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File No. 2-33566
811-1886
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 52 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 27 [X]
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SELIGMAN CAPITAL FUND, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of
rule 485
[X] on April 22, 1996 pursuant to paragraph (b) of rule
485
[ ] 60 days after filing pursuant to paragraph (a)(i) of rule
485
[ ] on (date) pursuant to paragraph (a)(i) of rule 485
[ ] 75 days after filing pursuant to paragraph (a)(ii) of
rule 485
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on February
20, 1996.
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SELIGMAN CAPITAL FUND, INC.
POST-EFFECTIVE AMENDMENT NO. 52
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
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<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
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<S> <C>
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
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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 Objective, 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
23. Financial Statements Financial Statements
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[Seligman Capital Fund, Inc.]
April 22, 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 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 purchase of such shares, declining to 1% in the sixth
year and 0% thereafter, an annual distribution fee of up to .75% and an annual
service fee of up to .25% 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 purchase.
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% and an annual service fee of up to .25% 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
<TABLE>
<CAPTION>
PAGE
<S> <C>
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.......................... 22
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
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
----------------- ----------------- -----------------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
SHAREHOLDER TRANSACTION EXPENSES LOAD ALTERNATIVE) LOAD ALTERNATIVE) LOAD ALTERNATIVE)
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).............................. 4.75% None None
Sales Load on Reinvested Dividends................................. None None None
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, whichever is lower)......................... None 5% in 1st year 1% in 1st year
4% in 2nd year None thereafter
3% in 3rd and
4th years
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
currently 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.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<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 expenses shown for the ten-year
period reflect the conversion of Class A shares to Class B shares after 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 and Class D shares for the
periods presented below have been audited by Deloitte & Touche LLP, independent
auditors. This information, which is derived from the financial and accounting
records of the Fund, should be read in conjunction with the financial statements
and notes contained in the Fund's 1995 Annual Report, which is incorporated by
reference in the Fund's Statement of Additional Information, copies of 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
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YEAR ENDED DECEMBER 31
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1995 1994 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
<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>
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Per share amounts for the years ended December 31, 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 fees. 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 fees, as discussed below, or to have the entire
initial purchase price invested in the Fund with the investment thereafter being
subject to higher ongoing fees and either a CDSL for a six-year period with
automatic conversion to Class A shares after eight years or a CDSL for a
one-year period with no automatic conversion to Class A shares.
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 fees 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 higher distribution fees on Class B and Class D shares 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
automatically to 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 loads with respect to Class A shares is the same as those of the deferred
sales loads and higher distribution fees with respect to Class B and Class D
shares in that the sales loads
4
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<PAGE>
and distribution fees 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
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 automatically convert to Class A shares, which are
subject to lower ongoing distribution 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 differences 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 automatic 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 and
conversion.* 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>
* 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
of the shares exchanged will be tacked onto the holding period of the shares
acquired.
5
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<PAGE>
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. 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
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.
6
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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 Depositary Receipts
('ADRs'), European Depositary Receipts ('EDRs') or Global Depositary Receipts
('GDRs') (collectively, 'Depositary 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. Depositary 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. Depositary 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 Depositary
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 Depositary Receipt programs are generally similar, the
issuers of securities represented by unsponsored Depositary 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 Depositary 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 Fund's Board of Directors may change such policies without
the vote of a majority of the Fund's 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
7
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<PAGE>
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 $11.9 billion at February 29, 1996. The
Manager also provides investment management or advice to institutional accounts
having an aggregate value at February 29, 1996 of approximately $3.9 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. The Subadviser provides investment management services 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 Depositary Receipts which are traded in the United
States or to commercial paper or certificates of deposit issued by foreign
banks. The Subadviser serves the Fund pursuant to a Subadvisory Agreement with
the Manager (the 'Subadvisory Agreement'), dated June 1, 1994. Pursuant to the
Subadvisory Agreement, the Subadviser, with respect to the Qualifying Assets,
provides investment management services including investment research,
8
<PAGE>
<PAGE>
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 Fund's 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 year ended December
31, 1995, the Fund did not require the services of the Subadviser and therefore
no fees were paid by the Manager to 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, Inc.; Portfolio Manager of the Seligman
Henderson Global Growth Opportunities 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 Global Policy Group will have overall responsibility for
directing and overseeing all aspects of foreign investment activity for the Fund
and will provide global 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, is responsible
for the day-to-day foreign investment activity of the Fund, to the extent there
are Qualifying Assets. Mr. Clark, who joined the Subadviser in 1992, has been a
Director of Henderson Administration Group plc since 1985.
The Manager's discussion of the Fund's performance as well as a line graph
illustrating comparative performance information between the Fund, the Standard
& Poor's 500 Composite Stock Price Index and the Lipper Capital Appreciation
Fund Average is included in the Fund's 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-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
9
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<PAGE>
seeking the most favorable price and execution available and such other policies
as the Directors of the Fund 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 mutual 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; 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 MATRIXSM.
No purchase order may be placed for Class B shares for an amount of
$250,000 or more; or for Class D shares for an amount of $4,000,000 or more.
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
assigned a purchase confirmation number. Funds in payment of the purchase may
then be wired to
10
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Mellon Bank, N.A., ABA #043000261, A/C Seligman Capital Fund, Inc. (A, B 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 be
accompanied by an investment slip (provided at the bottom of shareholder account
statements) include the shareholder's name, address, account number, name of
Fund and class of shares (A, B or D). 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 as uncollectable. 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
Fund's 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 higher distribution fees 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 expenses differ 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
schedule below, 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
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<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 shares of the other Seligman Mutual Funds sold with a front-end
sales load with the total net asset value of shares of those 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 by the
investor through an exchange of shares of another Seligman Mutual Fund on which
there was a front-end 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 front-end 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 front-end 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
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directors, trustees, officers, employees of the Fund (and family members of the
foregoing), the other investment companies in the Seligman Group, the Manager
and other companies affiliated with the Manager and their spouses. 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 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 eligible 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 plan' 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 PURCHASE 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 3 years.............. 3%
3 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%
and an annual service fee of up to .25% 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 purchase, 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
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Class A shares along with the underlying shares on which they were earned.
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 of
the shares exchanged will be tacked onto the holding period of 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 by exchange 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% and an annual service fee of up to .25% 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 automatically convert to Class A shares after eight years.
CONTINGENT DEFERRED SALES LOAD. 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 CDSL
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 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
(as defined under 'Administration, Shareholder Services and Distribution Plan')
at the time of sale.
To minimize the application of a CDSL to a redemption, shares acquired
pursuant to the investment of dividends and distributions (which are not subject
to a CDSL) will be redeemed first; followed by shares purchased at least six
years prior to redemption (in the case of Class B shares) or one year prior to
redemption (in the case of Class D 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 CDSL will be assessed on
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 were 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>
<CAPTION>
Total shares to be redeemed
(122.449 @ $12.25) as follows:.............. $1,500.00
<S> <C>
---------
---------
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.
14
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The CDSL will be waived or reduced in the following instances:
(a) on redemptions following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended
(the 'Code'); (b) in connection with (i) distributions from retirement plans
qualified under section 401(a) of the Code when such redemptions are necessary
to make distributions to plan participants (such payments include, but are not
limited to death, disability, retirement, or separation of service), (ii)
distributions from a custodial account under 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
of such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the mutual funds in the Seligman Group. SFSI may from time to time pay
a bonus or other incentive to dealers that sell shares of the Seligman Mutual
Funds. In some instances, these bonuses or incentives may be offered only to
certain dealers which employ registered representatives who have sold or may
sell a significant amount of shares of the Fund and/or certain other 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 the same class 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 services.
For investors who purchase shares through a broker/dealer: Telephone
services for a shareholder
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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.
For accounts registered as trusts (unless the trustee and sole beneficiary
are the same person), corporations or group retirement plans: Telephone
redemptions are not permitted. Additionally, group retirement plans are not
permitted to change a dividend or gain distribution option.
All Seligman Mutual Funds with the same account number (i.e., registered
exactly the same) as an existing account, including any new Seligman Mutual 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 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 via telephone. 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 request being processed at a later time than if a telephone transaction
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 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,
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NY 10017. The redemption request must be signed by all persons in whose name
the shares are registered. A shareholder may redeem shares that are not in book
credit form by surrendering certificates in proper form to the same address.
Certificates should be sent by registered mail. Share certificates must be
endorsed for transfer or accompanied by an endorsed stock power signed by all
share owners exactly as their name(s) appear(s) on the account registration. The
shareholder's letter of instruction or endorsed stock power should specify the
Fund name, 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 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 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 per account. 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
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telephone will not be accepted within 30 days following an address change. Keogh
Plans, IRAs or other retirement plans are not eligible for telephone
redemptions. The Fund reserves the right to suspend or terminate its telephone
redemption service at any time without notice.
For more information about telephone redemptions and the circumstances
under which a shareholder 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 would be
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 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 pro-
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spectuses to prospective investors and defraying SFSI's costs incurred in
connection with its marketing efforts with respect to shares of the Fund. The
Manager, in its sole discretion, may also make similar payments to SFSI from its
own resources, which may include the management fee that the Manager receives
from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
respect of Class A shares will be used primarily to compensate Service
Organizations which enter into agreements with SFSI. Such Service Organizations
will receive from SFSI a continuing fee of up to .25% on an annual basis,
payable quarterly, of the average daily net assets of Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors of the Fund.
The Plan as it relates to Class A shares, was approved by shareholders on
November 23, 1992 and became effective on January 1, 1993. The Plan is reviewed
by the Directors annually. The total amount paid for the year ended December 31,
1995 in respect of the Fund's Class A shares pursuant to the Plan was equal to
.22% 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 from Class B and Class D Plan fees, respectively, received from the
Fund in any other fiscal year.
The Plan as it relates to Class B shares was approved by the Directors of
the Fund on March 21, 1996. 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 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
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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 Seligman Mutual 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.
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 by exchange 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 Seligman Mutual Funds 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 in companies either 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
(which does not currently offer Class B shares) 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 currently offer Class B shares.)
SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES invests in investment grade
Pennsylvania tax-exempt securities. (Does not currently 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 currently offer Class B shares.)
SELIGMAN TAX-EXEMPT SERIES TRUST includes the California Tax-Exempt
Quality Series, the California Tax-Exempt High-Yield Series, the Florida Tax-
Exempt Series and the North Carolina Tax-Exempt Series, each of which invests in
tax-exempt securities of its designated state. (Does not currently offer Class B
shares.)
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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 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.
The Exchange Privilege via mail is generally applicable to investments in
group retirement plans, although some restrictions may apply. 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 exchange privileges,
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
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this purpose. Additionally, the Fund reserves the right to refuse any order for
the purchase of shares.
DIVIDENDS AND DISTRIBUTIONS
Any distribution of the Fund's net investment income, required by Federal
income tax law in order to avoid all Federal income tax liability, is generally
paid to shareholders in dividends in December. Payments vary in amount depending
on income received from portfolio securities and the costs of operations. The
Fund distributes substantially all of any taxable net long-term and short-term
gain realized on investments to shareholders at least annually. Such
distributions will generally be taxable to shareholders in the year in which
they are declared by the Fund if paid before February 1 of the following year.
Shareholders may elect: (1) to receive both dividends and gain
distributions in shares; (2) to receive dividends in cash and gain distributions
in shares; (3) to receive both dividends and gain distributions in cash. Cash
dividends and gain distributions are paid by check. If the payment option you
prefer is not listed, contact Seligman Data Corp. at (800) 221-2450 to request
information on other available options. 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 on the payable date using the net
asset value of 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 Code. 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,
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subject to certain restrictions, for the 70% dividends received deduction for
corporations.
Distributions of net capital gain, i.e., the excess of net long-term
capital gains over any net short-term losses, are taxable as long-term capital
gain, whether received in cash or invested in additional shares, regardless of
how long shares have been held by the shareholders; such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Any gain or loss realized upon a sale or redemption of shares in the Fund
by a shareholder who is not a dealer in securities will generally be treated as
a long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less, any loss
realized will be treated as long-term capital loss to the extent that it offsets
the long-term capital gain distribution. In addition, no loss will be allowed on
the sale or other disposition of shares of the Fund if, within a period
beginning 30 days before the date of such sale or disposition and ending 30 days
after such date, the holder acquires (such as through dividend reinvestment)
securities that are substantially identical to the shares of the Fund.
In determining gain or loss on shares of the Fund that are sold or
exchanged within 90 days after acquisition, a shareholder generally will not be
permitted to include in the tax basis attributable to such shares the sales load
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales load by reason of the Exchange or Reinstatement Privilege offered by
the Fund. Any sales load not taken into account in determining the tax basis of
shares sold or exchanged within 90 days after acquisition will be added to the
shareholder's tax basis in the shares acquired pursuant to the Exchange or
Reinstatement Privilege.
The Fund will generally be subject to an excise tax of 4% on the amount of
any income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned. Furthermore, dividends
declared in October, November or December payable to shareholders of record on a
specified date in such a month and paid in the following January will be treated
as having been paid by the Fund and received by each shareholder in December.
Under this rule, therefore, shareholders may be taxed in one year on dividends
or distributions actually received in January of the following year.
Shareholders are urged to consult their tax advisers concerning the effect
of Federal income taxes on their individual circumstances.
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 DEDUCTED 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
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Fund may be requested by writing the Corporate Communications/Investor Relations
Department, J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New York, NY
10017 or by telephoning the Corporate Communications/Investor Relations
Department toll-free at (800) 221-7844 from all continental United States,
except New York or (212) 850-1864 in New York State and the Greater New York
City area. Information about shareholder accounts may be requested by writing
Shareholder Services, Seligman Data Corp. at the same address or by toll-free
telephone by dialing (800) 221-2450 from all continental United States. Seligman
Data Corp. may be telephoned Monday through Friday (except holidays), between
the hours of 8:30 a.m. and 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 the
shareholder's savings or checking account, if the bank that maintains the
account is a member of the Automated Clearing House ('ACH'), 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 only
if accompanied by a $100 minimum in conjunction with the monthly investment
option, or a $250 minimum in conjunction with the quarterly investment option.
