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<PAGE>
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 [X]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 53 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 28 [X]
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL FUND, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
<TABLE>
<C> <S> <C> <C>
[X] immediately upon filing pursuant to paragraph (b) [ ] on (date) pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (b) [ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
</TABLE>
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 December
20, 1996.
<PAGE>
<PAGE>
File No. 2-33566
811-1886
SELIGMAN CAPITAL FUND, INC.
POST-EFFECTIVE AMENDMENT NO. 53
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
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<C> <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
<CAPTION>
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- -----------------------------------------------
<C> <S> <C>
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
</TABLE>
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<PAGE>
SELIGMAN CAPITAL FUND, INC.
100 Park Avenue
New York, NY 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450 -- all continental United States
For Retirement Plan Information -- Toll-Free Telephone: (800) 445-1777
May 1, 1997
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 A shares purchased in an amount of $1,000,000 or more are sold
without an initial sales load but are subject to a contingent deferred sales
load ('CDSL') of 1% on redemptions within eighteen months of purchase. Class B
shares are sold without an initial sales load but are subject to a 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 .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 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. No CDSL will be imposed on shares acquired through
the reinvestment of dividends or distributions received from any Class of
shares. See 'Alternative Distribution System.' Shares of the Fund may be
purchased through any authorized investment dealer.
This Prospectus sets forth concisely the information a prospective investor
should know about the Fund before investing. Please read it carefully before you
invest and keep it for future reference. Additional information about the Fund,
including a Statement of Additional Information, has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
available upon request and without charge by calling or writing the Fund at the
telephone numbers or the address set forth above. The Statement of Additional
Information is dated the same date as this Prospectus and is incorporated herein
by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Summary of Fund Expenses.................... 2 Administration, Shareholder Services and Distribution Plan..... 19
Financial Highlights........................ 3 Exchange Privilege............................................. 21
Alternative Distribution System............. 5 Further Information about Transactions in the Fund............. 22
Investment Objective, Policies and Risks.... 7 Dividends and Distributions.................................... 23
Management Services......................... 8 Federal Income Taxes........................................... 23
Purchase of Shares.......................... 11 Shareholder Information........................................ 24
Telephone Transactions...................... 16 Advertising the Fund's Performance............................. 26
Redemption of Shares........................ 18 Organization and Capitalization................................ 27
</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; except 5% in 1st year 1% in 1st year
1% in first 18 4% in 2nd year None thereafter
months if initial 3% in 3rd and
sales load was 4th years
waived in full 2% in 5th year
due to size of 1% in 6th year
purchase None thereafter
Redemption Fees.................................................... None None None
Exchange Fees...................................................... None None None
ANNUAL FUND OPERATING EXPENSES FOR 1996 CLASS A CLASS B CLASS D
(as a percentage of average net assets) ------- ------- -------
Management Fees.................................................... .49% .49% .49%
12b-1 Fees......................................................... .24% 1.00%* 1.00%*
Other Expenses..................................................... .34% .34% .34%
------- ------- -------
Total Fund Operating Expenses...................................... 1.07% 1.83% 1.83%
------- ------- -------
------- ------- -------
</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 initial sales loads are available in
certain circumstances. Class A shares are not subject to an initial sales load
for purchases of $1,000,000 or more; however, such shares are subject to a CDSL,
a one-time charge, only if the shares are redeemed within eighteen months of
purchase. The CDSLs 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.
'Other Expenses' for Class B shares are estimated based on expenses incurred
during 1996. 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
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) redemption at the
end of the periods shown............................................Class A $ 58 $80 $ 104 $172
Class B`D' $ 69 $88 $ 119 $195
Class D $ 29`D'`D' $58 $ 99 $215
</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.
* Includes an annual distribution fee of .75 of 1% and an annual service fee of
.25 of 1%. Pursuant to the Rules of the National Association of Securities
Dealers, Inc., the aggregate deferred sales loads and annual distribution
fees on Class 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) a 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, $58
for 3 years and $99 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) a 5% annual return and (2) no redemption at the end of one
year, the expenses on a $1,000 investment would be $19.
