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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. 50 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]
Amendment No. 25 [X]
SELIGMAN CAPITAL FUND, INC.
(Exact name of registrant as specified in charter)
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
THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
[_] immediately upon filing pursuant to paragraph (b) of rule 485
[_] on May 1, 1995 pursuant to paragraph (b) of rule 485
[X] 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 will be filed with the Commission on or
about February 28, 1996.
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File No. 2-33566
811-1886
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<CAPTION>
SELIGMAN CAPITAL FUND, INC.
POST-EFFECTIVE AMENDMENT NO. 50
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
<S> <C>
Item in Part A of Form N-1A Location in Prospectus
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;
Further Information About Transactions In The Fund
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; 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
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 Information
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
April , 1996
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') and, to the extent requested by the Manager in
respect of foreign assets, Seligman Henderson Co. (the 'Subadviser'). 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 three 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 B shares are sold without an initial sales load but are subject to
a contingent deferred sales load ('CDSL'), if applicable, of 5% on redemptions
in the first year after issuance of such shares, declining to 1.00% in the sixth
year and 0.00% thereafter, 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 B shares. Class B shares will automatically convert to Class A shares
on the last day of the month that precedes the eighth anniversary of their date
of issue. Class D shares are sold without an initial sales load but are subject
to a 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. Any CDSL
payable upon redemption of Class B or Class D shares will be assessed on the
lesser of the current net asset value or the original purchase price of the
shares redeemed. 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............. 6
Management Services.................................. 8
Purchase Of Shares................................... 10
Telephone Transactions............................... 15
Redemption Of Shares................................. 16
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PAGE
<S> <C>
Administration, Shareholder Services And Distribution
Plan............................................... 18
Exchange Privilege................................... 19
Further Information About Transactions In The Fund... 21
Dividends And Distributions.......................... 21
Federal Income Taxes................................. 22
Shareholder Information.............................. 23
Advertising The Fund's Performance................... 25
Organization And Capitalization...................... 26
</TABLE>
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SUMMARY OF FUND EXPENSES
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<CAPTION>
CLASS A CLASS B CLASS D
SHARES SHARES SHARES
-------------- --------------- ---------------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
LOAD LOAD LOAD
SHAREHOLDER TRANSACTION EXPENSES ALTERNATIVE) ALTERNATIVE) ALTERNATIVE)
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases .................... 4.75% None None
(as a percentage of offering price)
Sales Load on Reinvested Dividends.......................... None None None
Deferred Sales Load (as a percentage of original ........... None 5% in 1st year 1% in 1st year
purchase price or redemption proceeds, 4% in 2nd year None thereafter
whichever is lower) 3% in 3rd and
4th year
2% in 5th year
1% in 6th year
None thereafter
Redemption Fees............................................. None None None
Exchange Fees............................................... None None None
ANNUAL FUND OPERATING EXPENSES FOR 1995 CLASS A CLASS B* CLASS D
(as a percentage of average net assets) -------------- --------------- ---------------
Management Fees............................................. .51% .51% .51%
12b-1 Fees.................................................. .22% 1.00%** 1.00%**
Other Expenses.............................................. .36% .36% .36%
----- ----- -----
Total Fund Operating Expenses............................... 1.09% 1.87% 1.87%
----- ----- -----
----- ----- -----
</TABLE>
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 loads on Class B and Class D shares
are one-time charges paid only if shares are redeemed within six years or one
year of purchase, respectively. The 'Other Expenses' disclosed for Class D
shares have been restated to reflect the expense allocation methodology being
used by the Fund. 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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<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
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 $81 $105 $174
Class B`D' $ 69 $89 $121 $199
Class D $ 29`D'`D' $59 $101 $219
</TABLE>
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.
* Expenses for Class B shares are estimated because no shares of that
Class were outstanding in the year ended December 31, 1995.
** Includes an annual distribution fee of up to .75 of 1% and an annual
service fee of up to .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 B and Class D shares of the
Fund may not exceed 6.25% of total gross sales, subject to certain
exclusions. The maximum sales charge rule is applied separately to each
Class. The 6.25% limitation is imposed on the Fund rather than on a per
shareholder basis. Therefore, a long-term Class B or 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 such shares.
`D' Assuming (1) 5% annual return and (2) no redemption at the end of the
period, the expenses on a $1,000 investment would be $19 for 1 year, $59
for 3 years and $101 for 5 years. The 10 year expense amount accounts for
the conversion to Class A at the end of 8 years.
`D'`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 $19.
2
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FINANCIAL HIGHLIGHTS
The financial highlights for the Fund's Class A shares and Class D shares
for the periods presented below have been audited by ,
independent auditors. This information, which is derived from the financial and
accounting records of the Fund, should be read in conjunction with the financial
statements and notes contained in the 1995 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. Financial highlights are not presented for
the Class B shares because no shares of that Class were outstanding during the
periods set forth 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 its ending net asset value so that they 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.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
--------------------------------------------------------------------------------------------------
1995/x/ 1994/x/ 1993 1992 1991 1990 1989 1988 1987 1986
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $13.17 $15.95 $17.04 $16.66 $12.45 $12.38 $10.41 $11.02 $12.72 $12.82
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment income
(loss)...................... (.02) (.06) (.03) .02 .03 .06 .08 .04 (.03) .03
Net realized and unrealized
investment gain (loss)...... 4.74 (1.12) .84 1.89 6.66 .11 3.25 .22 (.29) 2.30
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Increase (decrease) from
investment operations....... 4.72 (1.18) .81 1.91 6.69 .17 3.33 .26 (.32) 2.33
Distributions from net gain
realized.................... (2.30) (1.60) (1.90) (1.53) (2.48) (.10) (1.36) (.87) (1.38) (2.43)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
net asset value............. 2.42 (2.78) (1.09) .38 4.21 .07 1.97 (.61) (1.70) (.10)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period...................... $15.59 $13.17 $15.95 $17.04 $16.66 $12.45 $12.38 $10.41 $11.02 $12.72
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN BASED ON NET
ASSET VALUE................. 37.32% (7.06)% 4.80% 11.56% 54.67% 1.38% 32.44% 2.47% (2.59)% 17.81%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets**.................... 1.09% 1.13% 1.13% .96% 1.01% .92% .88% .99% .83% .78%
Net investment income (loss)
to average net assets....... (.11)% (.39)% (.17)% .11% .25% .47% .67% .36% (.69)% 1.01%
Portfolio turnover........... 103.60% 70.72% 46.84% 42.32% 42.20% 23.05% 49.51% 92.07% 72.61% 32.06%
Net assets, end of period
(000's omitted)............. $215,688 $162,556 $196,212 $198,063 $172,676 $120,759 $124,623 $114,564 $151,965 $186,732
<PAGE>
<CAPTION>
CLASS D
--------------------------------------------
YEAR ENDED DECEMBER 31
--------------------------------------------
5/3/93*
1995 1994 TO 12/31/93
-------- ---------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $12.82 $15.86 $16.43
-------- ----- -----
Net investment income
(loss)...................... (.14) (.33) (.08)
Net realized and unrealized
investment gain (loss)...... 4.56 (1.11) 1.41
-------- ----- -----
Increase (decrease) from
investment operations....... 4.42 (1.44) 1.33
Distributions from net gain
realized.................... (2.30) (1.60) (1.90)
-------- ----- -----
Net increase (decrease) in
net asset value............. 2.12 (3.04) (.57)
-------- ----- -----
Net asset value, end of
period...................... $14.94 $12.82 $15.86
-------- ----- -----
-------- ----- -----
TOTAL RETURN BASED ON NET
ASSET VALUE................. 35.98% (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets**.................... 2.02% 2.66% 2.26%`D'
Net investment income (loss)
to average net assets....... (1.06)% (2.28)% (1.32)%`D'
Portfolio turnover........... 103.60% 70.72% 46.84%`D'`D'
Net assets, end of period
(000's omitted)............. $9,137 $ 3,179 $ 2,749
</TABLE>
- ------------
'/x/' Per share amounts for the years 1995 and 1994, are calculated based on
average shares outstanding.
* Commencement of offering of Class D shares.
** Excludes interest expense of $262,586 in 1987 and $320,583 in 1986.
`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
became effective on January 1, 1993.
3
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ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers three 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 B shares are sold to
investors choosing to pay no initial sales load, a higher distribution fee and a
CDSL with respect to redemptions within six years of purchase and who desire
shares to convert automatically to Class A shares after eight years. 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 either a CDSL for a
one-year period or a CDSL for a six-year period with an automatic conversion to
Class A shares after eight years.
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 B and 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 on Class A shares deducted at the time of purchase.
