
CERTIFIES THAT THE SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING, THE FUND IS
REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY A PORTION OF DISTRIBUTIONS
AND OTHER REPORTABLE PAYMENTS TO THE SHAREHOLDER. THE RATE OF BACKUP WITHHOLDING
IS 31%. SHAREHOLDERS SHOULD BE AWARE THAT, UNDER REGULATIONS PROMULGATED BY THE
INTERNAL REVENUE SERVICE, THE FUND MAY BE FINED $50 ANNUALLY FOR EACH ACCOUNT
FOR WHICH A CERTIFIED TAXPAYER IDENTIFICATION NUMBER IS NOT PROVIDED. IN THE
EVENT THAT SUCH A FINE IS IMPOSED, THE FUND MAY CHARGE A SERVICE FEE OF UP TO
$50 THAT MAY BE DEBITED FROM THE SHAREHOLDER'S ACCOUNT AND OFFSET AGAINST ANY
UNDISTRIBUTED DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. THE FUND ALSO RESERVES
THE RIGHT TO CLOSE ANY ACCOUNT WHICH DOES NOT HAVE A CERTIFIED TAXPAYER
IDENTIFICATION NUMBER.
SHAREHOLDER INFORMATION
Shareholders will be sent reports quarterly regarding the Fund. General
information about the Fund may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, New York 10017 or by telephoning the
Corporate Communications/Investor Relations Department toll-free by dialing
(800) 221-7844 from all continental United States, except New York or (212)
850-1864 in New York State and the Greater New York City area. Information about
shareholder accounts may be requested by writing Shareholder Services, Seligman
Data Corp. at the same address or by toll-free telephone by dialing (800)
221-2450 from all continental United States. Seligman Data Corp. may be
telephoned Monday through Friday (except holidays), between the hours of 8:30
a.m. and 5.30 p.m. Eastern time, and calls will be answered by service
representatives.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING 1-800-622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BALANCE,
MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS,
FORM 1099-DIVS AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF
CHECKS, ACCOUNT STATEMENTS AND OTHER INFORMATION, SELIGMAN DATA CORP. SHOULD BE
NOTIFIED IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGE. ADDRESS CHANGES MAY BE
TELEPHONED TO SELIGMAN DATA CORP. IF THE SHAREHOLDER HAS ELECTED TELEPHONE
SERVICES. FOR MORE INFORMATION ABOUT TELEPHONE SERVICES, SEE 'TELEPHONE
TRANSACTIONS' ABOVE.
ACCOUNT SERVICES. Shareholders are sent confirmation of financial
transactions in their Account.
Other investor services are available. These include:
INVEST-A-CHECK'r' SERVICE enables a shareholder to authorize checks to be
drawn on a regular checking account at regular monthly intervals in fixed
amounts of $100 or more, or regular quarterly intervals in fixed amounts of
$250 or more, to purchase Class A shares. (See 'Terms and Conditions' on
page 25.)
AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder to exchange
a specified amount, at regular monthly intervals in fixed amounts of $100
or more, or regular quarterly intervals in fixed amounts of $250 or more,
from Class A shares of the Fund into Class A shares of any other Seligman
Mutual Fund(s) registered in the same name. The shareholder's account must
have a value of at least $5,000 at the initiation of the service. Exchanges
will be made at the public offering price.
DIVIDENDS FROM OTHER INVESTMENTS permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in
additional shares of the Fund. (Dividend checks must meet or exceed the
required minimum purchase amount and include the shareholder's name, the
name of the Fund and the class of shares in which the investment is to
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be made and the shareholder's Fund account number.)
AUTOMATIC CD TRANSFER SERVICE permits a shareholder to instruct a bank to
invest the proceeds of a maturing bank certificate of deposit ('CD') in
shares of any designated Seligman Mutual Fund. Shareholders who wish to use
this service should contact Seligman Data Corp. or a broker to obtain the
necessary documentation. Banks may charge a penalty on CD assets withdrawn
prior to maturity. Accordingly, it will not normally be advisable to
liquidate a CD before its maturity.
PAYMENTS AT REGULAR INTERVALS can be made to a shareholder who owns or
purchases Class A shares worth $5,000 or more held as book credits under
the Automatic Cash Withdrawal Service. Holders of Class D shares may elect
to use this service with respect to shares that have been held for at least
one year. (See 'Terms and Conditions' on page 25.)
DIRECTED DIVIDENDS allows a shareholder to pay dividends to another person
or to direct the payment of such dividends to another mutual fund in the
Seligman Group for purchase at net asset value. Dividends on Class A and
Class D shares may only be directed to shares of the same class of another
mutual fund in the Seligman Group.
OVERNIGHT DELIVERY to service shareholder requests is available for a
$15.00 fee which may be deducted from a shareholder's account, if
requested.
COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of
charge for the current year and most recent prior year. Copies of year-end
statements for prior years back to 1970 are available for a fee of $10.00
per year, per account, with a maximum charge of $150 per account. Statement
requests should be forwarded, along with a check to Seligman Data Corp.
TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for all
types of tax-deferred retirement plans. SFSI makes available plans, plan forms
and custody agreements for:
-- Individual Retirement Accounts (IRAs);
-- Simplified Employee Pension Plans (SEPs);
-- Section 401(k) Plans for corporations and their employees;
-- Section 403(b)(7) Plans for employees of public school systems and
certain non-profit organizations who wish to make deferred compensation
arrangements; and
-- Pension and Profit Sharing Plans for sole proprietorships, corporations
and partnerships.
These types of plans may be established only upon receipt of a written
application form.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, New York 10017. You may telephone toll-free by
dialing (800) 445-1777 from all continental United States or you may receive
information through an authorized dealer.
ADVERTISING THE FUND'S PERFORMANCE
From time to time the Fund advertises its 'total return' and 'average
annual total return', each of which are calculated separately for Class A and
Class D shares. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. The 'total return' shows what an
investment in shares of Class A and Class D of the Fund would have earned over a
specified period of time (for example, one, five and ten-year periods or since
inception) assuming the payment of the maximum sales load, if any, when the
investment was made and that all distributions and dividends paid by the Fund
were reinvested on the reinvestment dates during the period. The 'average annual
total return' is the annual rate required for the initial payment to grow to the
amount which would be received at the end of the specified period (one, five and
ten-year periods or since inception of the Fund);
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i.e., the average annual compound rate of return. The total return and average
annual total return of Class A shares quoted from time to time through December
31, 1992 do not reflect the deduction of the administration, shareholder
services and distribution fee and through April 10, 1991 also does not reflect
the increase in the management fee approved by shareholders on April 10, 1991,
which fees if reflected would reduce the performance quoted. Total return and
average annual total return may also be presented without the effect of the
initial sales load or CDSL, as applicable.
From time to time, reference may be made in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Service, Inc. ('Lipper'), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's Class A and Class D shares, the Lipper analysis assumes investment
of all dividends and distributions paid but does not take into account
applicable sales loads. The Fund may also refer in advertisements or in other
promotional material to articles, comments, listings and columns in the
financial press pertaining to the Fund's performance. Examples of such financial
and other press publications include Barron's, Business Week, CDA/
Weisenberger Mutual Funds Investment Report, Christian Science Monitor,
Financial Planning, Financial Times, Financial World, Forbes, Fortune,
Individual Investor, Investment Advisor, Investors Business Daily, Kiplinger's,
Los Angeles Times, MONEY Magazine, Morningstar, Inc., Pensions and Investments,
Smart Money, The New York Times, U.S.A. Today, U.S. News and World Report, The
Wall Street Journal, Washington Post, Worth Magazine and Your Money.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end diversified management investment company
incorporated under the laws of the state of Maryland in 1968. The Fund is
authorized to issue 40,000,000 shares of common stock, each with a par value of
$1.00, divided into two classes. Each share of the Fund's Class A and Class D
common stock is equal as to earnings, assets and voting privileges, except that
each class bears its own separate distribution and certain other class expenses
and has exclusive voting rights with respect to any matter to which a separate
vote of any class is required by the 1940 Act or Maryland law. The Fund has
received an order from the Securities and Exchange Commission permitting the
issuance and sale of multiple classes of common stock. In accordance with the
Articles of Incorporation, the Board of Directors may authorize the creation of
additional classes of common stock with such characteristics as are permitted by
the order received from the Securities and Exchange Commission. The 1940 Act
requires that where more than one class exists, each class must be preferred
over all other classes in respect of assets specifically allocated to such
class. Shares have non-cumulative voting rights, do not have preemptive or
subscription rights and are transferable.
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APPENDIX
MANAGEMENT FEE
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Fund pays to the Manager promptly after the end of
each month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Fund at the close of
business on the previous business day. The term 'Applicable Percentage' means
the amount (expressed as a percentage and rounded to the nearest one millionth
of one percent) obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
The term 'Fee Amount' means the sum on an annual basis of:
.55 of 1% of the first $4 billion of Fee Base,
.50 of 1% of the next $2 billion of Fee Base,
.475 of 1% of the next $2 billion of Fee Base, and
.45 of 1% of Fee Base in excess of $8 billion.
The term 'Fee Base' as of any day means the sum of the net assets at the
close of business on the previous day of each of the investment companies
registered under the 1940 Act for which the Manager or any affiliated company
acts as investment adviser or manager (including the Fund).
SUBADVISORY FEE
As compensation for the services performed and the facilities and personnel
provided by the Subadviser, the Manager pays to the Subadviser each month a fee,
equal to the Applicable Percentage of the average monthly Net Qualifying Assets
of the Fund. For this purpose, the term 'Net Qualifying Assets' means the assets
designated by the Manager for which the Subadviser provides investment
management services less any related liabilities as designated by the Manager.
Average monthly Net Qualifying Assets shall be determined, for any month,
by taking the average of the value of the Net Qualifying Assets as of the (i)
opening of business on the first day of such month and (ii) close of business on
the last day of such month.
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TERMS AND CONDITIONS
GENERAL ACCOUNT INFORMATION
Investments will be made in as many shares, including fractions to the third
decimal place, as can be purchased at the net asset value plus a sales load, if
applicable, at the close of business on the day payment is received. If a check
in payment of a purchase of Fund shares is dishonored for any reason, Seligman
Data Corp. will cancel the purchase and may redeem additional shares, if any,
held in a shareholder's account in an amount sufficient to reimburse the Fund
for any loss it may have incurred and charge a $10.00 return check fee.
Shareholders will receive dividends from investment income and any distributions
from gain realized on investments in shares or in cash according to the option
elected. Dividend and gain options may be changed by notifying Seligman Data
Corp. in writing. These option changes must be received by Seligman Data Corp.
on or before the record date for the dividend or distribution in order to be
effective for that dividend or distribution. Stock certificates will not be
issued, unless requested. Replacement stock certificates will be subject to a
surety fee.
INVEST-A-CHECK'r' SERVICE
The Invest-A-Check'r' Service is available to all shareholders. The
application is subject to acceptance by the shareholder's bank and Seligman Data
Corp. Checks in the amount specified will be drawn automatically on the
shareholder's bank on the fifth day of each month (or on the prior business day
if the fifth day of the month falls on a weekend or holiday) in which an
investment is scheduled and invested at the public offering price at the close
of business on the same date. After the initial investment, the value of shares
held in the shareholder's account must equal not less than two regularly
scheduled investments. If a check is not honored by the shareholder's bank, or
if the value of shares held falls below the required minimum, the Service will
be suspended. In the event that a check is returned marked 'unpaid,' Seligman
Data Corp. will cancel the purchase, redeem shares held in the shareholder's
account for an amount sufficient to reimburse the Fund for any loss it may have
incurred as a result, and charge a $10.00 return check fee. This fee may be
debited to the shareholder's account. The Service will be reinstated upon
written request indicating that the cause of interruption has been corrected.
The Service may be terminated by the shareholder or Seligman Data Corp. at any
time by written notice. The shareholder agrees to hold the Fund and its agents
free from all liability which may result from acts done in good faith and
pursuant to these terms. Instructions for establishing Invest-A-Check'r' Service
are given on the Account Application. In the event a shareholder exchanges all
of the shares from one mutual fund in the Seligman Group to another, a
shareholder must re-apply for the Invest-A-Check'r' Service in the Seligman Fund
into which the exchange was made. In the event of a partial exchange, the
Invest-A-Check'r' Service will be continued, subject to the above conditions, in
the Seligman Fund from which the exchange was made. If a shareholder uses the
Invest-A-Check'r' Service to make an IRA investment, the purchase will be
credited as a current year contribution. If a shareholder uses the
Invest-A-Check'r' Service to make an investment in a pension or profit sharing
plan, the purchase will be credited as a current year employer contribution.
AUTOMATIC CASH WITHDRAWAL SERVICE
Automatic Cash Withdrawal Service is available to Class A shareholders and
to Class D shareholders with respect to Class D shares held for one year or
more. A sufficient number of full and fractional shares will be redeemed to
provide the amount required for a scheduled payment. Redemptions will be made at
the asset value at the close of business on the specific day designated by the
shareholder of each month (or on the prior business day if the day specified
falls on a weekend or holiday). A shareholder may change the amount of scheduled
payments or may suspend payments by written notice to Seligman Data Corp. at
least ten days prior to the effective date of such a change or suspension.
Service may be terminated by the shareholder or Seligman Data Corp. at any time
by written notice. It will be terminated upon proper notification of the death
or legal incapacity of the shareholder. This Service is considered terminated in
the event a withdrawal of shares, other than to make scheduled withdrawal
payments, reduces the value of shares remaining on deposit to less than $5,000.
Continued payments in excess of dividend income invested will reduce and
ultimately exhaust capital. Withdrawals, concurrent with purchases of shares of
this or any other investment company, will be disadvantageous because of the
payment of duplicative sales loads, if applicable. For this reason, additional
purchases of Fund shares are discouraged when the Withdrawal Service is in
effect.
LETTER OF INTENT -- CLASS A SHARES ONLY
Seligman Financial Services, Inc. will hold in escrow shares equal to 5% of
the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid to the shareholder or credited to their account.
Upon completion of the specified minimum purchase within the thirteen-month
period, all shares held in escrow will be deposited to the shareholder's account
or delivered to the shareholder. A shareholder may include the total asset value
of shares of the mutual funds in the Seligman Group on which a sales load was
paid owned as of the date of a Letter of Intent toward the completion of the
Letter. If the total amount invested within the thirteen-month period does not
equal or exceed the specified minimum purchase, a shareholder will be requested
to pay the difference between the amount of the sales load paid and the amount
of the sales load applicable to the total purchase made. If, within 20 days
following the mailing of a written request, a shareholder has not paid this
additional sales load to Seligman Financial Services, sufficient escrowed shares
will be redeemed for payment of the additional sales load. Shares remaining in
escrow after this payment will be released to the account. The intended purchase
amount may be increased at any time during the thirteen-month period by filing a
revised Agreement for the same period, provided that the Dealer furnishes
evidence that an amount representing the reduction in sales load under the new
Agreement, which becomes applicable on purchases already made under the original
Agreement, will be refunded to the shareholder and that the required additional
escrowed shares are being furnished by the shareholder.
Shares of Seligman Cash Management Fund which have been acquired by an
exchange of shares of another mutual fund in the Seligman Group on which there
is a sales load may be taken into account in completing a Letter of Intent, or
for Rights of Accumulation. However, shares of this Fund which have been
purchased directly may not be used for purposes of determining reduced sales
loads on additional purchases of the other mutual funds in the Seligman Group.
5/95
25
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<S> <C> <C> <C> <C> <C> <C>
THE SELIGMAN GROUP OF FUNDS
ACCOUNT APPLICATION
Please make your investment check payable to the
"Seligman Group of Funds" and mail it
with this completed Application to:
Seligman Data Corp. TO OPEN A SELIGMAN IRA, SEP OR PENSION/
100 Park Avenue/2nd Floor PROFIT SHARING PLAN, A SEPARATE ADOPTION
New York, NY 10017 AGREEMENT IS REQUIRED. PLEASE CALL
(800) 221-2450 RETIREMENT PLAN SERVICES FOR MORE
INFORMATION AT (800) 445-1777.
1. ACCOUNT REGISTRATION
TYPE OF ||INDIVIDUAL ||MULTIPLE OWNERS ||GIFT/TRANSFER TO MINOR ||OTHER (Corporations, Trusts, Organizations,
Partnerships, etc.)
ACCOUNT Use Line 1 Use Lines 1, 2 & 3 Use Line 4 Use Line 5 Multiple Owners
will be registered as Joint Tenants with Right of Survivorship.