2
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights for the Fund's Class A, Class B 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 1996 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.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from a Class'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 a Class'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.
Average commission rate paid represents the average commissions paid by the
Fund to purchase or sell securities. It is determined by dividing the total
commission dollars paid by the number of shares purchased and sold during the
period for which commissions were paid.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1996'o' 1995'o' 1994'o' 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
year........................... $15.59 $13.17 $15.95 $17.04 $16.66 $12.45 $12.38 $10.41 $11.02
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss).... (.04) (.02) (.06) (.03) .02 .03 .06 .08 .04
Net realized and unrealized
investment gain (loss)......... 2.68 4.74 (1.12) .84 1.89 6.66 .11 3.25 .22
-------- -------- -------- -------- -------- -------- -------- -------- --------
Increase (decrease) from
investment operations.......... 2.64 4.72 (1.18) .81 1.91 6.69 .17 3.33 .26
Distributions from net gain
realized....................... (1.87) (2.30) (1.60) (1.90) (1.53) (2.48) (.10) (1.36) (.87)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in net
asset value.................... .77 2.42 (2.78) (1.09) .38 4.21 .07 1.97 (.61)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of year.... $16.36 $15.59 $13.17 $15.95 $17.04 $16.66 $12.45 $12.38 $10.41
-------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN BASED ON NET ASSET
VALUE: 16.74% 37.32% (7.06)% 4.80% 11.56% 54.67% 1.38% 32.44% 2.47%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets*........................ 1.07% 1.09% 1.13% 1.13% .96% 1.01% .92% .88% .99%
Net investment income (loss) to
average net assets............. (.25)% (.11)% (.39)% (.17)% .11% .25% .47% .67% .36%
Portfolio turnover.............. 94.97% 103.60% 70.72% 46.84% 42.32% 42.20% 23.05% 49.51% 92.07%
Average commission rate paid.... $.0537
Net assets, end of year (000s
omitted)....................... $259,514 $215,688 $162,556 $196,212 $198,063 $172,676 $120,759 $124,623 $114,564
<CAPTION>
CLASS A
----------------------
YEAR ENDED DECEMBER 31,
----------------------
1987
--------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
year........................... $12.72
--------
Net investment income (loss).... (.03)
Net realized and unrealized
investment gain (loss)......... (.29)
--------
Increase (decrease) from
investment operations.......... (.32)
Distributions from net gain
realized....................... (1.38)
--------
Net increase (decrease) in net
asset value.................... (1.70)
--------
Net asset value, end of year.... $11.02
--------
--------
TOTAL RETURN BASED ON NET ASSET
VALUE: (2.59)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets*........................ .83%
Net investment income (loss) to
average net assets............. (.69)%
Portfolio turnover.............. 72.61%
Average commission rate paid....
Net assets, end of year (000s
omitted)....................... $151,965
</TABLE>
- ------------
'o' Per share amounts for the years ended December 31, 1996, 1995 and 1994 are
calculated based on average shares outstanding.
* Excludes interest expense of $262,586 in 1987.
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 by shareholders on
November 23, 1992 and became effective on January 1, 1993.