Furthermore, the distribution fees on Class B and Class D will be offset to the
extent any return is realized on the additional funds initially invested therein
that would have been equal to the amount of the initial sales load on Class A
shares. In addition, Class B shares will be converted into Class A shares after
a period of approximately eight years, and thereafter investors will be subject
to lower ongoing fees. Shares purchased through reinvestment of dividends and
distributions on Class B shares also will convert automatically to Class A
shares along with the underlying shares on which they were earned.
Alternatively, some investors might choose to have all of their funds
invested initially in Class B or Class D shares, although remaining subject to a
higher continuing distribution fee and for a six-year or 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 B or 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 B and 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.
Investors should bear in mind that total asset based sales charges (i.e.,
the higher continuing distribution fee plus the CDSL) on Class B shares that are
redeemed may exceed the total asset based sales charges that would be payable on
a purchase of the same amount of Class A or Class D shares, particularly if the
Class B shares are redeemed shortly after purchase or if the investor qualifies
for a reduced sales load on the Class A shares.
Investors should understand that the purpose and function of the initial
sales charges with respect to Class A shares is the same as those of the
deferred sales charges and higher distribution fees
4
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with respect to Class B and Class D shares in that the sales charges applicable
to each class provide for the financing of the distribution of the shares of the
Fund.
Class B and Class D shares are subject to the same ongoing distribution and
service fees but Class D shares are subject to a CSDL for a shorter period of
time (one year as opposed to six years) than Class B shares. However, unlike
Class D shares, Class B shares convert to Class A shares, which are subject to
lower ongoing distribution and service fees.
The three 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, potentially, 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 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 B and Class D shares bear higher distribution fees, which will cause the
Class B and Class D shares to pay lower dividends than the Class A shares. The
three classes also have separate exchange privileges.
The Directors of the Fund believe that no conflict of interest currently
exists between the Class A, Class B 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,
Class B and Class D shares are their sales load structures and ongoing expenses
as set forth below. The primary differences between Class B and Class D shares
are that Class D shares are subject to a shorter CDSL period but Class B shares
automatically convert to Class A shares after eight years, resulting in a
reduction in ongoing fees. Investors in Class B shares should take into account
whether they intend to redeem their shares within the CDSL period and, if not,
whether they intend to remain invested until the end of the conversion period
and thereby take advantage of the reduction in ongoing fees resulting from the
conversion into Class A shares. Other investors, however, may elect to purchase
Class D shares if they determine that it is advantageous to have all their
assets invested initially and they are uncertain as to the length of time they
intend to hold their assets in the Fund or another mutual fund in the Seligman
Group for which the exchange privilege is available. Although Class D
shareholders are subject to a shorter CDSL period at a lower rate, they forgo
the Class B conversion feature, making their investment subject to higher
distribution fees for an indefinite period of time. Each class has advantages
and disadvantages for different investors, and investors should choose the class
that best suits their circumstances and their objectives.
<TABLE>
<CAPTION>
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE OTHER
SALES LOAD DAILY NET ASSETS) INFORMATION
---------------- ------------------- -------------------
<S> <C> <C> <C>
CLASS A Maximum initial Service fee of Initial sales load
sales load of .25%. waived or reduced
4.75% of the for certain
public offering purchases.
price.
CLASS B None Service fee of CDSL of:
.25%; 5% in 1st year
Distribution fee 4% in 2nd year
of .75% until 3% in 3rd
conversion.* and 4th years
2% in 5th year
1% in 6th year
0% after 6th year.
CLASS D None Service fee of CDSL of 1% on
.25%; redemptions within
Distribution fee one year of
of .75%. purchase.
</TABLE>
(footnote on next page)
5
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* Conversion occurs at the end of the month which precedes the 8th anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to
the Class B shares acquired in the exchange will apply, and the holding period
for the shares exchanged will be tacked onto the holding period of the shares
acquired.
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. The Fund may pledge its assets only to the extent necessary
to effect permitted borrowings of up to 15% of its total assets on a secured
basis and to enter into escrow arrangements in connection with the sales of
permitted call options. 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 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
6
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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.
ILLIQUID 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 Manager, acting
pursuant to procedures approved by 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 this determination be made,
the Manager, acting pursuant to such procedures, 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, if and 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 paper and certificates of deposit issued by foreign
banks.
GENERAL. 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 the Fund's
7
<PAGE>
<PAGE>
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 were approximately $11.4 billion at January 31, 1996. The
Manager also provides investment management or advice to institutional accounts
having an aggregate value at January 31, 1996 of approximately $4.0 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
1995, the management fee paid by the Fund was equal to an annual rate of .51% 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, 1995 amounted to 1.09% and 2.02%, respectively, of the
average daily net assets of each class. No Class B shares of the Fund were
outstanding during this period.
THE SUBADVISER. Seligman Henderson Co. (the 'Subadviser') serves as
Subadviser to the Fund with respect to all or a portion of the Fund's foreign
investments as designated by the Manager ('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
Agree-
8
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<PAGE>
ment with the Manager (the 'Subadvisory Agreement'), dated June 1, 1994. The
Subadvisory Agreement provides that the Subadviser shall provide, with respect
to the Qualifying Assets, investment management services 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 January 1, 1995
through December 31, 1995, 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. and Tri-Continental Corporation. 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 Seligman Growth Fund and Vice President of Seligman Portfolios, Inc.
('SPI') and Portfolio Manager of SPI's Seligman Capital Portfolio. Mr. Muzzatti,
who joined the Manager in 1985, also manages a portion of the Manager's
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, is also a Director of Henderson
Administration Group plc. He was previously a Director of Henderson
International, Ltd. and Secretary, Treasurer and Vice President of Henderson
International, Inc.
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 1995 Annual Report to Shareholders.
Copies of the 1995 Annual Report may be obtained, without charge, by calling or
writing the Fund at the telephone numbers or address listed on the cover page of
this Prospectus.
PORTFOLIO TRANSACTIONS. The Management Agreement and Subadvisory Agreement
each recognize that in the purchase and sale of portfolio securities, the
Manager and the 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
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
or the Subadviser in connection with its services to other clients as well as to
the Fund. In over-the-
9
<PAGE>
<PAGE>
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 three classes of shares: Class A shares are sold to
investors choosing the initial sales load alternative; Class B shares are sold
to investors choosing to pay no initial sales load, a higher distribuiton fee
and a CDSL with respect to redemptions within six years of purchase and who
desire shares to convert automatically to Class A shares after eight years; 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. EXCEPTIONS TO
THESE MINIMUMS ARE AVAILABLE FOR ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH
THE INVEST-A-CHECK'r' SERVICE OR THE SELIGMAN TIME HORIZON MATRIX'sm'.
Orders received by an authorized dealer before the close of the New York
Stock Exchange ('NYSE') (normally, 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 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
10
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<PAGE>
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.
Current shareholders may purchase additional shares at any time through any
authorized dealer or by sending a check payable to the 'Seligman Group of
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 provide the required information, Seligman
Data Corp. will seek further clarification and may be forced to return the check
to the shareholder. 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 shareholder's account.
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 (normally, 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, Class B 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 B and
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 B and Class D
shares. In addition, net asset value per share of the three classes will be
affected to the extent any other 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 A shares. See 'Administration, Shareholder Services and
Distribution Plan' below.
11
<PAGE>
<PAGE>
<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>
SFSI shall pay broker/dealers, from its own resources, an additional fee in
respect of certain investments in Class A shares of the Seligman Mutual Funds by
an 'eligible employee benefit plan' (as defined below under 'Special Programs')
which are attributable to the particular broker/dealer. The shares eligible for
the fee are those on which an initial front-end sales load was not paid because
either (i) the participating eligible employee benefit plan has at least $1
million invested in the Seligman Mutual Funds or (ii) the participating employer
has at least 50 eligible employees to whom such plan is made available. The fee,
which is paid monthly, is a percentage of the average daily net asset value of
eligible shares based on the length of time the shares have been invested in an
eligible Seligman Mutual Fund, as follows: for shares held up to 1 year, .50%
per annum; for shares held more than 1 year up to 2 years, .25% per annum; for
shares held from 2 years up to 5 years, .10% per annum; and nothing thereafter.
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 Seligman Mutual
Funds that are sold with a front-end 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 Seligman Mutual Funds 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 Seligman Mutual Fund 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
Seligman Mutual 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 through an exchange of shares of another Seligman Mutual Fund 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 28.
SPECIAL PROGRAMS. The Fund may sell Class A shares at net asset value to
present and retired directors, trustees, officers, employees of the Fund,
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<PAGE>
the other investment companies in the Seligman Group, the Manager and other
companies affiliated with the Manager and their spouses (and family members of
the foregoing). Family members are defined to include lineal descendants and
lineal ancestors, siblings (and their spouses and children) and any company or
organizations controlled by any of the foregoing. 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 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' (i) which have at
least $1 million invested in the Seligman Group of Mutual Funds or (ii) of
employers who have at least 50 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.