The first name and Social Security or Taxpayer ID Number on line 1, 4, or 5
below will be used for IRS reporting. NAME (Minors cannot be legal owners)
PLEASE PRINT OR TYPE
1._______________________________________________________________ ___________________________ _________
First Middle Last Social Security Number Birthdate
2._______________________________________________________________ ___________________________ _________
First Middle Last Social Security Number Birthdate
3._______________________________________________________________ ___________________________ _________
First Middle Last Social Security Number Birthdate
4.______________________________, as custodian for ____________________ under the _______________
Custodian (one only) Minor (one only) State
Uniform Gift/Transfer to Minors Act_______________________________until age____________________ _________________
Minor's Social Security Number (Not more than 21) Minor's Birthdate
5._______________________________________________________________________ _____________________
Name of Corporation or Other Entity. If a Trust, also complete below. Taxpayer ID Number
TYPE OF TRUST ACCOUNT: ||Trust ||Guardianship ||Conservatorship ||Estate ||Other
Trustee/Fiduciary Name__________________________________ Trust Date__________________________
Trust Name ______________________________,for the benefit of (FBO)_______________________________
2. MAILING ADDRESS
ADDRESS TELEPHONE
___________________________________________ (_______)__________________(_______)_________________
Street Address or P.O. Box Daytime Evening
___________________________________________ U.S. CITIZEN? ||Yes ||No _________________________
City State Zip If no, indicate country
3. INVESTMENT SELECTION
Please indicate the dollar amount(s) you would like to invest in the space
provided below. Minimum initial investment is $1,000 per Fund except for
accounts established pursuant to the Invest-A-Check(R) Service (see section
6-I. of this application). IF MORE THAN ONE FUND IS SELECTED, ACCOUNTS MUST
HAVE IDENTICAL REGISTRATIONS AND CLASS OF SHARES (except for Seligman Cash
Management Fund). PLEASE CHOOSE ONE: || Class A Shares || Class D Shares
MAKE CHECK PAYABLE TO: SELIGMAN GROUP OF FUNDS
$_____________ TOTAL AMOUNT,
INVESTED AS FOLLOWS:
$_____________ *Seligman Communications $_____________ Seligman Common Stock Fund
and Information Fund $_____________ Seligman Income Fund
$_____________ Seligman Henderson $_____________ Seligman High-Yield Bond Fund
Global Technology Fund $_____________ Seligman U.S. Government Securities Fund
$_____________ Seligman Frontier Fund $_____________ Seligman National Tax-Exempt Fund
$_____________ Seligman Henderson Global $_____________ Seligman Tax-Exempt Fund (choose one):
Smaller Companies Fund CA-Qlty.|| FL|| MD|| MN|| NY|| OR||
$_____________ Seligman Capital Fund CA-Hy. || GA|| MA|| MO|| NC|| PA||
$_____________ Seligman Growth Fund CO || LA|| MI|| NJ|| OH|| SC||
$_____________ Seligman Henderson
International Fund $_____________ Seligman Cash Management Fund (Class A only)
*Closed indefinitely to new investors after June 30, 1995; please contact
your financial advisor for information on current availability. NO
REDEMPTION PROCEEDS WILL BE REMITTED TO A SHAREHOLDER WITH RESPECT TO
SHARES PURCHASED BY CHECK (UNLESS CERTIFIED) UNTIL SELIGMAN DATA CORP.
RECEIVES NOTICE THAT THE CHECK HAS CLEARED, WHICH MAY BE UP TO 15 DAYS FROM
THE CREDIT OF THE SHARES TO THE SHAREHOLDER'S ACCOUNT.
4. SIGNATURE AND CERTIFICATION
Under penalties of perjury I certify that the number shown on this form is
my correct Taxpayer Identification Number (Social Security Number) and that
I am not subject to backup withholding either because I have not been
notified that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or the Internal Revenue Service has
notified me that I am no longer subject to backup withholding. I certify to
my legal capacity to purchase or redeem shares of each Fund for my own
Account, or for the Account of the organization named below. I have
received and read the current Prospectus of each Fund in which I am
investing and appoint Seligman Data Corp. as my agent to act in accordance
with my instructions herein.
A. ________________________________________________________________________
Date Signature of Investor
B. ________________________________________________________________________
Date Signature of Co-Investor, if any
5. BROKER/DEALER OR FINANCIAL ADVISOR DESIGNATION
________________________________________ _____________________________
Firm Name Representative's Nam
________________________________________ _____________________________
Branch Office Address Representative's ID Number
________________________________________ (______)_____________________
City State Zip Representative's Telephone Number
________________________________________
Branch Number
<PAGE>
6. ACCOUNT OPTIONS AND SERVICES
________________________________________________________________________________
A. DIVIDENDS AND GAIN DISTRIBUTION OPTIONS
I choose the following options for each Fund listed: OPTION
------
1 2 3
Option 1. Dividends in shares, gain distributions in shares. || || || FUND NAME
Option 2. Dividends in cash, gain distributions in shares. || || || FUND NAME
Option 3. Dividends in cash, gain distributions in cash. || || || FUND NAME
__________________________________________________________________________________________
NOTE: IF NO ELECTION IS MADE, OPTION 1. WILL AUTOMATICALLY BE PUT INTO EFFECT.
All dividend and/or gain distributions taken in shares will be invested at net asset value.
__________________________________________________________________________________________
________________________________________________________________________________
B. DIVIDEND DIRECTION OPTION
If you wish to have your dividend payments made to another
party or Seligman Fund, please complete the following. I
hereby authorize and request that my dividend payments from
the following Fund(s)
__________________ __________________ __________________ be made payable to:
Fund Name Fund Name Fund Name
Name______________________ Seligman Fund__________________
Address___________________ (If opening a new account, a minimum of $1,000 is required.)
City______________________ Account Number_________________
State, Zip________________ (For an existing account.)
________________________________________________________________________________
C. LETTER OF INTENT SERVICE (CLASS A ONLY)
I intend to purchase, although I am not obligated to do so,
additional shares of Seligman _________________________
Fund within a 13-month period which, together with the
total asset value of shares owned, will aggregate at least:
||$50,000 ||$100,000 ||$250,000 ||$500,000 ||$1,000,000
||$4,000,000
I AGREE TO THE ESCROW PROVISION LISTED UNDER "TERMS AND CONDITIONS"
IN THE BACK OF EACH PROSPECTUS.
________________________________________________________________________________
D. RIGHT OF ACCUMULATION (CLASS A ONLY)
Please identify any additional Seligman Fund accounts
eligible for the Right of Accumulation or to be used toward
completion of a Letter of Intent, and check applicable box:
|| I am a trustee for the following accounts, which are
held by the same trust, estate, or under the terms of a
pension, profit sharing or other employee benefit trust
qualified under section 401 of the Internal Revenue Code.
|| In calculating my holdings for Right of Accumulation or
Letter of Intent purposes, I am including the following
additional accounts which are registered in my name, in my
spouse's name, or in the name(s) of my child(ren) under
the age of 21.
Name______________ Fund______________ Account#_____________
Name______________ Fund______________ Account#_____________
Name______________ Fund______________ Account#_____________
________________________________________________________________________________
E. AUTOMATIC CASH WITHDRAWAL SERVICE
(CLASS A, OR CLASS D ONLY AFTER CLASS D SHARES ARE HELD FOR ONE YEAR)
Please send a check for $ withdrawn from Seligman
________________________ Fund, beginning on the day of 19,
and thereafter on the day specified of every:
||Month ||3rd Month ||6th Month ||12th Month
Make payments to: Name___________________________________
Address________________________________
City___________State________Zip________
Shares having a current value at offering price of $5,000
or more must be held in the account at initiation of
Service, and all shares must be in "book credit" form.
________________________________________________________________________________
F. AUTOMATIC DOLLAR-COST-AVERAGING SERVICE
I authorize Seligman Data Corp. to withdraw $ _____________
(minimum: $100 monthly or $250 quarterly) from my Seligman
Cash Management Fund Class A account || Monthly or
|| Quarterly to purchase Class A shares of Seligman
________________________________ Fund, beginning on the
_____ day of __________ 19 ____. Shares in the Seligman
Cash Management Fund Class A account must have a current
value of $5,000 at the initiation of Service and all shares
must be in "book credit" form.
________________________________________________________________________________
G. EXPEDITED REDEMPTION SERVICE, FOR SELIGMAN CASH MGMT. FUND ONLY
I hereby authorize Seligman Data Corp. to honor telephone
or written instructions received from me without a
signature and believed by Seligman Data Corp. to be genuine
for redemption. Proceeds will be wired ONLY to the
commercial bank listed below for credit to my account, or
to my address of record. If Expedited Redemption Service is
elected, no certificates for shares will be issued. I also
understand and agree to the risks and procedures outlined
for all telephone transactions set forth in section 6-H. of
this Application.
Investment by ||Check ______________________________________________________________________
||Wire Name of Commercial Bank (Savings Bank May Not Be Used)
_________________________ ______________________ ______________________
Bank Account Name Bank Account No. Bank Routing No.
_______________________________________________________________________________________
Address of Bank City State Zip Code
X________________________________ X____________________________________________
Signature of Investor Date Signature of Co-Investor, if any Date
______________________________________________________________________________________________________________________
<PAGE>
H. TELEPHONE SERVICE ELECTION
AVAILABLE FOR INDIVIDUAL OR JOINT TENANT ACCOUNTS ONLY
By completing this section, I understand that I may place
the following requests by telephone:
o Redemptions up to $50,000 o Exchanges
o Address Changes o Dividend and/or Capital
Gain Distribution Option
changes
AUTHORIZATION
I understand that the telephone services are optional and
that by signing below I authorize the Funds, all other
Seligman Funds with the same account number and
registration which I currently own or in which I invest in
the future, and Seligman Data Corp. ("SDC"), to act upon
instructions received by telephone from me or any other
person in accordance with the provisions regarding
telephone services as set forth in the current prospectus
of each such Fund, as amended from time to time. I
understand that redemptions of uncertificated shares of up
to $50,000 will be sent only to my account address of
record, and only if such address has not changed within the
30 days preceding such request. Any telephone instructions
given in respect of this account and any account into which
exchanges are made are hereby ratified and I agree that
neither the Fund(s) nor SDC will be liable for any loss,
cost or expense for acting upon such telephone instructions
reasonably believed to be genuine and in accordance with
the procedures described in each prospectus, as amended
from time to time. Such procedures include recording of
telephone instructions, requesting personal and/or account
information to verify a caller's identity and sending
written confirmations of transactions. As a result of this
policy, I may bear the risk of any loss due to unauthorized
or fraudulent telephone instructions; provided, however,
that if the Fund(s) or SDC fail to employ such procedures,
the Fund(s) and/or SDC may be liable. TO ELECT TELEPHONE
SERVICES, PLEASE SIGN YOUR NAME(S) AS IT APPEARS ON THE
FIRST PAGE OF THIS ACCOUNT APPLICATION.
X________________________________ X____________________________________
Signature of Investor Date Signature of Co-Investor, if any Date
<PAGE>
I. INVEST-A-CHECK(R) SERVICE
To start your Invest-A-Check(R) Service, fill out the "Bank
Authorization to Honor Pre-Authorized Checks" below, and
forward it with an unsigned bank check from your regular
checking account (marked "void", if you wish). Please
arrange with my bank to draw pre-authorized checks and
invest the following dollar amounts (minimum: $100 monthly
or $250 quarterly) in the designated Seligman Fund(s) as
indicated:
_______________ $_________ ||Monthly ||Quarterly
Fund Name
________________ $_________ ||Monthly ||Quarterly
Fund Name
________________ $_________ ||Monthly ||Quarterly
Fund Name
I understand that my checks will be drawn on the fifth day
of the month, or prior business day, for the period
designated. I have completed the "Bank Authorization to
Honor Pre-Authorized Checks" below and have read and agree
to the Terms and Conditions applicable to the
Invest-A-Check(R) Service as set forth in each Prospectus
and as set forth below in the Bank Authorization.
X__________________________________________________________________
Signature of Investor (Please also sign Bank Authorization below.)
X__________________________________________________________________
Signature of Co-Investor, if any
________________________________________________________________________________________
BANK AUTHORIZATION TO HONOR PRE-AUTHORIZED CHECKS
________________________________________________________________________________________
To:_____________________________________________________________________________________
(Name of Bank)
________________________________________________________________________________________
Address of Bank or Branch (Street, City, State and Zip)
Please honor pre-authorized checks drawn on my account by Seligman Data Corp.,
100 Park Avenue, New York, N.Y. 10017, to the order of the Fund(s) designated
below:
____________________________________ $ ___________ ||Monthly ||Quarterly
Fund Name
____________________________________ $ ___________ ||Monthly ||Quarterly
Fund Name
____________________________________ $ ___________ ||Monthly ||Quarterly
Fund Name
and charge them to my regular checking account. Your authority to do so shall
continue until you receive written notice from me revoking it. You may
terminate your participation in this arrangement at any time by written notice
to me. I agree that your rights with respect to each pre-authorized check
shall be the same as if it were a check drawn and signed by me. I further
agree that should any such check be dishonored, with or without cause,
intentionally or inadvertently, you shall be under no liability whatsoever.
___________________________________ _________________________________________________
Checking Account Number Name(s) of Depositor(s) -- Please Print
X__________________________________________________
Signature(s) of Depositor(s) -- As Carried by Bank
X__________________________________________________
________________________________________________________________________________________
Address (Street) (City) (State, Zip)
________________________________________________________________________________________
To the Bank Designated above:
Your depositor(s) named in the above form has instructed us to establish the
Invest-A-Check(R) Service for his convenience. Under the terms of the Service,
your depositor(s) has pre-authorized checks to be drawn against his account in
a specific amount at regular intervals to the order of the designated Fund(s).
Checks presented to you will be magnetic-ink coded and will otherwise conform
to specifications of the American Bankers Association. A letter of
indemnification addressed to you and signed by Seligman Financial Services,
Inc., general distributor of the Seligman Mutual Funds, appears below. If
there is anything we can do to help you in giving your depositor(s) this
additional Service which he has requested, please let us know.
SELIGMAN DATA CORP.
INDEMNIFICATION AGREEMENT
To the Bank designated above:
SELIGMAN FINANCIAL SERVICES, INC., distributor of the shares of the Seligman
Mutual Funds, hereby agrees:
(1) To indemnify and hold you harmless against any loss, damage, claim or
suit, and any costs or expenses reasonably incurred in connection therewith,
either (a) arising as a consequence of your actions in connection with the
execution and issuance of any check or draft, whether or not genuine,
purporting to be executed by Seligman Data Corp. and received by you in the
regular course of business for the purpose of payment, or (b) resulting from
the dishonor of any such check or draft, with or without cause and
intentionally or inadvertently, even though such dishonor results in
suspension or termination of the Invest-A-Check(R) Service pursuant to which
such checks or drafts are drawn. (2) To refund to you any amount erroneously
paid by you on any such check or draft, provided claim for any such payment is
made within 12 months after the date of payment.
SELIGMAN FINANCIAL SERVICES, INC.
/S/Stephen J. Hodgdon
President
________________________________________________________________________________
<PAGE>
J. CHECK REDEMPTION SERVICE (CLASS A ONLY)
Available to shareholders who own or purchase shares having
a value of at least $25,000 invested in any of the
following: Seligman High-Yield Bond Fund, Seligman Income
Fund, Seligman U.S. Government Securities Fund, and any
Seligman Tax-Exempt Fund, or $2,000 invested in Seligman
Cash Management Fund. IF YOU WISH TO USE THIS SERVICE, YOU
MUST COMPLETE SECTION 4 AND THE SIGNATURE CARD BELOW.
SHAREHOLDERS ELECTING THIS SERVICE ARE SUBJECT TO THE
CONDITIONS OF THE TERMS AND CONDITIONS IN THE BACK OF EACH
PROSPECTUS.
CHECK WRITING SIGNATURE CARD Authorized Signature(s)
___________________________________________ 1.______________________________
Name of Fund for Check Redemption Service
___________________________________________ 2.______________________________
Name of Fund for Check Redemption Service
___________________________________________ 3.______________________________
Name of Fund for Check Redemption Service
__________________________________________ 4.______________________________
Account Number (If known)
__________________________________________ 5.______________________________
Account Registration (Please Print)
|| Check here if only one signature is required on checks.
|| Check here if a combination of signatures is required and specify the number:___________________.
ACCOUNTS IN THE NAMES OF CORPORATIONS, TRUSTS, PARTNERSHIPS, ETC., MUST
INDICATE THE LEGAL TITLES OF ALL AUTHORIZED SIGNATORIES. SHAREHOLDERS
ELECTING THIS SERVICE ARE SUBJECT TO THE TERMS AND CONDITIONS LISTED IN THE
PROSPECTUS.
</TABLE>
<PAGE>
MANAGED BY
[J&W SELIGMAN LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
Investment Managers and Advisors
ESTABLISHED 1864
JWS23 5/95
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
SELIGMAN CAPITAL FUND, INC.
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone (800) 221-2450 all continental United States
For Retirement Plan Information - Toll-Free Telephone (800) 445-1777
This Statement of Additional Information expands upon and supplements
the information contained in the current Prospectus of Seligman Capital Fund,
Inc., (the "Fund") dated May 1, 1995 It should be read in conjunction with the
Prospectus, which may be obtained by writing or calling the Fund at the above
address or telephone numbers. This Statement of Additional Information, although
not in itself a Prospectus, is incorporated by reference into the Prospectus in
its entirety.
The Fund offers two classes of shares. Class A shares may be purchased
at net asset value plus a sales load of up to 4.75%. Class D shares may be
purchased at net asset value and are subject to a contingent deferred sales load
("CDSL") of 1% if redeemed within one year.
Each Class A and Class D share represents an identical legal interest
in the investment portfolio of the Fund and has the same rights except for
certain class expenses and except that Class D shares bear a higher distribution
fee that generally will cause the Class D shares to have a higher expense ratio
and pay lower dividends than Class A shares. Each Class has exclusive voting
rights with respect to its distribution plan. Although holders of Class A and
Class D shares have identical legal rights, the different expenses borne by each
Class will result in different net asset values and dividends. The two classes
also have different exchange privileges.
TABLE OF CONTENTS
Page
Investment Objective, Policies
And Risks.................................... 2
Investment Limitations......................... 4
Directors And Officers......................... 5
Management And Expenses........................ 8
Administration, Shareholder Services And
Distribution Plan........................... 10
Portfolio Transactions..........................10
Purchase And Redemption Of Fund Shares..........11
Distribution Services...........................14
Valuation.......................................14
Performance.....................................15
General Information.............................16
Financial Statements............................16
Appendix .......................................17
EQCA1A
-1-
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
As stated in the Prospectus, the Fund seeks to produce capital appreciation
for its shareholders.
Borrowing. The Fund may from time to time borrow money from banks to increase
its portfolio of securities.
Borrowings are subject to any applicable limitations under regulations of the
Federal Reserve Board. Current asset value coverage of three times any amount
borrowed is required at all times. No borrowings occurred during 1994, 1993 and
1992.
Any gain in the value of securities purchased with money borrowed in excess
of the cost of amounts borrowed would cause the net asset value of the Fund's
shares to increase more than otherwise would be the case. Conversely, any
decline in the value of securities purchased with money borrowed or any gain in
value less than the cost of amounts borrowed would cause net asset value to
decline more than would otherwise be the case.
Lending of Portfolio Securities. The Fund may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash collateral
and obtain additional income or receive an agreed upon amount of interest from
the borrower. Loans are subject to termination at the option of the Fund or the
borrower. The Fund may pay reasonable administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest earned
on the cash or equivalent collateral to the borrower or placing broker. The Fund
does not have the right to vote securities on loan, but would terminate the loan
and regain the right to vote if that were considered important with respect to
the investment.