3
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS D
--------- ------------------------------------------------
4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
TO --------------------------------- TO
12/31/96'o' 1996'o' 1995'o' 1994'o' 12/31/93
--------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................... $16.43 $14.94 $12.82 $15.86 $16.43
--------- ------ ------ ------ --------
Net investment income (loss)............................... (.10) (.16) (.14) (.33) (.08)
Net realized and unrealized investment gain (loss)......... 1.01 2.56 4.56 (1.11) 1.41
--------- ------ ------ ------ --------
Increase (decrease) from investment operations............. .91 2.40 4.42 (1.44) 1.33
Distributions from net gain realized....................... (1.87) (1.87) (2.30) (1.60) (1.90)
--------- ------ ------ ------ --------
Net increase (decrease) in net asset value................. .96 .53 2.12 (3.04) (.57)
--------- ------ ------ ------ --------
Net asset value, end of period............................. $15.47 $15.47 $14.94 $12.82 $15.86
--------- ------ ------ ------ --------
--------- ------ ------ ------ --------
TOTAL RETURN BASED ON NET ASSET VALUE: 5.33% 15.84% 35.98% (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................. 1.89%`D' 1.83% 2.02% 2.66% 2.26%`D'
Net investment income (loss) to average net assets......... (.99)%`D' (1.00)% (1.06)% (2.28)% (1.32)%`D'
Portfolio turnover......................................... 94.97%`D'`D' 94.97% 103.60% 70.72% 46.84% D'`D'`D'
Average commission rate paid............................... $.0537`D'`D' $.0537
Net assets, end of period (000s omitted)................... $4,337 $19,974 $9,137 $3,179 $2,749
</TABLE>
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'o' Per share amounts for the periods ended December 31, 1996, 1995 and 1994 are
calculated on average shares outstanding.
* Commencement of offering of shares.
`D' Annualized.
`D'`D' For the year ended December 31, 1996.
`D'`D'`D' For the year ended December 31, 1993.
4
<PAGE>
<PAGE>
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 expect to maintain their investment for an extended period of
time might 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 ongoing 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.
Investors who qualify for reduced initial sales loads, as described under
'Purchase of Shares' below, might also choose to purchase Class A shares because
the sales load deducted at the time of purchase would be less or waived in full.
However, investors should consider the effect of the 1% CDSL imposed on shares
on which the initial sales load was waived in full because the amount of Class A
shares purchased was $1,000,000 or more. 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
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 (and deferred sales load, when applicable) 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 and
distribution fees applicable to each class provide for the financing of the
distribution of the shares of the Fund.
5
<PAGE>
<PAGE>
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 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 and a lower CDSL rate 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. CDSL of
price. 1% on redemptions
within 18 months of
purchase on shares
on which the
initial sales load
was waived in full
due to the size of
the purchase.
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 up to .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.
6
<PAGE>
<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.
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
7
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<PAGE>
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 Rule 144A securities will
further evolve. 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 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
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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 seventeen 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 Municipal
Fund Series, Inc., Seligman Municipal Series Trust, Seligman New Jersey
Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund Series, Seligman
Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman Select
Municipal Fund, Inc., Seligman Value Fund Series, Inc. and Tri-Continental
Corporation. The aggregate assets of the Seligman Group were approximately $14.2
billion at March 31, 1997. The Manager also provides investment management or
advice to institutional accounts having an aggregate value at March 31, 1997 of
approximately $4.2 billion.
Mr. William C. Morris is Chairman 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
1996, the management fee paid by the Fund was equal to an annual rate of .49% 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 for the year ended
December 31, 1996 amounted to 1.07% and 1.83%, respectively, of the average
daily net assets of such class. The annualized total expenses of the Fund's
Class B shares for the period ended December 31, 1996 amounted to 1.89% of the
average daily net assets of such class.
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, 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, 1996, 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 plc. The
Subadviser, headquartered in New York, was created to provide international and
global investment advice to institutional and individual investors
9
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<PAGE>
and investment companies in the United States. The Subadviser also 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., certain portfolios of Seligman Portfolios, Inc.,
each series of Seligman Value Fund Series, 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.; Co-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 and Co-Portfolio Manager of SPI's Seligman Henderson Global Growth
Opportunities 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 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 1996 Annual Report to Shareholders.
Copies of the 1996 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 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 Seligman
Mutual Funds 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%.