Section 403(b) plans sponsored by public educational institutions are not
eligible for net asset value purchases based on the aggregate investment made by
the plan or number of eligible employees. Participants in such plans are
eligible for reduced sales loads based solely on their individual investments.
CLASS B SHARES. Class B shares are sold without an initial sales load but
are subject to a CDSL if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original purchase price, whichever is less.
<TABLE>
<CAPTION>
YEARS SINCE ISSUANCE CDSL
- -------------------- ----
<S> <C>
less than 1 year................................... 5%
1 year or more but less than 2 years............... 4%
2 years or more but less than 4 years.............. 3%
4 years or more but less than 5 years.............. 2%
5 years or more but less than 6 years.............. 1%
6 years or more.................................... 0%
</TABLE>
Class B shares are also subject to 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 B shares. SFSI will make a 4% payment to dealers in
respect of purchases of Class B shares. Approximately eight years after
issuance, Class B shares will convert automatically into Class A shares of the
Fund, which are subject to an annual service fee of .25% but no distribution
fee. Shares purchased through reinvestment of dividends and distributions on
Class B shares also will convert automatically to Class A shares along with the
underlying shares on which they were earned.
13
<PAGE>
<PAGE>
Conversion occurs at the end of the month which precedes the eighth anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to the
Class B shares acquired in the exchange will apply, and the holding period for
the shares exchanged will be tacked onto the holding period for the shares
acquired. Class B shareholders of the Fund exercising the exchange privilege
will continue to be subject to the Fund's CDSL schedule if such schedule is
higher or longer than the CDSL schedule relating to the new Class B shares. In
addition, Class B shares of the Fund acquired through the exchange privilege
will be subject to the Fund's CDSL schedule if such schedule is higher or longer
than the CDSL schedule relating to the Class B shares of the fund from which the
exchange has been made.
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. Unlike Class B
shares, Class D shares do not convert to Class A shares.
CONTINGENT DEFERRED SALES CHARGE. A CDSL will be imposed on any redemption
of Class B or Class D shares which were purchased during the preceding six years
(for Class B shares) or twelve months (for Class D shares); however, no such
charge will be imposed on shares acquired through the investment of dividends or
distributions from any Class B or Class D shares of mutual funds within the
Seligman Group. The amount of any CDSL will be paid to and retained by SFSI.
To minimize the application of the 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
(in the case of Class D Shares) or six years prior to redemption (in the case of
Class B Shares). Shares held for the longest period of time within the
applicable period will then be redeemed. Additionally, for those shares
determined to be subject to the CDSL, the application of the CDSL will be made
to the current net asset value or original purchase price, whichever is less.
For example, assume an investor purchased 100 Class D shares in January at
a price of $10.00 per share. During the first year, 5 additional Class D shares
were acquired through investment of dividends and distributions. In January of
the following year, an additional 50 Class D 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 Class D 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.
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
14
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<PAGE>
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 section 403(b)(7) of the Code 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; and
(f) in connection with the redemption of Class B or Class D shares of the Fund
if the Fund is combined with another mutual fund in the Seligman Group, or
another similar reorganization transaction.
If, with respect to a redemption of any Class B or 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 payment or a portion of the payment made by the SFSI at the time of sale.
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 mutual
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 with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER-DEALER REPRESENTATIVE, will have the ability to effect the following
transactions via telephone: (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. All
telephone transactions are effected through Seligman Data Corp. at (800) 221-
2450.
For investors who purchase shares by completing and submitting an Account
Application (except those accounts registered as trusts (unless the trustee and
sole beneficiary are the same person), corporations or group retirement plans):
Unless an election is made otherwise on the Account Application, a shareholder
and the shareholder's broker-dealer of record, as designated on the Account
Application, will automatically receive telephone transaction privileges.
For investors who purchase shares through a broker-dealer: Telephone
services for a shareholder and the shareholder's representative may be elected
by completing a supplemental election application available from the
broker-dealer of record.
For accounts registered as IRAs: Telephone Services will include only
exchanges or address changes.
15
<PAGE>
<PAGE>
For accounts registered as trusts (unless the trustee and sole beneficiary
are the same person), corporations or group retirement plans: Telephone services
are not available.
All funds with the same account number (i.e., registered exactly the same)
as an existing account, including any new fund in which the shareholder invests
in the future, will automatically include telephone services if the existing
account has telephone services. Telephone services may also be elected at any
time on a supplemental election application.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone transaction services, authorizes each of the other owners to effect
telephone transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares. In these
circumstances, the shareholder or the shareholder's representative 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. 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 transactions 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. Shareholders, of
course, may refuse or cancel telephone services. Telephone services may be
terminated by a shareholder at any time by sending a written request to Seligman
Data Corp. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A SHAREHOLDER'S
BROKER-DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHAREHOLDER. Written
acknowledgment of termination of telephone transaction services will be sent to
the shareholder at the address of record.
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
16
<PAGE>
<PAGE>
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:
<TABLE>
<S> <C>
Seligman Data Corp.
100 Park Avenue/2nd Floor
New York, NY 10017
(800) 221-2450
</TABLE>
TO OPEN A SELIGMAN IRA, SEP OR PENSION/
PROFIT SHARING PLAN, A SEPARATE ADOPTION
AGREEMENT IS REQUIRED. PLEASE CALL
RETIREMENT PLAN SERVICES FOR MORE
INFORMATION AT (800) 445-1777.
<PAGE>
- --------------------------------------------------------------------------------
1. ACCOUNT REGISTRATION
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TYPE OF [ ] INDIVIDUAL [ ] MULTIPLE OWNERS [ ] GIFT/TRANSFER TO MINOR
ACCOUNT Use Line 1 Use Lines 1, 2 & 3 Use Line 4
<CAPTION>
<S> <C>
TYPE OF [ ] OTHER (Corporations, Trusts, Organizations, Partnerships,
ACCOUNT Use Line 5
</TABLE>
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
<TABLE>
<S> <C> <C> <C>
1. ------------------------------------------------------------------------------------ ----------------- ---------
First Middle Last Social Security Birthdate
Number
2. ------------------------------------------------------------------------------------ ----------------- ---------
First Middle Last Social Security Birthdate
Number
3. ------------------------------------------------------------------------------------ ----------------- ---------
First Middle Last Social Security Birthdate
Number
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. Tax ID Number
</TABLE>
TYPE OF TRUST ACCOUNT: [ ] Trust [ ] Guardianship [ ] Conservatorship
[ ] Estate [ ] Other _____________________________
Trustee/Fiduciary Name _____________________ Trust Date _____________________
Trust Name ____________________, for the benefit of (FBO) ___________________
- --------------------------------------------------------------------------------
2. MAILING ADDRESS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ADDRESS TELEPHONE
( ) ( )
_________________________________________________________________________ ____________ ___________ _____ ______________
Street Address or P.O. Box Daytime Evening
__________________________________________________________________________ U.S. CITIZEN? [ ] Yes [ ] No ________________________
City State Zip If no, indicate country
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
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 ($2,500 for
Seligman Communications and Information Fund) except for accounts established
concurrently with the Invest-A-Check Service (see section 6-J. of this
application). IF MORE THAN ONE FUND IS SELECTED, ACCOUNTS MUST HAVE IDENTICAL
REGISTRATIONS AND CLASS OF SHARES.
PLEASE CHOOSE ONE: [ ] Class A Shares [ ] Class B Shares [ ] Class D Shares
MAKE CHECK PAYABLE TO: SELIGMAN GROUP OF FUNDS
$______________ TOTAL AMOUNT, INVESTED AS FOLLOWS:
$_____________ Seligman Communications
and Information Fund
$_____________ Seligman Henderson
Global Technology Fund
$_____________ Seligman Frontier Fund
$_____________ Seligman Henderson Global
Smaller Companies Fund
$_____________ Seligman Capital Fund
$_____________ Seligman Henderson Global
Growth Opportunities Fund
$_____________ Seligman Growth Fund
$_____________ Seligman Henderson
International Fund
$_____________ Seligman Common Stock Fund
$_____________ Seligman Income Fund
$_____________ Seligman High-Yield Bond Fund
$_____________ Seligman U.S. Government Securities Fund*
$_____________ Seligman National Tax-Exempt Fund*
$_____________ Seligman Tax-Exempt Fund (choose one):*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CA-Qlty. [ ] FL [ ] MD [ ] MN [ ] NY [ ] OR [ ]
CA-Hy. [ ] GA [ ] MA [ ] MO [ ] NC [ ] PA [ ]
CO [ ] LA [ ] MI [ ] NJ [ ] OH [ ] SC [ ]
$______________________________ Seligman Cash Management Fund (Class A only)
</TABLE>
* Currently, these funds do not offer Class B shares.