Rights and Warrants. The Fund may not invest in rights and warrants if, at the
time of acquisition, the investment in rights and warrants would exceed 5% of
the Fund's net assets, valued at the lower of cost or market. In addition, no
more than 2% of net assets may be invested in warrants not listed on the New
York or American Stock Exchanges. For purposes of this restriction, rights and
warrants acquired by the Fund in units or attached to securities may be deemed
to have been purchased without cost.
Foreign Currency Transactions. A forward foreign currency exchange contract is
an agreement to purchase or sell a specific currency at a future date and at a
price set at the time the contract is entered into. The Fund will generally
enter into forward foreign currency exchange contracts to fix the US dollar
value of a security it has agreed to buy or sell for the period between the date
the trade was entered into and the date the security is delivered and paid for,
or, to hedge the US dollar value of securities it owns.
The Fund may enter into a forward contract to sell or buy the amount of a
foreign currency it believes may experience a substantial movement against the
US dollar. In this case the contract would approximate the value of some or all
of the Fund's portfolio securities denominated in such foreign currency. Under
normal circumstances, the portfolio manager will limit forward currency
contracts to not greater than 75% of the Fund's portfolio position in any one
country as of the date the contract is entered into. This limitation will be
measured at the point the hedging transaction is entered into by the Fund. Under
extraordinary circumstances, the Subadviser may enter into forward currency
contracts in excess of 75% of the Fund's portfolio position in any one country
as of the date the contract is entered into. The precise matching of the forward
contract amounts and the value of securities involved will not generally be
possible since the future value of such securities in foreign currencies will
change as a consequence of market involvement in the value of those securities
between the date the forward contract is entered into and the date it matures.
The projection of short-term currency market movement is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Under certain circumstances, the Fund may commit up to the entire
value of its assets which are denominated in foreign currencies to the
consummation of these contracts. The Subadviser will consider the effect a
substantial commitment of its assets to forward contracts would have on the
investment program of the Fund and its ability to purchase additional
securities.
Except as set forth above and immediately below, the Fund will also not
enter into such forward contracts or maintain a net exposure to such contracts
where the consummation of the contracts would oblige the Fund to deliver an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. The Fund, in order to
avoid excess transactions and transaction costs, may nonetheless maintain a net
exposure to forward contracts in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency provided the excess
amount is "covered" by cash or liquid, high-grade debt securities, denominated
in any currency, at least equal at all times to the amount of such excess. Under
normal circumstances, consideration of the prospect for currency parties will be
incorporated into the longer term investment decisions made with regard to
overall diversification strategies. However, the Subadviser believes that it is
-2-
<PAGE>
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of the Fund will be served.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of the forward contract.
Accordingly, it may be necessary for the Fund to purchase additional foreign
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 foreign currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver. However, the Fund may use liquid, high-grade
debt securities, denominated in any currency, to cover the amount by which the
value of a forward contract exceeds the value of the securities to which it
relates.
If the Fund retains the portfolio security and engages in offsetting
transactions, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign 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.
The Fund's dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. Of course, the Fund is not required
to enter into forward contracts with regard to its foreign currency-denominated
securities and will not do so unless deemed appropriate by the Subadviser. It
also should be realized that this method of hedging against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange at a future date.
Additionally, although such contracts tend to minimize the risk of loss due to a
decline in the value of a hedged currency, at the same time, they tend to limit
any potential gain which might result from an increase in the value of that
currency.
Shareholders should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to the Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to resell that currency to the dealer.
Investment income received by the Fund from sources within foreign countries
may be subject to foreign income taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries which entitle the Fund
to a reduced rate of such taxes or exemption from taxes on such income. It is
impossible to determine the effective rate of foreign tax in advance since the
amounts of the Fund's assets to be invested within various countries is not
known.
Repurchase Agreements. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term. A
repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation, subject to resale at
an agreed upon price and date. Such resale price reflects an agreed upon
interest rate effective for the period of time the instrument is held by the
Fund and is unrelated to the interest rate on the instrument. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default by the seller, including possible delays and expenses in liquidating the
securities underlying the agreement, decline in value and the underlying
securities and loss of interest. Repurchase agreements usually are for short
periods, such as one week or less, but may be for longer periods. However, as a
matter of fundamental policy, the Fund will not enter into repurchase agreements
of more than one week's duration if more than 10% of its net assets would be so
invested. The Fund to date has not entered into any repurchase agreements and
has no present intention of doing so in the future.
Except as described under the following "Investment Limitations", the
foregoing investment policies are not fundamental and the Board of Directors of
the Fund may change such policies without the vote of a majority of its
outstanding voting securities (as defined on page 5).
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<PAGE>
Portfolio Turnover. The Fund's portfolio turnover rate is calculated by dividing
the lesser of purchases or sales of portfolio securities for the fiscal year by
the monthly average value of the portfolio securities owned during the fiscal
year. Securities with remaining maturities of one year or less at the date of
acquisition are excluded from the calculation.
The Fund's portfolio turnover rates were 70.72% in 1994 and 46.84% in 1993.
INVESTMENT LIMITATIONS
Under the Fund's fundamental policies, which cannot be changed except by vote
of a majority of its outstanding voting securities, the Fund may not:
- - Borrow money, except in an amount not to exceed one-third of the value of its
total assets less liabilities other than borrowings;
- - Mortgage or pledge any of its assets, except to secure permitted borrowings
up to 10% of the value of its total assets (taken at cost) and except to
enter into escrow arrangements in connection with the sales of permitted call
options. The Fund has no present intention of investing in these types of
securities, and will not do so without the prior approval of the Fund's Board
of Directors;
- - Purchase securities on "margin," or sell "short";
- - Participate on a joint or a joint and several basis in any securities trading
account;
- - Invest more than 5% of the value of its total assets, at market value, in
securities of any company which, with their predecessors, have been in
operation less than three continuous years, provided, however, that
securities guaranteed by a company that (including predecessors) has been in
operation at least three continuous years shall be excluded from this
calculation;
- - Invest more than 5% of its total assets (taken at market) in securities of
any one issuer, other than the U.S. Government, its agencies or
instrumentalities, buy more than 10% of the outstanding voting securities or
more than 10% of all the securities of any issuer, or invest to control or
manage any company;
- - Invest more than 25% of total assets at market value in any one industry;
- - Invest in securities issued by other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
- - Purchase or hold any real estate, except the Fund may invest in securities
secured by real estate or interests therein or issued by persons (other than
real estate investment trusts) which deal in real estate or interests
therein;
- - Purchase or hold the securities of any issuer, if to its knowledge, directors
or officers of the Fund individually owning beneficially more than 0.5% of
the securities of that issuer own in the aggregate more than 5% of such
securities;
- - Deal with its directors or officers, or firms they are associated with, in
the purchase or sale of securities of other issuers, except as broker;
- - Purchase or sell commodities and commodity contracts;
- - Underwrite the securities of other issuers, except insofar as the Fund may be
deemed an underwriter under the Securities Act of 1933 as amended, in
disposing of a portfolio security;
- - Make loans, except loans of portfolio securities and except to the extent the
purchase of notes, bonds or other evidences of indebtedness, the entry into
repurchase agreements or deposits with banks may be considered loans; or
-4-
<PAGE>
- - Write or purchase put, call, straddle or spread options except that the Fund
may sell covered call options listed on a national securities exchange or
quoted on NASDAQ and purchase closing call options so listed or quoted. The
Fund has no present intention of investing in these types of securities, and
will not do so without the prior approval of the Fund's Board of Directors.
Although not fundamental policies subject to shareholder vote, as long as
the Fund's shares are registered in certain states, it may not mortgage, pledge
or hypothecate its assets to the extent that the value of such encumbered assets
exceeds 10% of the per share offering price of shares of the Fund, it may not
invest in interests in oil, gas or other mineral exploration or development
programs and it must limit to 5% of its gross assets at market value its
combined investments in securities of companies in operation for less than three
years.
Under the Investment Company Act of 1940 (the "1940 Act"), a "vote of a
majority of the outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (l) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares present at a shareholders' meeting if more than
50% of the outstanding shares are represented at the meeting in person or by
proxy.
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years, are shown below. Each
Director who is an "interested person" of the Fund, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive
(56) Officer and Chairman of the Executive Committee
Managing Director, Chairman and President, J. &
W. Seligman & Co. Incorporated, investment
managers and advisors; and Seligman Advisors,
Inc., advisors; Chairman and Chief Executive
Officer, the Seligman Group of Investment
Companies; Chairman, Seligman Financial
Services, Inc., distributor; Seligman Holdings,
Inc., holding company; Seligman Services, Inc.,
broker/dealer; and Carbo Ceramics Inc., ceramic
proppants for oil and gas industry; Director or
Trustee, Seligman Data Corp. (formerly Union
Data Service Center, Inc.), shareholder service
agent; Daniel Industries, Inc., manufacturer of
oil and gas metering equipment; Kerr-McGee
Corporation, diversified energy company; and
Sarah Lawrence College; and a Member of the
Board of Governors of the Investment Company
Institute; formerly, Chairman, Seligman
Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company.
RONALD T. SCHROEDER* Director, President and Member of the Executive
(47) Committee
Director, Managing Director and Chief Investment
Officer, J. & W. Seligman & Co. Incorporated,
investment managers and advisors; Managing
Director and Chief Investment Officer, Seligman
Advisors, Inc., advisors; Director or Trustee
and President and Chief Investment Officer,
Tri-Continental Corporation, closed-end
investment company and the open-end investment
companies in the Seligman Group of Investment
Companies; Director and President, Seligman
Holdings, Inc., holding company; Director,
Seligman Financial Services, Inc., distributor;
Seligman Data Corp., shareholder service agent;
Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc., closed-end
investment companies; Seligman Henderson Co.,
advisors; and Seligman Services, Inc.,
broker/dealer; formerly, Director, J. & W.
Seligman Trust Company, trust company; and
Seligman Securities, Inc., broker/dealer.
FRED E. BROWN* Director
(81)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
Director or Trustee, Tri-Continental
Corporation, closed-end investment company; and
the open-end investment companies in the
Seligman Group of Investment Companies;
Director, Seligman Financial Services, Inc.,
distributor; Seligman Quality Municipal Fund,
-5-
<PAGE>
Inc. and Seligman Select Municipal Fund, Inc.,
closed-end investment companies; Seligman
Services Inc., broker/dealer; Trustee, Trudeau
Institute, nonprofit bio-medical research
organization; Lake Placid Center for the Arts,
cultural organization; Lake Placid Education
Foundation, education foundation; formerly,
Director, J. & W. Seligman Trust Company, trust
company; and Seligman Securities, Inc.,
broker/dealer.
ALICE S. ILCHMAN Director
(59)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment
Companies; NYNEX (formerly, New York Telephone
Company), telephone company; The Rockefeller
Foundation, charitable foundation; and The
Committee for Economic Development; formerly,
Trustee, The Markle Foundation, philanthropic
organization; and Director, International
Research and Exchange Board, intellectual
exchanges.
Sarah Lawrence College, Bronxville, NY 10708
JOHN E. MEROW* Director
(65)
Partner, Sullivan & Cromwell, law firm; Director
or Trustee, the Commonwealth Aluminum
Corporation; the Seligman Group of Investment
Companies; the Municipal Art Society of New
York; the U. S. Council for International
Business and the U. S.-New Zealand Council;
Chairman, American Australian Association; the
Municipal Art Society of New York; Member of the
American Law Institute and Council on Foreign
Relations; and Member of the Board of Governors
of the Foreign Policy Association and New York
Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(52)
Attorney; Director or Trustee, the Seligman
Group of Investment Companies; National
Association of Independent Schools (Washington,
D.C.), education; Chairman of the Board of
Trustees of St. George's School (Newport, RI).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ
07934
DOUGLAS R. NICHOLS, JR. Director
(75)
Management Consultant; Director or Trustee, the
Seligman Group of Investment Companies;
formerly, Trustee, Drew University.
790 Andrews Avenue, Delray Beach, FL 33483
JAMES C. PITNEY Director
(68)
Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of
Investment Companies; Public Service Enterprise
Group, public utility.
Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(67)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies; The Brooklyn Museum; The Brooklyn
Union Gas Company; The Committee for Economic
Development; Dow Jones & Co., Inc.; Public
Broadcasting Service; formerly, Co-Chairman of
the Policy Council of the Tax Foundation;
Director and Vice Chairman, Mobil Corporation;
Director, Tesoro Petroleum Companies, Inc.; and
Director and President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
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<PAGE>
HERMAN J. SCHMIDT Director
(78)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies; H. J. Heinz Company; HON Industries,
Inc.; and MAPCO, Inc; formerly, Director,
MetLife Series Fund, Inc. and MetLife
Portfolios, Inc.; and Ryder System, Inc.
15 Oakley Lane, Greenwich, CT 06830
ROBERT L. SHAFER Director
(62)
Vice President, Pfizer Inc., pharmaceuticals;
Director or Trustee, the Seligman Group of
Investment Companies; and USLIFE Corporation,
life insurance.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(60)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises, Inc.;
Director or Trustee, Red Man Pipe and Supply
Company, piping and other materials; the
Seligman Group of Investment Companies;
Director, C-SPAN.
300 Crescent Court, Suite 700, Dallas, TX 75201
BRIAN T. ZINO* Director and Member of the Executive Committee
(42)
Managing Director (formerly, Chief
Administrative and Financial Officer), J. & W.
Seligman & Co. Incorporated, investment managers
and advisors; Director or Trustee, the Seligman
Group of Investment Companies; Chairman,
Seligman Data Corp., shareholder service agent;
Director, Seligman Financial Services, Inc.,
distributor; Seligman Services, Inc.,
broker/dealer; Senior Vice President, Seligman
Henderson Co., advisors; formerly, Director and
Secretary, Chuo Trust - JWS Advisors, Inc.,
advisors; and Director, Seligman Securities,
Inc., broker/dealer; and J. & W. Seligman Trust
Company, trust company.
LORIS D. MUZZATTI Vice President and Portfolio Manager
(38)
Managing Director (formerly, Vice President and
Portfolio Manager), J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
Vice President and Portfolio Manager, one other
open-end investment company in the Seligman
Group of Investment Companies.
LAWRENCE P. VOGEL Vice President
(38)
Senior Vice President, Finance, J. & W. Seligman
& Co. Incorporated, investment managers and
advisors; Seligman Financial Services, Inc.,
distributor; and Seligman Advisors, Inc.,
advisors; Vice President, the Seligman Group of
Investment Companies; Senior Vice President,
Finance (formerly, Treasurer), Seligman Data
Corp., shareholder service agent; Treasurer,
Seligman Holdings, Inc., holding company; and
Seligman Henderson Co., advisors; formerly,
Senior Audit Manager at Price Waterhouse,
independent accountants.
FRANK J. NASTA Secretary
(30)
Secretary, the Seligman Group of Investment
Companies; J. & W. Seligman & Co., Incorporated,
investment managers and advisers; Seligman
Financial Services, Inc., distributor; Seligman
Henderson Co., advisers; Seligman Services,
Inc., broker/dealers; Seligman Data Corp.; Vice
President, Law and Regulation, J. & W. Seligman
& Co. Incorporated, investment managers and
advisers; formerly, attorney, Seward & Kissel.
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<PAGE>
THOMAS G. ROSE Treasurer
(37)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc.
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund for
which no market valuation is available and to elect or appoint officers of the
Fund to serve until the next meeting of the Board.
<TABLE>
<CAPTION>
Compensation Table
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as part of from Fund and
Position With Registrant from Fund (1) Fund Expenses Fund Complex (2)
------------------------ ------------- ------------- ----------------
<S> <C> <C> <C>
William C. Morris, Director N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
Alice S. Ilchman, Director $2,854.48 N/A $67,000.00
John E. Merow, Director 2,818.76(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,818.76 N/A 66,000.00
Douglas R. Nichols, Jr., Director 2,818.76 N/A 66,000.00
James C. Pitney, Director 2,854.48 N/A 67,000.00
James Q. Riordan, Director 2,818.76 N/A 66,000.00
Herman J. Schmidt, Director 2,818.76 N/A 66,000.00
Robert L. Shafer, Director 2,818.76 N/A 66,000.00
James N. Whitson, Director 2,818.76(d) N/A 66,000.00(d)
Brian T. Zino, Director N/A N/A N/A
- ---------------------
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1994.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
(d) Deferred. The total amounts of deferred compensation (including interest)
payable to Messrs. Merow, Pitney and Whitson as of December 31, 1994 were
$37,741, $37,104 and $4,764, respectively. Mr. Pitney no longer defers current
compensation.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is accrued
on the deferred balances. The annual cost of such interest is included in the
directors' fees and expenses, and the accumulated balance thereof is included in
"Liabilities" in the Fund's financial statements.
Directors and officers of the Fund are also directors or trustees and
officers of some or all of the other investment companies in the Seligman Group.
Directors and officers of the Fund as a group owned directly or indirectly
80,022 shares or less than 1% of the Fund's Class A Capital Stock at March 31,
1995. As of that date, no Directors or Officers owned shares of the Fund's Class
D Capital Stock.
MANAGEMENT AND EXPENSES
As indicated in the Prospectus, under the Management Agreement, dated
December 29, 1988, as amended April 10, 1991, subject to the control of the
Board of Directors, the Manager manages the investment of the assets of the
Fund, including making purchases and sales of portfolio securities consistent
with the Fund's investment objectives and policies, and administers its business
and other affairs. The Manager provides the Fund with such office space,
administrative and other services and executive and other personnel as are
necessary for Fund operations. The Manager pays all the compensation of the
-8-
<PAGE>
directors of the Fund who are employees or consultants of the Manager and of the
officers and employees of the Fund. The Manager also provides senior management
for Seligman Data Corp., the Fund's shareholder service agent.