10
<PAGE>
<PAGE>
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 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; 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 FUND ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE
INVEST-A-CHECK'r'. THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE SELIGMAN
TIME HORIZON MATRIX'sm' ASSET ALLOCATION PROGRAM IS $10,000. FOR INFORMATION
ABOUT THIS PROGRAM, CONTACT YOUR FINANCIAL ADVISOR.
No purchase order may be placed for Class B shares for an amount of
$250,000 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, any 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, any 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 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 of the Fund at any time
through any authorized dealer or by sending a check payable to the 'Seligman
Group of Funds' in our postage-paid return envelope or directly to P.O. BOX
3947, NEW YORK, NY 10008-3947. Checks for investment must be in U.S. dollars
drawn on a domestic bank. Credit card convenience checks and third party checks
(i.e., checks made payable to someone other than the 'Seligman Group of Funds')
may not be used to open a new fund account or purchase additional shares of the
Fund. The check should be accompanied by an investment slip (provided at the
bottom of shareholder account statements) and 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
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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, any applicable sales
load.
Seligman Data Corp. may 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.
<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 - or more* 0 0 0
- ------------
* Shares acquired at net asset value pursuant to the above
schedule will be subject to a CDSL of 1% if redeemed
within 18 months of purchase. See 'Purchase of Shares --
Contingent Deferred Sales Load.'
</TABLE>
There is no initial sales load on purchases of Class A shares of $1,000,000
or more ('NAV sales'); however, such shares are subject to a CDSL of 1% if
redeemed within eighteen months of purchase.
SFSI shall pay broker/dealers, from its own resources, a fee on sales of
$1,000,000 or more, calculated as follows: 1.00% of NAV sales up to but not
including $2 million; .80% of NAV sales from $2 million up to but not including
$3 million; .50% of NAV sales from $3 million up to but not including $5
million; and .25% of NAV sales from $5 million and above. The calculation of the
fee will be based on assets held by a 'single person' as defined below.
SFSI shall also pay broker/dealers, from its own resources, a fee on assets
of certain investments in Class A shares of the Seligman Mutual Funds
participating in an 'eligible employee benefit plan' (as defined below under
'Special Programs') that are
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attributable to the particular broker/dealer. The shares eligible for the fee
are those on which an initial sales load was not paid because either the
participating eligible employee benefit plan has at least (i) $500,000 invested
in the Seligman Mutual Funds or (ii) 50 eligible employees to whom such plan is
made available. Class A shares representing only an initial purchase of Seligman
Cash Management Fund are not eligible for the fee. Such shares will become
eligible for the fee once they are exchanged for shares of another Seligman
Mutual Fund. The payment is based on cumulative sales during a single calendar
year, or portion thereof. The payment schedule, for each calendar year, is as
follows: 1.00% of sales up to but not including $2 million; 80% of sales from $2
million up to but not including $3 million; .50% of sales from $3 million up to
but not including $5 million; and .25% of sales from $5 million and above.
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.
Class A shares purchased without an initial sales load in accordance with
the sales load schedule or pursuant to a Volume Discount, Right of Accumulation
or Letter of Intent are subject to a CDSL of 1% on redemptions within eighteen
months of purchase.
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 an initial 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 an initial sales
load with the total net asset value of shares of those Seligman Mutual Funds
already owned that were sold with an initial 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 an initial 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 initial 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 an initial 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 an initial 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 29.
SPECIAL PROGRAMS. The Fund may sell Class A shares at net asset value to
present and retired 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 an initial sales load in
connection with the acquisition of cash and securities owned by other investment
companies; to any registered unit investment trust which is the issuer of
periodic payment plan certifi-
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cates, 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 (not to exceed the dollar value of such
redemption proceeds); 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; to other investment
companies in the Seligman Group in connection with a deferred fee arrangement
for outside directors; and to 'eligible employee benefit plans' which have at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. '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. Employee benefit plans eligible for
net asset value sales, as described above, will be subject to a CDSL of 1% for
terminations at the plan level only, on redemptions of shares purchased within
eighteen months of plan termination. Sales pursuant to a 401(k) alliance program
which has an agreement with SFSI are available at net asset value and are not
subject to a CDSL.