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.
<PAGE>
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ----------------------------------------------------------- ----------------------------------------
Firm Name Representative's Name
- ----------------------------------------------------------- ----------------------------------------
Branch Office Address Representative's ID Number
( )
- ----------------------------------------------------------- ----------------------------------------
City State Zip Representative's Telephone Number
- -----------------------------------------------------------
Branch Number
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
6. ACCOUNT OPTIONS AND SERVICES
- --------------------------------------------------------------------------------
A. DIVIDENDS
AND GAIN
DISTRIBUTION
OPTIONS
I choose the following options for each Fund listed:
Option 1. Dividends in shares, gain distributions in shares.
Option 2. Dividends in cash, gain distributions in shares.
Option 3. Dividends in cash, gain distributions in cash.
OPTION
------
1 2 3
[ ] [ ] [ ] __________________________________________________
FUND NAME
[ ] [ ] [ ] __________________________________________________
FUND NAME
[ ] [ ] [ ] __________________________________________________
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 __________________________________
(IF OPENING A NEW ACCOUNT, A MINIMUM OF $1,000 IS REQUIRED.)
ADDRESS______________________________________
CITY_________________________________________ ACCOUNT NUMBER__________________________________
(FOR AN EXISTING ACCOUNT.)
STATE, ZIP___________________________________
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 comple-
tion 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 #___________________________
<PAGE>
E. AUTOMATIC
CASH
WITHDRAWAL
SERVICE
(CLASS A; CLASS B
SHARES HELD FOR SIX
YEARS; OR 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
H. TELEPHONE
SERVICE
ELECTION
AVAILABLE FOR ALL TYPES OF ACCOUNTS EXCEPT AS NOTED BELOW
Unless I check the box below, I understand that I may place the following requests by telephone:
Redemptions up to $50,000 Exchanges
Address Changes Dividend and/or Capital Gain Distribution Option Changes
[ ] I DO NOT WANT TELEPHONE SERVICES FOR MYSELF AND MY REPRESENTATIVE NAMED IN SECTION 5 OF
THIS APPLICATION
AUTHORIZATION
I understand that the telephone services are optional and that unless I checked
the box above, 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 (including the representative named in
section 5 of this application) 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.
Telephone services are not available for trusts (unless the trustee and sole
beneficiary are the same person), corporations or group retirement plans. IRA
telephone services will include only exchanges and address changes.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
I. INVEST-A-CHECK'r' To start your Invest-A-Check'r' Service,
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).
ACCOUNTS MAY BE ESTABLISHED CONCURRENTLY
WITH THE INVEST-A-CHECK'r' SERVICE WITH A
$100 MINIMUM ($200 MINIMUM FOR SELIGMAN
COMMUNICATIONS AND INFORMATION FUND) IF
THE MONTHLY INVESTMENT OPTION IS CHOSEN,
OR WITH A $250 MINIMUM ($500 MINIMUM FOR
SELIGMAN COMMUNICATIONS AND INFORMATION
FUND) IF THE QUARTERLY INVESTMENT OPTION
IS CHOSEN.
Please arrange with my bank to draw
pre-authorized checks and invest the
following dollar amounts (minimum: $200
monthly or $500 quarterly for Seligman
Communications and Information Fund: $100
monthly or $250 quarterly for all other
Funds) 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______________________________________________________
</TABLE>
<PAGE>
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.
PRESIDENT
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
<PAGE>
<TABLE>
<S> <C>
J. CHECK
REDEMPTION Available to shareholders who own or purchase shares having a value of at least $25,000 invested
SERVICE in any of the following: Seligman High-Yield Bond Fund, Seligman Income Fund, Seligman U.S.
(CLASS A ONLY) 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.
</TABLE>
<TABLE>
<S> <C>
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)
___________________________________________________________
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:_______________________________________________
</TABLE>
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.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
<PAGE>
<PAGE>
Managed by
J. & W. SELIGMAN & CO.
INCORPORATED
Investment Managers and Advisors
ESTABLISHED 1864
<PAGE>
<PAGE>
the account registration. The shareholder's letter of instruction or endorsed
stock power should specify the account number, class of shares (A, B 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 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 B shares redeemed after six years and 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 B
shares are redeemed within six years of purchase, a shareholder will
receive the net asset value per share next determined after receipt of a
request in good order less the applicable CDSL as described under 'Purchase of
Shares--Class B Shares' above. 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 (less any applicable CDSL). 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, less any applicable CDSL. 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, less any
applicable CDSL. 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 once per day, in an amount of up to $50,000. One telephone redemption
request per day is permitted. Telephone redemption requests 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 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.
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For more information about telephone redemptions and the circumstances
under which shareholders may bear the risk of loss for a fraudulent transaction,
see 'Telephone Transactions' above.
GENERAL. With respect to shares redeemed, a check for the proceeds will be
sent to the shareholder's address of record within seven calendar days after
acceptance of the redemption order and will be made payable to all of the
registered owners on the account. With respect to shares repurchased by the
Fund, a check for the proceeds will be sent to the investment dealer within
seven calendar days after acceptance of the repurchase order and will be made
payable to the investment dealer. 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 to reinvest them, or to shift the investment to one of the other
Seligman Mutual Funds, 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 Seligman Mutual Funds. If a
shareholder redeems Class B shares or 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 Seligman Mutual Funds 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, Class B 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.
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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,
1995 in respect of the Fund's Class A shares pursuant to the Plan was equal to
. % of the Class A shares' average daily net assets.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class B and Class D shares at an annual rate of up to 1% of the respective
average daily net asset value of the Class B and Class D shares. Proceeds from
the Class B and Class D distribution fees are used primarily to compensate
Service Organizations for administration, shareholder services and distribution
assistance (including a continuing fee of up to .25% on an annual basis of the
average daily net asset value of Class B and 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 payment of 4% (in the case of Class B shares) or 1%
(in the case of Class D shares) made by it to Service Organizations at the time
of the sale. The amounts expended by SFSI in any one year upon the initial
purchase of Class B and Class D shares may exceed the amounts received by it
from Plan payments retained. Expenses of administration, shareholder services
and distribution of Class B and Class D shares in one fiscal year of the Fund
may be paid, respectively, from Class B and 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 total amount paid for the
year ended December 31, 1995 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. The Plan as
it relates to Class B shares was approved by the Directors on March 21, 1996.
The Plan is reviewed by the Directors annually.
Seligman Services, Inc. ('SSI'), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts as a 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
receives compensation for providing personal service and account maintenance to
such accounts of record.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any part 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 the shareholder has telephone services.
Class A, Class B and Class D shares may be exchanged only for Class A,
Class B and Class D shares, respectively, of another Seligman Mutual Fund on the
basis of relative net asset value.
If Class B or Class D shares that are subject to a CDSL are exchanged for
Class B or Class D shares, respectively, of another fund, then for purposes of
assessing the CDSL payable upon disposition of the exchanged Class B or Class D
shares, the applicable holding period shall be reduced by the holding period of
the original Class B or Class D shares.
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Class B shareholders of the Fund exercising the exchange privilege will
continue to be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL schedule relating to the new Class B shares. In addition,
Class B shares of the Fund acquired through use of the exchange privilege will
be subject to the Fund's CDSL schedule if such schedule is higher or longer than
the CDSL schedule relating to the Class B shares of the fund from which the
exchange has been made.
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.
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 Growth Opportunities
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.
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. (Does not offer Class B shares.)
SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES invests in investment grade
Pennsylvania tax-exempt securities. (Does not offer Class B shares.)
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. (Does not offer Class B shares.)
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. (Does not offer Class B shares.)
All permitted exchanges will be based on the net asset values of the
respective funds determined at the close of the NYSE on that day. Telephone
requests for exchanges 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, 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
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exchange is being made. The method of receiving distributions, unless otherwise
indicated, will be carried over to the new Fund account, as will telephone
services. 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, jointly or as 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 Seligman Mutual Funds.
A broker/dealer representative of record will be able to effect exchanges
on behalf of a shareholder only if the shareholder has telephone services or if
the broker/dealer has entered into a Telephone Exchange Agreement with SFSI
wherein the broker/dealer must agree to indemnify SFSI and the Seligman Mutual
Funds 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 any telephone exchange request. Any rejected telephone exchange order may
be processed by mail. For more information about telephone exchanges, which,
unless objected to, are assigned to most shareholders automatically, 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
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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 telephone services, changes may
also be telephoned to Seligman Data Corp. between 8:30 a.m. and 6:00 p.m.
Eastern time, by either the shareholder or the broker/dealer of record on the
account. For information about 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.
The per share dividends from net investment income on Class B and 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 B and Class D
shares. Per share dividends of the three 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, Class B and Class D shares. See 'Purchase
Of Shares -- Valuation.'