(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, account number, the name of
the Fund and the class of shares in which the investment is to be made.)
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
24
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shareholder who owns or purchases shares worth $5,000 or more held as book
credits. Holders of Class B shares may elect to use this service immediately,
although certain withdrawals may be subject to a CDSL. Please contact Seligman
Data Corp. at (800) 221-2450 for more information. Holders of Class D shares may
elect to use this service with respect to shares that have been held for at
least one year. (See 'Terms and Conditions' on page 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, NY 10017 or telephone toll-free (800) 445-1777 from
all continental United States. You also 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.
25
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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. The Fund has adopted a Plan (the 'Multiclass Plan') pursuant to
Rule 18f-3 under the 1940 Act permitting the issuance and sales of multiple
classes of common stock. In accordance with the Articles of Incorporation, the
Board of Directors may authorize the creation of additional classes of common
stock with such characteristics as are permitted by the Multiclass Plan and Rule
18f-3. The 1940 Act requires that where more than one class exists, each class
must be preferred over all other classes in respect of assets specifically
allocated to such class. Shares have non-cumulative voting rights, do not have
preemptive or subscription rights and are transferable.
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APPENDIX
MANAGEMENT FEE
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Fund pays to the Manager promptly after the end of
each month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Fund at the close of
business on the previous business day. The term 'Applicable Percentage' means
the amount (expressed as a percentage and rounded to the nearest one millionth
of one percent) obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
The term 'Fee Amount' means the sum on an annual basis of:
.55 of 1% of the first $4 billion of Fee Base,
.50 of 1% of the next $2 billion of Fee Base,
.475 of 1% of the next $2 billion of Fee Base, and
.45 of 1% of Fee Base in excess of $8 billion.
The term 'Fee Base' as of any day means the sum of the net assets at the
close of business on the previous day of each of the investment companies
registered under the 1940 Act for which the Manager or any affiliated company
acts as investment adviser or manager (including the Fund).
SUBADVISORY FEE
As compensation for the services performed and the facilities and personnel
provided by the Subadviser, the Manager pays to the Subadviser each month a fee,
equal to the Applicable Percentage of the average monthly Net Qualifying Assets
of the Fund. For this purpose, the term 'Net Qualifying Assets' means the assets
designated by the Manager for which the Subadviser provides investment
management services less any related liabilities as designated by the Manager.
Average monthly Net Qualifying Assets shall be determined, for any month,
by taking the average of the value of the Net Qualifying Assets as of the (i)
opening of business on the first day of such month and (ii) close of business on
the last day of such month.
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TERMS AND CONDITIONS
GENERAL ACCOUNT INFORMATION
Investments will be made in as many shares, including fractions to the third
decimal place, as can be purchased at the net asset value plus a sales load, if
applicable, at the close of business on the day payment is received. If a check
in payment of a purchase of Fund shares is dishonored for any reason, Seligman
Data Corp. will cancel the purchase and may redeem additional shares, if any,
held in a shareholder's account in an amount sufficient to reimburse the Fund
for any loss it may have incurred and charge a $10.00 return check fee.
Shareholders will receive dividends from investment income and any distributions
from gain realized on investments in shares or in cash according to the option
elected. Dividend and gain options may be changed by notifying Seligman Data
Corp. These option changes must be received by Seligman Data Corp. 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. The electronic funds transfer ('ACH debit') or preauthorized check in the
amount specified will be drawn automatically on the shareholder's bank on the
fifth day (unless otherwise specified) of each month (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 an ACH debit or preauthorized check is not honored by
the shareholder's bank, or if the value of shares held falls below the required
minimum, the Invest-A-Check'r' Service may be suspended. In the event that a
check or ACH debit is returned as uncollectable, 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 deducted from the
shareholder's account. The Invest-A-Check'r' Service may be reinstated upon
written request indicating that the cause of interruption has been corrected.
The Invest-A-Check'r' 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 Invest-A-Check'r' Privilege will be terminated in the Seligman
Mutual Fund that was closed as a result of the exchange of all shares and 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 Mutual 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
The Automatic Cash Withdrawal Service is available to Class A shareholders,
to Class B shareholders and to Class D shareholders with respect to Class D
shares held for one year or more. A sufficient number of full and fractional
shares will be redeemed to provide the amount required for a scheduled payment.
Redemptions will be made at the asset value at the close of business on the
specific day designated by the shareholder of each month (or on the prior
business day if the day specified falls on a weekend or holiday), less, in the
case of Class B shares, any applicable CDSL. A shareholder may change the amount
of scheduled payments or may suspend payments by written notice to Seligman Data
Corp. at least ten days prior to the effective date of such a change or
suspension. Service may be terminated by the shareholder or Seligman Data Corp.
at any time by written notice. It will be terminated upon proper notification of
the death or legal incapacity of the shareholder. This Service is considered
terminated in the event a withdrawal of shares, other than to make scheduled
withdrawal payments, reduces the value of shares remaining on deposit to less
than $5,000. Continued payments in excess of dividend income invested will
reduce and ultimately exhaust capital. Withdrawals, concurrent with purchases of
shares of this or any other investment company, will be disadvantageous because
of the payment of duplicative sales loads, if applicable. For this reason,
additional purchases of Fund shares are discouraged when the Withdrawal Service
is in effect.
LETTER OF INTENT -- CLASS A SHARES ONLY
Seligman Financial Services, Inc. will hold in escrow shares equal to 5% of
the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid to the shareholder or credited to their account.
Upon completion of the specified minimum purchase within the thirteen-month
period, all shares held in escrow will be deposited to the shareholder's account
or delivered to the shareholder. A shareholder may include toward completion of
a Letter of Intent the total asset value of shares of the Seligman Mutual Funds
on which a front-end sales load was paid as of the date 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, Inc., 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 Fund and that the required additional
escrowed shares will be purchased by the shareholder.
Shares of Seligman Cash Management Fund which have been acquired by an
exchange of shares of another Seligman Mutual Fund on which there is a front-end
sales load may be taken into account in completing a Letter of Intent, or for
Right of Accumulation. However, shares of the Seligman Cash Management 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.
4/96
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-------------------------------------
P R O S P E C T U S
SELIGMAN
CAPITAL
FUND, INC.
SELIGMAN
- -------------------------------
CAPITAL
100 Park Avenue
New York, New York 10017 FUND, INC.
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 APRIL 22, 1996
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 [LOGO]
New York, New York 10004 -------------------------
A CAPITAL APPRCIATION FUND
IN ITS 28TH YEAR
EQCA1 4/96
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
APRIL 22, 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 22, 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 purchase 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 of purchase.
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
<TABLE>
<CAPTION>
Page Page
---- ----
<S> <C> <C> <C>
Investment Objective, Policies Portfolio Transactions..................10
And Risks........................... 2 Purchase And Redemption Of Fund Shares..10
Investment Limitations................. 3 Distribution Services...................13
Directors And Officers................ 4 Valuation...............................13
Management And Expenses............... 8 Performance.............................14
Administration, Shareholder Services And General Information.....................15
Distribution Plan................... 9 Financial Statements....................15
Appendix ...............................16
</TABLE>
EQCA1A
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INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund seeks to produce capital appreciation for its shareholders. The
following information regarding the Fund's investment policies supplements the
information contained in the prospectus.
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.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term. A
repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation, subject to resale at
an agreed upon price and date. Such resale price reflects an agreed upon
interest rate effective for the period of time the instrument is held by the
Fund and is unrelated to the interest rate on the instrument. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default by the seller, including possible delays and expenses in liquidating the
securities underlying the agreement, decline in value and the underlying
securities and loss of interest. Repurchase agreements usually are for short
periods, such as one week or less, but may be for longer periods. However, as a
matter of fundamental policy, the Fund will not enter into repurchase agreements
of more than one week's duration if more than 10% of its net assets would be so
invested. The Fund to date has not entered into any repurchase agreements and
has no present intention of doing so in the future.
Except as described under the following "Investment Limitations", the
foregoing investment policies are not fundamental and the Board of Directors of
the Fund may change such policies without the vote of a majority of its
outstanding voting securities (as defined on page 5).
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 103.60% in 1995 and 70.72% in 1994.
-2-
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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
- - 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.
-3-
<PAGE>
<PAGE>
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.
<TABLE>
<S> <C>
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer and Chairman of
(57) the Executive Committee
Managing Director, Chairman and President, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; and Seligman Advisors,
Inc., advisers; 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; Kerr-McGee Corporation, diversified energy
company; and Sarah Lawrence College; and a Member of the Board of
Governors of the Investment Company Institute; formerly, Chairman,
Seligman Securities, Inc., broker/dealer; and J. & W. Seligman Trust
Company, trust company.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(43)
Director and Managing Director (formerly, Chief Administrative and
Financial Officer), J. & W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors, Inc., advisers; 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., advisers; and Director,
Seligman Securities, Inc., broker/dealer; and J. & W. Seligman Trust
Company, trust company.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors, Inc., advisers; 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 Seligman Securities,
Inc., broker/dealer and J. & W. Seligman Trust Company, trust company.
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 Raytheon Co., 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
</TABLE>
-4-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
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)
Chairman and Senior Partner, Sullivan & Cromwell, law firm; Director or
Trustee, 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 Chairman of the Board of Trustees of St. George's School (Newport,
RI).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
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
</TABLE>
-5-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
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 advisers; and
Seligman Advisors, Inc., advisers; Director or Trustee, the Seligman Group
of Investment Companies; Director, Seligman Holdings, Inc., holding
company; Seligman Financial Services, Inc., distributor; Seligman
Henderson Co., advisers; 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 advisers; Vice
President and Portfolio Manager, two other open-end investment companies
in the Seligman Group of Investment Companies.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; 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., advisers; formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Vice President, Finance, J. & W.
Seligman Trust Company, 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., advisers; Corporate Secretary, the Seligman Group
of Investment Companies; Seligman Financial Services, Inc., broker/dealer
Seligman Henderson Co., advisers; Seligman Services, Inc., broker/dealer;
and Seligman Data Corp. shareholder serviceagent; formerly, Secretary, J.
& W. Seligman Trust Company, trust company; and attorney, Seward and
Kissel law firm.
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.
</TABLE>
-6-
<PAGE>
<PAGE>
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.
Compensation Table
<TABLE>
<CAPTION>
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 $ 1,696.94 N/A $41,252.75
Alice S. Ilchman, Director 2,788.76 N/A 68,000.00
Frank A. McPherson, Director 1,696.94 N/A 41,252.75
John E. Merow, Director 2,717.32 N/A 66,000.00(d)
Betsy S. Michel, Director 2,967.31 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 1,020.38 N/A 24,747.25
James C. Pitney, Director 2,788.76 N/A 68,000.00
James Q. Riordan, Director 3,074.48 N/A 70,000.00
Herman J. Schmidt, Director* 1,020.38 N/A 24,747.25
Ronald T. Schroeder, Director N/A N/A N/A
Robert L. Shafer, Director 3,074.48 N/A 70,000.00
James N. Whitson, Director 3,003.02 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.
*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
$42,658, $39,208 and $8,100, 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
189,772 shares or 1.4% of the Fund's Class A Capital Stock at March 29, 1996. As
of that date, no Directors or Officers owned shares of the Fund's Class D
Capital Stock.
As of March 29, 1996, 1,309,939 Class A shares of the Fund, or 9.2% of the
Fund's capital stock and 9.7% of the Fund's Class A capital stock then
outstanding were registered in the name of State of Wisconsin Public Emp. Def.
Comp. Plan, c/o National Defined Compensation, P.O. Box 20629, Columbus, OH
43220-0629.
-7-
<PAGE>
<PAGE>
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, J. & W. Seligman &
Co. Incorporated (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 $948,951 in 1995, $945,288 in
1994, and $1,059,275 in 1993 which was equivalent to an annual rate of .51% of
the average daily 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
Seligman Henderson Co (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.
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
January 17, 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.
-8-
<PAGE>
<PAGE>
The Subadvisory Agreement may be terminated at any time by the Fund, on 60 days
written notice to the Subadviser. The Subadvisory Agreement will terminate
automatically in the event of its assignment or upon the termination of the
Management Agreement.
For the period June 1, 1994 through December 31, 1994 and for the year ended
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 $19 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
"Ethics Code"). The Ethics 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 Ethics Code. The Ethics
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 Ethics 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 Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may not
be purchased due to a possible conflict with clients. All officers, directors
and employees are also required to disclose all securities beneficially owned by
them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
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 22, 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
-9-
<PAGE>
<PAGE>
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
$364,005, $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.
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.
-10-
<PAGE>
<PAGE>
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>
CLASS A
<S> <C>
Net asset value per Class A share.......................... $15.59
------
Maximum sales load (4.75% of offering price)............... .78
---
Offering price to public................................... 16.37
======
CLASS B AND CLASS D
Net asset value and offering price per share*.............. $14.94
======
</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.
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 of 1986, as amended,
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:
-11-
<PAGE>
<PAGE>
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
Prospectus, reports and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
ELIGIBLE EMPLOYEE BENEFIT PLANS. The term "eligible employee benefit plan" means
any plan or arrangement, whether or not tax qualified, which provides for the
purchase of Fund shares. The term "participant account plan" means any "eligible
employee benefit plan" where (i) the Fund shares are purchased through payroll
deductions or otherwise by a fiduciary or other person for the account of
participants who are employees (or their spouses) of an employer and (ii) a
separate Open Account is maintained in the name of such fiduciary or other
person for the account of each participant in the plan (such as a payroll
deduction IRA program).
The table of sales loads in the Prospectus applies to sales to "eligible
employee benefit plans" (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.
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
-12-
<PAGE>
<PAGE>
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 family members, as defined
in the Prospectus) of the Funds, the other investment companies in the Seligman
Group, the Manager and other companies affiliated with the Manager. 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 $32,091
in 1995, after allowance of $241,684 as commissions to dealers; $16,143 in 1994,
after allowance of $121,768 as commissions to dealers; and $36,577 in 1993,
after allowance of $290,127 as commissions 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
$3,349; 2,361 for the year ending December 31, 1994 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.
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.