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 .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, which are subject to an annual
service fee of .25% but no distribution fee. Shares purchased through
reinvestment of dividends and distributions on Class B shares also will convert
automatically to Class A shares along with the underlying shares on which they
were earned. 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.
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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). 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. Pursuant to an agreement with FEP
Capital, L.P. ('FEP') to fund payments in respect of Class B shares, SFSI has
agreed to pay any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on any redemption of Class A shares
purchased during the preceding eighteen months if such shares were acquired at
net asset value pursuant to the sales load schedule provided under 'Class A
Shares -- Initial Sales Load.' Employee benefit plans eligible for net asset
value sales as described above under 'Special Programs' may be subject to a CSDL
of 1% for terminations at the plan level only, on redemptions of shares
purchased within eighteen months prior to plan termination.
The 1% CDSL normally imposed on redemptions of certain Class A shares
(i.e., those purchased during the preceding eighteen months at net asset value
pursuant to the sales load schedule provided under 'Class A Shares -- Initial
Sales Load') will be waived on shares that were purchased through Dean Witter
Reynolds, Inc. ('Dean Witter') by certain Chilean institutional investors (i.e.,
pension plans, insurance companies and mutual funds). Upon redemption of such
shares within an eighteen month period, Dean Witter will reimburse SFSI a pro
rata portion of the fee it received from SFSI at the time of sale of such
shares.
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 held for a period of time
longer than the applicable CDSL period. Shares held for the longest period of
time within the applicable CDSL 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. No
CDSL will be imposed on shares acquired through the investment of dividends or
distributions from any Class A, Class B or Class D shares of Seligman Mutual
Funds.
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>
<S> <C>
Total shares to be redeemed
(122.449 @ $12.25) as follows:.............. $1,500.00
---------
---------
Dividend/Distribution shares
(5 @ $12.25)................................ 61.25
Shares held more than 1 year (100 @ $12.25)... 1,225.00
Shares held less than 1 year subject to CDSL
(17.449 @ $12.25)........................... 213.75
---------
Gross proceeds of redemption................ $1,500.00
Less CDSL (17.449 shares @
$12.00 = $209.39 X 1% = $2.09)........... (2.09)
---------
Net proceeds of redemption.................. $1,497.91
---------
---------
</TABLE>
For federal income tax purposes, the amount of the CDSL will reduce the
gain or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.
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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 (an '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 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 A, 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.
For the period from the date Seligman Global Horizon Funds (the 'Offshore
Fund') commences offering its shares, until May 31, 1997, SFSI will reimburse
any CDSL charged upon the redemption of Class B or Class D shares of any
Seligman Mutual Fund by a non-U.S. resident alien investor who uses the
redemption proceeds to purchase Class B or Class A shares, respectively, of the
Offshore Fund through Merrill Lynch, Pierce, Fenner & Smith Incorporated, or any
of its affiliates (collectively, 'Merrill Lynch'). Merrill Lynch will, in turn,
reimburse SFSI for the amount of CDSL so reimbursed by it over a period of four
years.
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 Seligman Mutual Funds. 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
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<PAGE>
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 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. Group retirement plans that may allow plan
participants to place telephone exchanges directly with the Fund must first
provide a letter of authorization signed by the plan custodian or trustee, and
provide a telephone services election form signed by each plan participant.
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 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 telephone services election form.
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 may 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 the addition of telephone services to an existing account or
termination of telephone services will be sent to the shareholder at the address
of record.
17
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REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit ('uncertificated') form
without charge, except a CDSL, if applicable, at any time by SENDING A WRITTEN
REQUEST to Seligman Data Corp., P.O. Box 3947, New York, NY 10008-3947; or if
the request is being sent by overnight delivery service to 100 Park Avenue, New
York, 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 without charge, except a CDSL, if applicable, 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 (i.e., requests to sell
shares at a specific price or on a future date).