Shareholders exchanging shares of one mutual fund for shares of another
mutual fund in the 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
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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.
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.
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and 6:00 p.m. Eastern time, and calls will be answered by a service
representative.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (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 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 additional
purchases of shares automatically by electronic funds transfer from a
checking account, if the bank that maintains the account is a member of the
Automated Clearing House, or by preauthorized checks to be drawn on the
shareholder's checking account, at regular monthly intervals in fixed
amounts of $100 or more per Fund, or regular quarterly intervals in fixed
amounts of $250 or more per Fund, to purchase shares. Accounts may be
established concurrently with the Invest-A-Check'r' Service with a $100
minimum in conjunction with the monthly investment option, or a $250
minimum in conjunction with the quarterly investment option. Accounts
established in conjunction with the Invest-A-Check'r' Service must be
accompanied by the minimum investment. (See 'Terms and Conditions' on page
28.)
AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder of
Seligman Cash Management Fund to exchange a specified amount, at regular
monthly intervals in fixed amounts of $100 or more per Fund, or regular
quarterly intervals in fixed amounts of $250 or more per Fund, from shares
of any class of the Cash Management Fund into shares of the same class
of any other Seligman Mutual Fund registered in the same name. The
shareholder's Cash Management Fund 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
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.
AUTOMATIC CASH WITHDRAWAL SERVICE permits payments at regular intervals
to be made to a shareholder who owns or purchases Class A shares worth
$5,000 or more held as book credits. Holders of Class D shares may elect to
use this service with respect to shares that have been held for at least
one year. Holders of Class B shares may elect to use this service with
respect to shares that have been held for at least
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six years. (See 'Terms and Conditions' on page 28.)
DIRECTED DIVIDENDS allows a shareholder to pay dividends to another
person or to direct the payment of such dividends to another Seligman
Mutual Fund for purchase at net asset value. Dividends on Class A, Class B
and Class D shares may only be directed to shares of the same class of
another Seligman Mutual Fund.
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. The Fund may register an IRA investment for which an account
application has not been received as an ordinary taxable account.
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, Class
B 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, Class B 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 (or CDSL upon redemption, if applicable), 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); 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.
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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, Class B 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 500,000,000 shares of common stock, each with a par value of
$1.00, divided into three classes. Each share of the Fund's Class A, Class B and
Class D common stock is equal as to earnings, assets and voting privileges,
except that each class bears its own separate distribution and, potentially,
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. 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 Rule 18f-3 under the 1940 Act. 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.
26
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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.
27
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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 unless otherwise specified (or
on the prior business day if such 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 Seligman Mutual Fund to
another, the shareholder must re-apply for the Invest-A-Check'r' Service in the
Seligman Mutual 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. Accounts
established in conjunction with the Invest-A-Check'r' Service must be
accompanied by a minimum initial investment of at least $100 in connection with
monthly investment options or $250 in connection with the quarterly investment
option. 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, to
Class B shareholders with respect to Class B shares held for six years or more,
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.
<PAGE>
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.
2/96
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SELIGMAN
CAPITAL
FUND, INC.
- -----------------------------
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, New York 10017
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York, 10004
EQCA1
- -------------------
P R O S P E C T U S
[SELIGMAN CAPITAL FUND LOGO]
April , 1996
[JWS LOGO]
- ---------------------------
A Capital Appreciation Fund
In its 27th year
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
APRIL ____, 1996
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 April , 1996 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 three classes of shares. Class A shares may be
purchased at net asset value plus a sales load of up to 4.75%. Class B shares
may be purchased at net asset value and are subject to a contingent deferred
sales load ("CDSL"), if applicable, in the following amount (as a percentage of
the current net asset value or the original purchase price, whichever is less,
if redemption occurs within the indicated number of years of issuance of such
shares: 5% (less than 1 year), 4% (1 but less than 2 years), 3% (2 but less than
4 years), 2% (4 but less than 5 years), 1% (5 but less than 6 years) and 0% (6
or more years). Class B shares automatically convert to class A shares after
approximately eight years resulting in lower ongoing fees. Shares purchased
through reinvestment of dividends and distributions on Class B shares also will
convert automatically to Class A shares along with the underlying shares on
which they were earned. Class D shares may be purchased at net asset value and
are subject to a CDSL of 1% (of the current net asset value or the original
purchase price, whichever is less) if redeemed within one year.
Each Class A, Class B 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 B shares and Class D shares
bear a higher distribution fee that generally will cause the Class B shares and
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, Class B 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 three 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........................ 9
Administration, Shareholder Services And
Distribution Plan........................... 11
Portfolio Transactions..........................11
Purchase And Redemption Of Fund Shares..........12
Distribution Services...........................14
Valuation.......................................14
Performance.....................................15
General Information.............................16
Financial Statements............................17
Appendix .......................................17
EQCA1A
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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 1995, 1994 or
1993.
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 invest in common stock rights and warrants
believed by the Manager to provide capital appreciation opportunities. Common
stock rights and warrants received as part of a unit or attached to securities
purchased (i.e., not separately purchased) are not included in the Fund's
investment restrictions regarding such securities.
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
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of the Fund will be served.
2
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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.
3
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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).
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 % in 1995 and 70.72% in 1994.
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 the extent necessary to
effect permitted borrowings of up to 15% its total assets on a secured basis
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";
- - 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
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<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
(57) Executive Officer and Chairman of (57) 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., broker/dealer; 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., 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.
BRIAN T. ZINO* Director, President and Member of the Executive
(43) Committee
Managing Director (formerly, Chief
Administrative and Financial Officer), J. & W.
Seligman & Co. Incorporated, investment
managers and advisors; and Seligman Advisors,
Inc., advisors; Director or Trustee, the
Seligman Group of Investment Companies;
President, the Seligman Group of Investment
Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund,
Inc.; Chairman, Seligman Data Corp.,
shareholder service agent; Director, Seligman
Financial Services, Inc., broker/dealer;
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.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
and Seligman Advisors, Inc., advisors; Director
or Trustee, the Seligman Group of Investment
Companies; Seligman Financial Services, Inc.,
broker/dealer; Seligman Services Inc.,
broker/dealer; Trudeau Institute, nonprofit
biomedical research organization; Lake Placid
Center for the Arts, cultural organization; and
Lake Placid Education Foundation, education
foundation; formerly, Director, J. & W.
Seligman Trust Company; and Seligman
Securities, Inc., broker/dealer.
5
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JOHN R. GALVIN* Director
(66)
Dean, Fletcher School of Law and Diplomacy at
Tufts University; Director or Trustee, the
Seligman Group of Investment Companies;
Chairman of the American Council on Germany; a
Governor of the Center for Creative Leadership;
Director of USLIFE, insurance; National
Committee on U.S.-China Relations, National
Defense University and the Institute for
Defense Analysis; and Consultant of Thomson
CSF, electronics. Formerly, Ambassador, U.S.
State Department; Distinguished Policy Analyst
at Ohio State University and Olin Distinguished
Professor of National Security Studies at the
United States Military Academy. From June, 1987
to June, 1992, he was the Supreme Allied
Commander, Europe and the Commander-in-Chief,
United States European Command.
Tufts University, Packard Avenue, Medford, MA
02155
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment
Companies; Chairman, The Rockefeller
Foundation, charitable foundation; and
Director, NYNEX, telephone company; 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
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive
Officer, Kerr-McGee Corporation, energy and
chemicals; Director or Trustee, the Seligman
Group of Investment Companies; Director of
Kimberly-Clark Corporation, consumer products,
Bank of Oklahoma Holding Company, American
Petroleum Institute, Oklahoma City Chamber of
Commerce, Baptist Medical Center, Oklahoma
Chapter of the Nature Conservancy, Oklahoma
Medical Research Foundation and United Way
Advisory Board; Chairman of Oklahoma City
Public Schools Foundation; and Member of the
Business Roundtable and National Petroleum
Council.
123 Robert S. Kerr Avenue, Oklahoma City, OK
73102
JOHN E. MEROW* Director
(66)
Partner, Sullivan & Cromwell, law firm;
Director or Trustee, Commonwealth Aluminum
Corporation; the Seligman Group of Investment
Companies; The Municipal Art Society of New
York; Commonwealth Aluminum Corporation; the U.
S. Council for International Business; and the
U. S.-New Zealand Council; Chairman, American
Australian Association; 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
(53)
Attorney; Director or Trustee, the Seligman
Group of Investment Companies; and 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
6
<PAGE>
<PAGE>
JAMES C. PITNEY Director
(69)
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
(68)
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.; and 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
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief
Investment Officer, Institutional, J. & W.