-13-
<PAGE>
<PAGE>
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 30.77%, 17.07%, and
13.25%, respectively. These returns 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 34.98% and 11.67%, respectively. These returns
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. It
was then assumed that at the end of each period, the entire amount was redeemed,
subtracting the 1% CDSL, if applicable. Performance information is not provided
for Class B shares because no Class B shares were outstanding during these
periods.
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 $3,471 on December
31, 1995, resulting in an aggregate total return of 247.09%. 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 $ 1,342 on December 31, 1995,
resulting in an aggregate total return of 34.17%. The results shown should not
be considered a representation of the dividend income or gain or loss in capital
value which may be realized from an investment made in a class of shares of the
Fund today.
TABLE A - CLASS A SHARES
<TABLE>
<CAPTION>
Value of
Year Ended Value of Initial Value of Gain Dividends Total
12/31 (1) Investment (2) Distribution Invested Total Value(2) Return (1)(3)
- ----------- ---------------- ------------- --------- -------------- --------------
<S> <C> <C> <C> <C>
1986 $ 945 $ 177 $ 0 $1,122
1987 819 274 0 1,093
1988 773 347 0 1,120
1989 920 563 0 1,483
1990 925 579 0 1,504
1991 1,238 1,088 0 2,326
1992 1,266 1,329 0 2,595
1993 1,185 1,535 0 2,720
1994 978 1,550 0 2,528
1995 1,158 2,313 0 3,471 247.09%
</TABLE>
-14-
<PAGE>
<PAGE>
TABLE B - CLASS D SHARES
<TABLE>
<CAPTION>
Value of
Year Ended Value of Initial Value of Gain Dividends Total
12/31(1) Investment (2) Distribution Invested Total Value(2) Return (1)(3)
- --------- -------------- ------------ -------- -------------- -------------
<S> <C> <C> <C> <C>
1993 $965 $116 0 $1,081
1994 780 207 0 987
1995 909 433 0 1,342 34.17%
</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.
CUSTODIAN. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105 serves as custodian of the Fund. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for the Fund.
AUDITORS. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York, New
York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 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.
-15-
<PAGE>
<PAGE>
APPENDIX
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the
oldest of eight brothers, arrived in the United States from Germany. He earned
his living as a pack peddler in Pennsylvania, and began sending for his
brothers. The Seligmans became successful merchants, establishing businesses in
the South and East.
Backed by nearly thirty years of business success - culminating in the
sale of government securities to help finance the Civil War - Joseph Seligman,
with his brothers, established the international banking and investment firm of
J. & W. Seligman & Co. In the years that followed, 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 to finance World War I.
...1920s
o Participates in hundreds of underwritings including those for some of the
country's largest companies: Briggs Manufacturing, Dodge Brothers, General
Motors, Minneapolis-Honeywell Regulatory Company, Maytag Company, United
Artists Theater Circuit and Victor Talking Machine Company.
o Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion in
assets, and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
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, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
-16-
<PAGE>
<PAGE>
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
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.
-17-
<PAGE>
<PAGE>
------------------
27th annual Report
------------------
Seligman
Capital
Fund, Inc.
------------------
December 31, 1995
Seligman Financial Services, Inc.
an affiliate of
[Logo]
[Logo]
J. & W. Seligman & Co.
Incorporated
Established 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the
information of shareholders or those who ------------------
have received the offering prospectus
covering shares of Capital Stock of A Capital Appreciation Fund
Seligman Capital Fund, Inc., which
contains information about the sales Established in 1969
charges, management fee, and other costs.
Please read the prospectus carefully
before investing or sending money.
EQCA2 12/95
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND
- --------------------------------------------------------------------------------
A mutual fund that invests primarily in common stocks believed to provide
capital appreciation opportunities. Current income is not an objective.
HIGHLIGHTS OF 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
--------------------- ----------------------
CLASS A CLASS D CLASS A CLASS D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets (in thousands)............................ $215,688 $9,137 $162,556 $3,179
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $15.59 $14.94 $13.17 $12.82
With December 1995 Gain Distribution
Taken in Shares.................................. 18.08 17.43 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares..................... 37.32% 35.98% -- --
- ----------------------------------------------------------------------------------------------------------------------
Distribution of Realized Gain per Share.............. $2.298 $2.298 $1.60 $1.60
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of Average Net Assets...... $0.0109 $0.0202 $0.0113 $0.0266
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Your Fund performed favorably during the past year, though its performance
modestly trailed the Standard & Poor's 500 Composite Stock Price Index (S&P
500). The S&P 500's total return was driven by better-than-average advances by
the companies with the largest market capitalizations, and therfore heaviest
weightings, in the Index. As a result, the S&P 500 outperformed more than 87% of
US equity funds. Long-term performance results and an interview with your
Portfolio Manager begin on page 3.
For Class A and D shares, net realized gain per share from investment
transactions for the 12 months totaled $2.43. Net unrealized gain per share
totaled $4.39 at December 31. A realized gain distribution of $2.298 was paid on
November 22, to shareholders of record November 16.
The US equity markets had a banner year. After a pessimistic start, many
factors including low inflation, falling interest rates, and strong corporate
earnings paved the way for a memorable year.
Overall, the market indices tell the best story. The S&P 500, which had its
second best gain since 1957, was up 34.11%, and other indices such as the New
York Stock Exchange Composite and the Wilshire 5000 were up 30% or more for the
year. The leading market indices have only twice, since the end of World War II,
risen more than 1995's powerful advance.
The equity markets did, however, teeter towards the end of the year due to
the Federal budget stalemate between the White House and Congress, which brought
on fears of higher inflation and interest rates. Nevertheless, the deadlock in
Washington did not deter the Federal Reserve Board from lowering short-term
interest rates on December 19 -- a move that quickly rejuvenated the equity
markets.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead.
We remain optimistic about your Fund's performance and will continue to
search for, and invest in, those companies that can sustain earnings growth in a
challenging and competitive global business environment -- a strategy we believe
is key to investment performance.
A Special Meeting of Shareholders was held on December 12, at which several
proposals were voted on. The results of the Special Meeting appear on page 18.
We thank you for your continued investment in Seligman Capital Fund, and
look forward to serving your investment needs in 1996 and the years ahead.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 2, 1996
2
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND
- --------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW
The following is a biography of your Portfolio Manager, a discussion with him
regarding Seligman Capital Fund, and a comparison chart and table of your Fund's
performance against the Standard & Poor's 500 Composite Stock Price Index and
the Lipper Capital Appreciation Fund Average.
YOUR PORTFOLIO MANAGER
Loris D. Muzzatti is a Managing Director of J. & W. Seligman &
Co. Incorporated and has been Vice President and Portfolio
Manager of Seligman Capital Fund for the past seven years. Mr.
Muzzatti, who joined Seligman in 1985, also manages Seligman
[photo] Growth Fund, the Capital portfolio of Seligman Portfolios,
Inc., the US portion of Seligman Henderson Global Growth
Opportunities Fund, and a portion of the firm's institutional
accounts. Mr. Muzzatti is assisted by a team of seasoned
research professionals who are responsible for identifying
companies that offer the greatest capital appreciation
potential consistent with Seligman Capital Fund's objective.
Your Manager's Investment Strategy
"OVERWEIGHTING THE TECHNOLOGY SECTOR OF YOUR FUND IN THE FIRST HALF OF 1995,
WHEN THE END-MARKETS IN TELECOMMUNICATIONS AND COMPUTER-RELATED PRODUCTS WERE
STRONG, CONTRIBUTED POSITIVELY TO PERFORMANCE. CONVERSELY, OUR UNDERWEIGHTING OF
THE UTILITIES SECTOR, WHICH BENEFITED FROM THE DECLINE IN INTEREST RATES,
NEGATIVELY AFFECTED YOUR FUND'S PERFORMANCE."
Economic Factors Affecting Seligman Capital Fund
"STRONG GROWTH IN CORPORATE PROFITS, WITH MODEST INFLATION AND LOWER INTEREST
RATES, PROVIDED A BENEFICIAL ECONOMIC ENVIRONMENT FOR THE STRONG US EQUITY
MARKETS IN 1995. THESE FAVORABLE ECONOMIC FACTORS HELPED YOUR FUND'S TECHNOLOGY
AND INTEREST-SENSITIVE ISSUES POST SIGNIFICANT GAINS DURING THE YEAR. ON THE
OTHER HAND, POOR RETAIL SALES, INCLUDING A DOWNHEARTED HOLIDAY PERIOD, MADE IT
VERY DIFFICULT FOR RETAILERS AND INDUSTRIES ASSOCIATED WITH THIS SECTOR."
Individual Sector Performance
"THE FINANCIAL SECTOR WAS THE STRONGEST PERFORMING SECTOR, BENEFITING FROM BOTH
A FAVORABLE ECONOMIC ENVIRONMENT AND STRONG INDIVIDUAL COMPANY PERFORMANCE. THE
BASIC MATERIALS SECTOR, HOWEVER, WAS THE WEAKEST SECTOR, DUE MAINLY TO DECLINING
STEEL PRICES AND GENERALLY POOR EARNINGS RESULTS."
Outlook for the Year Ahead
"LOOKING AHEAD, YOUR FUND IS WELL POSITIONED TO TAKE ADVANTAGE OF CONTINUED
STRENGTH IN THE US EQUITY MARKETS. OUR WELL-DIVERSIFIED PORTFOLIO OF STRONG,
PROFITABLE COMPANIES SHOULD PROVIDE GOOD RELATIVE EARNINGS GAINS IN AN
ENVIRONMENT WHERE THE S&P 500 EARNINGS GROWTH IS EXPECTED TO SLOW."
3
<PAGE>
<PAGE>
================================================================================
PERFORMANCE COMPARISON CHART AND TABLE December 31, 1995
- --------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman Capital
Fund Class A shares, with and without the maximum initial sales charge of 4.75%,
for the 10-year period ended December 31, 1995, to a $10,000 hypothetical
investment made in the Standard & Poor's 500 Composite Stock Price Index (S&P
500) and the Lipper Capital Appreciation Fund Average (Lipper Capital) for the
same period. The performance of Seligman Capital Fund Class D shares is not
shown in this chart, but is included in the table below. It is important to keep
in mind that the S&P 500 excludes the effect of any fees or sales charges, and
the Lipper Capital excludes the effect of any sales charges.
<TABLE>
<CAPTION>
Seligman Capital Fund Seligman Capital Fund
--Class A --Class A Lipper
With Sales Charge Without Sales Charge S&P 500 Index Capital
--------------------- --------------------- ------------- --------
<S> <C> <C> <C> <C> <C>
12/31/85 9524.52 10000 10000 10000.00
3/31/86 11534.2 12110.01 11410.50 11609.00
6/30/86 12423.18 13043.36 12083.03 12425.11
9/30/86 11011.28 11560.98 11240.12 11141.60
12/31/86 11220.69 11780.84 11866.53 11460.25
3/31/87 13573.19 14250.78 14400.28 13987.23
6/30/87 14106.87 14811.1 15123.17 14211.03
9/30/87 14756.17 15492.82 16120.85 14935.79
12/31/87 10930.08 11475.72 12489.63 11557.32
3/31/88 11068.93 11621.51 13200.78 12565.11
6/30/88 11723.55 12308.8 14079.96 13247.40
9/30/88 11207.79 11767.3 14127.69 13076.51
12/31/88 11200.57 11759.72 14563.81 13186.35
3/31/89 12104.36 12708.63 15596.38 14206.97
6/30/89 13008.15 13657.54 16973.08 15374.79
9/30/89 15149.28 15905.56 18790.72 16966.08
12/31/89 14833.58 15574.1 19178.56 16691.23
3/31/90 14354.3 15070.9 18601.67 16292.31
6/30/90 16582.94 17410.79 19771.90 17300.80
9/30/90 12832.6 13473.23 17054.65 14351.01
12/31/90 15038.44 15789.19 18583.43 15315.40
3/31/91 18215.24 19124.58 21282.86 18190.10
6/30/91 18360.19 19276.76 21234.12 17935.44
9/30/91 20534.42 21559.54 22369.72 19510.17
12/31/91 23260.56 24421.76 24245.20 21334.37
3/31/92 22953.4 24099.26 23632.77 21443.18
6/30/92 21906.25 22999.85 24082.26 20654.07
9/30/92 23274.52 24436.42 24841.58 21112.59
12/31/92 25950.1 27245.56 26092.60 23348.41
3/31/93 26193.76 27501.39 27232.06 24223.98
6/30/93 25919.64 27213.58 27364.68 24897.41
9/30/93 27579.59 28956.4 28072.06 26635.25
12/31/93 27196.39 28554.07 28722.49 27239.87
3/31/94 26360.89 27676.86 27633.33 26340.95
6/30/94 23308.76 24472.36 27749.67 25208.29
9/30/94 25337.83 26602.73 29106.35 26897.24
12/31/94 25276.46 26538.29 29101.69 26439.99
3/31/95 26696.7 28029.43 31935.32 28198.25
6/30/95 29114.95 30568.4 34983.87 30784.03
9/30/95 31609.97 33187.97 37764.04 33751.61
12/31/95 34709.23 36441.95 40037.43 34477.27
</TABLE>
The table below shows the average annual total returns for the one-, five-, and
10 -year periods through December 31, 1995, for the Seligman Capital Fund Class
A shares, with and without the maximum initial sales charge of 4.75%, the S&P
500, and the Lipper Capital. Also included in the table are the average annual
total returns for the one-year and since-inception periods through December 31,
1995, for the Seligman Capital Fund Class D shares, with and without the effect
of the 1% contingent deferred sales load ("CDSL") imposed on shares redeemed
within one year of purchase, the S&P 500, and the Lipper Capital.
AVERAGE ANNUAL TOTAL RETURNS
ONE FIVE 10
YEAR YEARS YEARS
------ ------ -------
Seligman Capital Fund
Class A with sales charge 30.77% 17.07% 13.25%
Class A without sales charge 37.32 18.21 13.80
S&P 500 37.58 16.59 14.86
Lipper Capital 30.40 17.62 13.18
*From 4/30/93.