The Fund pays the Manager a management fee for its services, calculated
daily and payable monthly, based on a percentage of the daily net assets of the
Fund. The method for determining this percentage is set forth in the Appendix to
the Prospectus. The management fee amounted to $945,288 in 1994, $1,059,275 in
1993 and $935,819 in 1992 which was equivalent to an annual rate of .53% of the
average net assets of the Fund in 1994, .53% in 1993 and .53% in 1992.
The Fund pays all its expenses other than those assumed by the Manager,
including brokerage commissions, administration, shareholder services and
distribution fees, fees and expenses of independent attorneys and auditors,
taxes and governmental fees including fees and expenses for qualifying the Fund
and its shares under Federal and state securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder record keeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees and expenses of
directors of the Fund not employed by (or serving as a Director of) the Manager
or its affiliates, insurance premiums and extraordinary expenses such as
litigation expenses. The Manager has undertaken to one state securities
administrators, so long as required, to reimburse the Fund for each year in the
amount by which total expenses, including the management fee, but excluding
interest, taxes, brokerage commissions, distribution fees and extraordinary
expenses, exceed 2 1/2% of the first $30,000,000 of average net assets, 2% of
the next $70,000,000 of average net assets, and 1 1/2% thereafter. Such
reimbursement, if any, will be made monthly.
On December 29, 1988, a majority of the outstanding voting securities of
the Manager was purchased by Mr. William C. Morris and a simultaneous
recapitalization of the Manager occurred.
The Management Agreement was approved by the Board of Directors on
September 30, 1988 and by the shareholders at a special meeting held on December
16, 1988. The Management Agreement will continue in effect until December 31 of
each year if (1) such continuance is approved in the manner required by the 1940
Act (by a vote of a majority of the Board of Directors or of the outstanding
voting securities of the Fund and by a vote of a majority of the Directors who
are not parties to the Management Agreement or interested persons of any such
party) and (2) if the Manager shall not have notified the Fund at least 60 days
prior to December 31 of any year that it does not desire such continuance. The
Management Agreement may be terminated by the Fund, without penalty, on 60 days'
written notice to the Manager and will terminate automatically in the event of
its assignment. The Fund has agreed to change its name upon termination of the
Management Agreement if continued use of the name would cause confusion in the
context of the Manager's business.
The Manager is a successor firm to an investment banking business founded
in 1864 which has thereafter provided investment services to individuals,
families, institutions and corporations. See the Appendix for further history of
the Manager.
Under the Subadvisory Agreement, dated June 1, 1994, the Subadviser
supervises and directs a portion of the Fund's investment in foreign securities
and Depository Receipts consistent with the Fund's investment objectives,
policies and principles. For these services, the Subadviser is paid a fee as
described in Appendix A to the Fund's Prospectus. The Subadvisory Agreement was
approved by the Board of Directors at a meeting held on January 20, 1994 by the
shareholders of the Fund on May 19, 1994. The Subadvisory Agreement will
continue in effect until December 31, 1995, and from year to year thereafter if
such continuance is approved in the manner required by the 1940 Act (by a vote
of a majority of the Board of Directors or of the outstanding voting securities
of the Fund and by a vote of a majority of the Directors who are not parties to
the Subadvisory Agreement or interested persons of any such party) and (2) if
the Subadviser shall not have notified the Manager in writing at least 60 days
prior to December 31 of any year that it does not desire such continuance. The
Subadvisory Agreement may be terminated at any time by the Fund, on 60 days
written notice to the Subadviser. The Subadvisory Agreement will terminate
automatically in the event of its assignment or upon the termination of the
Management Agreement.
For the period June 1, 1994 through December 31, 1994, the Fund did not
require the services of the Subadviser.
-9-
<PAGE>
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The Firm
currently manages approximately $18.5 billion in assets and is recognized as a
specialist in global equity investing.
Officers, directors and employees of the Manager are permitted to engage in
personal securities transactions, subject to the Manager's Code of Ethics (the
"Code"). The Code proscribes certain practices with regard to personal
securities transactions and personal dealings, provides a framework for the
reporting and monitoring of personal securities transactions by the Manager's
Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Code. The Code prohibits
each of the officers, directors and employees (including all portfolio managers)
of the Manager from purchasing or selling any security that the officer,
director or employee knows or believes (i) was recommended by the Manager for
purchase or sale by any client, including the Fund, within the preceding two
weeks, (ii) has been reviewed by the Manager for possible purchase or sale
within the preceding two weeks, (iii) is being purchased or sold by any client,
(iv) is being considered by a research analyst, (v) is being acquired in a
private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Code also imposes a strict standard of confidentiality and
requires portfolio managers to disclose any interest they may have in the
securities or issuers that they recommend for purchase by any client.
The Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may not
be purchased due to a possible conflict with clients. All officers, directors
and employees are also required to disclose all securities beneficially owned by
them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
As indicated in the Prospectus, the Fund has adopted an Administration,
Shareholder Services and Distribution Plan for each Class (the "Plan") in
accordance with Section 12(b) of the Act and Rule 12b-1 thereunder.
The Plan was approved on July 16, 1992 by the Board of Directors of the
Fund, including a majority of the Directors who are not "interested persons" (as
defined in the Act) and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (the "Qualified
Directors") and was approved by shareholders of the Fund at a Special Meeting of
Shareholders held on November 23, 1992. The Plan became effective in respect of
the Class A shares on January 1, 1993. The Plan was approved in respect of the
Class D shares on March 18, 1993 by the Board of Directors of the Fund,
including a majority of the Qualified Directors, and became effective with
respect to the Class D shares on May 1, 1993. The Plan will continue in effect
through December 31 of each year so long as such continuance is approved by a
majority vote of both the Directors and the Qualified Directors of the Fund,
cast in person at a meeting called for the purpose of voting on such approval.
The Plan may not be amended to increase materially the amounts payable to
Service Organizations with respect to a Class without the approval of a majority
of the outstanding voting securities of the Class and no material amendment to
the Plan may be made except by a majority of both the Directors and Qualified
Directors.
The Plan requires that the Treasurer of the Fund shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
PORTFOLIO TRANSACTIONS
The Management and Subadvisory Agreements recognize that in the purchase
and sale of portfolio securities the Manager and Subadviser will seek the most
favorable price and execution, and, consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager or Subadviser for their use, as well as to the
-10-
<PAGE>
general attitude toward and support of investment companies demonstrated by such
brokers or dealers. Such services include supplemental investment research,
analysis and reports concerning issues, industries and securities deemed by the
Manager and Subadviser to be beneficial to the Fund. In addition, the Manager
and Subadviser are authorized to place orders with brokers who provide
supplemental investment and market research and statistical and economic
analysis although the use of such brokers may result in a higher brokerage
charge to the Fund than the use of brokers selected solely on the basis of
seeking the most favorable price and execution and although such research and
analysis may be useful to the Manager and Subadviser in connection with its
services to clients other than the Fund.
In over-the-counter markets, the Fund deals with primary market makers
unless a more favorable execution or price is believed to be obtainable. The
Fund may buy securities from or sell securities to dealers acting as principal,
except dealers with which its directors and/or officers are affiliated.
When two or more of the investment companies in the Seligman Group or other
investment advisory clients of the Manager and Subadviser desire to buy or sell
the same security at the same time the securities purchased or sold are
allocated by the Manager and Subadviser in a manner believed to be equitable to
each. There may be possible advantages or disadvantages of such transactions
with respect to price or the size of positions readily obtainable or saleable.
Brokerage commissions for the last three fiscal years are set forth in the
following table:
<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Total Brokerage Commissions Paid (1) $ 293,441 $ 161,086 $ 115,895
Brokerage Commissions Paid
to Seligman Securities, Inc. (2) -- 13,748 57,027
Brokerage Commissions Paid to Others for
Execution and Research and Statistical Services 293,441 147,338 58,868
</TABLE>
Notes:
(1) Not including any spreads on principal transactions on a net basis.
(2) Brokerage commissions paid to Seligman Securities, Inc. were 8.5% and 49.2%
of total brokerage commissions paid for 1993 and 1992, respectively. The
aggregate dollar amount of the Fund's transactions for which Seligman
Securities, Inc. acted as broker was 10.5% of the total dollar amount of
all commission transactions in 1993 and 51.2% in 1992. The Board of
Directors adopted procedures effective January 1, 1984, pursuant to which
Seligman Securities, Inc. was available to the Fund as broker for
approximately one-half of agency transactions in listed securities
(exclusive of option and option-related transactions) as commission rates
believed in accordance with applicable regulations to be fair and
reasonable. As of March 31, 1993, Seligman Securities, Inc. ceased
functioning as a broker for the Fund and its other clients.
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund issues two classes of shares: Class A shares may be purchased at a
price equal to the next determined net asset value per share, plus a sales load.
Class D shares may be purchased at a price equal to the next determined net
asset value without an initial sales load, but a CDSL may be charged on
redemptions within one year of purchase. See "Alternative Distribution System,"
"Purchase Of Shares," and "Redemption Of Shares" in the Prospectus.
Specimen Price Make-Up
Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold at a maximum sales load of 4.75% and Class
D shares are sold at net asset value*. Using the Fund's net asset value at
December 31, 1994, the maximum offering price of the Fund's shares is as
follows:
-11-
<PAGE>
Class A
Net asset value per Class A share...................................... $ 13.17
Maximum sales load (4.75% of offering price)........................... .66
------
Offering price to public............................................... $ 13.83
-------
-------
Class D
Net asset value and offering price per Class D share*.................. $ 12.82
-------
-------
- -----------
* Class D shares are subject to a CDSL of 1% on redemptions within one year of
purchase. See "Redemption Of Shares" in the Prospectus
CLASS A SHARES - REDUCED SALES LOADS
Reductions Available. Shares of any Seligman Fund sold with a sales load in a
continuous offering will be eligible for the following reductions:
Volume Discounts are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other Funds in
the Seligman Group which are sold with a sales load, reaches levels indicated in
the sales load schedule set forth in the Prospectus.
The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of the Fund and shares of Seligman Common Stock Fund,
Seligman Communications and Information Fund, Seligman Frontier Fund, Seligman
Growth Fund, Seligman Henderson Global Fund Series, Seligman High Income Fund
Series, Seligman Income Fund, Seligman New Jersey Tax-Exempt Fund, Inc.,
Seligman Pennsylvania Tax-Exempt Fund Series, Seligman Income Fund, Seligman
Tax-Exempt Fund Series, or Seligman Tax-Exempt Series Trust sold with a sales
load with the total net asset value of shares of those Mutual Funds already
owned that were sold with a sales load and the total net asset value of shares
of Seligman Cash Management Fund which were acquired through an exchange of
shares of another Mutual Fund in the Seligman Group on which there was a sales
load at the time of purchase to determine reduced sales loads in accordance with
the schedule in the Prospectus. The value of the shares owned, including the
value of shares of Seligman Cash Management Fund acquired in an exchange of
shares of another Mutual Fund in the Seligman Group on which there was a sales
load at the time of purchase will be taken into account in orders placed through
a dealer, however, only if Seligman Financial Services, Inc. is notified by an
investor or a dealer of the amount owned at the time your purchase is made and
is furnished sufficient information to permit confirmation.
A Letter of Intent allows an investor to purchase shares over a 13-month
period at reduced sales loads in accordance with the schedule in the Prospectus,
based on the total amount of Class A shares of the Fund that the letter states
the investor intends to purchase plus the total net asset value of shares sold
with a sales load of Seligman Common Stock Fund, Seligman Communications and
Information Fund, Seligman Frontier Fund, Seligman Growth Fund, Seligman
Henderson Global Fund Series, Seligman High Income Fund Series, Seligman Income
Fund, Seligman New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania
Tax-Exempt Fund Series, Seligman Tax-Exempt Fund Series, or Seligman Tax-Exempt
Series Trust already owned and the total net asset value of shares of Seligman
Cash Management Fund which were acquired through an exchange of shares of
another Mutual Fund in the Seligman Group on which there was a sales load at the
time of purchase. Reduced sales loads also may apply to purchases made within a
13-month period starting up to 90 days before the date of execution of a letter
of intent. For more information concerning the terms of the letter of intent,
see "Terms and Conditions - Letter of Intent - Class A Shares Only" accompanying
the account application in the Prospectus.
Persons Entitled To Reductions. Reductions in sales loads apply to purchases of
Class A shares by a "single person," including an individual; members of a
family unit comprising husband, wife and minor children; or a trustee or other
fiduciary purchasing for a single fiduciary account. Employee benefit plans
qualified under Section 401 of the Internal Revenue Code, organizations tax
exempt under Section 501 (c)(3) or (13), and non-qualified employee benefit
plans that satisfy uniform criteria are considered "single persons" for this
purpose. The uniform criteria are as follows:
-12-
<PAGE>
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
Prospectus, reports and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
Eligible Employee Benefit Plans. The term "eligible employee benefit plan" means
any plan or arrangement, whether or not tax qualified, which provides for the
purchase of Fund shares. The term "participant account plan" means any "eligible
employee benefit plan" where (i) the Fund shares are purchased through payroll
deductions or otherwise by a fiduciary or other person for the account of
participants who are employees (or their spouses) of an employer and (ii) a
separate Open Account is maintained in the name of such fiduciary or other
person for the account of each participant in the plan (such as a payroll
deduction IRA program).
The table of sales loads in the Prospectus applies to sales to "eligible
employee benefit plans", except that the Fund may sell shares at net asset value
to "eligible employee benefit plans," of employers who have at least 2,000 U.S.
employees to whom such plan is made available or, regardless of the number of
employees, if such plan is established or maintained by any dealer which has a
sales agreement with Seligman Financial Services, Inc. Such sales must be made
in connection with a payroll deduction system of plan funding or other systems
acceptable to Seligman Data Corp., the Fund's shareholder service agent. Such
sales are believed to require limited sales effort and sales-related expenses
and therefore are made at net asset value. Contributions or account information
for plan participation also should be transmitted to Seligman Data Corp. by
methods which it accepts. Additional information about "eligible employee
benefit plans" is available from investment dealers or Seligman Financial
Services, Inc.
Payment in Securities. In addition to cash, the Fund may accept securities in
payment for Fund shares sold at the applicable public offering price (net asset
value plus any applicable sales load) although the Fund does not presently
intend to accept securities in payment for Fund shares. Generally, the Fund will
only consider accepting securities (l) to increase its holdings in a portfolio
security, or (2) if the Manager determines that the offered securities are a
suitable investment for the Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that the
Fund would not accept securities with a value of less than $100,000 per issue in
payment for shares. The Fund may reject in whole or in part offers to pay for
Fund shares with securities, may require partial payment in cash for applicable
sales loads, and may discontinue accepting securities as payment for Fund shares
at any time without notice. The Fund will not accept restricted securities in
payment for shares. The Fund will value accepted securities in the manner
provided for valuing portfolio securities of the Fund. Any securities accepted
by the Fund in payment for Fund shares will have an active and substantial
market and have a value which is readily ascertainable (See "Valuation"). In
accordance with Texas securities regulations, should the Fund accept securities
in payment for shares, such transactions would be limited to a bona fide
reorganization, statutory merger, or to other acquisitions of portfolio
securities (except for municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) which meet the investment
objectives and policies of the investment company; are acquired for investment
and not for resale; are liquid securities which are not restricted as to
transfer either by law or liquidity of market; and have a value which is readily
ascertainable (and not established only by evaluation procedures) as evidenced
by a listing on the American Stock Exchange, the New York Stock Exchange or
NASDAQ.
Further Types of Reductions. Class A shares may be issued without a sales load
in connection with the acquisition of cash and securities owned by other
investment companies and personal holding companies, to financial institution
trust departments, to registered investment advisers exercising investment
discretionary authority with respect to the purchase of Fund shares, or pursuant
to sponsored arrangements with organizations which make recommendations to, or
permit group solicitation of, its employees, members or participants in
connection with the purchase of shares of the Fund, to separate accounts
established and maintained by an insurance company which are exempt from
registration under Section 3(c)(11) of the 1940 Act, to registered
representatives and employees (and their spouses and minor children) of any
dealer that has a sales agreement with SFSI, to shareholders of mutual funds
with investment objectives and policies similar to the Fund's who purchase
shares with redemption proceeds of such funds and to certain unit investment
trusts as described in the Prospectus.
-13-
<PAGE>
Class A shares may be sold at net asset value to these persons since such
sales require less sales effort and lower sales related expenses as compared
with sales to the general public.
More About Redemptions. The procedures for redemption of Fund shares under
ordinary circumstances are set forth in the Prospectus. In unusual circumstances
payment may be postponed, if the orderly liquidation of portfolio securities is
prevented by the closing of, or restricted trading on the New York Stock
Exchange during periods of emergency, or such other periods as ordered by the
Securities and Exchange Commission. Payment may be made in securities, subject
to the review of some state securities commissions. If payment is made in
securities, a shareholder may incur brokerage expenses in converting these
securities into cash.
DISTRIBUTION SERVICES
The Fund and Seligman Financial Services, Inc. ("SFSI") are parties to a
Distributing Agreement dated January 1, 1993. SFSI, an affiliate of the Manager,
acts as general distributor of the shares of the Fund and of the other mutual
funds in the Seligman Group. As general distributor of the Fund's Capital Stock,
SFSI allows concessions to all dealers, as indicated in the Prospectus. Pursuant
to agreements with the Fund, certain dealers may also provide sub-accounting and
other services for a fee. SFSI receives the balance of sales loads and any CDSLs
paid by investors. The balance of sales loads paid by investors and received by
SFSI in respect of Class A shares amounted to $16,143 in 1994, after allowance
of $121,768 as concessions to dealers; $36,577 in 1993, after allowance of
$290,127 as concessions to dealers; and $35,778 in 1992, after allowance of
$291,558 as concessions to dealers. For the year ended December 31, 1994, SFSI
retained CDSL charges from Class D shares amounting to $2,361; and $126 for the
period May 3, 1993 to December 31, 1993.
Class A shares may be sold at net asset value to present and retired
directors, trustees, officers, employees (and their spouses and minor children)
of the Fund, the other investment companies in the Seligman Group, the Manager
and other companies affiliated with the Manager. Such sales also may be made to
employee benefit and thrift plans for such persons and to any investment
advisory, custodial, trust or other fiduciary account managed or advised by the
Manager or any affiliate. These sales may be made for investment purposes only,
and shares may be resold only to the Fund.