Seligman & Co. Incorporated, investment
managers and advisors; and Seligman Advisors,
Inc., advisors; Director or Trustee, the
Seligman Group of Investment Companies;
Director, Seligman Holdings, Inc., holding
company; Seligman Financial Services, Inc.,
distributor; Seligman Henderson Co., advisors;
and Seligman Services, Inc., broker/dealer;
formerly, President, the Seligman Group of
Investment Companies, except Seligman Quality
Municipal Fund, Inc. and Seligman Select
Municipal Fund, Inc.; and Director, J. & W.
Seligman Trust Company; Seligman Data Corp.,
shareholder service agent; and Seligman
Securities, Inc., broker/dealer.
ROBERT L. SHAFER Director
(63)
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
(61)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises,
Inc.; Director or Trustee, the Seligman Group
of Investment Companies; Red Man Pipe and
Supply Company, piping and other materials; and
C-SPAN. 300 Crescent Court, Suite 700, Dallas,
TX 75201
LORIS D. MUZZATTI Vice President and Portfolio Manager
(39)
Managing Director (formerly, Vice President and
Portfolio Manager), J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
Vice President and Portfolio Manager, two other
open-end investment company in the Seligman
Group of Investment Companies.
7
<PAGE>
<PAGE>
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisors; Seligman Financial
Services, Inc., broker/dealer; 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 Vice President, Seligman
Securities, Inc., broker/dealer; and Vice
President, Finance J & W Seligman Trust
Company.
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation, and
Corporate Secretary, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
and Seligman Advisors, Inc., advisors;
Corporate Secretary, the Seligman Group of
Investment Companies; Seligman Financial
Services, Inc., broker/dealer Seligman
Henderson Co., advisers; Seligman Services,
Inc., broker/dealers; Seligman Data Corp.;
formerly, Secretary, J. & W. Seligman Trust
Company; and attorney, Seward and Kissel.
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc. and the American
Investors Family of Funds.
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 Total Compensation
Aggregate Retirement Benefits from Registrant and
Name and Compensation Accrued as part of Fund Complex Paid
Position with Registrant from Registrant (1) Fund Expenses to Directors (2)
------------------------ ------------------- ------------- ----------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
John R. Galvin, Director N/A $41,252.75
Alice S. Ilchman, Director N/A 68,000.00
Frank A. McPherson, Director N/A 41,252.75
John E. Merow, Director N/A 66,000.00(d)
Betsy S. Michel, Director N/A 67,000.00
Douglas R. Nichols, Jr., Director* N/A 24,252.75
James C. Pitney, Director N/A 68,000.00
James Q. Riordan, Director N/A 70,000.00
Herman J. Schmidt, Director* N/A 24,747.75
Ronald T. Schroeder, Director N/A N/A N/A
Robert L. Shafer, Director N/A 70,000.00
James N. Whitson, Director N/A 68,000.00(d)
</TABLE>
- ----------------------
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
8
<PAGE>
<PAGE>
*Retired May 18, 1995
(d) Deferred. The total amounts of deferred compensation (including interest)
payable to Messrs. Merow, Pitney and Whitson as of December 31, 1995 were $ , $
and $ , 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
shares or less than 1% of the Fund's Class A Capital Stock at March 31, 1996. As
of that date, no Directors or Officers owned shares of the Fund's Class D
Capital Stock.
MANAGEMENT AND EXPENSES
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 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 $ in 1995, $945,288 in 1994, and
$1,059,275 in 1993 which was equivalent to an annual rate of . % of the average
net assets of the Fund in 1995, .53% in 1994 and .53% in 1993.
The Fund pays all its expenses other than those assumed by the Manager, or
the subadviser , 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 recordkeeping 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.
9
<PAGE>
<PAGE>
The Management Agreement was initially approved by the Board of Directors
on September 30, 1988 and by the shareholders at a special meeting held on
December 16, 1988. The amendments to the Management Agreement, to increase the
fee rate payable to the Manager by the Fund, were approved by the Board of
Directors on , 1991 and by the shareholders at a special meeting held on April
10, 1991. 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. 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. 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, by
the Manager, 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 and by the shareholders of the Fund on May 19, 1994. The
Subadvisory Agreement will continue in effect until December 31 of each year (2)
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, 1995, the Fund did not
require the services of the Subadviser.
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 $ 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.
10
<PAGE>
<PAGE>
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
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) of the Fund 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 B shares on March 21, 1996 by the Board of
Directors of the Fund, including a majority of the Qualified Directors, and
became effective with respect to the Class B shares on April , 1996. 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 annually 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 . If the amount payable with respect to Class A shares under the Plan is
proposed to be increased materially, the Fund will either (i) permit holders of
Class B shares to vote as a separate class on the proposed increase or (ii)
establish a new class of shares subject to the same payment under the Plan as
existing Class A shares, in which case the Class B shares will thereafter
convert into the new class instead of into Class A shares. 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
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.
The total brokerage commissions paid to others for execution and research
and statistical services for the years 1995, 1994 and 1993, respectively, were $
, $293,441 and $161,086, of which Seligman Securities, Inc. received $13,748 in
1993. Seligman Securities, Inc. ceased functioning as a broker for the Fund and
its other clients on March 31, 1993. The increase in commission costs from 1993
to 1995 is due primarily in the growth of the Fund.
11
<PAGE>
<PAGE>
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund issues three 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 B 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 6 years of purchase. 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
B and Class D shares are sold at net asset value*. Using the Fund's net asset
value at December 31, 1995, the maximum offering price of the Fund's shares is
as follows:
<TABLE>
<CAPTION>
<S> <C>
Class A
Net asset value per Class A share...................................... $
Maximum sales load (4.75% of offering price)........................... --------
Offering price to public............................................... ========
Class B and Class D
Net asset value and offering price per share*..........................
</TABLE>
- ----------
* Class B shares are subject to a CDSL declining from 5% in the first year
after purchase to 0% after six years. 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 Front - End Sales Loads
Reductions Available. Shares of any Seligman Fund sold with a front-end 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 front-end 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 the other Mutual Funds in
the Seligman Group sold with a front-end sales load with the total net asset
value of shares of those mutual funds already owned that were sold with a
front-end 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 front-end 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 front-end 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.
12
<PAGE>
<PAGE>
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 front-end sales load of the other Mutual Funds in the Seligman Group
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:
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" (as defined in the Prospectus), except that the Fund may
sell shares at net asset value to "eligible employee benefit plans," (i) which
have at least $1 million invested in the Seligman Group of Mutual Funds or (ii)
of employers who have at least 50 eligible 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.
13
<PAGE>
<PAGE>
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.
Class A shares may be issued without a sales load to present and retired
directors, trustees, officers, employees and their spouses (and family member of
the foregoing) of the Funds, the other investment companies in the Seligman
Group, the Manager and other companies affiliated with the Manager. Family
members are defined to include lineal descendants and lineal ancestors, siblings
(and their spouses and children) and any company or organization controlled by
any of the foregoing. Such sales may also be made to employee benefit plans 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.
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, or the right of redemption postponed for more than
seven days, 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
Seligman Financial Services, Inc. ("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. The Fund and SFSI are parties to a Distributing
Agreement dated January 1, 1993. 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 $ in
1995, after allowance of $ as concessions to dealers; $16,143 in 1994, after
allowance of $121,768 as concessions to dealers; and $36,577 in 1993, after
allowance of $290,127 as concessions to dealers. No Class B shares were
outstanding throughout the 3 year period ended December 31, 1995 and as a result
no CDSL charges from Class B shares were retained by SFSI. For the year ended
December 31, 1995, SFSI retained CDSL charges from Class D shares amounting to $
; for the year ending December 31, 1994 $2,361; and $126 for the period May 3,
1993 to December 31, 1993.
VALUATION
Net asset value per share of each class of the Fund is determined as of the
close of trading on the New York Stock Exchange ("NYSE") (normally, 4:00 p.m.
Eastern time), on each day that the NYSE is open. The NYSE 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 B
and 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 such shares.
14
<PAGE>
<PAGE>
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. Other
securities not listed on an exchange or securities market, or securities in
which there were no transactions, are valued at the average of the most recent
bid and asked price, except in the case of open short positions where the asked
price is available. 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
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, 1995 were %, %, and %,
respectively. These amounts were computed by subtracting the maximum sales load
of 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, 1995 and since inception through December 31,
1995 were % and %, respectively. These amounts were computed assuming 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, 1995, it was then assumed that at the end of the period, the entire
amount was redeemed, subtracting the applicable 1% CDSL. Performance information
is not provided for Class B shares because no Class B shares were outstanding
prior to April , 1996.
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, 1986 had a value of $3,306 on December
31, 1995, resulting in an aggregate total return of
% 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 $ on December
31, 1995, resulting in an aggregate total return of %. 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.