SINCE
ONE INCEPTION
YEAR 5/3/93
------ -----------
Seligman Capital Fund
Class D with CDSL 34.98% n/a
Class D without CDSL 35.98 11.67%
S&P 500 37.58 16.62*
Lipper Capital 30.40 14.71*
No adjustment was made to performance for periods prior to January 1, 1993, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders. Performance data quoted represent changes in
prices and assume that all distributions within the periods are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
4
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF 1995
GAIN DISTRIBUTION FOR
TAXABLE ACCOUNTS
A distribution of $2.298 per share, consisting of $2.006 from net long-term and
$0.292 from net short-term gain realized on investments in 1995, was paid on
November 22, 1995, to both Class A and D shareholders. The distribution from net
long-term gain is designated as a "capital gain dividend" for federal income tax
purposes and is taxable to shareholders in 1995 as a long-term gain from the
sale of capital assets, no matter how long your shares have been owned or
whether the distribution was paid in additional shares or cash. However, if
shares on which a long-term capital gain distribution was received are
subsequently sold, and such shares were held for six months or less from the
date of purchase, any loss would be treated as long-term to the extent it
offsets the long-term gain distribution. Net short-term gain is taxable as
ordinary income whether paid to you in cash or shares.
If the distribution was paid in shares, the per share cost basis for federal
income tax purposes is $14.36 for Class A shares and $13.77 for Class D shares.
A year-end statement of account showing activity for 1995 and a combined
Form 1099-DIV-B have been mailed to each shareholder. The Form 1099-B shows the
proceeds of any redemptions paid to shareholders during the year and reported to
the Internal Revenue Service as required by federal regulations. Form 1099-DIV
shows the amount of the distribution from gain on investments paid during the
year.
5
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND
- --------------------------------------------------------------------------------
DIVERSIFICATION OF ASSETS December 31, 1995
<TABLE>
<CAPTION>
PERCENT
PERCENT OF
OF NET NET ASSETS
ISSUES COST VALUE ASSETS DEC. 31, 1994
------ ------------ ------------- ------- --------------
<S> <C> <C> <C> <C> <C>
NET CASH AND SHORT-TERM HOLDINGS .......... 2 $ 10,031,556 $ 10,031,556 4.5 6.7
-- ------------ ------------- ----- -----
COMMON STOCKS
Automotive and related...................... 2 5,642,287 6,015,625 2.7 2.5
Basic materials............................. 4 8,898,366 10,691,719 4.8 4.5
Business services and supplies.............. 4 5,551,730 13,595,624 6.0 6.6
Computer goods and services................. 5 8,421,934 16,002,188 7.1 11.5
Consumer goods and services................. 10 14,502,518 21,081,644 9.4 11.4
Drugs and health care....................... 13 31,671,307 42,205,000 18.8 10.4
Financial services.......................... 8 19,441,187 25,946,863 11.5 3.6
Food and food services...................... 2 4,212,938 6,787,500 3.0 2.4
Industrial goods and services............... 2 4,201,094 5,587,500 2.5 2.9
Leisure and related......................... 6 14,105,997 16,350,625 7.3 5.0
Packaging................................... 1 1,645,997 1,375,000 0.6 --
Retail trade................................ 6 9,214,147 14,415,000 6.4 11.5
Software.................................... 11 18,915,691 27,782,874 12.3 10.4
Telecommunications.......................... 2 4,983,776 6,889,375 3.1 10.6
Other....................................... 1 -- 67,570 -- --
-- ------------ ------------ ----- -----
77 151,408,969 214,794,107 95.5 93.3
-- ------------ ------------ ----- -----
NET ASSETS ................................. 79 $161,440,525 $224,825,663 100.0 100.0
== ============ ============ ===== =====
</TABLE>
6
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL FUND
LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/95
- ------------ ----------- -----------
Amerin 165,000 165,000
Compaq Computers 45,000 45,000
Donaldson, Lufkin & Jenrette 125,000 125,000
Guidant 110,000 110,000
Humana 100,000 100,000
MBNA 85,000 85,000
Mid Atlantic Medical Services 125,000 125,000
Oakley 79,650 119,900
OfficeMax 100,000 100,000
Sterling Software 50,000 50,000
HOLDINGS
REDUCTIONS DECREASE 12/31/95
- -------------- ----------- ------------
AVX 100,500 --
CBS 50,000 --
Crown Cork & Seal 70,000 --
DSC Communications 90,000 --
Eaton 65,000 --
HFS Group 50,000 75,000
Intel 50,000 50,000
MEMC Electronic Materials 81,600 --
Motorola 80,000 --
Symantec 150,000 --
* Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
MAJOR PORTFOLIO HOLDINGS
AT DECEMBER 31, 1995
SECURITY VALUE
- ----------- ----------
Travelers................................ $7,859,375
PepsiCo.................................. 6,146,250
HFS Group................................ 6,131,250
Amgen.................................... 5,931,250
FIserv................................... 5,239,063
Interpublic Group of Companies........... 5,205,000
United Healthcare........................ 4,912,500
Home Depot............................... 4,787,500
Guidant.................................. 4,647,500
Amerin................................... 4,403,438
7
<PAGE>
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
-------- ---------
COMMON STOCKS 95.5%
AUTOMOTIVE AND RELATED 2.7%
Cooper Tire & Rubber
Automobile and truck tires,
rubber products............ 75,000 $ 1,846,875
Harley-Davidson
Motorcycle manufacturer.... 145,000 4,168,750
-----------
6,015,625
-----------
BASIC MATERIALS 4.8%
Minerals Technologies
Marketer of specialty
minerals and products...... 75,000 2,737,500
Nucor
Manufacturer of steel joints,
angles, and rounds......... 70,000 3,998,750
Olin
Chemicals, metals, and defense
products................... 25,000 1,857,813
Schulman, A.
Manufacturer of plastics... 93,750 2,097,656
-----------
10,691,719
-----------
BUSINESS SERVICES AND SUPPLIES 6.0%
CKS Group
Wide range of integrated marketing
communication services..... 15,500 602,562
HFS Group*
Franchiser of hotels and residential
real estate brokerage...... 75,000 6,131,250
Interpublic Group of Companies
Worldwide advertising agency 120,000 5,205,000
Meta Group
Consulting company......... 54,100 1,656,812
-----------
13,595,624
-----------
COMPUTER GOODS AND SERVICES 7.1%
Ceridian*
Computer services.......... 100,000 4,125,000
Compaq Computers
A leading global PC
manufacturer............... 45,000 2,160,000
FIserv*
Data processing services... 175,000 5,239,063
Intel
Semiconductor/memory circuits 50,000 2,840,625
LSI Logic*
Manufacturer of complex logic
circuits................... 50,000 1,637,500
-----------
16,002,188
-----------
CONSUMER GOODS AND SERVICES 9.4%
Block (H.&R.)
Tax, computer, and personal
services................... 50,000 2,025,000
CUC International*
Member-based consumer
goods...................... 30,000 1,023,750
Department 56*
Designer, importer, and
distributor of fine quality
collectibles............... 17,000 652,375
Estee Lauder*
Cosmetics and toiletries... 50,000 1,743,750
Gucci Group*
Manufacturer and marketer of
apparel.................... 29,250 1,137,094
Newell
Home furnishings........... 150,000 3,881,250
Oakley
Manufacturer of sunglasses. 119,900 4,076,600
Tambrands
Manufacturer of feminine
hygiene products........... 20,300 969,325
Tommy Hilfiger
Designer and distributor of
men's apparel.............. 100,000 4,237,500
UST Inc.
Tobacco and pipes.......... 40,000 1,335,000
-----------
21,081,644
-----------
DRUGS AND HEALTH CARE 18.8%
AmeriSource Health*
Distributor of pharmaceutical
supplies................... 100,000 3,300,000
Amgen*
Researcher and developer of
biological products........ 100,000 5,931,250
Bristol-Myers Squibb
Health and personal care
products................... 50,000 4,293,750
Columbia/HCA Healthcare
Health care facilities
and services............... 75,000 3,806,250
EmCare Holdings
Physician services......... 65,000 1,535,625
Guidant
Cardiac rhythm management
and coronary artery disease
intervention............... 110,000 4,647,500
Humana*
Provider of managed health
care plans................. 100,000 2,737,500
8
<PAGE>
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
-------- ---------
Lumisys*
Medical image digitizers... 150,000 $ 1,687,500
Mid Atlantic Medical Services*
Managed health care services 125,000 3,031,250
Oxford Health Plans
Provider of health benefit
services................... 25,000 1,843,750
Physio Control Holding
Manufacturer of integrated line
of non-invasive emergency
cardiac defibrillators..... 145,000 2,628,125
Sunrise Medical*
Manufacturer of home health
care products.............. 100,000 1,850,000
United Healthcare
Health maintenance
organization............... 75,000 4,912,500
-----------
42,205,000
-----------
FINANCIAL SERVICES 11.5%
Allmerica Financial
Property liability insurance 62,500 1,687,500
Amerin
Mortgage insurance provider 165,000 4,403,438
Checkfree*
Electronic commerce........ 85,400 1,825,425
Donaldson Lufkin & Jenrette
Leading investment and
merchant bank.............. 125,000 3,906,250
MBNA
Issuer of bank credit cards 85,000 3,134,375
Meadowbrook Insurance
Alternative risk insurance
company.................... 20,500 686,750
Progressive (Ohio)
High-risk auto insurance... 50,000 2,443,750
Travelers
Diversified financial services 125,000 7,859,375
-----------
25,946,863
-----------
FOOD AND FOOD SERVICES 3.0%
Boston Chicken*
Operator of franchised food service
stores..................... 20,000 641,250
PepsiCo
Soft drinks, consumer
products................... 110,000 6,146,250
-----------
6,787,500
-----------
INDUSTRIAL GOODS AND SERVICES 2.5%
Lam Research*
Manufacturer of plasma-etching
equipment.................. 30,000 1,368,750
UCAR International*
Provider of graphite
electrodes ................ 125,000 4,218,750
-----------
5,587,500
-----------
LEISURE AND RELATED 7.3%
British Sky Broadcasting (ADRs)*
Satellite delivered entertainment
channel in the UK.......... 60,000 2,257,500
Circus Circus Enterprises*
Casino hotels.............. 75,000 2,090,625
Infinity Broadcasting*
Owner/operator of radio
stations................... 115,000 4,283,750
Mirage Resorts*
Hotel/casino complex....... 100,000 3,450,000
Sierra On Line*
Developer of entertainment
software products.......... 25,000 715,625
Viacom (Class B)
Diverse entertainment
communications company..... 75,000 3,553,125
-----------
16,350,625
-----------
PACKAGING 0.6%
Ball
Manufacturer of containers. 50,000 1,375,000
-----------
RETAIL TRADE 6.4%
Borders Group
Leading book superstore.... 90,000 1,665,000
Home Depot
Home improvement stores.... 100,000 4,787,500
MSC Industrial Direct
Catalog marketer of industrial
products................... 45,000 1,237,500
Nordstrom
Department store chain..... 50,000 2,018,750
Office Depot*
Office supply retailer..... 125,000 2,468,750
OfficeMax
Office supplies superstore. 100,000 2,237,500
-----------
14,415,000
-----------
9
<PAGE>
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued) December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
-------- ---------
SOFTWARE 12.3%
Activision
PC CD-ROM-based
entertainment.............. 101,000 $ 1,117,312
Arbor Software*
Multidimensional software.. 50,000 2,350,000
Comshare*
Timesharing computer services 150,000 3,975,000
DST Systems*
Mutual fund data processing
services................... 66,500 1,895,250
Informix*
Designer, manufacturer, and
supporter of database
management systems......... 95,000 2,855,937
Microsoft*
Microcomputer software..... 40,000 3,512,500
Objective Systems Integrators*
Client/server software solutions
for network operations support 50,000 2,731,250
Parametric Technology*
Developer of mechanical design
software................... 35,000 2,323,125
Sterling Software
Software and network services,
automated program design
software................... 50,000 3,118,750
Sybase*
Developer of database
management software........ 100,000 3,587,500
UUNET Technologies*
Internet access services... 5,000 316,250
-----------
27,782,874
-----------
TELECOMMUNICATIONS 3.1%
Century Telephone Enterprises
Regional telephone services 100,000 3,175,000
WorldCom*
Long distance carrier...... 105,000 3,714,375
-----------
6,889,375
-----------
OTHER ...................... 67,570
-----------
TOTAL COMMON STOCKS
(Cost $151,408,969) ....... 214,794,107
-------------
PRIN. AMT. VALUE
--------- ---------
SHORT-TERM HOLDINGS 7.0%
ABN-AMRO Bank,
Grand Cayman,
Fixed Time Deposit,
57/8%, 1/2/96 .................$7,890,000 $ 7,890,000
First National Bank of Chicago,
Grand Cayman,
Fixed Time Deposit,
513/16%, 1/2/96 ...............7,890,000 7,890,000
-----------
TOTAL SHORT-TERM HOLDINGS
(Cost $15,780,000) ............ 15,780,000
-----------
TOTAL INVESTMENTS 102.5%
(Cost $167,188,969) ........... 230,574,107
OTHER ASSETS
LESS LIABILITIES (2.5)% ...... (5,748,444)
-----------
NET ASSETS 100.0% .............. $224,825,663
============
- -----------------------------
* Non-income producing security.
Descriptions of companies have not been audited by
Deloitte & Touche LLP.
See notes to financial statements.
10
<PAGE>
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Common stocks (cost $151,408,969)....................................... $ 214,794,107
Short-term holdings (cost $15,780,000).................................. 15,780,000 $ 230,574,107
-------------
Cash....................................................................... 500,639
Receivable for Capital Stock sold.......................................... 820,502
Receivable for securities sold............................................. 352,375
Receivable for dividends and interest...................................... 74,280
Investment in, and expenses prepaid to, shareholder service agent.......... 20,919
Other...................................................................... 57,424
------------
Total Assets .............................................................. 232,400,246
------------
LIABILITIES:
Payable for securities purchased........................................... 7,009,916
Payable for Capital Stock repurchased...................................... 141,728
Accrued expenses, taxes, and other......................................... 422,939
------------
Total Liabilities ......................................................... 7,574,583
------------
Net Assets ................................................................ $224,825,663
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 40,000,000 shares authorized; 14,450,324
shares outstanding):
Class A.................................................................. $ 13,838,572
Class D.................................................................. 611,752
Additional paid-in capital................................................. 140,534,028
Accumulated net investment loss............................................ (89,966)
Undistributed net realized gain............................................ 6,546,139
Net unrealized appreciation of investments................................. 63,385,138
------------
Net Assets ................................................................ $224,825,663
============
NET ASSET VALUE PER SHARE:
Class A ($215,688,328 / 13,838,572 shares) ................................ $15.59
======
Class D ($9,137,335 / 611,752 shares) ..................................... $14.94
======
- -----------------------------
See notes to financial statements.