VALUATION
Net asset value per Fund share is determined as of the close of trading on
the New York Stock Exchange, (usually, 4:00 p.m. Eastern time), on each day that
the New York Stock Exchange is open. The New York Stock Exchange is currently
closed on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value of Class D shares will generally be lower than the net asset value of
Class A shares as a result of the larger distribution fee with respect to Class
D shares.
The net asset value per share is determined separately for each class of
shares. Portfolio securities, including open short positions and options
written, are valued at the last sale price on the securities exchange or
securities market on which such securities primarily are traded. Securities
traded on a U.S. or foreign exchange or over-the counter market are valued at
the last sales price on the primary exchange or market on which they are traded.
United Kingdom securities for which there are no recent sales transactions are
valued based on quotations provided by primary market makers in such securities.
Any securities for which recent market quotations are not readily available,
including restricted securities, are valued at fair value as determined in
accordance with procedures approved by the Board of Directors. Short-term
obligations with less than sixty days remaining to maturity are generally valued
at amortized cost. Short-term obligations with more than sixty days remaining to
maturity will be valued at current market value until the sixtieth day prior to
maturity, and will then be valued on an amortized cost basis based on the value
on such date unless the Board determines that this amortized cost value does not
represent fair market value. Expenses and fees, including the investment
management fee, are accrued daily and taken into account for the purpose of
determining the net asset value of Fund shares. Premiums received on the sale of
call options will be included in the net asset value, and the current market
value of the options sold by the Fund will be subtracted from net asset value.
Generally, trading in foreign securities, as well as US Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of the shares of the
Fund are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the value of such securities and such exchange rates may occur between
the times at which they are determined and the close of the NYSE, which will not
be reflected in the computation of net asset value. If during such periods
-14-
<PAGE>
events occur which materially affect the value of such securities, the
securities will be valued at their fair market value as determined in accordance
with procedures approved by the Board of Directors.
For purposes of determining the net asset value per share of the Fund, all
assets and liabilities initially expressed in foreign currencies will be
converted into US dollars at the mean between the bid and offer prices of such
currencies against US dollars quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a pricing service
that takes into account the quotes provided by a number of such major banks.
PERFORMANCE
The average annual total returns of Class A shares for the one-year,
five-year and ten-year periods ended December 31, 1994 were (11.50)%, 10.17%,
and 12.70%, respectively. These amounts were computed by assuming a hypothetical
initial payment of $1,000, subtracting the maximum sales load of $47.50 (4.75%
of public offering price) and assuming that all of the dividends and
distributions paid by the Fund over the relevant time period were reinvested. It
was then assumed that at the end of these periods, the entire amount was
redeemed. The average annual total return was then calculated by calculating the
annual rate required for the initial payment to grow to the amount which would
have been received upon redemption (i.e., the average annual compound rate of
return). The average annual total returns for Class D shares of the Fund for the
one-year period ended December 31, 1994 and since inception through December 31,
1994 were (9.55)% and (0.80)%, respectively. This amount was computed assuming a
hypothetical initial payment of $1,000 and that all of the dividends and
distributions paid by the Fund's Class D shares, if any, were reinvested over
the relevant time period. For the one-year period ended December 31, 1994, it
was then assumed that at the end of the period, the entire amount was redeemed,
subtracting the applicable 1% CDSL.
Table A below illustrates the total return (income and capital) on Class A
shares of the Fund with dividends invested and gain distributions taken in
shares. It shows that a $1,000 investment in Class A shares, assuming payment of
the 4.75% sales load, made on January 1, 1985 had a value of $3,306 on December
31, 1994, resulting in an aggregate total return of 230.63%. Table B illustrates
the total return (income and capital) on Class D shares of the Fund with
dividends invested and gain distributions, if any, taken in shares. It shows
that a $1,000 investment in Class D shares made on May 3, 1993 (commencement of
offering of Class D shares) had a value of $987 on December 31, 1994, resulting
in an aggregate total return of (1.33)%. The results shown should not be
considered a representation of the dividend income or gain or loss in capital
value which may be realized from an investment made in a class of shares of the
Fund today.
<TABLE>
<CAPTION>
TABLE A - CLASS A SHARES
Value of
Year Ended Value of Initial Value of Gain Dividends Total
12/31 (1) Investment (2) Distribution Invested Total Value(2) Return (3)
- --------- -------------- ------------ -------- -------------- ----------
<S> <C> <C> <C> <C> <C>
1985 $ 1,246 $ 0 $ 0 $ 1,246
1986 1,236 232 0 1,468
1987 1,071 359 0 1,430
1988 1,012 453 0 1,465
1989 1,203 737 0 1,940
1990 1,210 757 0 1,967
1991 1,619 1,424 0 3,043
1992 1,656 1,738 0 3,394
1993 1,550 2,008 0 3,558
1994 1,280 2,026 0 3,306 230.63%
</TABLE>
<TABLE>
<CAPTION>
TABLE B - CLASS D SHARES
Value of
Year Ended Value of Initial Value of Gain Dividends Total
12/31 (1) Investment (2) Distribution Invested Total Value(2) Return (3)
- --------- -------------- ------------ -------- -------------- ----------
<S> <C> <C> <C> <C> <C>
1993 $965 $116 $0 $1,081
1994 780 207 0 987 (1.33)%
</TABLE>
1 For the ten years ended December 31, 1994; and from commencement of offering
of Class D shares on May 3, 1993.
-15-
<PAGE>
2 The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load, assumes that all dividends and capital
gain distributions were taken in cash and reflects changes in the net asset
value of the shares purchased with the hypothetical initial investment.
"Total Value" reflects the effect of the CDSL, if applicable, assumes
investment of all dividends and capital gain distributions and reflects
changes in the net asset value.
3 "Total Return" for each class of shares of the Fund is calculated by
assuming a hypothetical initial investment of $1,000 at the beginning of the
period specified, subtracting the maximum sales load for Class A shares;
determining total value of all dividends and distributions that would have
been paid during the period on such shares assuming that each dividend or
distribution was invested in additional shares at net asset value;
calculating the total value of the investment at the end of the period;
subtracting the CDSL on Class D shares, if applicable; and finally, by
dividing the difference between the amount of the hypothetical initial
investment at the beginning of the period and its total value at the end of
the period by the amount of the hypothetical initial investment.
No adjustments have been made for any income taxes payable by investors on
dividends invested or gain distributions taken in shares.
The total return and average annual total return of the Class A shares
quoted from time to time through December 31, 1992 does not reflect the
deduction of the administration, shareholder services and distribution fee,
effective January 1, 1993; and for the periods through April 10, 1991 also does
not reflect the management fee approved by shareholders on April 10, 1991, which
fees if reflected would reduce the performance quoted.
The Fund may also include its aggregate total return over a specified period
in advertisements or in information furnished to present or prospective
shareholders.
GENERAL INFORMATION
Capital Stock. The Board of Directors is authorized to classify or reclassify
and issue any unissued Capital Stock of the Fund into any number of other
classes without further action by shareholders. The 1940 Act requires that where
more than one class exists, each class must be preferred over all other classes
in respect of assets specifically allocated to such class.
Custodian. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105 serves as custodian of the Fund. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for the Fund.
Auditors. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York, New
York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 1994 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1994, as
well as certain other financial information as of that date. The Annual Report
will be furnished, without charge, to investors who request copies of the Fund's
Statement of Additional Information.
-16-
<PAGE>
APPENDIX
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the
oldest of eight brothers, arrived in the United States from Germany. He earned
his living as a pack peddler in Pennsylvania, and began sending for his
brothers. The Seligmans became successful merchants, establishing businesses in
the South and East.
Backed by nearly thirty years of business success - culminating in the
sale of government securities to help finance the Civil War - Joseph Seligman,
with his brothers, established the international banking and investment firm of
J. & W. Seligman & Co. In the years that followed, Seligman played a major role
in the geographical expansion and industrial development of the United States.
Seligman:
.... Prior to 1900
o Helps finance America's fledgling railroads through underwriting.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made
it unnecessary.
o Becomes a prominent underwriter of corporate securities, including New
York Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate
to award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Plays a significant role in raising capital for America's industrial
and urban development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping finance World War I.
...1920s
o Participates in hundreds of underwritings including those for some of
the country's largest companies: Briggs Manufacturing, Dodge Brothers,
General Motors, Minneapolis-Honeywell Regulatory Company, Maytag
Company, United Artists Theater Circuit and Victor Talking Machine
Company.
o Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion
in assets, and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund.
o Establishes Investment Advisory Service.
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman
Growth Fund.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund.
-17-
<PAGE>
...1950-1989
o Develops new open-end investment companies. Today, manages 44 mutual
fund portfolios with combined assets of $7.3 billion.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
o Establishes J. & W. Seligman Trust Company, and J. & W. Seligman
Valuations Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund and Seligman Quality
Municipal Fund, two closed-end funds that invest in high-quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global
investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today
offers three separate series: Seligman Henderson International Fund,
Seligman Henderson Global Smaller Companies Fund and Seligman Henderson
Global Technology Fund.
-18-
<PAGE>
==================================================
Seligman
Capital
Fund, Inc.
--------------------------------------------------
A Capital
Appreciation Fund
--------------------------------------------------
26th Annual Report
1994
==================================================
[Logo]
<PAGE>
================================================================================
Seligman Capital Fund
- --------------------------------------------------------------------------------
A mutual fund that invests primarily in common stocks believed to provide
capital appreciation opportunities. Current income is not an objective.
<TABLE>
<CAPTION>
Highlights of 1994
- ----------------------------------------------------------------------------------------------------------------------
December 31, 1994 December 31, 1993
-------------------- --------------------
Class A Class D Class A Class D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets (in thousands)............................ $162,556 $3,179 $196,212 $2,749
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $13.17 $12.82 $15.95 $15.86
With December 1994 Gain Distribution
Taken in Shares.................................. 14.82 14.47 -- --
Decrease in Net Asset Value with Gain
Distribution Taken in Shares..................... (7.06)% (8.75)% -- --
- ----------------------------------------------------------------------------------------------------------------------
Distribution of Realized Gain per Share.............. $1.60 $1.60 $1.90 $1.90
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of Average Net Assets...... $0.0113 $0.0266 $0.0113 $0.0226+
- ----------------------------------------------------------------------------------------------------------------------
+ Annualized.
</TABLE>
1
<PAGE>
================================================================================
To the Shareholders
- --------------------------------------------------------------------------------
We are pleased to report Seligman Capital Fund's long-term investment
results, portfolio holdings, and audited financial statements at December 31,
1994.
For your Fund's Class A shares, net asset value per share was $13.17 at
December 31, compared to $14.86 at September 30, and $15.95 a year ago. For your
Fund's Class D shares, net asset value per share was $12.82 at December 31,
compared to $14.57 at September 30, and $15.86 a year ago. For both Class A and
D shares, the change in the net asset value is partly caused by the deduction of
the $1.60 per share capital gain payment made on December 20 to Shareholders of
record December 13.
For your Fund's Class A shares, total return was -0.24% for the three months
and -7.06% for the 12 months ended December 31. For your Fund's Class D shares,
total return was -0.67% and -8.75%, respectively, for the same periods. This
compares to the Standard & Poor's 500 Composite Stock Price Index's total return
of -0.02% for the three months and 1.32% for the 12 months ended December 31.
(Total return reflects change in net asset value and assumes any distributions
paid within the period are reinvested in additional shares. Class A returns do
not, however, reflect the effect of the maximum initial sales charge of 4.75%,
and Class D returns do not reflect the effect of the 1% contingent deferred
sales load.)
While your Fund's performance was less favorable in 1994, its longer-term
performance remains strong. Please refer to page 4 for a discussion with your
Portfolio Manager about your Fund's performance in 1994, followed by the chart
and table that analyze longer-term performance.
Looking back on 1994, the one generalization that can be made with
confidence is that it was a turbulent and trying year for equity and bond
investors alike. The Federal Reserve Board exhibited an aggressive stance
against inflation, putting through six short-term interest rate increases by the
end of the year. This caused an upheaval in the bond market, with yields
increasing and bond prices spiraling lower--an event in the financial markets
unmatched in magnitude since 1973-74. The equity market remained hostage to the
bond market and demonstrated lackluster performance for the year.
The U.S. economy continued to grow at a modest yet controlled pace,
accompanied by corporate news of solid growth and strong earnings. This economic
news, although positive, caused the underlying question to remain: Will the
economy overheat, opening the door to increased inflation? We don't believe so.
We believe an economic slowdown is close at hand. In March of 1995, the
current growth cycle will mark its fourth year. The consumer has both increased
debt as a percentage of income and drawn down savings--suggesting nearer-term
caution after a stronger-than-expected pattern of spending in 1994. We also
believe that inflation will remain under control in light of intense global
competition, low unit labor costs, and an aging population that should favor
saving over spending. Job creation remains robust despite gains in productivity,
and U.S. competitiveness in world markets is likely to be enhanced under
G.A.T.T.--General Agreement on Tariffs and Trade.
For more information about Seligman Capital Fund, or your investment in its
shares, please write or call the toll-free telephone numbers listed on page 18.
By order of the Board of Directors,
/s/William C. Morris
William C. Morris
Chairman
/s/Ronald T. Schroeder
Ronald T. Schroeder
President
February 3, 1995
2
<PAGE>
================================================================================
Seligman Capital Fund
- --------------------------------------------------------------------------------
Federal Tax Status of 1994 Gain
Distribution For Taxable Accounts
The distribution of $1.60 per share from taxable net long-term gain realized on
investments during 1994, paid on December 20, 1994, to both Class A and D
shareholders, is designated a "capital gain dividend" for federal income tax
purposes. This distribution is taxable to shareholders in 1994 as a gain from
the sale of capital assets, no matter how long your shares have been owned or
whether the distribution was received in shares or in cash. However, if shares
on which a long-term capital gain distribution was received are subsequently
sold, and such shares were held for six months or less from date of purchase,
any loss would be treated as long-term to the extent it offsets the long-term
gain distribution.
If the distribution was paid in shares, the per share cost basis for federal
income tax purposes is $12.74 for Class A shares and $12.41 for Class D shares.
The tax cost basis of shares previously held is not affected.
A year-end statement of account showing activity for 1994 has been mailed to
each shareholder. Under "Tax Information for Calendar Year," the statement shows
the proceeds of any redemptions paid to the shareholder during the year and
reported to the Internal Revenue Service as required by federal regulations
(Form 1099-B). In addition, a separate Form 1099-DIV showing the amount of the
distribution from gain on investments paid during the year has been mailed to
each shareholder.
3
<PAGE>
================================================================================
Annual Performance Overview
- --------------------------------------------------------------------------------
The following is a biography of your Portfolio Manager, a discussion with him
regarding Seligman Capital Fund, and a comparison chart of your Fund's
performance against the Standard & Poor's 500 Composite Stock Price Index and
the Lipper Capital Appreciation Fund Average.
Your Portfolio Manager
Loris D. Muzzatti is a Managing Director of J. & W. Seligman &
[Photo} Co. Incorporated and has been Vice President and Portfolio
Manager of Seligman Capital Fund for the past six years. Mr.
Muzzatti, who joined Seligman in 1985, also manages a portion
of the firm's institutional accounts.
Economic Factors Affecting Seligman Capital Fund
"Continued solid economic growth, despite the Federal Reserve
Board's six short-term interest rate increases, had a negative
impact on U.S. financial markets in 1994. The bulk of the
damage was sustained in the second quarter of the year, as interest rates were
increased twice within the three-month period. Since then, due to subsided
selling pressure from liquidity-sensitive investors and a rebound in equity
valuations, the financial markets and your Fund have regained strength. In
addition, your Fund's holdings with international exposure benefited from both
the low level of inflation and the devaluation of the U.S. Dollar."
Your Manager's Investment Strategy
"Throughout the year, your Fund maintained a large exposure to companies with
steady predictable earnings growth. Typically, these companies, which are driven
by growth in unit sales, do not rely on significant price increases or strong
economic growth. However, in a period of strong economic growth, like 1994,
cyclical or highly economically sensitive companies can show rapid growth
spurts, which often dwarf the performance of companies with steady earnings
streams. In terms of portfolio construction, the strategy of reducing your
Fund's concentration in a few of its very large positions, despite the large
capital gain's impact, proved beneficial."
Individual Sector Performance
"In 1994, technology was the best performing sector in the market and in your
Fund. Your Fund's large position in Microsoft performed very well, as did its
semiconductor-related issues. Although the technology sector of the market
continues to provide us with a number of attractive investment opportunities,
the sector also tends to exhibit considerable volatility--a characteristic we
feel is worth withstanding. The Fund's consumer cyclical exposure remained heavy
throughout the year, but, again, despite some very strong financial
performances, the stocks continued to remain undervalued."
Looking Ahead
"The expected slowing of the economy in the second half of 1995 should play well
into the Fund's exposure to companies with superior earnings prospects that are
selling at compelling valuations. The unsettled international environment and an
improving Dollar may also bring the U.S. equity markets back into investor
focus, and provide for some good capital appreciation, all of which bodes well
for your Fund."
4
<PAGE>
================================================================================
Ten-Year Performance Comparison Chart and Table December 31, 1994
- --------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman Capital
Fund Class A shares, with and without the maximum initial sales charge of 4.75%,
for the 10-year period ended December 31, 1994, to a $10,000 hypothetical
investment made in the Standard & Poor's 500 Composite Stock Price Index (S&P
500) and the Lipper Capital Appreciation Fund Average (Lipper Capital) for the
same period. The performance of Seligman Capital Fund Class D shares is not
shown in this chart, but is included in the table below. It is important to keep
in mind that the S&P 500 excludes the effect of any fees or sales charges, and
the Lipper Capital excludes the effect of any sales charges.