15
<PAGE>
<PAGE>
<TABLE>
TABLE A - CLASS A SHARES
<CAPTION>
Value of
Year Ended Value of Initial Value of Gain Dividends Total
12/31 Investment (2) Distribution Invested Total Value(2) Return (1)(3)
- ------------ -------------- ------------ -------- -------------- -------------
<S> <C> <C> <C> <C>
1986 $ $ $ 0 $
1987 0
1988 0
1989 0
1990 0
1991 0
1992 0
1993 0
1994 0
1995 0
TABLE B - CLASS D SHARES
Value of
Year Ended Value of Initial Value of Gain Dividends Total
12/31 Investment (2) Distribution Invested Total Value(2) Return (1)(3)
- ------ -------------- ------------ -------- -------------- -------------
1993 $ $ 0 $
1994 0 %
1995 0
</TABLE>
1 For the ten years ended December 31, 1995; and from commencement of offering
of Class D shares on May 3, 1993.
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.
16
<PAGE>
<PAGE>
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. _____________________, 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, 1995 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1995, 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.
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, the Seligman complex played a
major role in the geographical expansion and industrial development of the
United States.
The Seligman Complex:
.... Prior to 1900
o Helps finance America's fledgling railroads through underwritings.
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 Become a leader 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.
17
<PAGE>
<PAGE>
...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.
...1950-1989
o Develops new open-end investment companies. Today, manages 44 mutual
fund portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
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 and
international investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today
offers four separate series: Seligman Henderson International Fund,
Seligman Henderson Global Smaller Companies Fund, Seligman Henderson
Global Technology Fund and Seligman Henderson Global Growth
Opportunities Fund.
18
<PAGE>
<PAGE>
File No. 2-33566
811-1886
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, 1995; Financial Highlights for Class D shares for
the period from May 3, 1993 (commencement of offering) to
December 31, 1995.
Part B Required Financial Statements are included in the Fund's Annual
Report to Shareholders, dated December 31, 1995, which are
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements include: Portfolio of
Investments as of December 31, 1995; Statement of Assets and
Liabilities as of December 31, 1995; Statement of Operations for
the year ended December 31, 1995; Statement of Changes in Net
Assets for the years ended December 31, 1995 and 1994; Notes to
Financial Statements; Financial Highlights for the five years
ended December 31, 1995 for the Fund's Class A shares and for the
period May 3, 1993 (commencement of offering) through December
31, 1995 for the Fund's Class D shares; Report of Independent
Auditors (will be filed by subsequent amendment).
(b) Exhibits: All Exhibits have been previously filed except Exhibits
marked with an asterisk (*) which are incorporated herein and
Exhibits marked with a double asterisk (**) which will be filed
by amendment.
(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.)
(4a) Specimen certificate of Class B Capital Stock.**
(5) Amended Management Agreement between Registrant and J. & W. Seligman &
Co. Incorporated.
(Incorporated by reference to Registrant's Post-Effective Amendment No.
49 filed on May 1, 1995.)
(5a) Form of Subadvisory Agreement between the Manager and Seligman Henderson
Co.
(Incorporated by reference to Registrant's Post-Effective Amendment No.
49 filed on May 1, 1995.)
(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.**
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
Item 24. Financial Statements and Exhibits (continued)
(11) Report and Consent of Independent Auditors.**
(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 Services 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.)
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.**
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940.*
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 December 31, 1995, there
were _______ record holders of Registrant's Class A Capital Stock
and ________ 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.
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
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.
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 December 5, 1995).
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 January 18, 1996
(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
Brian T. Zino* Director Director and President
Ronald T. Schroeder* Director Director
Fred E. Brown* Director Director
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
David Watts* Director None
</TABLE>
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of January 18, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
Stephen J. Hodgdon* President None
Lawrence P. Vogel* Senior Vice President, Finance Vice President
Mark R. Gordon* Senior Vice President, Director None
of Marketing
Gerald I. Cetrulo, III Senior Vice President of Sales, None
140 West Parkway Regional Sales Manager
Pompton Plains, NJ 07444
Bradley F. Hanson Senior Vice President of Sales, None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
Bradley W. Larson Senior Vice President of Sales, None
367 Bryan Drive Regional Sales Manager
Danville, CA 94526
D. Ian Valentine Senior Vice President of Sales, None
307 Braehead Drive Regional Sales Manager
Fredericksburg, VA 22401
Helen Simon* Vice President, Sales None
Administration Manager
Marsha E. Jacoby* Vice President, National Accounts None
Manager
William W. Johnson* Vice President, Order Desk None
James R. Besher Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
Brad Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Andrew Draluck Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
Jonathan Evans Regional Vice Pesident None
222 Fairmont Way
Ft. Lauderdale, FL 33326
Carla Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Susan Gutterud Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
Mark Lien Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
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 Road, Ste 205
Alpharetta, CA 30201
</TABLE>
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of January 18, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
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 H. Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
Bruce Tuckey Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
Andrew Veasey Regional Vice President None
14 Woodside
Rumson, NJ 07760
Todd Volkman Regional Vice President None
4650 Cole Avenue, #216
Dallas, TX 75205
Kelli A. Wirth-Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Frank P. Marino* Assistant Vice President, Mutual
Fund Product Manager None
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
</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
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
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,
1995, 1994, and 1993, the approximate cost of these services
were:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Class A Shares $ 44, 994 $ 62,500
Class D Shares $ 1,697 $ 300
</TABLE>
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>
<PAGE>
File No. 2-33566
811-1886
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(a) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 50 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 15th day of February, 1996.
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. 50 has been signed below by the following persons
in the capacities indicated on February 15, 1996.
Signature Title
/s/ William C. Morris Chairman of the Board
- ---------------------- (Principal executive officer)
William C. Morris* and Director
/s/ Brian T. Zino Director and President
- ----------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- ----------------------
Thomas G. Rose
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
-----------------
James C. Pitney, Director ) *Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
SELIGMAN GROUP OF MUTUAL FUNDS
Plan for Multiple Classes of Shares
THIS PLAN, as it may be amended from time to time, sets forth
the separate arrangement and expense allocation of each class of shares (a
"Class") of each registered open-end management investment company, or series
thereof, in the Seligman Group of Mutual Funds that offers multiple classes of
shares (each, a "Fund"). The Plan has been adopted pursuant to Rule 18f-3(d)
under the Investment Company Act of 1940, as amended (the "Act"), by a majority
of the Board of Directors or Trustees, as applicable ("Directors"), of each Fund
listed on Schedule I hereto, including a majority of the Directors who are not
interested persons of such Fund within the meaning of Section 2(a)(19) of the
Act ("Disinterested Directors"). Any material amendment to this Plan is subject
to the prior approval of the Board of Directors of each Fund to which it
relates, including a majority of the Disinterested Directors.
1. General
A. Any Fund may issue more than one Class of voting stock,
provided that each Class:
i. Shall have a different arrangement for shareholder
services or the distribution of securities or both,
and shall pay all of the expenses of that
arrangement;
ii. May pay a different share of other expenses, not
including advisory or custodial fees or other
expenses related to the management of the Fund's
assets, if these expenses are actually incurred in a
different amount by that Class, or if the Class
receives services of a different kind or to a
different degree than other Classes of the same Fund
("Class Level Expenses");
iii. May pay a different advisory fee to the extent that
any difference in amount paid is the result of the
application of the same performance fee provisions in
the advisory contract of the Fund to the different
investment performance of each Class;
iv. Shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its
arrangement;
1
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v. Shall have separate voting rights on any matter
submitted to shareholders in which the interests of
one Class differ from the interests of any other
Class; and
vi. Shall have in all other respects the same rights and
obligations as each other Class of the Fund.
B. i. Except as expressly contemplated by this paragraph
B., no types or categories of expenses shall be
designated Class Level Expenses.
ii. The Directors recognize that certain expenses arising
in certain sorts of unusual situations are properly
attributable solely to one Class and therefore should
be borne by that Class. These expenses ("Special
Expenses") may include, for example: (i) the costs of
preparing a proxy statement for, and holding, a
special meeting of shareholders to vote on a matter
affecting only one Class; (ii) the costs of holding a
special meeting of Directors to consider such a
matter; (iii) the costs of preparing a special report
relating exclusively to shareholders of one Class;
and (iv) the costs of litigation affecting one Class
exclusively. J. & W. Seligman & Co. Incorporated (the
"Manager") shall be responsible for identifying
expenses that are potential Special Expenses.
iii. Subject to clause iv. below, any Special Expense
identified by the Manager shall be treated as a Class
Level Expense.
iv. Any Special Expense identified by the Manager that is
material to the Class in respect of which it is
incurred shall be submitted by the Manager to the
Directors of the relevant Fund on a case by case
basis with a recommendation by the Manager as to
whether it should be treated as a Class Level
Expense. If approved by the Directors, such Special
Expense shall be treated as a Class Level Expense of
the affected class.