</TABLE>
11
<PAGE>
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $2,623)..... $ 1,242,192
Interest................................................ 418,108
Other income............................................ 153,259
-----------
Total investment income................................. $ 1,813,559
EXPENSES:
Management fee.......................................... 948,951
Distribution and service fees........................... 453,620
Shareholder account services............................ 383,818
Auditing and legal fees................................. 73,507
Shareholder reports and communications.................. 60,572
Registration............................................ 48,701
Directors' fees and expenses............................ 33,421
Custody and related services............................ 30,000
Shareholders' meeting................................... 11,614
Miscellaneous........................................... 23,808
-----------
Total expenses.......................................... 2,068,012
-----------
Net investment loss .................................... (254,453)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments........................ 35,184,301
Net change in unrealized appreciation of investments.... 24,927,528
-----------
Net gain on investments ................................ 60,111,829
-----------
Increase in net assets from operations ................. $59,857,376
===========
- -----------------------------
See notes to financial statements.
</TABLE>
12
<PAGE>
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------
1995 1994
------------- ------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment loss.......................................................... $ (254,453) $ (756,459)
Net realized gain on investments............................................. 35,184,301 18,012,834
Net change in unrealized appreciation of investments......................... 24,927,528 (31,248,422)
------------- ------------
Increase (decrease) in net assets from operations............................ 59,857,376 (13,992,047)
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A.................................................................... (27,349,482) (17,718,531)
Class D.................................................................... (1,044,584) (351,353)
------------- ------------
Decrease in net assets from distributions.................................... (28,394,066) (18,069,884)
------------- ------------
SHARES
--------------------------------
CAPITAL SHARE TRANSACTIONS: YEAR ENDED DECEMBER 31
--------------------------------
1995 1994
------------- ------------
Net proceeds from sale of shares:
Class A................................ 733,030 537,358 10,961,004 8,103,350
Class D................................ 290,741 112,437 4,369,424 1,665,414
Exchanged from associated Funds:
Class A................................ 1,028,684 274,413 15,769,810 4,071,383
Class D................................ 132,768 6,633 1,987,004 93,444
Shares issued in payment of gain distributions:
Class A................................ 1,729,508 1,275,447 24,834,625 16,249,301
Class D................................ 62,511 26,625 860,777 330,484
---------- ---------- ------------ ------------
Total.................................... 3,977,242 2,232,913 58,782,644 30,513,376
---------- ---------- ------------ ------------
Cost of shares repurchased:
Class A................................ (1,250,270) (1,315,179) (18,467,977) (19,543,622)
Class D................................ (62,080) (27,140) (883,945) (388,031)
Exchanged into associated Funds:
Class A................................ (743,367) (734,774) (10,921,916) (11,092,468)
Class D................................ (60,208) (43,927) (881,945) (652,829)
---------- ---------- ------------ ------------
Total.................................... (2,115,925) (2,121,020) (31,155,783) (31,676,950)
---------- ---------- ------------ ------------
Increase (decrease) in net assets
from capital share transactions....... 1,861,317 111,893 27,626,861 (1,163,574)
========== ========== ------------ ------------
Increase (decrease) in net assets............................................ 59,090,171 (33,225,505)
NET ASSETS:
Beginning of year............................................................ 165,735,492 198,960,997
------------ ------------
End of year (including accumulated net investment loss of
$89,966 and $79,609, respectively)........................................ $224,825,663 $165,735,492
============ ============
- -----------------------------
See notes to financial statements.
</TABLE>
13
<PAGE>
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Capital Fund, Inc. (the "Fund") offers two classes of shares.
All shares existing prior to May 3, 1993, were classified as Class A
shares. Class A shares are sold with an initial sales charge of up to 4.75%
and a continuing service fee of up to 0.25% on an annual basis. Class D
shares are sold without an initial sales charge but are subject to a
distribution fee of up to 0.75% and a service fee of up to 0.25% on an
annual basis, and a contingent deferred sales load ("CDSL") of 1% imposed
on certain redemptions made within one year of purchase. The two classes of
shares represent interests in the same portfolio of investments, have the
same rights and are generally identical in all respects except that each
class bears its separate distribution and certain class expenses and has
exclusive voting rights with respect to any matter to which a separate vote
of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in stocks are valued at current market values or, in their
absence, at fair value determined in accordance with procedures approved by
the Board of Directors. Securities traded on national exchanges are valued
at last sales prices or, in their absence and in the case of
over-the-counter securities, a mean of bid and asked prices. Short-term
holdings maturing in 60 days or less are valued at amortized cost.
b. There is no provision for federal income or excise tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income
tax purposes. Dividends receivable and payable are recorded on ex-dividend
dates. Interest income is recorded on an accrual basis.
d. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares
based upon the relative value of shares of each class. Class-specific
expenses, which include distribution and service fees and any other items
that are specifically attributed to a particular class, are charged
directly to such class.
e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gain may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, or capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations,
or net asset value per share of the Fund.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December 31, 1995, amounted to $185,317,577 and
$185,342,268, respectively.
At December 31, 1995, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities amounted to $66,484,439 and $3,099,301, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
all officers of the Fund, all directors of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager is
paid by the Manager. The Manager receives a fee, calculated daily and payable
monthly, equal to a per annum percentage of the Fund's daily net assets. The
management fee rate is calculated on a sliding scale of 0.55% to 0.45%, based on
average daily net assets of all the investment companies managed by the Manager.
The management fee for the year ended December 31, 1995, was equivalent to an
annual rate of 0.51% of the average daily net assets of the Fund.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of
14
<PAGE>
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
the Manager, received concessions of $32,091 from sales of Class A shares, after
commissions of $241,684 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Fund pursuant to
the Plan. For the year ended December 31, 1995, fees paid aggregated $406,896,
or 0.22% per annum of the average daily net assets of Class A shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the year ended December 31, 1995,
fees paid amounted to $46,724, or 1% per annum of the average net daily assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended December
31, 1995, such charges amounted to $3,349.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became eligible to receive commissions from certain sales of shares of
the Fund, as well as distribution and service fees pursuant to the Plan. For the
period ended December 31, 1995, Seligman Services, Inc. received commissions of
$2,981 from sales of shares of the Fund. Seligman Services, Inc. also received
distribution and service fees of $39,543, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $365,118 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $2,199.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or Seligman Data Corp.
Fees of $23,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1995, of
$89,966 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
5. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1995, which are included in the corresponding captions of the
Statement of Operations, were as follows:
CLASS A CLASS D
-------- -------
Distribution and service fees..... $406,896 $46,724
Registration...................... 11,724 7,007
Shareholder reports and
communications................. 6,998 154
15
<PAGE>
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid, at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
---------------------------------------------- ----------------------------
YEAR ENDED
YEAR ENDED DECEMBER 31 DECEMBER 31 5/3/93*
---------------------------------------------- ----------------- TO
1995** 1994** 1993 1992 1991 1995** 1994** 12/31/93
------ ------ ------ ------ ------ ------ ------ ------
PER SHARE OPERATING
PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $13.17 $15.95 $17.04 $16.66 $12.45 $12.82 $15.86 $16.43
Net investment income (loss)...... (.02) (.06) (.03) .02 .03 (.14) (.33) (.08)
Net realized and unrealized
investment gain (loss)......... 4.74 (1.12) .84 1.89 6.66 4.56 (1.11) 1.41
Increase (decrease) from
investment operations.......... 4.72 (1.18) .81 1.91 6.69 4.42 (1.44) 1.33
Distributions from net
gain realized.................. (2.30) (1.60) (1.90) (1.53) (2.48) (2.30) (1.60) (1.90)
Net increase (decrease) in
net asset value................ 2.42 (2.78) (1.09) .38 4.21 2.12 (3.04) (.57)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period.... $15.59 $13.17 $15.95 $17.04 $16.66 $14.94 $12.82 $15.86
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE ........... 37.32% (7.06)% 4.80% 11.56% 54.67% 35.98% (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.... 1.09% 1.13% 1.13% .96% 1.01% 2.02% 2.66% 2.26%+
Net investment income (loss)
to average net assets.......... (.11)% (.39)% (.17)% .11% .25% (1.06)% (2.28)% (1.32)%+
Portfolio turnover................ 103.60% 70.72% 46.84% 42.32% 42.20% 103.60% 70.72% 46.84%++
Net assets, end of period
(000's omitted)................ $215,688 $162,556 $196,212 $198,063 $172,676 $9,137 $3,179 $2,749
- -----------------------------
*Commencement of offering of Class D shares.
**Per share amounts for the years 1995 and 1994 are calculated based on average shares outstanding.
+Annualized.
++For the year ended December 31, 1993.
See notes to financial statements.
</TABLE>
16
<PAGE>
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN CAPITAL FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Capital Fund, Inc. as of December 31,
1995, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the Fund's custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Capital
Fund, Inc. as of December 31, 1995, the results of its operations, the changes
in its net assets and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
February 2, 1996
17
<PAGE>
<PAGE>
================================================================================
PROXY RESULTS
- --------------------------------------------------------------------------------
Seligman Capital Fund Shareholders voted on the following proposals at the
Special Meeting of Shareholders held on December 12, 1995, in New York, New
York. Each Director was elected, and all other proposals were approved except
for the proposals to amend the Management and Subadvisory Agreements. The
description of each proposal and number of shares voted are as follows:
FOR AGAINST NON-VOTE
--- ------- --------
Election of Directors:
Fred E. Brown 8,685,355 286,571 3,137,121
John R. Galvin 8,671,142 300,139 3,137,160
Alice S. Ilchman 8,700,405 282,769 3,137,116
Frank A. McPherson 8,674,329 297,905 3,137,126
John E. Merow 8,702,766 280,690 3,137,115
Betsy S. Michel 8,702,582 283,005 3,137,115
William C. Morris 8,703,180 281,090 3,137,114
James C. Pitney 8,701,135 283,324 3,137,115
James Q. Riordan 8,692,392 292,066 3,137,116
Ronald T. Schroeder 8,698,140 281,090 3,137,114
Robert L. Shafer 8,702,110 282,983 3,137,115
James N. Whitson 8,700,117 284,975 3,137,115
Brian T. Zino 8,699,369 285,725 3,137,114
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTE
--- ------- ------- --------
<S> <C> <C> <C> <C>
Ratification of Deloitte & Touche LLP as independent auditors: 8,565,710 119,738 301,077 3,136,962
Approval of amendments to the Management Agreement to increase
management fee payable by the Fund: 5,357,797 3,101,252 530,374 3,134,063
Approval of amendments to the Subadvisory Agreement to increase
the subadvisory fee payable by J. & W. Seligman & Co. Incorporated: 5,413,197 3,015,778 557,449 3,137,063
Approval of amendments of the Fund's fundamental investment policy to
permit mortgaging or pledging of its assets: 7,117,581 1,330,649 538,194 3,137,062
Elimination of Fund's fundamental investment policy prohibiting
participation in a joint securities trading account: 7,338,672 1,043,674 604,078 3,137,063
</TABLE>
18
<PAGE>
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
Fred E. Brown
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
John R. Galvin 2, 4
DEAN, Fletcher School of Law
and Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
Alice S. Ilchman 3, 4
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
Frank A. McPherson 2, 4
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
John E. Merow
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
Betsy S. Michel 2, 4
DIRECTOR OR TRUSTEE,
Various Organizations
William C. Morris 1
CHAIRMAN
CHAIRMAN OF THE BOARD AND PRESIDENT,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
James C. Pitney 3, 4
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
James Q. Riordan 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
Ronald T. Schroeder 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3, 4
VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFE Corporation
James N. Whitson 2, 4
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
Brian T. Zino 1
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
- ---------------------
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
William C. Morris
CHAIRMAN
Brian T. Zino
PRESIDENT
Loris D. Muzzatti
VICE PRESIDENT
Lawrence P. Vogel
VICE PRESIDENT
Thomas G. Rose
TREASURER
Frank J. Nasta
SECRETARY
- --------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access Service
19
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A: Financial Highlights for Class A shares for the ten years ended
December 31, 1995; Financial Highlights for Class D shares 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;
Statements 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.
(b) Exhibits: All Exhibits have been previously filed except Exhibits marked
with an asterisk (*) which are incorporated herein.
(1a) Articles of Incorporation of Registrant. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 26, filed on February 27,
1981.)
(1b) Articles Supplementary to Articles of Incorporation of Registrant, dated
January 5, 1993. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 46 filed, on April 23, 1993.)
(1c) Articles Supplementary to Articles of Incorporation of Registrant dated
February 8, 1996.*
(1d) Articles Supplementary to Articles of Incorporation of Registrant dated
April 10, 1996.*
(2) By-laws of the Corporation. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 26, filed on February 27, 1981.)
(3) N/A
(4a) Specimen certificate of Class D Capital Stock. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 46, filed on April 23,
1993.)
(4b) Specimen certificate of Class B Capital Stock. (Incorporated by reference
to Form SE, filed on behalf of the Registrant on April 16, 1996)
(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 No. 43, filed on April 30, 1992.)
(6a) Copy of Amended Sales Agreement between Seligman Financial Services, Inc.
and Dealers.*
(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.)
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 24. Financial Statements and Exhibits (continued)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 42, filed on April 30, 1991.)
(9) N/A
(10) Opinion and Consent of Counsel. (Incorporated by reference to Registrant
Post-Effective Amendment No. 47, filed on March 31, 1994
(11) Report and Consent of Independent Auditors.*
(12) N/A
(13a) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated.*
(13b) 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 No. 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 No. 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
No. 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 No. 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 No. 1, filed on January 1, 1988.)