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 CORPORATION, EXECUTOR,
ADMINISTRATOR, TRUSTEE, CUSTODIAN OR RETIREMENT PLAN. 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 (except for shares purchased without an
initial sales load due to the size of the purchase), 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 A shares which were purchased
without an initial sales load because the purchase amount was $1,000,000 or more
are redeemed within eighteen months 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 A
Shares -- Initial Sales Load' above. 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
18
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<PAGE>
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
payable to the address of record may be made once per day, in an amount of up to
$50,000 per fund 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 telephone will not be accepted within 30 days following
an address change. Qualified 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. Payment of redemption proceeds will be delayed
on 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 an initial sales load, all or any part of the investment in
Class A shares of the Fund or in shares of any of the other Seligman Mutual
Funds. If a shareholder redeems shares and the redemption was subject to a CDSL,
the shareholder may reinstate all or any part of 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 applicable
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; AND THE FUND'S MINIMUM INITIAL
INVESTMENT AMOUNT MUST BE MET AT THE TIME OF REINSTATEMENT.
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 distri-
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bution assistance with respect to assets invested in the Fund, (ii) compensation
to Service Organizations for providing administration, accounting and other
shareholder services with respect to Fund shareholders, and (iii) otherwise
promoting the sale of shares of the Fund, including paying for the preparation
of advertising and sales literature and the printing and distribution of such
promotional materials and prospectuses to prospective investors and defraying
SFSI's costs incurred in connection with its marketing efforts with respect to
shares of the Fund. The Manager, in its sole discretion, may also make similar
payments to SFSI from its own resources, which may include the management fee
that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
respect of Class A shares will be used primarily to compensate Service
Organizations which enter into agreements with SFSI. Such Service Organizations
will receive from SFSI a continuing fee of up to .25% on an annual basis,
payable quarterly, of the average daily net assets of Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors of the Fund.
The Plan as it relates to Class A shares, was approved by shareholders on
November 23, 1992 and became effective on January 1, 1993. The Plan is reviewed
by the Directors annually. The total amount paid for the year ended December 31,
1996 in respect of the Fund's Class A shares pursuant to the Plan was equal to
.24% 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 distribution fees are used to pay Service Organizations a continuing
fee of up to .25% on an annual basis of the average net asset value of Class B
shares attributable to particular Service Organizations for providing personal
service and/or the maintenance of Shareholder accounts and will also be used by
SFSI to defray the expense of the payment of 4% made by it to Service
Organizations at the time of the sale of Class B shares. In that connection,
SFSI has assigned FEP its interest in most of the fees payable to it in respect
of the Class B Shares, other than the portion payable to Service Organizations
on a continuing basis. Proceeds from 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 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 1% made by it to Service
Organizations at the time of the sale of Class D shares. The amounts expended by
SFSI in any one year upon the initial purchase of Class 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 and became effective April 22, 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 period ended
December 31, 1996 by the Fund's Class B and Class D shares pursuant to the Plan
was 1% per annum of the Classes' average daily net assets. 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.
20
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EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any part or all of an investment in the Fund for shares of any of the other
mutual funds in the Seligman Group. Exchanges may be made by mail, or by
telephone, if the shareholder has telephone services.
Class A, Class B and Class D shares may be exchanged only for Class A,
Class B and Class D shares, respectively, of another Seligman Mutual Fund on the
basis of relative net asset value.
If shares that are subject to a CDSL are exchanged for shares of another
Seligman Mutual Fund, then for purposes of assessing the CDSL payable upon
disposition of the exchanged shares, the applicable holding period shall be
reduced by the holding period of the original 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 Emerging Markets Growth
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 consists of the Seligman U.S. Government
Securities Series and the Seligman High-Yield Bond Series which seek high
current income by investing in debt securities.