C. i. Realized and unrealized capital gains and losses of a
Fund shall be allocated to each class of that Fund on
the basis of the aggregate net asset value of all
outstanding shares ("Record Shares") of the Class in
relation to the aggregate net asset value of Record
Shares of the Fund.
2
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<PAGE>
ii. Income and expenses of a Fund not charged directly to
a particular Class shall be allocated to each Class
of that Fund on the following basis:
a. For periodic dividend funds, on the basis of
the aggregate net asset value of Record
Shares of each Class in relation to the
aggregate net asset value of Record Shares
of the Fund.
b. For daily dividend funds, on the basis of
the aggregate net asset value of Settled
Shares of each Class in relation to the
aggregate net asset value of Settled Shares
of the Fund. "Settled Shares" means Record
Shares minus the number of shares of that
Class or Fund that have been issued but for
which payment has not cleared and plus the
number of shares of that Class or Fund which
have been redeemed but for which payment has
not yet been issued.
D. On an ongoing basis, the Directors, pursuant to their
fiduciary responsibilities under the Act and otherwise, will
monitor each Fund for the existence of any material conflicts
among the interests of its several Classes. The Directors,
including a majority of the Disinterested Directors, shall
take such action as is reasonably necessary to eliminate any
such conflicts that may develop. The Manager and Seligman
Financial Services, Inc. (the "Distributor") will be
responsible for reporting any potential or existing conflicts
to the Directors. If a conflict arises, the Manager and the
Distributor will be responsible at their own expense for
remedying such conflict by appropriate steps up to and
including separating the classes in conflict by establishing a
new registered management company to operate one of the
classes.
E. The plan of each Fund adopted pursuant to Rule 12b-1 under the
Act (the "Rule 12b-1 Plan") provides that the Directors will
receive quarterly and annual statements complying with
paragraph (b)(3)(ii) of Rule 12b-1, as it may be amended from
time to time. To the extent that the Rule 12b-1 Plan in
respect of a specific Class is a reimbursement plan, then only
distribution expenditures properly attributable to the sale of
shares of that Class will be used in the statements to support
the Rule 12b-1 fee charged to shareholders of such Class. In
such cases expenditures not related to the sale of a specific
Class will not be presented to the Directors to support Rule
12b-1 fees charged to shareholders of such Class. The
statements, including the allocations upon which they are
based, will be subject to the review of the Disinterested
Directors.
3
<PAGE>
<PAGE>
F. Dividends paid by a Fund with respect to each Class, to the
extent any dividends are paid, will be calculated in the same
manner, at the same time and on the same day and will be in
the same amount, except that fee payments made under the Rule
12b-1 Plan relating to the Classes will be borne exclusively
by each Class and except that any Class Level Expenses shall
be borne by the applicable Class.
G. The Directors of each Fund hereby instruct such Fund's
independent auditors to review expense allocations each year
as part of their regular audit process, to inform the
Directors and the Manager of any irregularities detected and,
if specifically requested by the Directors, to prepare a
written report thereon. In addition, if any Special Expense is
incurred by a Fund and is classified as a Class Level Expense
in the manner contemplated by paragraph B. above, the
independent auditors for such Fund, in addition to reviewing
such allocation, are hereby instructed to report thereon to
the Audit Committee of the relevant Fund and to the Manager.
The Manager will be responsible for taking such steps as are
necessary to remedy any irregularities so detected, and will
do so at its own expense to the extent such irregularities
should reasonably have been detected and prevented by the
Manager in the performance of its services to the Fund.
2. Specific Arrangements for Each Class
The following arrangements regarding shareholder services,
expense allocation and other indicated matters shall be in effect with respect
to the Class A shares, Class B shares and Class D shares of each Fund. The
following descriptions are qualified by reference to the more detailed
description of such arrangements set forth in the prospectus relating to each
Fund, as the same may from time to time be amended or supplemented (for each
Fund, the "Relevant Prospectus"), provided that no Relevant Prospectus may
modify the provisions of this Plan applicable to Rule 12b-1 fees or Class Level
Expenses.
(a) Class A Shares
i. Class A shares are subject to an initial sales load
which varies with the size of the purchase, to a
maximum of 4.75% of the public offering price.
Reduced sales loads shall apply in certain
circumstances. Class A shares of Seligman Cash
Management Fund, Inc. shall not be subject to an
initial sales load.
ii. Class A shares shall be subject to a Rule 12b-1 fee
of up to 0.25% of average daily net assets.
4
<PAGE>
<PAGE>
iii. Special Expenses attributable to the Class A shares,
except those determined by the Directors not to be
Class Level Expenses of the Class A shares in
accordance with paragraph 1.B.iv., shall be Class
Level Expenses and attributed solely to the Class A
shares. No other expenses shall be treated as Class
Level Expenses of the Class A shares.
iv. The Class A shares shall be entitled to the
shareholder services, including exchange privileges,
described in the Relevant Prospectus.
(b) Class B Shares
i. Class B shares are sold without an initial sales load
but are subject to a contingent deferred sales load
("CDSL") in certain cases. The CDSL in respect of any
Class B share, if applicable, will be in the
following amount (as a percentage of the current net
asset value or the original purchase price, whichever
is less) if the redemption occurs within the
indicated number of years of issuance of such share:
Years since issuance CDSL
-------------------- ----
less than one 5%
one but less than two 4%
two but less than four 3%
four but less than five 2%
five but less than six 1%
six or more 0%
ii. Class B shares shall be subject to a Rule 12b-1 fee
of up to 1.00% of average daily net assets,
consisting of an asset-based distribution fee of up
to 0.75% and a service fee of up to 0.25%.
iii. Each Class B share shall automatically convert to a
Class A share on the last day of the month which
precedes the eighth anniversary of its date of issue
occurs.
iv. Special Expenses attributable to the Class B shares,
except those determined by the Directors not to be
Class Level Expenses of the Class B shares in
accordance with paragraph 1.B.iv., shall be Class
Level Expenses and attributed solely to the Class B
shares. No other expenses shall be treated as Class
Level Expenses of the Class B shares.
5
<PAGE>
<PAGE>
v. The Class B shares shall be entitled to the
shareholder services, including exchange privileges,
described in the Relevant Prospectus.
(c) Class D Shares
i. Class D shares are sold without an initial sales load
but are subject to a CDSL of 1% of the lesser of the
current net asset value or the original purchase
price in certain cases if the shares are redeemed
within one year.
ii. Class D shares shall be subject to a Rule 12b-1 fee
of up to 1.00% of average daily net assets,
consisting of an asset-based distribution fee of up
to 0.75% and a service fee of up to 0.25%.
iii. Special Expenses attributable to the Class D shares,
except those determined by the Directors not to be
Class Level Expenses of the Class D shares in
accordance with paragraph 1.B.iv., shall be Class
Level Expenses and attributed solely to the Class D
shares. No other expenses shall be treated as Class
Level Expenses of the Class D shares.
iv. The Class D shares shall be entitled to the
shareholder services, including exchange privileges,
described in the Relevant Prospectus.
6
<PAGE>
<PAGE>
Schedule I
Seligman Cash Management Fund, Inc.
Seligman Capital Fund, Inc.
Seligman Common Stock, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Income Fund, Inc.
Seligman Henderson Global Growth Opportunities Fund
Seligman Henderson Global Smaller Companies Fund
Seligman Henderson Global Technology Fund
Seligman Henderson International Fund
Seligman High-Yield Bond Fund
Seligman U.S. Government Securities Fund
Seligman National Tax-Exempt Fund
Seligman California Quality Tax Exempt Fund
Seligman California High-Yield Tax-Exempt Fund
Seligman Colorado Tax-Exempt Fund
Seligman Florida Tax-Exempt Fund
Seligman Georgia Tax-Exempt Fund
Seligman Louisiana Tax-Exempt Fund
Seligman Maryland Tax-Exempt Fund
Seligman Massachusetts Tax-Exempt Fund
Seligman Michigan Tax-Exempt Fund
Seligman Minnesota Tax-Exempt Fund
Seligman Missouri Tax- Exempt Fund
Seligman New Jersey Tax-Exempt Fund, Inc.
Seligman New York Tax-Exempt Fund
Seligman North Carolina Tax-Exempt Fund
Seligman Ohio Tax-Exempt Fund
Seligman Oregon Tax-Exempt Fund
Seligman Pennsylvania Tax-Exempt Fund Series
Seligman South Carolina Tax-Exempt Fund
7
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as `D'
The registered trademark symbol shall be expressed as 'r'
The service mark symbol shall be expressed as 'sm'
The theta reference symbol shall be expressed as '/x/'
<PAGE>