(14d) Copy of Amended Simplified Employee Pension Plan (SEP). (Incorporated by
reference to Registrant's Post-Effective Amendment No. 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 No. 43, filed on April 30, 1992.)
(15) Copy of Amended Administration, Shareholder Services and Distribution
Plan and form of Agreement of Registrant.*
(16) Schedule of Computation of Data Performance provided in Registration
Statement in response to Item 22. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 37 filed on March 2, 198.)
(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. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 50, filed on March 15, 1996.)
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.
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 26. Number of Holders of Securities.
(1) (2)
Numbers of Record
Title of Class Holders as of March 29, 1996
-------------- ----------------------------
Class A Common Stock 8,990
Class B Common Stock 0
Class D Common Stock 1,227
Item 27. Indemnification - Incorporated by reference to Registrant's
Post-Effective Amendment No. 42, filed with the Commission on May 1,
1992.
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 eight other associated
investment companies. They are Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Seligman Frontier Fund,
Inc., 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.
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 Registrant's 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 Registrant's principal
underwriter named in response to Item 21:
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Seligman Financial Services, Inc.
As of March 29, 1996
<TABLE>
<CAPTION>
(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
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
</TABLE>
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Seligman Financial Services, Inc.
As of March 29, 1996
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ ---------------- ---------------
<S> <C> <C>
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
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
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, NY 10017.
(c) Not applicable.
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 30. Location of Accounts and Records
(1) Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105 and
(2) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Item 31. Management Services - Seligman Data Corp. ("SDC") the Registrant's
shareholder service agent, has an agreement with First Data Investor
Services Group ("FDISG") pursuant to which FDISG 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:
1995 1994 1993
---- ---- -----
Class A Shares $43,800 $44,994 $62,500
Class D Shares $ 2,000 $ 1,697 $ 300
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>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 52 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 19th day of April, 1996.
SELIGMAN CAPITAL FUND, INC.
By: /s/ William C. Morris
--------------------------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940 this Post-Effective Amendment No. 51 has been
signed below by the following persons in the capacities indicated on April 19,
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 ) -----------------------------------------
James Q. Riordan, Director ) *Brian T. Zino, Attorney-in-fact
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as `D'
The registered trademark symbol shall be expressed as 'r'
<PAGE>
</TABLE>
<PAGE>
SELIGMAN CAPITAL FUND, INC.
ARTICLES SUPPLEMENTARY
Seligman Capital Fund, Inc., a Maryland Corporation having its principal
office in Baltimore City, Maryland and registered as an open-end investment
company under the Investment Company Act of 1940 (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The total number of shares of capital stock of all classes
which the Corporation has authority to issue is hereby increased to 500,000,000
shares of capital stock (par value $1.00 per share), amounting to an aggregate
par value of $500,000,000.
SECOND: The Board of Directors of the Corporation on September 21,
1995, duly adopted and approved a resolution in accordance with Section 2-105(c)
of Maryland Corporations and Associations Code, in which was set forth the
foregoing increase in capital stock of the Corporation.
THIRD: (a) The total number of shares of capital stock of all
classes which the Corporation was heretofore authorized to issue was 40,000,000
shares of capital stock (par value $1.00), amounting to an aggregate par value
of $40,000,000.
(b) The total number of shares of Common Stock is increased
by this amendment to 500,000,000 shares of the par value of $1.00 each and of
the aggregate par value of $500,000,000.
(c) The Corporation currently has only one class of Common
Stock outstanding.
IN WITNESS WHEREOF, SELIGMAN CAPITAL FUND, INC. has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Secretary, and each of said officers of the
Corporation has also acknowledged these Articles Supplementary to be the
corporate act of the Corporation and has stated under penalties of perjury that
to the best of his knowledge, information and belief that the matters and facts
set forth with respect to approval are true in all material respects, all on
February 8, 1996.
SELIGMAN CAPITAL FUND, INC.
By /s/ Brian T. Zino
---------------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- ---------------------------
Frank J. Nasta
Secretary
<PAGE>
<PAGE>
SELIGMAN CAPITAL FUND, INC.
ARTICLES SUPPLEMENTARY
Seligman Capital Fund, Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation") and registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: The total number of shares of capital stock of all classes
which the Corporation has authority to issue is 500,000,000 shares, which were
previously classified by the Board of Directors of the Corporation into two
classes designated as Class A Common Stock and Class D Common Stock. The number
of authorized shares of Class A Common Stock and of Class D Common Stock each
consisted of the sum of x and y, where x equalled the issued and outstanding
shares of such class and y equalled one-half of the authorized but unissued
shares of Common Stock of all classes; provided that at all times the aggregate
authorized, issued and outstanding shares of Class A and Class D Common Stock
shall not exceed the authorized number of shares of Common Stock; and, in the
event application of the formula above would have resulted, at any time, in
fractional shares, the applicable number of authorized shares of each class was
to have been rounded down to the nearest whole number of shares of such class.
SECOND: Pursuant to the authority of the Board of Directors to
classify and reclassify unissued shares of capital stock, the Board of Directors
has reclassified the unissued shares of Class A Common Stock and Class D Common
Stock into the following classes and has provided for the issuance of shares of
such classes. The terms of the Common Stock as set by the Board of Directors are
as follows:
(a) The Common Stock of the Corporation shall have three classes
of shares, which shall be designated Class A Common Stock, Class B
Common Stock and Class D Common Stock. The number of authorized shares
of Class A Common Stock, of Class B Common Stock and of Class D Common
Stock shall each consist of the sum of x and y, where x equals the
issued and outstanding shares of such class and y equals one-third of
the authorized but unissued shares of Common Stock of all classes;
provided that at all times the aggregate authorized, issued and
outstanding shares of Class A, Class B and Class D Common Stock shall
not exceed the authorized number of shares of Common Stock (i.e.,
500,000,000 shares of Common Stock until changed by further action of
the Board of Directors in accordance with Section 2-208.1 of the
Maryland General Corporation Law, or any successor provision); and, in
the event application of the formula above would result, at any time, in
fractional shares, the applicable number of authorized shares of each
class shall be rounded down to the nearest whole number of shares of
such class. Any class of Common Stock shall be referred to herein
individually as a "Class" and collectively, together with any further
class or classes from time to time established, as the "Classes".
(b) All Classes shall represent the same interest in the
Corporation and have identical voting, dividend, liquidation, and other
rights; provided, however, that notwithstanding anything in the charter
of the Corporation to the contrary:
(1) Class A shares may be subject to such front-end sales
loads as may be established by the Board of Directors from time
to time in accordance with the Investment Company Act and
applicable rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD").
(2) Class B shares may be subject to such contingent
deferred sales charges as may be established from time to time by
the Board of Directors in accordance with the Investment Company
Act and applicable rules and regulations of the NASD. Subject to
subsection (5) below, each Class B share shall convert
automatically into Class A shares on the last business day of the
month that precedes the eighth anniversary of the date of
issuance of such Class B share; such conversion shall be effected
on the basis of the relative net asset values of Class B shares
and Class A shares as determined by the Corporation on the date
of conversion.
-1-
<PAGE>
<PAGE>
(3) Class D shares may be subject to such contingent
deferred sales charges as may be established from time to time by
the Board of Directors in accordance with the Investment Company
Act and applicable rules and regulations of the NASD.
(4) Expenses related solely to a particular Class
(including, without limitation, distribution expenses under a
Rule 12b-1 plan and administrative expenses under an
administration or service agreement, plan or other arrangement,
however designated, which may differ between the Classes) shall
be borne by that Class and shall be appropriately reflected (in
the manner determined by the Board of Directors) in the net asset
value, dividends, distribution and liquidation rights of the
shares of that Class.
(5) At such time as shall be permitted under the
Investment Company Act, any applicable rules and regulations
thereunder and the provisions of any exemptive order applicable
to the Corporation, and as may be determined by the Board of
Directors and disclosed in the then current prospectus of the
Corporation, shares of a particular Class may be automatically
converted into shares of another Class; provided, however, that
such conversion shall be subject to the continuing availability
of an opinion of counsel to the effect that such conversion does
not constitute a taxable event under Federal income tax law. The
Board of Directors, in its sole discretion, may suspend any
conversion rights if such opinion is no longer available.
(6) As to any matter with respect to which a separate vote
of any Class is required by the Investment Company Act or by the
Maryland General Corporation Law (including, without limitation,
approval of any plan, agreement or other arrangement referred to
in subsection (4) above), such requirement as to a separate vote
by the Class shall apply in lieu of single Class voting, and, if
permitted by the Investment Company Act or any rules, regulations
or orders thereunder and the Maryland General Corporation Law,
the Classes shall vote together as a single Class on any such
matter that shall have the same effect on each such Class. As to
any matter that does not affect the interest of a particular
Class, only the holders of shares of the affected Class shall be
entitled to vote.
THIRD: These Articles Supplementary do not change the total
number of authorized shares of the Corporation.
IN WITNESS WHEREOF, SELIGMAN CAPITAL FUND, INC. has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Secretary, and each of said officers of the
Corporation has also acknowledged these Articles Supplementary to be the
corporate act of the Corporation and has stated under penalties of perjury that
to the best of his knowledge, information and belief that the matters and facts
set forth with respect to approval are true in all material respects, all on
April 10, 1996.
SELIGMAN CAPITAL FUND, INC.
By: /s/ Brian T. Zino
----------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- ------------------
Frank J. Nasta
Secretary
-2-
<PAGE>
<PAGE>
ADDENDUM
TO
Sales Agreement
covering shares of capital stock
or shares of beneficial interest of
the Seligman Mutual Funds
between
SELIGMAN FINANCIAL SERVICES, INC.
and
DEALER
Dear Dealer:
Your Sales Agreement with Seligman Financial Services, Inc. ("SFSI") is
hereby amended to include the following provisions in connection with the
offering by certain of the Seligman Mutual Funds of Class B shares as described
in each applicable prospectus:
1. Dealer agrees to comply with the attached "Policies and Procedures" with
respect to sales of Seligman Mutual Funds offering three classes of
shares.
2. SFSI shall be entitled to a contingent deferred sales load ("CDSL") on
redemptions within six years of purchase on any Class B shares sold and
within one year of purchase on any Class D shares sold. With respect to
omnibus accounts in which Class B shares or Class D shares are held at
Seligman Data Corp. ("SDC") in Dealer's name, Dealer agrees that by the
tenth day of each month it will furnish to SDC a report of each
redemption in the preceding month to which a CDSL was applicable,
accompanied by a check payable to SFSI in payment of the CDSL due.
3. If, with respect to a redemption of any Class B shares or Class D shares
sold by Dealer, the CDSL is waived because the redemption qualifies for
a waiver set forth in the Fund's prospectus, Dealer shall promptly remit
to SFSI an amount equal to the payment made by SFSI to Dealer at the
time of sale with respect to such Class B shares or Class D Shares.
4. The Dealer will comply in all respects with Notice to Members 95-80 of
the National Association of Securities Dealers, Inc. regarding members
obligations and responsibilities regarding mutual fund sales practices.
The sale of any Class A,Class B or Class D shares of a Seligman Mutual
Fund will constitute Dealer's acceptance of and agreement with the terms set
forth herein.
<PAGE>
<PAGE>
EXHIBIT C
POLICIES AND PROCEDURES
In connection with the offering by the Funds of three classes of shares,
one subject to a front-end sales load and a service fee ("Class A Shares"), one
subject to a service fee, a distribution fee, no front-end sales load and a
contingent deferred sales load on redemptions within six years of purchase
("Class B Shares") and one subject to a service fee, a distribution fee, no
front-end sales load and a contingent deferred sales load on redemptions within
one year of purchase ("Class D Shares"), it is important for an investor to
choose the method of purchasing shares which best suits his or her particular
circumstances. To assist investors in these decisions, Seligman Financial
Services has instituted the following policies with respect to orders for
Shares:
1. No purchase order may be placed for Class B Shares or Class D Shares
for amounts of $4,000,000 or more.
2. Any purchase order for less than $4,000,000 may be for either Class A,
Class B or Class D Shares in light of the relevant facts and
circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his Shares;
and
c. any other relevant circumstances such as the availability of
purchases under a Letter of Intent, Volume Discount, or
Right of Accumulation.
There are instances when one method of purchasing Shares may be more
appropriate than another. For example, an investor who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of higher ongoing distribution fee. On the other hand, an
investor whose order would not qualify for such a discount may wish to have all
of his or her funds invested in Class B or Class D Shares. An investor who
expects to hold his or her shares for longer than eight years might prefer Class
B Shares over Class D Shares because of the conversion feature; once the Class B
Shares have converted to Class A Shares, the ongoing distribution fees will be
reduced. Class D Shares may remain a more attractive choice for shorter-term
investors because of the contingent deferred sales load on such shares is only
1%, and it does not apply if the investor owns his or her shares for at least
one year. If an investor anticipates that he or she will redeem his or her Class
B Shares or Class D Shares while still subject to a contingent deferred sales
charge, the investor may, depending on the amount of the purchase, pay an amount
greater than the sales load and service fee attributable to Class A Shares.
Appropriate supervisory personnel within your organization must ensure
that all employees receiving investor inquiries about the purchase of Shares of
a Fund advise the investor of then available pricing structures offered by the
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.
Questions relating to this policy should be directed to Stephen J.
Hodgdon, President, Seligman Financial Services at (212) 850-1217.
<PAGE>
<PAGE>
SALES AGREEMENT
covering shares of capital stock
and/or shares of beneficial interest of
THE SELIGMAN MUTUAL FUNDS
Seligman Capital 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 Tax-Exempt Fund Series, Inc.
Seligman Tax-Exempt Series Trust
between
SELIGMAN FINANCIAL SERVICES, INC.
and
----------------------------------------------------------------------------
Dealer
The Dealer named above and Seligman Financial Services, Inc., exclusive agent
for distribution of shares of capital stock of Seligman Capital 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 Income Fund, Inc., Seligman New
Jersey Tax-Exempt Fund, Inc., and Seligman Tax-Exempt Fund Series, Inc., and
shares of beneficial interest of Seligman High Income Fund Series, Seligman
Pennsylvania Tax-Exempt Fund, and Seligman Tax-Exempt Series Trust, agree to the
terms and conditions set forth in this agreement.