[The table below was represented by a graph in the printed material]
Capital Fund Capital Fund
with sales charge w/o sales charge S&P 500 Lipper Capital
12/31/84 $ 9,524 $10,000 $10,000 $10,000
3/31/85 $10,709 $11,245 $10,919 $10,918
6/30/85 $11,778 $12,367 $11,632 $11,719
9/30/85 $10,787 $11,327 $11,044 $11,239
12/31/85 $12,459 $13,082 $12,836 $13,172
3/31/86 $15,087 $15,842 $14,919 $15,030
6/30/86 $16,250 $17,063 $15,954 $15,916
9/30/86 $14,403 $15,124 $14,309 $14,806
12/31/86 $14,677 $15,411 $14,710 $15,631
3/31/87 $17,755 $18,642 $17,961 $18,969
6/30/87 $18,453 $19,375 $18,221 $19,921
9/30/87 $19,302 $20,267 $19,154 $21,235
12/31/87 $19,302 $15,012 $14,825 $16,452
3/31/88 $14,297 $15,203 $16,083 $17,388
6/30/88 $15,335 $16,102 $16,964 $18,547
9/30/88 $14,661 $15,394 $16,740 $18,610
12/31/88 $14,651 $15,384 $16,899 $19,184
3/31/89 $15,833 $16,625 $18,216 $20,544
6/30/89 $19,816 $17,866 $19,713 $22,358
9/30/89 $19,403 $20,807 $21,759 $24,752
12/31/89 $18,776 $20,373 $21,420 $25,263
3/31/90 $21,692 $19,715 $20,908 $24,503
6/30/90 $16,786 $22,776 $22,238 $26,044
9/30/90 $19,671 $17,625 $18,444 $22,465
12/31/90 $23,827 $20,655 $19,729 $24,479
3/31/91 $24,016 $25,018 $23,446 $28,034
6/30/91 $26,860 $25,217 $23,097 $27,970
9/30/91 $30,426 $28,203 $25,141 $29,466
12/31/91 $30,025 $31,948 $27,532 $31,936
3/31/92 $28,655 $31,526 $27,617 $31,130
6/30/92 $30,445 $30,088 $26,518 $31,722
9/30/92 $33,944 $31,967 $27,099 $32,722
12/31/92 $34,263 $35,642 $29,977 $34,370
3/31/93 $33,905 $35,976 $31,020 $35,871
6/30/93 $36,076 $35,600 $31,879 $36,045
9/30/93 $35,575 $37,880 $34,086 $36,977
12/31/93 $34,482 $37,353 $34,764 $37,834
3/31/94 $30,482 $36,206 $33,592 $36,399
6/30/94 $30,489 $32,014 $32,114 $36,552
9/30/94 $33,144 $34,801 $34,189 $38,339
12/31/94 $33,063 $34,716 $33,574 $38,334
The table below shows the average annual total returns for the one-year,
five-year, and 10-year periods through December 31, 1994, for the Seligman
Capital Fund Class A shares, with and without the maximum initial sales charge
of 4.75%, the S&P 500, and the Lipper Capital. Also included in the table are
the average annual total returns for the one-year and since-inception periods
through December 31, 1994, for the Seligman Capital Fund Class D shares, with
and without the effect of the 1% contingent deferred sales load ("CDSL") imposed
on shares redeemed within one year of purchase, the S&P 500, and the Lipper
Capital.
Average Annual Total Returns
One Five Ten
Year Years Years
-------- -------- --------
Seligman Capital Fund
Class A with sales charge (11.50)% 10.17% 12.70%
Class A without sales charge (7.06) 11.25 13.25
S&P 500 1.32 8.70 14.34
Lipper Capital (3.42) 9.40 12.88
Since
One Inception
Year 5/3/93
------ ---------
Seligman Capital Fund
Class D with CDSL (9.55)% N/A
Class D without CDSL (8.75) (0.80)%
S&P 500 1.32 5.59
Lipper Capital (3.42) 5.36
No adjustment was made to performance for periods prior to January 1, 1993, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. THE PERFORMANCE OF CLASS D SHARES WILL BE GREATER THAN OR LESS THAN THE
PERFORMANCE SHOWN FOR CLASS A SHARES, BASED ON THE DIFFERENCES IN SALES CHARGES
AND FEES PAID BY SHAREHOLDERS. Performance data quoted represent changes in
prices and assume that all distributions within the periods are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
5
<PAGE>
================================================================================
Seligman Capital Fund
- --------------------------------------------------------------------------------
Diversification of Assets December 31, 1994
<TABLE>
<CAPTION>
Percent
Percent of
of Net Net Assets
Issues Cost Value Assets Dec. 31, 1993
------ ------------ ------------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net Cash and Short-Term Holdings .......... 2 $ 11,028,523 $ 11,028,523 6.7 8.0
-- ------------ ------------- ----- -----
Common Stocks
Automotive and related...................... 1 4,633,197 4,207,500 2.5 6.5
Basic materials............................. 3 6,149,514 7,473,437 4.5 --
Building related............................ -- -- -- -- 4.4
Business services and supplies.............. 3 7,234,581 10,893,750 6.6 6.4
Computer goods and services................. 5 9,051,315 19,056,250 11.5 8.1
Consumer goods and services................. 8 14,116,707 18,915,000 11.4 11.0
Drugs and health care....................... 7 17,545,936 17,214,063 10.4 5.0
Energy...................................... -- -- -- -- 1.1
Financial services.......................... 2 5,111,856 6,050,000 3.6 4.8
Food and food services...................... 1 3,572,938 3,987,500 2.4 4.5
Industrial goods and services............... 2 2,995,939 4,881,250 2.9 1.4
Leisure and related......................... 3 6,575,469 8,221,250 5.0 9.8
Retail trade................................ 7 12,761,547 19,068,750 11.5 13.3
Software.................................... 5 12,999,227 17,204,375 10.4 5.2
Specialty chemicals......................... -- -- -- -- 4.3
Steel....................................... -- -- -- -- 0.6
Telecommunications.......................... 5 13,501,133 17,507,500 10.6 5.3
Other....................................... 1 -- 26,344 -- 0.3
-- ------------ ------------ ----- -----
53 116,249,359 154,706,969 93.3 92.0
-- ------------ ------------ ----- -----
Net Assets ................................. 55 $127,277,882 $165,735,492 100.0 100.0
== ============ ============ ===== =====
</TABLE>
6
<PAGE>
================================================================================
Seligman Capital Fund
- --------------------------------------------------------------------------------
Largest Portfolio Changes*
During Past Three Months
Shares
--------------------
Holdings
Additions Increase 12/31/94
- --------- -------- --------
British Sky Broadcasting
(ADRs)........................ 135,000 135,000
Emcare Holdings................. 75,000 75,000
Jones Apparel Group............. 50,000 50,000
Lam Research.................... 30,000 50,000
Liz Claiborne................... 150,000 150,000
Nordstrom....................... 25,000 100,000
Powersoft....................... 25,000 25,000
Sports & Recreation............. 55,000 100,000
Synopsys........................ 20,000 70,000
TeleWest Communications
(ADRs)........................ 100,000 100,000
Holdings
Reductions Decrease 12/31/94
- --------- -------- --------
Brinker International........... 125,000 --
Chrysler........................ 75,000 --
Grainger (W.W.)................. 30,000 --
Healthsource.................... 50,000 --
Home Depot...................... 50,000 100,000
MCI Communications.............. 125,000 --
Microsoft....................... 25,000 75,000
NEXTEL Communications........... 100,000 --
Staples......................... 90,000+ --
Teva Pharmaceutical (ADRs)...... 125,000 --
*Largest portfolio changes from previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
+Includes 30,000 shares received as a result of a 3-for-2 stock split.
Major Portfolio Holdings
at December 31, 1994
Security Value
- -------- ----------
Motorola................................ $5,208,750
Interpublic Group of Companies.......... 4,818,750
Home Depot.............................. 4,600,000
Microsoft............................... 4,593,750
Sensormatic Electronics................. 4,500,000
Xilinx.................................. 4,434,375
EMC..................................... 4,325,000
Parametric Technology................... 4,296,875
Nordstrom............................... 4,212,500
Eaton................................... 4,207,500
7
<PAGE>
================================================================================
Portfolio of Investments
- --------------------------------------------------------------------------------
Shares Value
------ -----
Common Stocks--93.3%
Automotive and Related--2.5%
Eaton
Electronic systems equipment ............. 85,000 $ 4,207,500
-----------
Basic Materials--4.5%
Louisiana Pacific
Lumber, plywood, and pulp ................ 100,000 2,725,000
Minerals Technologies
Marketer of specialty minerals
and products ............................. 75,000 2,193,750
Schulman, A. ...............................
Manufacturer of plastics ................. 93,750 2,554,687
-----------
7,473,437
-----------
Business Services and Supplies--6.6%
Interpublic Group of Companies
Worldwide advertising agency ............. 150,000 4,818,750
Leggett & Platt
Manufacturer of springs for
furniture and bedding .................... 45,000 1,575,000
Sensormatic Electronics
Electronic article surveillance
systems .................................. 125,000 4,500,000
-----------
10,893,750
-----------
Computer Goods and Services--11.5%
Ceridian*
Computer services ........................ 100,000 2,687,500
EMC*
Mainframe storage devices ................ 200,000 4,325,000
FIserv*
Data processing software ................. 175,000 3,784,375
Intel
Semiconductor/memory circuits ............ 60,000 3,825,000
Xilinx*
Integrated circuits ...................... 75,000 4,434,375
-----------
19,056,250
-----------
Consumer Goods and Services--11.4%
CUC International*
Member-based consumer
services ................................. 80,000 2,680,000
Department 56*
Designer, importer, and
distributor of fine quality
collectibles ............................. 50,000 1,987,500
Jones Apparel Group*
Designer and distributor
of women's apparel ....................... 50,000 1,287,500
Liz Claiborne
Designer and distributor of
women's apparel .......................... 150,000 2,531,250
Newell
Home furnishings ......................... 150,000 3,150,000
Nine West Group*
Manufacturer and retailer of
women's footwear ......................... 50,000 1,418,750
Reebok International
Marketer of athletic
footwear ................................. 50,000 1,975,000
UST Inc. ...................................
Tobacco and pipes ........................ 140,000 3,885,000
-----------
18,915,000
-----------
Drugs and Health Care--10.4%
Beverly Enterprises
Health care facilities ................... 150,000 2,156,250
Columbia/HCA Healthcare
Health care facilities
and services ............................. 100,000 3,650,000
Dentsply International*
Manufacturer of dental
and x-ray equipment ...................... 70,000 2,187,500
Emcare Holdings
Physician services ....................... 75,000 1,096,875
Protein Design Labs*
Antibody technology ...................... 125,000 1,976,563
Sunrise Medical*
Manufacturer of home health
care products ............................ 100,000 2,762,500
United Healthcare
Health maintenance
organization ............................. 75,000 3,384,375
-----------
17,214,063
-----------
Financial Services--3.6%
MGIC Investment
Private mortgage insurance ............... 60,000 1,987,500
Travelers
Diversifed financial services ............ 125,000 4,062,500
-----------
6,050,000
-----------
Food and Food Services--2.4%
PepsiCo
Soft drinks, consumer products ........... 110,000 3,987,500
-----------
Industrial Goods and Services--2.9%
Lam Research*
Manufacturer of plasma-etching
equipment ................................ 50,000 1,856,250
Nordson
Industrial application equipment ......... 50,000 3,025,000
-----------
4,881,250
-----------
Leisure and Related--5.0%
British Sky Broadcasting (ADRs)*
Satellite-delivered entertainment
channel in the U.K ....................... 135,000 3,240,000
Circus Circus Enterprises*
Casino hotels ............................ 100,000 2,325,000
TeleWest Communications (ADRs)*
UK-based cable and
telephone services ....................... 100,000 2,656,250
-----------
8,221,250
-----------
8
<PAGE>
================================================================================
December 31, 1994
- --------------------------------------------------------------------------------
Shares Value
------ -----
Retail Trade--11.5%
Fingerhut
Catalog marketer ......................... 100,000 $ 1,550,000
Home Depot
Home improvement stores .................. 100,000 4,600,000
Nordstrom
Department stores chain .................. 100,000 4,212,500
Office Depot*
Office supply retailer ................... 100,000 2,400,000
OfficeMax*
Office supplies superstore ............... 50,000 1,325,000
PETsMART*
Pet foods, supplies, and services ........ 70,000 2,406,250
Sports & Recreation*
Operator of sporting equipment
superstores .............................. 100,000 2,575,000
-----------
19,068,750
-----------
Software--10.4%
Informix*
Designer, manufacturer, and
supporter of database
management systems ....................... 100,000 3,206,250
Microsoft*
Microcomputer software ................... 75,000 4,593,750
Parametric Technology*
Developer of mechanical design
software ................................. 125,000 4,296,875
Powersoft*
Developer of application software
products ................................. 25,000 2,062,500
Synopsys*
Developer of design software ............. 70,000 3,045,000
-----------
17,204,375
-----------
Telecommunications--10.6%
Bay Networks*
Computer network products ................ 100,000 2,937,500
Century Telephone Enterprises
Regional telephone services .............. 100,000 2,950,000
Cisco Systems*
Manufacturer of computer network
products ................................. 80,000 2,805,000
DSC Communications*
Digital telephone systems ................ 100,000 3,606,250
Motorola
Wireless telecommunications .............. 90,000 5,208,750
-----------
17,507,500
-----------
Other ...................................... 26,344
-----------
Total Common Stocks
(Cost $116,249,359) ...................... 154,706,969
-----------
Short-Term Holdings--5.7%
ABN-AMRO Bank, Grand Cayman,
Fixed Time Deposit,
5 5/8%, 1/3/1995 ....................... $ 4,400,000 4,400,000
Bank of Montreal,
Fixed Time Deposit,
5 1/2%, 1/3/1995 ....................... 5,000,000 5,000,000
-----------
Total Short-Term Holdings
(Cost $9,400,000) ........................ 9,400,000
-----------
Total Investments--99.0%
(Cost $125,649,359) ...................... 164,106,969
Other Assets Less
Liabilities--1.0% ........................ 1,628,523
------------
Net Assets--100.0% ......................... $165,735,492
============
- -----------
*Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
9
<PAGE>
================================================================================
Statement of Assets and Liabilities December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments, at value:
Common stocks (cost $116,249,359)........................................ $154,706,969
Short-term holdings (cost $9,400,000).................................... 9,400,000 $164,106,969
-------------
Cash....................................................................... 118,032
Receivable for securities sold............................................. 1,553,127
Receivable for Capital Stock sold.......................................... 272,488
Receivable for dividends and interest...................................... 91,806
Investment in, and expenses prepaid to, shareholder service agent.......... 88,732
Other...................................................................... 5,628
-------------
Total Assets .............................................................. 166,236,782
-------------
Liabilities:
Payable for Capital Stock repurchased...................................... 206,183
Accrued expenses, taxes, and other......................................... 295,107
-------------
Total Liabilities ......................................................... 501,290
-------------
Net Assets ................................................................ $165,735,492
=============
Composition of Net Assets:
Capital Stock, at par ($1 par value; 40,000,000 shares authorized;
12,589,007 shares outstanding):
Class A ................................................................. $ 12,340,987
Class D ................................................................. 248,020
Additional paid-in capital................................................. 114,768,484
Accumulated net investment loss............................................ (79,609)
Net unrealized appreciation of investments................................. 38,457,610
-------------
Net Assets ................................................................ $165,735,492
=============
Net Asset Value per share:
Class A ($162,556,212 / 12,340,987 shares) ................................ $13.17
=======
Class D ($3,179,280 / 248,020 shares) ..................................... $12.82
=======
</TABLE>
- -----------------
See notes to financial statements.
10
<PAGE>
================================================================================
Statement of Operations For the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income:
Dividends.................................................................. $ 1,210,181
Interest................................................................... 103,434
------------
Total investment income.................................................... $ 1,313,615
Expenses:
Management fee............................................................. 945,288
Shareholder account services............................................... 485,011
Distribution and service fees.............................................. 381,533
Auditing and legal fees.................................................... 65,747
Registration............................................................... 45,268
Shareholder reports and communications..................................... 43,074
Shareholders' meeting...................................................... 34,959
Directors' fees and expenses............................................... 33,865
Custody and related services............................................... 18,322
Miscellaneous.............................................................. 17,007
------------
Total expenses............................................................. 2,070,074
------------
Net investment loss ....................................................... (756,459)
Net realized and unrealized gain (loss) on investments:
Net realized gain on investments........................................... 18,012,834
Net change in unrealized appreciation of investments....................... (31,248,422)
------------
Net loss on investments ................................................... (13,235,588)
------------
Decrease in net assets from operations .................................... $(13,992,047)
============
</TABLE>
- -----------------
See notes to financial statements.
11
<PAGE>
================================================================================
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------
1994 1993
------------ ------------
<S> <C> <C>
Operations:
Net investment loss.......................................................... $ (756,459) $ (350,390)
Net realized gain on investments............................................. 18,012,834 21,327,854
Net change in unrealized appreciation of investments......................... (31,248,422) (11,433,615)
------------ ------------
Increase (decrease) in net assets from operations............................ (13,992,047) 9,543,849
------------ ------------
Distributions to shareholders:
Net realized gain on investments:
Class A ................................................................... (17,718,531) (21,084,356)
Class D ................................................................... (351,353) (283,102)
------------ ------------
Decrease in net assets from distributions.................................... (18,069,884) (21,367,458)
------------ ------------
<CAPTION>
Shares
------------------------------
Year Ended December 31
------------------------------
Capital share transactions:* 1994 1993
--------- ---------
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A................................ 537,358 886,299 8,103,350 14,990,089
Class D................................ 112,437 161,053 1,665,414 2,732,491
Exchanged from associated Funds:
Class A................................ 274,413 213,541 4,071,383 3,619,415
Class D................................ 6,633 -- 93,444 --
Shares issued in payment of gain distributions:
Class A................................ 1,275,447 1,218,300 16,249,301 19,346,255
Class D................................ 26,625 16,557 330,484 261,938
---------- ---------- ------------ ------------
Total.................................... 2,232,913 2,495,750 30,513,376 40,950,188
---------- ---------- ------------ ------------
Cost of shares repurchased:
Class A................................ (1,315,179) (962,224) (19,543,622) (16,432,871)
Class D................................ (27,140) (811) (388,031) (14,178)
Exchanged into associated Funds:
Class A................................ (734,774) (678,500) (11,092,468) (11,721,594)
Class D................................ (43,927) (3,407) (652,829) (59,471)
---------- ---------- ------------ ------------
Total.................................... (2,121,020) (1,644,942) (31,676,950) (28,228,114)
---------- ---------- ------------ ------------
Increase (decrease) in net assets
from capital share transactions........ 111,893 850,808 (1,163,574) 12,722,074
========== ========== ------------ ------------
Increase (decrease) in net assets............................................ (33,225,505) 898,465
Net Assets:
Beginning of year............................................................ 198,960,997 198,062,532
------------ ------------
End of year (including accumulated net investment loss of
$79,609 and $81,029, respectively)......................................... $165,735,492 $198,960,997
============ ============
</TABLE>
- -------------------
* The Fund began offering Class D shares on May 3, 1993.