SELIGMAN INCOME FUND, INC. seeks high current income and the possibility
of improvement of future income and capital value.
SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and
a National Series. The National Municipal Series seeks to provide maximum income
exempt from regular federal income taxes; individual state series, each seeking
to maximize income exempt from regular 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 MUNICIPAL SERIES TRUST includes the Seligman California
Municipal Quality Series, the Seligman California Municipal High-Yield Series,
the Seligman Florida Municipal Series and the Seligman North Carolina Municipal
Series, each of which invests in municipal securities of its designated state.
(Does not currently offer Class B shares.)
SELIGMAN NEW JERSEY MUNICIPAL FUND, INC. invests in investment grade New
Jersey municipal securities. (Does not currently offer Class B shares.)
SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES invests in investment grade
Pennsylvania municipal securities. (Does not currently offer Class B shares.)
21
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SELIGMAN VALUE FUND SERIES, INC. consists of the Seligman Large-Cap Value
Fund and the Seligman Small-Cap Value Fund, each of which seeks capital
appreciation by investing in equity securities of value companies.
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 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 this
purpose. Additionally, the Fund reserves the right to refuse any order for the
purchase of shares.
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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. 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
Seligman Mutual Fund will continue to receive dividends and gains as elected
prior to such exchange unless otherwise specified. In the event that a
shareholder redeems, transfers or exchanges 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, 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
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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 advisors 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 semi-annually regarding the Fund. General
information about the Fund may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, 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, or (212)-682-7600 outside the
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
AND FORM 1099-DIV CAN BE ORDERED. TO
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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.
For investments in the Seligman Time Horizon Matrix'sm' Asset Allocation
Program, the minimum amount is $500 at regular monthly intervals or $1,000 at
regular quarterly intervals. (See 'Terms and Conditions' on page 29.)
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. For exchanges into the Seligman Time
Horizon Matrix'sm' Asset Allocation Program, the minimum amount is $500 at
regular monthly intervals or $1,000 at regular quarterly intervals. 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 or another Seligman Mutual 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 shareholder who owns or purchases shares worth $5,000 or more
held as book credits. Holders of Class A shares purchased at net asset value
because the purchase amount was $1,000,000 or more should bear in mind that
withdrawals will be subject to a 1% CDSL if made within eighteen months of
purchase of such shares. Holders of Class B shares may elect to use this service
immediately, although certain withdrawals may be subject to a CDSL. 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 29.)
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 will be deducted from a shareholder's account, if requested.
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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:
-- Individual Retirement Accounts (IRAs);
-- Savings Incentive Match Plans for Employees (SIMPLE 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
-- Money Purchase 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.
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.
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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 shares is dishonored for any reason, Seligman Data
Corp. will cancel the purchase and may redeem additional shares, if any, held in
the 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 such 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 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 will 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
and any applicable CDSL. 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. Automatic
withdrawals of Class A shares which were purchased at net asset value because
the purchase amount was $1,000,000 or more will be subject to a CDSL if made
within eighteen months of purchase of such shares. Under this Service, a Class B
shareholder who requests both dividends and distributions in additional shares
may withdraw up to 12% of the value of the shareholder's fund account (at the
time of election) per annum, without the imposition of a 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 into 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 an initial 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 an initial
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 Seligman Mutual Funds.
5/97
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STATEMENT OF ADDITIONAL INFORMATION
May 1, 1997
SELIGMAN CAPITAL FUND, INC.
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone (800) 221-2450 all continental United States
For Retirement Plan Information - Toll-Free Telephone (800) 445-1777
This Statement of Additional Information expands upon and supplements
the information contained in the current Prospectus of Seligman Capital Fund,
Inc., (the "Fund") dated May 1, 1997. 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 A shares purchased in
an amount of $1,000,000 or more are sold without an initial sales load but are
subject to a contingent deferred sales load ("CDSL") of 1% (of the current net
asset value or original purchase price, whichever is less) if such shares are
redeemed within eighteen months of purchase. Class B shares may be purchased at
net asset value and are subject to a 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 higher ongoing fees that generally will cause the Class B shares and Class
D shares to have higher expense ratios 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 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....................... 16
Distribution Plan....................... 9 Financial Statements...................... 16
Portfolio Transactions.................... 10 Appendix ................................. 17
</TABLE>
EQCA1A
<PAGE>
<PAGE>
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 1996, 1995 or
1994.