DEALER SIGNATURE SELIGMAN FINANCIAL SERVICES, INC. ACCEPTANCE
- ----------------------------- --------------------------------------------
Principal Officer Stephen J. Hodgdon, President
SELIGMAN FINANCIAL SERVICES, INC.
- ----------------------------- 100 Park Avenue
Address New York, New York 10017
- ----------------------------- --------------------------------------------
Employer Identification No. Date
REV 1/95
<PAGE>
<PAGE>
The Dealer and Seligman Financial Services, Inc. ("Seligman Financial
Services"), as exclusive agent for distribution of Class A and Class D Shares
(as described in the "Policies and Procedures," as set forth below) of the
Capital Stock and/or Class A and Class D Shares of beneficial interest
(collectively, the "Shares") of Seligman Capital 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, Seligman Tax-Exempt Fund Series, Inc. and Seligman Tax-Exempt Series Trust
and or any other mutual fund for which Seligman Financial Services is exclusive
agent for distribution (herein called the Funds), agree as follows:
1. The Dealer agrees to comply with the attached "Policies and Procedures"
with respect to sales of Seligman Mutual Funds offering two classes of
shares, as set forth below.
2. An order for Shares of one or more of the Funds, placed by the Dealer
with Seligman Financial Services, will be confirmed at the public
offering price as described in each Fund's current prospectus. Unless
otherwise agreed when an order is placed, the Dealer shall remit the
purchase price to the Fund, or Funds, with issuing instruction, within
the period of time prescribed by existing regulations. No wire orders
under $1,000 may be placed for initial purchases.
3. Shares of the Funds shall be offered for sale and sold by the Dealer
only at the applicable public offering price currently in effect,
determined in the manner prescribed in each Fund's prospectus. Seligman
Financial Services will make a reasonable effort to notify the Dealer of
any redetermination or suspension of the current public offering price,
but Seligman Financial Services shall be under no liability for failure
to do so.
4. On each purchase of Shares by the Dealer, the Dealer shall be entitled,
based on the Class of Shares purchased and except as provided in each
Fund's current prospectus, to a concession determined as a percentage of
the price to the investor as set forth in each Fund's current
prospectus. On each purchase of Class A Shares, Seligman Financial
Services reserves the right to receive a minimum concession of $.75 per
transaction. No concessions will be paid to the Dealer for the
investment of dividends in additional shares.
5. Except for sales to and purchases from the Dealer's retail customers,
all of which shall be made at the applicable current public offering
price or the current price bid by Seligman Financial Services on behalf
of the Fund, the Dealer agrees to buy Shares only through Seligman
Financial Services and not from any other sources and to sell shares
only to Seligman Financial Services, the Fund or its redemption agent
and not to any other purchasers.
6. By signing this Agreement, both Seligman Financial Services and the
Dealer warrant that they are members of the National Association of
Securities Dealers, Inc., and agree that termination of such membership
at any time shall terminate this Agreement forthwith regardless of the
provisions of paragraph 10 hereof. Each party further agrees to comply
with all rules and regulations of such Association and specifically to
observe the following provisions:
(a) Neither Seligman Financial Services nor the Dealer shall withhold
placing customers' orders for Shares so as to profit itself as a
result of such withholding.
(b) Seligman Financial Services shall not purchase Shares from any of
the Funds except for the purpose of covering purchase orders
already received, and the Dealer shall not purchase Shares of any
of the Funds through Seligman Financial Services other than for
investment, except for the purpose of covering purchase orders
already received.
<PAGE>
<PAGE>
(c) Seligman Financial Services shall not accept a conditional order
for Shares on any basis other than at a specified definite price.
The Dealer shall not, as principal, purchase Shares of any of the
Funds from a recordholder at a price lower than the bid price, if
any, then quoted by or for the Fund, but the Dealer shall not be
prevented from selling Shares for the account of a record owner
to Seligman Financial Services, the Fund or its redemption agent
at the bid price currently quoted by or for such Fund, and
charging the investor a fair commission for handling the
transaction.
(d) If Class A Shares are repurchased by a Fund or by Seligman
Financial Services as its agent, or are tendered for redemption
within seven business days after confirmation by Seligman
Financial Services of the original purchase order of the Dealer
for such Shares, (i) the Dealer shall forthwith refund to
Seligman Financial Services the full concession allowed to the
Dealer on the original sales and (ii) Seligman Financial Services
shall forthwith pay to the Fund Seligman Financial Services'
share of the "sales load" on the original sale by Seligman
Financial Services, and shall also pay to the Fund the refund
which Seligman Financial Services received under (i) above. The
Dealer shall be notified by Seligman Financial Services of such
repurchase or redemption within ten days of the date that such
redemption or repurchase is placed with Seligman Financial
Services, the Fund or its authorized agent. Termination or
cancellation of this Agreement shall not relieve the Dealer or
Seligman Financial Services from the requirements of this clause
(d).
7. (a) Seligman Financial Services shall be entitled to a contingent
deferred sales load ("CDSL") on redemptions within one year of
purchase on any Class D Shares sold. With respect to omnibus
accounts in which Class D Shares are held at Seligman Data Corp.
("SDC") in the Dealer's name, the Dealer agrees that by the tenth
day of each month it will furnish to SDC a report of each
redemption in the preceding month to which a CDSL was applicable,
accompanied by a check payable to Seligman Financial Services in
payment of the CDSL due.
(b) If, with respect to a redemption of any Class D Shares sold by
the Dealer, the CDSL is waived because the redemption qualifies
for a waiver set forth in the Fund's prospectus, the Dealer shall
promptly remit to Seligman Financial Services an amount equal to
the payment made by Seligman Financial Services to the Dealer at
the time of sale with respect to such Class D Shares.
8. In all transactions between Seligman Financial Services and the Dealer
under this Agreement, the Dealer will act as principal in purchasing
from or selling to Seligman Financial Services. The dealer is not for
any purposes employed or retained as or authorized to act as broker,
agent or employee of any Fund or of Seligman Financial Services and the
Dealer is not authorized in any manner to act for any Fund or Seligman
Financial Services or to make any representations on behalf of Seligman
Financial Services. In purchasing and selling Shares of any Fund under
this Agreement, the Dealer shall be entitled to rely only upon matters
stated in the current offering prospectus of the applicable Fund and
upon such written representations, if any, as may be made by Seligman
Financial Services to the Dealer over the signature of Seligman
Financial Services.
9. Seligman Financial Services will furnish to the Dealer, without charge,
reasonable quantities of the current offering prospectus of each Fund
and sales material issued from time to time by Seligman Financial
Services.
10. Either Party to this Agreement may cancel this Agreement by written
notice to the other party. Such cancellation shall be effective at the
close of business on the 5th day following the date on which such notice
was given. Seligman Financial Services may modify this Agreement at any
time by written notice to the Dealer. Such notice shall be deemed to
have been given on the date upon which it was either delivered
personally to the other party or any officer or member thereof, or was
mailed postage-paid, or delivered to a telegraph office for transmission
to the other party at his or its address as shown herein.
<PAGE>
<PAGE>
11. This Agreement shall be construed in accordance with the laws of the
State of New York and shall be binding upon both parties hereto when
signed by Seligman Financial Services and by the Dealer in the spaces
provided on the cover of this Agreement. This Agreement shall not be
applicable to Shares of a Fund in a state in which such Fund Shares are
not qualified for sale.
POLICIES AND PROCEDURES
In connection with the offering by the Funds of three classes of shares,
one subject to a front-end sales load and a service fee ("Class A Shares"), one
subject to a service fee, a distribution fee, no front-end sales load and a
contingent deferred sales load on redemptions within six years of purchase
("Class B Shares") and one subject to a service fee, a distribution fee, no
front-end sales load and a contingent deferred sales load on redemptions within
one year of purchase ("Class D Shares"), it is important for an investor to
choose the method of purchasing shares which best suits his or her particular
circumstances. To assist investors in these decisions, Seligman Financial
Services has instituted the following policies with respect to orders for
Shares:
1. No purchase order may be placed for Class B Shares or Class D
Shares for amounts of $4,000,000 or more.
2. Any purchase order for less than $4,000,000 may be for either
Class A, Class B or Class D Shares in light of the relevant facts
and circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his Shares;
and
c. any other relevant circumstances such as the availability of
purchases under a Letter of Intent, Volume Discount, or
Right of Accumulation.
There are instances when one method of purchasing Shares may be more
appropriate than another. For example, an investor who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of higher ongoing distribution fee. On the other hand, an
investor whose order would not qualify for such a discount may wish to have all
of his or her funds invested in Class B or Class D Shares. An investor who
expects to hold his or her shares for longer than eight years might prefer Class
B Shares over Class D Shares because of the conversion feature; once the Class B
Shares have converted to Class A Shares, the ongoing distribution fees will be
reduced. Class D Shares may remain a more attractive choice for shorter-term
investors because of the contingent deferred sales load on such shares is only
1%, and it does not apply if the investor owns his or her shares for at least
one year. If an investor anticipates that he or she will redeem his or her Class
B Shares or Class D Shares while still subject to a contingent deferred sales
charge, the investor may, depending on the amount of the purchase, pay an amount
greater than the sales load and service fee attributable to Class A Shares.
Appropriate supervisory personnel within your organization must ensure
that all employees receiving investor inquiries about the purchase of Shares of
a Fund advise the investor of then available pricing structures offered by the
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.
Questions relating to this policy should be directed to Stephen J.
Hodgdon, President, Seligman Financial Services at (212) 850-1217.
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Seligman Capital Fund, Inc.:
We consent to the incorporation by reference in the Statement of Additional
Information in this Post-Effective Amendment No. 52 to Registration Statement
No. 2-33566 of our report dated February 2, 1996, appearing in the Annual Report
to shareholders for the year ended December 31, 1995, and to the reference to us
under the caption "Financial Highlights" in the Prospectus, which is a part of
such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 17, 1996
<PAGE>
<PAGE>
INVESTMENT LETTER
SELIGMAN CAPITAL FUND, INC.
Seligman Capital Fund, Inc. (the "Fund"), an open-end diversified management
investment company, and the undersigned ("Purchaser"), intending to be legally
bound, hereby agree as follows:
1. The Fund hereby sells to Purchaser and Purchaser purchases 1 Class B
share (the "Share") of Capital Stock (par value $1.00) of the Fund at a
price equivalent to the net asset value of one share of the Fund as of
the close of business on April 18, 1996. The Fund hereby acknowledges
receipt from Purchaser of funds in such amount in full payment for the
Share.
2. Purchaser represents and warrants to the Fund that the Shares are being
acquired for investment and not with a view to distribution thereof, and
that Purchaser has no present intention to redeem or dispose of the
Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the 18th day
of April, 1996 ("Purchase Date").
SELIGMAN CAPITAL FUND, INC.
By: /s/ Lawrence P. Vogel
----------------------
Name: Lawrence P. Vogel
Title: Vice President
J. & W. SELIGMAN & CO. INCORPORATED
By: /s/ Lawrence P. Vogel
----------------------
Name: Lawrence P. Vogel
Title: Senior Vice President
<PAGE>
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
SECTION 1. Seligman Capital Fund, Inc. (the "Fund") will pay fees
to Seligman Financial Services, Inc., the principal underwriter of its shares
(the "Distributor"), for administration, shareholder services and distribution
assistance for the Class A, Class B, and Class D shares of the Fund. As a
result, the Fund is adopting this Administration, Shareholder Services and
Distribution Plan (the "Plan") pursuant to Section 12(b) of the Investment
Company Act of 1940, as amended (the "Act") and Rule 12b-1 thereunder.
SECTION 2. Pursuant to this Plan, the Fund may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Fund (payable quarterly with respect to Class A
and monthly with respect to Class B and Class D) and a distribution fee of .75%
on an annual basis, payable monthly, of the average daily net assets of the Fund
attributable to the Class B Shares and a distribution fee of up to .75% on an
annual basis, payable monthly, of the average daily net assets of the Fund
attributable to Class D shares. Such fees will be used in their entirety by the
Distributor to make payments for administration, shareholder services and
distribution assistance, including, but not limited to (i) compensation to
securities dealers and other organizations (each, a "Service Organization" and
collectively, the "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
the Distributor's costs incurred in connection with its marketing efforts with
respect to shares of the Fund. To the extent a Service Organization provides
administration, accounting and other shareholder services, payment for which is
not required to be made pursuant to a plan meeting the requirements of Rule
12b-1, a portion of the fee paid by the Fund shall be deemed to include
compensation for such services. The fees received from the Fund hereunder in
respect of the Class A shares may not be used to pay any interest expense,
carrying charges or other financing costs, and fees received hereunder may not
be used to pay any allocation of overhead of the Distributor. The fees of any
particular class of the Fund may not be used to subsidize the sale of shares of
any other class. The fees payable to Service Organizations from time to time
shall, within such limits, be determined by the Directors of the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's
investment manager (the "Manager"), in its sole discretion, may make payments
to the Distributor for similar purposes. These payments will be made by the
Manager from its own resources, which may include the management fee that the
Manager receives from the Fund.
SECTION 4. This Plan shall continue in effect through December 31
of each year so long as such continuance is specifically approved at least
annually by vote of a majority of
1
<PAGE>
<PAGE>
both (a) the Directors of the Fund and (b) the Qualified Directors, cast in
person at a meeting called for the purpose of voting on such approval.
SECTION 5. The Distributor shall provide to the Fund's Directors,
and the Directors shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 6. This Plan may be terminated by the Fund with respect
to any class at any time by vote of a majority of the Qualified Directors, or by
vote of a majority of the outstanding voting securities of such class. If this
Plan is terminated in respect of a class, no amounts (other than amounts accrued
but not yet paid) would be owed by the Fund to the Distributor with respect to
such class.