See notes to financial
statements.
12
<PAGE>
================================================================================
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Effective May 3, 1993, Seligman Capital Fund, Inc. (the "Fund") began
offering two classes of shares. All shares existing prior to May 3, 1993, have
been classified as Class A shares. Class A shares are sold with an initial sales
charge of up to 4.75% and a continuing service fee of up to 0.25% on an annual
basis. Class D shares are sold without an initial sales charge but are subject
to a higher distribution fee and a contingent deferred sales load ("CDSL") of 1%
imposed on certain redemptions made within one year of purchase. The two classes
of shares represent interests in the same portfolio of investments, have the
same rights and are generally identical in all respects except that each class
bears its separate distribution and certain class expenses and has exclusive
voting rights with respect to any matter to which a separate vote of any class
is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in stocks are valued at current market values or, in their
absence, at fair value determined in accordance with procedures approved by
the Board of Directors. Securities traded on national exchanges are valued
at last sales prices or, in their absence and in the case of
over-the-counter securities, a mean of bid and asked prices. Short-term
holdings maturing in 60 days or less are valued at amortized cost.
b. There is no provision for federal income or excise tax. The Fund has elected
to be taxed as a regulated investment company and intends to distribute
substantially all taxable net income and net gain realized.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. Dividends receivable and payable are recorded on ex-dividend
dates. Interest income is recorded on an accrual basis.
d. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares based
upon the relative proportion of the value of shares outstanding of each
class. Class-specific expenses, which include distribution and service fees
and any other items that can be specifically attributed to a particular
class, are charged directly to such class.
e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gain may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, or capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassification
will have no effect on net assets, results of operations, or net asset value
per share of the Fund.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December 31, 1994, amounted to $124,250,547 and
$139,397,787, respectively.
At December 31, 1994, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities amounted to $42,018,544 and $3,560,934, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
all officers of the Fund, all directors of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager is
paid by the Manager. The Manager receives a fee, calculated daily and payable
monthly, equal to a per annum percentage of the Fund's daily net assets. The
management fee rate is calculated on a sliding scale of 0.55% to 0.45%, based on
13
<PAGE>
================================================================================
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
average daily net assets of all the investment companies managed by the Manager.
The management fee for the year ended December 31, 1994, was equivalent to an
annual rate of 0.53% of the average daily net assets of the Fund.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
commissions of $16,143 from sales of Class A shares, after concessions of
$121,768 paid to dealers.
Effective January 1, 1993, the Fund adopted an Administration, Shareholder
Services and Distribution Plan (the "Plan") with respect to Class A shares under
which service organizations can enter into agreements with the Distributor and
receive a continuing fee of up to 0.25% on an annual basis, payable quarterly,
of the average daily net assets of the Class A shares attributable to the
particular service organizations for providing personal services and/or the
maintenance of shareholder accounts. The Distributor charges such fees to the
Fund pursuant to the Plan. For the year ended December 31, 1994, fees paid
aggregated $350,604, or 0.20% per annum of the average daily net assets of Class
A shares.
Effective May 3, 1993, the Fund adopted a Plan with respect to Class D
shares under which service organizations can enter into agreements with the
Distributor and receive a continuing fee for providing personal services and/or
the maintenance of shareholder accounts of up to 0.25% on an annual basis of the
average daily net assets of the Class D shares for which the organizations are
responsible, and fees for providing other distribution assistance of up to 0.75%
on an annual basis of such average daily net assets. Such fees are paid monthly
by the Fund to the Distributor pursuant to the Plan. For the year ended December
31, 1994, fees paid amounted to $30,929, or 1% per annum of the average daily
net assets of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended December
31, 1994, such charges amounted to $2,361.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $468,421 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $2,199.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or Seligman Data Corp.
Fees of $21,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1994, of
$79,609 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
5. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1994, which are included in the corresponding captions of the
Statement of Operations, were as follows:
Class A Class D
-------- -------
Distribution and service fees ................ $350,604 $30,929
Registration ................................. 14,925 21,305
Shareholders' meeting ........................ 14,428 828
Shareholder reports and
communications ............................. 10,472 217
14
<PAGE>
================================================================================
Financial Highlights
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amount.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
Class A Class D
--------------------------------------------------- ---------------------
Year Ended December 31 Year 5/3/93*
--------------------------------------------------- Ended to
1994** 1993 1992 1991 1990 12/31/94** 12/31/93
------ ------ ------ ------ ------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning
of period...................... $15.95 $17.04 $16.66 $12.45 $12.38 $15.86 $16.43
------ ------ ------ ------ ------ ------ ------
Net investment income (loss)..... (.06) (.03) .02 .03 .06 (.33) (.08)
Net realized and unrealized
investment gain (loss)......... (1.12) .84 1.89 6.66 .11 (1.11) 1.41
------ ------ ------ ------ ------ ------ ------
Increase (decrease) from
investment operations.......... (1.18) .81 1.91 6.69 .17 (1.44) 1.33
Distributions from net
gain realized.................. (1.60) (1.90) (1.53) (2.48) (.10) (1.60) (1.90)
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in
net asset value................ (2.78) (1.09) .38 4.21 .07 (3.04) (.57)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period... $13.17 $15.95 $17.04 $16.66 $12.45 $12.82 $15.86
====== ====== ====== ====== ====== ====== ======
Total return based
on net asset value ............ (7.06)% 4.80% 11.56% 54.67% 1.38% (8.75)% 8.12%
Ratios/Supplemental Data:
Expenses to average net assets... 1.13% 1.13% .96% 1.01% .92% 2.66% 2.26%+
Net investment income (loss)
to average net assets.......... (.39)% (.17)% .11% .25% .47% (2.28)% (1.32)%+
Portfolio turnover............... 70.72% 46.84% 42.32% 42.20% 23.05% 70.72% 46.84%++
Net assets, end of period
(000's omitted)................$162,556 $196,212 $198,063 $172,676 $120,759 $3,179 $2,749
</TABLE>
- -------------------
*Commencement of offering of Class D shares.
**Per share amounts for the year ended December 31, 1994, are calculated based
on average shares outstanding.
+Annualized.
++For the year ended December 31, 1993.
See notes to financial statements.
15
<PAGE>
================================================================================
Report of Independent Auditors
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders,
Seligman Capital Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Capital Fund, Inc. as of December 31,
1994, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994 by correspondence with the Fund's custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Capital
Fund, Inc. as of December 31, 1994, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
---------------------
DELOITTE & TOUCHE LLP
New York, New York
February 3, 1995
16
<PAGE>
================================================================================
Board of Directors
- --------------------------------------------------------------------------------
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
Alice S. Ilchman 3, 4
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Trustee, The Rockefeller Foundation
John E. Merow
Partner, Sullivan & Cromwell, Attorneys
Betsy S. Michel 2, 4
Director or Trustee,
Various Organizations
William C. Morris 1
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Daniel Industries, Inc.
Director, Kerr-McGee Corporation
Douglas R. Nichols, Jr. 2, 4
Management Consultant
James C. Pitney 3, 4
Partner, Pitney, Hardin, Kipp & Szuch, Attorneys
Director, Public Service Enterprise Group
James Q. Riordan 3, 4
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Herman J. Schmidt 2, 4
Director, H.J. Heinz Company
Director, HON Industries, Inc.
Director, MAPCO, Inc.
Ronald T. Schroeder 1
President
Managing Director, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3, 4
Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson 2, 4
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Brian T. Zino 1
Managing Director, J. & W. Seligman & Co. Incorporated
- -------------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
17
<PAGE>
================================================================================
Executive Officers
- --------------------------------------------------------------------------------
William C. Morris
Chairman
Ronald T. Schroeder
President
Loris D. Muzzatti
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
- --------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
18
<PAGE>
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[Logo]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Capital Fund, Inc., which contains information about the sales charges,
management fee, and other costs. Please read the prospectus carefully before
investing or sending money.
EQCA2 12/94
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Schedule:
Part A Financial Highlights for Class A shares for the ten years ended
December 31, 1994; Financial Highlights for Class D shares for
the period from May 3, 1993 (commencement of offering) to
December 31, 1994.
Part B Required Financial Statements are included in the Fund's Annual
Report to Shareholders, dated December 31, 1994, which are
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements include: Portfolio of
Investments as of December 31, 1994; Statement of Assets and
Liabilities as of December 31, 1994; Statement of Operations for
the year ended December 31, 1994; Statement of Changes in Net
Assets for the years ended December 31, 1994 and 1993; Notes to
Financial Statements; Financial Highlights for the five years
ended December 31, 1994 for the Fund's Class A shares and for the
period May 3, 1993 (commencement of offering) through December
31, 1994 for the Fund's Class D shares; Report of Independent
Auditors.
(b) Exhibits: All Exhibits have been previously filed except Exhibits
marked with an asterisk (*) which are incorporated herein.
(1) Articles of Incorporation of Registrant.
(Incorporated by Reference to Registrant's Post-Effective Amendment #26
filed on February 27, 1981.)
(1a) Articles Supplementary.
(Incorporated by Reference to Registrant's Post-Effective Amendment #46
filed on April 23, 1993.)
(2) By-laws of the Corporation.
(Incorporated by Reference to Registrant's Post-Effective Amendment #26
filed on February 27, 1981.)
(3) N/A
(4) Specimen certificate of Class D Capital Stock.
(Incorporated by Reference to Registrant's Post-Effective Amendment #46
filed on April 23, 1993.)
(5) Amended Management Agreement between Registrant and J. & W. Seligman &
Co. Incorporated.*
(5a) Form of Subadvisory Agreement between the Manager and Seligman Henderson
Co.*
(6) Copy of Amended Distributing Agreement between Registrant and Seligman
Financial Services, Inc. (Incorporated by Reference to Registrant's
Post-Effective Amendment #43 filed on April 30, 1992.)
(6a) Copy of Amended Sales Agreement between Seligman Financial Services, Inc.
(Incorporated by Reference to Post-Effective Amendment No. 47 filed on
March 31, 1994.)
(7) Amendments to the Amended Retirement Income Plan of J. & W. Seligman &
Co. Incorporated and Trust. (Incorporated by Reference to Post-Effective
Amendment No. 48 filed on April 29, 1994.)
(7a) Amendments to the Amended Employee's Thrift Plan of Union Data Service
Center, Inc. and Trust. (Incorporated by Reference to Post-Effective
Amendment No. 48 filed on April 29, 1994.)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by Reference to Registrant's Post-Effective
Amendment #42 filed on April 30, 1991.)
(9) N/A
(10) Opinion and Consent of Counsel. (Incorporated by Reference to
Registrant's Post-Effective Amendment No. 47 filed on March 31, 1994.)
(11) Report and Consent of Independent Auditors.*
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 24. Financial Statements and Exhibits (continued)
(12) N/A
(13) Purchase Agreement for Initial Capital between Registrant's Class D
shares and J. & W. Seligman & Co. Incorporated. (Incorporated by
Reference to Registrant's Post-Effective Amendment #46 filed on April 23,
1993.)
(14) Copy of Amended Individual Retirement Account Trust and Related
Documents. (Incorporated by Reference to Registrant's Post-Effective
Amendment #43 filed on April 30, 1992.)
(14a) Copy of Amended Comprehensive Retirement Plans for Money Purchase and/or
Prototype Profit Sharing Plan. (Incorporated by Reference to Seligman
Tax-Exempt Fund Series, Inc. (File No. 2-86008) Post-Effective Amendment
#24 filed on November 30, 1992.)
(14b) Copy of Amended Basic Business Retirement Plans for Money Purchase and/or
Profit Sharing Plans. (Incorporated by Reference to Seligman Tax-Exempt
Fund Series, Inc. (File No. 2-86008) Post-Effective Amendment #24 filed
on November 30, 1992.)
(14c) Copy of Amended 403(b)(7) Custodial Account Plan. (Incorporated by
Reference to Seligman New Jersey Tax-Exempt Fund, Inc. (File No.
33-13401) Pre-Effective Amendment #1 filed on January 1, 1988.)
(14d) Copy of Amended Simplified Employee Pension Plan (SEP). (Incorporated by
Reference to Registrant's Post-Effective Amendment #43 filed on April 30,
1992.)
(14e) Copy of the Amended J. & W. Seligman & Co. Incorporated (SARSEP) Salary
Reduction and Other Elective Simplified Employee Pension-Individual
Retirement Accounts Contribution Agreement (Under Section 408(k) of the
Internal Revenue Code). (Incorporated by Reference to Registrant's
Post-Effective Amendment #43 filed on April 30, 1992.)
(15) Copy of Amended Administration, Shareholder Service s and Distribution
Plan and form of Agreement of Registrant. (Incorporated by Reference to
Registrant's Post-Effective Amendment #46 filed on April 23, 1993.)
(16) Schedule for Computation of each Performance Quotation provided in
Registration Statement to Item 22. (Incorporated by Reference to
Registrant's Post-Effective Amendment #37 filed on March 2, 1989.)
Item 25. Persons Controlled by or Under Common Control with Registrant -
Seligman Data Corp. ("SDC"), a New York Corporation, is owned by the
Registrant and certain associated investment companies. The
Registrant's investment in SDC is recorded at a cost of $2,199.
Item 26. Number of Holders of Securities - As of March 31, 1995, there were
9,040 record holders of Registrant's Class A Capital Stock and 375
holders of Registrant's Class D Capital Stock.
Item 27. Indemnification - Incorporated by reference to Registrant's
Post-Effective Amendment #42 as filed with the Commission on 5/1/92.
Item 28. Business and Other Connections of Investment Adviser - The Manager
also serves as investment manager to sixteen associated investment
companies. They are Seligman Cash Management Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information
Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund,
Inc., Seligman Henderson Global Fund Series, Inc., Seligman High
Income Fund Series, Seligman Income Fund, Inc., Seligman New Jersey
Tax-Exempt Fund, Inc. Seligman Pennsylvania Tax-Exempt Fund Series,
Seligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc.,
Seligman Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt Series
Trust, Seligman Select Municipal Fund, Inc. and Tri-Continental
Corporation.
The Subadviser also serves as subadviser to seven other associated
investment companies. They are Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Inc., Seligman Growth
Fund, Inc., Seligman Henderson Global Fund Series, Inc., Seligman
Income Fund, Inc., the Global and Global Smaller Companies Portfolios
of Seligman Portfolios, Inc. and Tri-Continental Corporation.
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 28. The Manager and Subadviser have investment advisory service
divisions which provide investment management or advice to private
clients. The list required by this Item 28 of officers and directors
of the Manager and the Subadviser, respectively, together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by the Manager and the
Subadviser, respectively, pursuant to the Investment Advisers Act of
1940 (SEC File No. 801-5798 and SEC File No. 801-4067 both of which
were filed on March 30, 1994).
Item 29. Principal Underwriters
(a) The names of each investment company (other than the
Registrant) for which each principal underwriter currently
distributing securities of the Registrant also acts as a
principal underwriter, depositor or investment adviser follow:
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman New Jersey Tax-Exempt Fund, Inc.
Seligman Pennsylvania Tax-Exempt Fund Series
Seligman Portfolios, Inc.
Seligman Tax-Exempt Fund Series, Inc.
Seligman Tax-Exempt Series Trust
(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 21:
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of April 1, 1995
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
William C. Morris* Director Chairman of the Board and
Chief Executive Officer
Ronald T. Schroeder* Director President and Director
Fred E. Brown* Director Director
Michael J. Del Priore* Director None
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
David Watts* Director None
Brian T. Zino* Director Director
Stephen J. Hodgdon* President None
Mark R. Gordon Senior Vice President, None
Director of Marketing
Gerald I. Cetrulo, III Senior Vice President of Sales None
140 West Parkway and Regional Sales Manager
Pompton Plains, NJ 07444
Brad Davis Regional Vice President None
241 110th Avenue SE
Bellevue, WA 98004
Jonathan G. Evans Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
</TABLE>
<PAGE>
PART C. OTHER INFORMATION
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of April 1, 1995
---------------------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
Susan Gutterud Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
Bradley F. Hanson Senior Vice President of Sales None
9707 Xylon Court and Regional Sales Manager
Bloomington, MN 55438
Bradley W. Larson Senior Vice President of Sales None
367 Bryan Drive and Regional Sales Manager
Danville, CA 94526
Randy D. Lierman Regional Vice President None
2627 R.D. Mize Road
Independence, MO 64057
Judith L. Lyon Regional Vice President None
163 Haynes Bridge Rd, Ste. 205
Alpharetta, GA 30201
David Meyncke Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
Herb W. Morgan Regional Vice President None
11308 Monticook Court
San Diego, CA 92127
Melinda Nawn Regional Vice President None
5850 Squire Hill Court
Cincinnati, OH 45241
Robert H. Ruhm Regional Vice President None
167 Derby Street
Melrose, MA 02176
Diane Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
Lynda M. Soleim* Regional Vice President None
14074 Rue St. Raphael Street
Del Mar, CA 92014
Bruce Tuckey Regional Vice President None
23477 Haggerty Road
Building No. 7
Novi, MI 48375
D. Ian Valentine Senior Vice President of Sales None
307 Braehead Drive and Regional Sales Manager
Fredericksburg, VA 22401
Andrew Veasey Regional Vice President None
40 Goshawk Court
Voorhees, NJ 08043
Todd Volkman Regional Vice President None
4650 Cole Avenue, #216
Dallas, TX 75205
Kelli A. Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
</TABLE>
<PAGE>
PART C. OTHER INFORMATION
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of April 1, 1995
---------------------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ ---------------------- ---------------------
<S> <C> <C>
James R. Besher Regional Vice President None
1400 Margaux Lane
Town & Country, MO 63017
Lawrence P. Vogel* Senior Vice President - Finance Vice President
Helen Simon* Vice President None
Marsha E. Jacoby* Vice President, National Accounts None
Manager
Vito Graziano* Assistant Secretary Assistant Secretary
William W. Johnson* Vice President, Order Desk None
Frank P. Marino* Assistant Vice President, Mutual
Fund Product Manager None
Aurelia Lacsamana* Treasurer None
Frank J. Nasta, Esq.* Secretary Secretary
</TABLE>
* The principal business address of each of these directors and/or
officers is 100 Park Avenue, NY, NY 10017.