SECTION 7. All agreements related to this Plan shall be in
writing, and shall be approved by vote of a majority of both (a) the Directors
of the Fund and (b) the Qualified Directors, cast in person at a meeting called
for the purpose of voting on such approval, provided, however, that the identity
of a particular Service Organization executing any such agreement may be
ratified by such a vote within 90 days of such execution. Any agreement related
to this Plan shall provide:
A. That such agreement may be terminated in respect of any class of
the Fund at any time, without payment of any penalty, by vote of
a majority of the Qualified Directors or by vote of a majority of
the outstanding voting securities of the class, on not more than
60 days' written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
SECTION 8. This Plan may not be amended to increase materially
the amount of fees permitted pursuant to Section 2 hereof without the approval
of a majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
2
<PAGE>
<PAGE>
SECTION 9. The Fund is not obligated to pay any administration,
shareholder services or distribution expense in excess of the fee described in
Section 2 hereof, and, in the case of Class A shares, any expenses of
administration, shareholder services and distribution of Class A shares of the
Fund accrued in one fiscal year of the Fund may not be paid from administration,
shareholder services and distribution fees received from the Fund in respect of
Class A shares in any other fiscal year.
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
<PAGE>
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION AGREEMENT, dated as of
, 19 between Seligman Financial Services, Inc. ("Seligman Financial
Services") and (the "Service Organization").
The Parties hereto enter into a Administration, Shareholder Services and
Distribution Agreement ("Service Agreement") with respect to the shares of
Seligman Capital Fund, Inc., 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 Tax-Exempt Fund Series, Inc., Seligman
Tax-Exempt Series Trust (the "Funds"), and any other future mutual funds that
may become members of the Seligman Group of Investment Companies which adopt an
Administration, Shareholder Services and Distribution Plan, pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "Act"), and in
consideration of the mutual agreements herein made, agree as follows:
The Service Organization shall make such use of or provide such
information and services as may be necessary or appropriate (i) to provide
shareholder services to shareholders of the Funds and (ii) to assist Seligman
Financial Services in any distribution of shares of the Funds, including,
without limitation, making use of the Service Organization's name, client lists,
and publications, for the solicitation of sales of shares of the Funds to
Service Organization clients, and such other assistance as Seligman Financial
Services reasonably requests, to the extent permitted by applicable statute,
rule or regulation.
1. Except with respect to the Class D shares of a Fund for the first year
following the sale thereof, Seligman Financial Services shall pay to the
Service Organization a service fee (as defined in the National Association
of Securities Dealers, Inc. Rules of Fair Practice) not to exceed .25 of 1%
per annum of the average daily net assets of each class of shares of each
Fund attributable to the clients of the Service Organization.
2. With respect to the first year following the sale of Class D shares of a
Fund, Seligman Financial Services shall pay to the Service Organization at
or promptly after the time of sale a service fee (as defined in the
National Association of Securities Dealers, Inc. Rules of Fair Practice)
not to exceed .25 of 1% of the net asset value of the Class D shares sold
by the Service Organization. Such service fee shall be paid to the Service
Organization solely for personal services and/or the maintenance of
shareholder accounts to be provided by the Service Organization to the
purchaser of such Class D Shares over the course of the first year
following the sale.
3. Any service fee paid hereunder shall be paid solely for personal services
and/or the maintenance of shareholder accounts. For greater certainty, no
part of a service fee shall be paid for subtransfer agency services,
subaccounting services, or administrative services.
<PAGE>
<PAGE>
4. In addition to payment of the service fee, from time to time Seligman
Financial Services may make payments to the Service Organization in
addition to those contemplated above for providing distribution assistance
with respect to assets invested in each Fund by its clients.
5. Neither the Service Organization nor any of its employees or agents are
authorized to make any representation concerning the Funds or the Funds'
shares except those contained in the then current Prospectus, copies of
which will be supplied by Seligman Financial Services. The Service
Organization shall have no authority to act as agent for Seligman Financial
Services or the Funds.
6. In consideration of the services provided pursuant to paragraphs 1, 2
and/or 4 above, the Service Organization shall be entitled to receive fees
as are set forth in Exhibit A hereto as may be amended from time to time by
Seligman Financial Services. Seligman Financial Services has no obligation
to make any such payments and the Service Organization agrees to waive
payment of its fee until Seligman Financial Services is in receipt of the
fee from the Fund(s). The payment of fees has been authorized pursuant to
an Administration, Shareholder Services and Distribution Plans (the
"Plans") approved by the Directors/Trustees and the shareholders of the
Funds pursuant to the requirements of the Act and such authorizations may
be withdrawn at any time.
7. It is understood that the Funds reserve the right, at their discretion and
without notice, to suspend or withdraw the sale of shares of the Funds.
This Agreement shall not be construed to authorize the Service Organization
to perform any act that Seligman Financial Services would not be permitted
to perform under the respective Distributing Agreements between each of the
Funds and Seligman Financial Services.
8. Subject to the proviso in Section 6 of the Plans, this Agreement shall
continue until December 31 of the year in which any Plan has first been
approved by shareholders and through December 31 of each year thereafter
provided such continuance is specifically approved at least annually by a
vote of a majority of (i) the Fund's Directors/Trustees and (ii) the
Qualified Directors/Trustees cast in person at a meeting called for the
purpose of voting on such approval and provided further that the Service
Organization shall not have notified Seligman Financial Services in writing
at least 60 days prior to the anniversary date of the previous continuance
that it does not desire such continuance. This Agreement may be terminated
at any time without payment of any penalty with respect to any of the Funds
by vote of a majority of the Qualified Directors/Trustees, or by vote of a
majority of the outstanding voting securities of the particular Fund or
class or series of a Fund, on 60 days' written notice to the Service
Organization and Seligman Financial Services. Notwithstanding anything
contained herein, in the event that any of the Plans shall be terminated or
any of the Plans or any part thereof shall be found invalid or ordered
terminated by any regulatory or judicial authority, or the Service
Organization shall fail to perform the services contemplated by this
Agreement, such determination to be made in good faith by Seligman
Financial Services, this Agreement may be terminated with respect to such
Plan effective upon receipt of written notice thereof by the Service
Organization. This Agreement will also terminate automatically in the event
of its assignment.
<PAGE>
<PAGE>
9. All communications to Seligman Financial Services shall be sent to it at
its offices, 100 Park Avenue, New York, New York 10017.
Any notice to the Service Organization shall be duly given if mailed or
telegraphed to it at the address shown below.
10. As used in this Agreement, the terms "assignment", "interested person" and
"vote of a majority of the outstanding voting securities" shall have the
respective meanings specified in the Act and in the rules and regulations
thereunder and the term "Qualified Directors/Trustees" shall mean the
Directors/Trustees of a Fund who are not interested persons of the Fund and
have no direct or indirect financial interest in its Plan or in any
agreements related to the Plan.
11. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or to
impose any duty upon, any of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, Seligman Financial Services and the Service Organization
have caused this Agreement to be executed by their duly authorized offices as of
the date first above written.
SELIGMAN FINANCIAL SERVICES, INC.
By
--------------------------------
Stephen J. Hodgdon, President
SERVICE ORGANIZATION
--------------------------------
By
--------------------------------
Address
---------------------------
--------------------------------
1/95
<PAGE>
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION AGREEMENT
EXHIBIT A
The payment schedule for Service Organizations is set forth immediately below:
<TABLE>
<CAPTION>
AVERAGE DAILY FEES AS A PERCENTAGE
NET ASSETS OF EACH FUND'S/SERIES'
ATTRIBUTABLE TO NET ASSETS ATTRIBUTABLE
FUND NAME SERVICE ORGANIZATIONS TO SERVICE ORGANIZATIONS*
- --------- --------------------- -------------------------
CLASS A SHARES CLASS A SHARES/ CLASS D
-------------- ---------------
CLASS B SHARES+ SHARES**
--------------- --------
<S> <C> <C> <C>
Seligman Capital Fund, Inc. $100,000 or more .25% 1.00%
Seligman Cash Management Fund, Inc: $100,000 or more -0-/.25% 1.00%
Seligman Common Stock Fund, Inc. $100,000 or more .25% 1.00%
Seligman Communications and Information Fund, Inc. $100,000 or more .25% 1.00%
Seligman Frontier Fund, Inc. $100,000 or more .25% 1.00%
Seligman Growth Fund, Inc. $100,000 or more .25% 1.00%
Seligman Henderson Global Fund Series, Inc:
Seligman Henderson Emerging Markets Growth Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Smaller Companies Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Growth Opportunities Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Technology Fund $100,000 or more .25% 1.00%
Seligman Henderson International Fund $100,000 or more .25% 1.00%
Seligman High Income Fund Series:
U.S. Government Securities Portfolio $100,000 or more .25% 1.00%
High-Yield Bond Portfolio $100,000 or more .25% 1.00%
Seligman Income Fund, Inc. $100,000 or more .25% 1.00%
Seligman New Jersey Tax-Exempt Fund, Inc. $100,000 or more .25% 1.00%
Seligman Pennsylvania Tax-Exempt Fund Series $100,000 or more .25% 1.00%
Seligman Tax-Exempt Fund Series, Inc:
National Series $100,000 or more .10% 1.00%
Colorado Series $100,000 or more .10% 1.00%
Georgia Series $100,000 or more .10% 1.00%
Louisiana Series $100,000 or more .10% 1.00%
Maryland Series $100,000 or more .10% 1.00%
Massachusetts Series $100,000 or more .10% 1.00%
Michigan Series $100,000 or more .10% 1.00%
Minnesota Series $100,000 or more .10% 1.00%
Missouri Series $100,000 or more .10% 1.00%
New York Series $100,000 or more .10% 1.00%
Ohio Series $100,000 or more .10% 1.00%
Oregon Series $100,000 or more .10% 1.00%
South Carolina Series $100,000 or more .10% 1.00%
Seligman Tax-Exempt Series Trust:
California Tax-Exempt Quality Series $100,000 or more .10% 1.00%
California Tax-Exempt High-Yield Series $100,000 or more .10% 1.00%
Florida Tax-Exempt Series $100,000 or more .25% 1.00%
North Carolina Tax-Exempt Series $100,000 or more .25% 1.00%
</TABLE>
March 21, 1996
* Included in each of the percentages above is the service fee (as defined in
the National Association of Securities Dealers, Inc. Rules of Fair Practice)
with respect to each class of shares referred to in paragraph 1 of this
Agreement. Except as provided in Footnote ** below, Seligman Financial Services
shall pay the fees provided for above to the Service Organization quarterly.
** At or promptly after the time of sale of any Class D Shares, a Service
Organization shall be paid 1.00% of the net asset value of the Class D Shares
sold by it. The difference between .75% and the amount paid is comprised of the
service fee referred to in paragraph 1 of this Agreement for services to be
provided to Class D shareholders over the course of the one year period
immediately following the sale.
+ Class B Shares are not available for the U.S. Government Securities Portfolio
of Seligman High Income Fund Series, Selligman New Jersey Tax-Exempt Fund, Inc.,
Seligman Pennsylvania Tax-Exempt Fund Series or any Series of Seligman
Tax-Exempt Fund Series, Inc. or Seligman Tax-Exempt Series Trust.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELIGMAN CAPITAL FUND - CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 167189
<INVESTMENTS-AT-VALUE> 230574
<RECEIVABLES> 1247
<ASSETS-OTHER> 579
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 232400
<PAYABLE-FOR-SECURITIES> 7010
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564
<TOTAL-LIABILITIES> 7574
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 154985
<SHARES-COMMON-STOCK> 13839<F1>
<SHARES-COMMON-PRIOR> 12341<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (90)
<ACCUMULATED-NET-GAINS> 6546
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 63385
<NET-ASSETS> 215689<F1>
<DIVIDEND-INCOME> 1212<F1>
<INTEREST-INCOME> 408<F1>
<OTHER-INCOME> 149<F1>
<EXPENSES-NET> (1974)<F1>
<NET-INVESTMENT-INCOME> (205)<F1>
<REALIZED-GAINS-CURRENT> 35184
<APPREC-INCREASE-CURRENT> 24927
<NET-CHANGE-FROM-OPS> 59857
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (27349)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1762<F1>
<NUMBER-OF-SHARES-REDEEMED> (1994)<F1>
<SHARES-REINVESTED> 1730<F1>
<NET-CHANGE-IN-ASSETS> 59090
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (79)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 925<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1974<F1>
<AVERAGE-NET-ASSETS> 181139<F1>
<PER-SHARE-NAV-BEGIN> 13.17<F1>
<PER-SHARE-NII> (.02)<F1>
<PER-SHARE-GAIN-APPREC> 4.74<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (2.30)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 15.59<F1>
<EXPENSE-RATIO> 1.09<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A only. All other data are fund level.
</FN>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 004
<NAME> SELIGMAN CAPITAL FUND - CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 167189
<INVESTMENTS-AT-VALUE> 230574
<RECEIVABLES> 1247
<ASSETS-OTHER> 579
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 232400
<PAYABLE-FOR-SECURITIES> 7010
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564
<TOTAL-LIABILITIES> 7574
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 154985
<SHARES-COMMON-STOCK> 612<F1>
<SHARES-COMMON-PRIOR> 248<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (90)
<ACCUMULATED-NET-GAINS> 6546
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 63385
<NET-ASSETS> 9137<F1>
<DIVIDEND-INCOME> 31<F1>
<INTEREST-INCOME> 10<F1>
<OTHER-INCOME> 4<F1>
<EXPENSES-NET> (94)<F1>
<NET-INVESTMENT-INCOME> (49)<F1>
<REALIZED-GAINS-CURRENT> 35184
<APPREC-INCREASE-CURRENT> 24927
<NET-CHANGE-FROM-OPS> 59857
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (1045)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 424<F1>
<NUMBER-OF-SHARES-REDEEMED> (123)<F1>
<SHARES-REINVESTED> 63<F1>
<NET-CHANGE-IN-ASSETS> 59090
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (79)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 24<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 94<F1>
<AVERAGE-NET-ASSETS> 4672<F1>
<PER-SHARE-NAV-BEGIN> 12.82<F1>
<PER-SHARE-NII> (.14)<F1>
<PER-SHARE-GAIN-APPREC> 4.56<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (2.30)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 14.94<F1>
<EXPENSE-RATIO> 2.02<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
<PAGE>