(c) Not applicable.
Item 30. Location of Accounts and Records
Custodian: Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105 and
Seligman Capital Fund, Inc.
100 Park Avenue
New York, NY 10017
Item 31. Management Services - Seligman Data Corp. ("SDC") the Registrant's
shareholder service agent, has an agreement with The Shareholder
Service Group ("TSSG") pursuant to which TSSG provides a data
processing system for certain shareholder accounting and
recordkeeping functions performed by SDC, which commenced in July
1990. For the fiscal years ended December 31, 1994, 1993, and 1992,
the approximate cost of these services were:
1994 1993 1992
---- ---- ----
Class A Shares $ 44,994 $ 62,500 $ 60,780
Class D Shares $ 1,697 $ 300 N/A
Item 32. Undertakings - The Registrant undertakes, (1) to furnish a copy of
the Registrant's latest annual report, upon request and without
charge, to every person to whom a prospectus is delivered and (2) if
requested to do so by the holders of at least ten percent of its
outstanding shares, to call a meeting of shareholders for the
purpose of voting upon the removal of a director or directors and to
assist in communications with other shareholders as required by
Section 16(c) of the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 49 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 28th day of April, 1995.
SELIGMAN CAPITAL FUND, INC.
By: /s/ William C. Morris
----------------------------
William C. Morris, Chairman*
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 49 has been signed below by the following persons
in the capacities indicated on April 28, 1995.
Signature Title
---------- -----
/s/ William C. Morris
- ---------------------- Chairman of the Board
William C. Morris* (Principal executive officer)
and Director
/s/ Ronald T. Schroeder
- -----------------------
Ronald T. Schroeder* Director and President
/s/ Thomas G. Rose
- --------------------
Thomas G. Rose Treasurer
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director ) /s/ Brian T. Zino
Betsy S. Michel, Director ) --------------------------------
Douglas R. Nichols, Jr., Direct ) * Brian T. Zino, Attorney-in-fact
James C. Pitney, Director )
James Q. Riordan, Director )
Herman J. Schmidt, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
Brian T. Zino, Director )
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Seligman Capital Fund - Class A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 125649
<INVESTMENTS-AT-VALUE> 164107
<RECEIVABLES> 2006
<ASSETS-OTHER> 124
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 166237
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 501
<TOTAL-LIABILITIES> 501
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 127357
<SHARES-COMMON-STOCK> 12341<F1>
<SHARES-COMMON-PRIOR> 12303<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 80
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38458
<NET-ASSETS> 162556<F1>
<DIVIDEND-INCOME> 1199<F1>
<INTEREST-INCOME> 103<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> 1988<F1>
<NET-INVESTMENT-INCOME> (686)<F1>
<REALIZED-GAINS-CURRENT> 18013
<APPREC-INCREASE-CURRENT> (31249)
<NET-CHANGE-FROM-OPS> (13992)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 17719<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 812<F1>
<NUMBER-OF-SHARES-REDEEMED> 2050<F1>
<SHARES-REINVESTED> 1276<F1>
<NET-CHANGE-IN-ASSETS> (33226)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 39
<OVERDISTRIB-NII-PRIOR> 81
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 929<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1988<F1>
<AVERAGE-NET-ASSETS> 175871<F1>
<PER-SHARE-NAV-BEGIN> 15.95<F1>
<PER-SHARE-NII> (.06)<F1>
<PER-SHARE-GAIN-APPREC> (1.12)<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> 1.60<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 13.17<F1>
<EXPENSE-RATIO> 1.13<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A only. All other data are fund level.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Seligman Capital Fund - Class D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 125649
<INVESTMENTS-AT-VALUE> 164107
<RECEIVABLES> 2006
<ASSETS-OTHER> 124
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 166237
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 501
<TOTAL-LIABILITIES> 501
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 127357
<SHARES-COMMON-STOCK> 248<F1>
<SHARES-COMMON-PRIOR> 173<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 80
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38458
<NET-ASSETS> 3179<F1>
<DIVIDEND-INCOME> 11<F1>
<INTEREST-INCOME> 1<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> 82<F1>
<NET-INVESTMENT-INCOME> (70)<F1>
<REALIZED-GAINS-CURRENT> 18013
<APPREC-INCREASE-CURRENT> (31249)
<NET-CHANGE-FROM-OPS> (13992)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 351<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 119<F1>
<NUMBER-OF-SHARES-REDEEMED> 71<F1>
<SHARES-REINVESTED> 27<F1>
<NET-CHANGE-IN-ASSETS> (33226)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 39
<OVERDISTRIB-NII-PRIOR> 81
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 82<F1>
<AVERAGE-NET-ASSETS> 3093<F1>
<PER-SHARE-NAV-BEGIN> 15.86<F1>
<PER-SHARE-NII> (.33)<F1>
<PER-SHARE-GAIN-APPREC> (1.11)<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> 1.60<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 12.82<F1>
<EXPENSE-RATIO> 2.66<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
</TABLE>
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of December 29, 1988, and amended April 10,
1991, between SELIGMAN CAPITAL FUND, INC., a Maryland corporation (the
"Corporation"), and J. & W. SELIGMAN & CO. INCORPORATED, a Delaware corporation
(the "Manager").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Duties of the Manager. The Manager shall manage the affairs of the
Corporation including, but not limited to, continuously providing the
Corporation with investment management, including investment research,
advice and supervision, determining which securities shall be purchased or
sold by the Corporation, making purchases and sales of securities on behalf
of the Corporation and determining how voting and other rights with respect
to securities of the Corporation shall be exercised, subject in each case
to the control of the Board of Directors of the Corporation and in
accordance with the objectives, policies and principles set forth in the
Registration Statement and Prospectus of the Corporation and the
requirements of the Investment Company Act of 1940 (the "Act") and other
applicable law. In performing such duties, the Manager shall provide such
office space, such bookkeeping, accounting, internal legal, clerical,
secretarial and administrative services (exclusive of, and in addition to,
any such services provided by any others retained by the Corporation) and
such executive and other personnel as shall be necessary for the operations
of the Corporation. The Manager shall also, if requested by and subject to
the control of the Board of Directors of Union Data Service Center, Inc.
("Data"), manage the affairs of Data and provide Data with such office
management, personnel, reproduction, employee cafeteria and internal legal
services and such senior executive officers (other than vice presidents) as
may be necessary for the operation of Data, and with a treasurer, a
corporate secretary and a principal operating officer.
2. Expenses. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1 and shall pay any salaries,
fees and expenses of the directors of the Corporation who are employees of
the Manager or its affiliates. The Manager shall not be required to pay any
other expenses of the Corporation, including, but not limited to, direct
charges relating to the purchase and sale of portfolio securities, interest
charges, fees and expenses of independent attorneys and auditors, taxes and
governmental fees, cost of stock certificates and any other expenses
(including clerical expenses) of issue, sale, repurchase or redemption of
shares, expenses of registering and qualifying shares for sale, expenses of
printing and distributing reports, notices and proxy materials to
shareholders, expenses of corporate data processing and related services,
shareholder recordkeeping and shareholder account service, expenses of
printing and filing reports and other documents filed with governmental
agencies, expenses of printing and distributing prospectuses, expenses of
annual and special shareholders' meetings, fees and disbursements of
transfer agents and custodians, expenses of disbursing dividends and
distributions, fees and expenses of directors of the Corporation who are
not employees of the Manager or its affiliates, membership dues in the
Investment Company Institute, insurance premiums and extraordinary expenses
such as litigation expenses.
-1-
<PAGE>
3. Compensation.
a. As compensation for the services performed and the facilities and
personnel provided by the Manager pursuant to Section 1, the
Corporation will pay to the Manager promptly after the end of each
month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Corporation at the
close of business on the previous business day.
b. As used herein.
1. The term "Applicable Percentage" means the amount (expressed as a
percentage and rounded to the nearest one millionth of one percent)
obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
2. The term "Fee Amount" means the sum of the following:
.55 of 1% on an annual basis of the first $4,000,000,000 of Fee Base, .50
of 1% on an annual basis of the next $2,000,000,000 of Fee Base,
.475 of 1% on an annual basis of the next $2,000,000,000 of Fee Base, and .45
of 1% on an annual basis of Fee Base in excess of $8,000,000,000.
3. The term "Fee Base" as of any day means the sum of the net assets at
the close of business on the previous day of each of the investment
companies registered under the Act for which the Manager or any
affiliated company acts as investment adviser or manager (including the
Corporation).
c. If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Manager shall purchase securities from
or through and sell securities to or through such persons, brokers or
dealers (including the Manager or an affiliate of the Manager) as the
Manager shall deem appropriate in order to carry out the policy with
respect to brokerage as set forth in the Registration Statement and
Prospectus of the Corporation or as the Board of Directors of the
Corporation may direct from time to time. In providing the Corporation with
investment management and supervision it is recognized that the Manager
will seek the most favorable price and execution, and, consistent with such
policy, may give consideration to the research, statistical and other
services furnished by brokers or dealers to the Manager for its use, to the
general attitude of brokers or dealers toward investment companies and
their support of them, and to such other considerations as the Board of
Directors of the Corporation may direct or authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the
Corporation that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers who execute
brokerage transactions at a higher cost to the Corporation than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Corporation with such brokers,
subject to review by the Corporation's Board of Directors from time to time with
respect to the extent and continuation of this practice. It is understood that
the services provided by such brokers may be useful to the Manager in connection
with its services to other clients as well as to the Corporation.
-2-
<PAGE>
The placing of purchase and sale orders may be carried out by the Manager
or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the
Corporation, the Manager or any subsidiary of the Manager may, without material
risk, arrange to receive a soliciting dealer's fee or other underwriter's or
dealer's discount or commission, the Manager shall, unless otherwise directed by
the Board of Directors of the Corporation, obtain such fee, discount or
commission and the amount thereof shall be applied to reduce the compensation to
be received by the Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Corporation of additional compensation to
others for consulting services, supplemental research and security and economic
analysis.
5. Term of Agreement. This Agreement shall continue in full force and effect
until December 29, 1992 and from year to year thereafter if such
continuance is approved in the manner required by the Act and if the
Manager shall not have notified the Corporation in writing at least 60 days
prior to such December 29 or prior to December 29 of any year thereafter
that it does not desire such continuance. This Agreement may be terminated
at any time, without payment of penalty by the Corporation, on 60 days'
written notice to the Manager by vote of the Board of Directors of the
Corporation or by vote of a majority of the outstanding voting securities
of the Corporation (as defined by the Act). This Agreement shall
automatically terminate in the event of its assignment (as defined by the
Act).
6. Miscellaneous. 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.
IN WITNESS WHEREOF, the Corporation and the Manager have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
SELIGMAN CAPITAL FUND, INC.
By /s/ Ronald T. Schroeder
------------------------
Ronald T. Schroeder
J. & W. SELIGMAN & CO. INCORPORATED
By /s/ Brian T. Zino
------------------
Brian T. Zino
-3-
<PAGE>
SUBADVISORY AGREEMENT
Seligman Capital Fund, Inc.
SUBADVISORY AGREEMENT, dated as of May 19, 1994 between J. & W. SELIGMAN & CO.
INCORPORATED, a Delaware corporation (the "Manager") and SELIGMAN HENDERSON CO.,
a New York general partnership (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement dated December 29,
1988, as amended April 10, 1991 (the "Management Agreement") with Seligman
Capital Fund, Inc. (the "Fund"), an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), pursuant to which the Manager will render investment management
services to the Fund, and to administer the business and other affairs of the
Fund; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment
management services to the Fund, and the Subadviser is willing to render such
investment management services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Duties of the Subadviser. The Subadviser will provide the Fund with
investment management services with respect to assets of the Fund if, and
to the extent, designated by the Manager (such designated assets,
"Qualifying Assets"). Such services shall include investment research,
advice and supervision, determining which securities shall be purchased or
sold by the Fund, making purchases and sales of securities on behalf of the
Fund and determining how voting and other rights with respect to securities
of the Fund shall be exercised, subject in each case to the control of the
Board of Directors of the Fund and in accordance with the objectives,
policies and principles set forth in the Registration Statement and
Prospectus(es) of the Fund and the requirements of the 1940 Act and other
applicable law.
Subject to Section 36 of the 1940 Act, the Subadviser shall not be liable to the
Fund for any error of judgment or mistake of law or for any loss arising out of
any investment or for any act or omission in the management of the Fund and the
performance of its duties under this Agreement except for willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
2. Expenses. The Subadviser shall pay all of its expenses arising from the
performance of its obligations under Section 1.
3. Compensation
(a) As compensation for the services performed and the facilities and
personnel provided by the Subadviser pursuant to Section 1, the Manager
will pay to the Subadviser each month a fee, equal to the Applicable
Percentage of the average monthly Net Qualifying Assets of the Fund.
-1-
<PAGE>
(b) As used herein:
(1) The term "Applicable Percentage" means the amount (expressed as a
percentage and rounded to the nearest one millionth of one percent)
obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
(2) The term "Fee Amount" means the sum of the following:
.55 of 1% on an annual basis of the first $4,000,000,000 of Fee Base,
.50 of 1% on an annual basis of the next $2,000,000,000 of Fee Base,
.475 of 1% on an annual basis of the next $2,000,000,000 of Fee Base,
.45 of 1% on an annual basis of Fee Base in excess of $8,000,000,000.
(3) The term "Fee Base" as of any day means the sum of the net assets at
the close of business on the previous day of each of the investment
companies registered under the 1940 Act for which the Manager or any
affiliated company acts as investment adviser or manager (including the
Fund).
(4) The term "Net Qualifying Assets" means the Qualifying Assets less
related liabilities as designated by the Manager.
(c) Average monthly Net Qualifying Assets shall be determined, for any
month, by taking the average of the value of the Net Qualifying Assets
as of the (i) opening of business on the first day of such month and
(ii) close of business on the last day of such month.
(d) If the Subadviser shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Subadviser shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers as the Subadviser shall deem appropriate in order to carry out the
policy with respect to allocation of portfolio transactions as set forth in
the Registration Statement and Prospectus(es) of the Fund or as the Board
of Directors of the Fund may direct from time to time. In providing the
Fund with investment management and supervision, it is recognized that the
Subadviser will seek the most favorable price and execution, and,
consistent with such policy, may give consideration to the research,
statistical and other services furnished by brokers or dealers to the
Subadviser for its use, to the general attitude of brokers or dealers
toward investment companies and their support of them, and to such other
considerations as the Board of Directors of the Fund may direct or
authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the Fund
that the Subadviser have access to supplemental investment and market research
and security and economic analysis provided by brokers who execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
execution. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities of the Fund with such brokers, subject to review
by the Fund's Board of Directors from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Subadviser in connection with its services
to other clients as well as the Fund.
-2-
<PAGE>
If, in connection with purchases and sales of securities for the Fund, the
Subadviser may, without material risk, arrange to receive a soliciting dealer's
fee or other underwriter's or dealer's discount or commission, the Subadviser
shall, unless otherwise directed by the Board of Directors of the Fund, obtain
such fee, discount or commission and the amount thereof shall be applied to
reduce the compensation to be received by the Subadviser pursuant to Section 3
hereof.
Nothing herein shall prohibit the Board of Directors of the Fund from approving
the payment by the Fund of additional compensation to others for consulting
services, supplemental research and security and economic analysis.
5. Term of Agreement. This Agreement shall continue in full force and effect
until December 31, 1995, and from year to year thereafter if such
continuance is approved in the manner required by the 1940 Act, and if the
Subadviser shall not have notified the Manager in writing at least 60 days
prior to such date or prior to December 31 of any year thereafter that it
does not desire such continuance. This Agreement may be terminated at any
time, without payment of penalty by the Fund, on 60 days' written notice to
the Subadviser by vote of the Board of Directors of the Fund or by vote of
a majority of the outstanding voting securities of the Fund (as defined by
the 1940 Act). This Agreement will automatically terminate in the event of
its assignment (as defined by the 1940 Act) or upon the termination of the
Management Agreement.
6. Amendments. This Agreement may be amended by consent of the parties hereto
provided that the consent of the Fund is obtained in accordance with the
requirements of the 1940 Act.
7. Miscellaneous. 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.
IN WITNESS WHEREOF, the Manager and the Subadviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
J. & W. SELIGMAN & CO. INCORPORATED
By /s/ Brian T. Zino
------------------
Brian T. Zino
SELIGMAN HENDERSON CO.
By /s/ David Stein
---------------
David Stein
-3-
<PAGE>
Consent of Independent Auditors
Seligman Capital Fund, Inc.:
We consent to the incorporation by reference in the Statement of
Additional Information in this Post-Effective Amendment No. 49 to Registration
Statement No. 2-33566 of our report dated February 3, 1995, appearing in the
Annual Report to shareholders for the year ended December 31, 1994, and to the
reference to us under the caption "Financial Highlights" in the Prospectus,
which is a part of such Registration Statement.
/s/ Deloitte & Touche LLP
- ---------------------------
DELOITTE & TOUCHE LLP
New York, New York
April 28, 1995