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 indicated above or 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 ).
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 for the years ended December 31, 1996 and
1995 were 94.97% and 103.60%, respectively.
-2-
<PAGE>
<PAGE>
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 selling call
options, 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 entering into these types of transactions,
and will not do so without the prior approval of the Fund's Board of
Directors.
- --------
* The Fund has applied for, and expects to receive, an exemptive order from the
Securities and Exchange Commission that would permit it to purchase shares of
other investment companies advised by the Manager for the limited purpose of
hedging its obligations in connection with the deferred fee arrangement for
outside directors referred to under "Directors and Officers" below.
-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
(59) the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated, investment managers and
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, President, J. &
W. Seligman & Co., Incorporated; Chairman, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust Company, trust company; and
Director, Daniel Industries Inc., manufacturer of oil and gas metering
equipment.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(44)
Director and President , J. & W. Seligman & Co. Incorporated, investment
managers and advisers; President (with the exception of Seligman Quality
Municipal Fund, Inc. and Seligman Select Municipal Fund, Inc.) and
Director or Trustee, the Seligman Group of Investment Companies; and
Seligman Advisors, Inc., advisers; Chairman and President, Seligman Data
Corp., shareholder service agent; and Director, Seligman Financial
Services, Inc., broker/dealer; Seligman Services, Inc., broker/dealer;
Seligman Henderson Co., advisers; formerly, Director, Seligman Securities,
Inc., broker/dealer; and J. & W. Seligman Trust Company, trust company.
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy at Tufts University; Director
or Trustee, the Seligman Group of Investment Companies; Chairman, American
Council on Germany; a Governor of the Center for Creative Leadership;
Director, USLIFE Corporation, life insurance; National Committee on
U.S.-China Relations, National Defense University; 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 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
</TABLE>
-4-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
ALICE S. ILCHMAN Director
(62)
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
(64)
Director, various corporations; Director or Trustee, the Seligman Group of
Investment Companies; 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; Oklahoma City Public Schools Foundation; and
Member of the Business Roundtable and National Petroleum Council;
formerly, Chairman of the Board and Chief Executive Officer, Kerr-McGee
Corporation, energy and chemicals.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW* Director
(67)
Retired Chairman and Senior Partner, Sullivan & Cromwell, law firm;
Director or Trustee, the Seligman Group of Investment Companies; 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 The New York Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(54)
Attorney; Director or Trustee, the Seligman Group of Investment Companies;
Trustee, Geraldine R. Dodge Foundation, charitable foundation; and
Chairman of the Board of Trustees of St. George's School (Newport, RI);
formerly, Director, the National Association of Independent Schools
(Washington, DC).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(70)
Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm; Director or
Trustee, the Seligman Group of Investment Companies; and Public Service
Enterprise Group, public utility. Park Avenue at Morris County, P.O. Box
1945, Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(69)
Director, various corporations; Director or Trustee, the Seligman Group of
Investment Companies; The Houston Exploration Company; 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
(49)
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., broker/dealer; 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, Seligman Data Corp.,
shareholder service agent; Seligman Henderson Co., advisers; J. & W.
Seligman Trust Company, trust company; and Seligman Securities, Inc.,
broker/dealer.
ROBERT L. SHAFER Director
(64)
Director, various corporations; Director or Trustee, the Seligman Group of
Investment Companies; and USLIFE Corporation, life insurance; formerly,
Vice President, Pfizer Inc., pharmaceuticals.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(62)
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, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; and Vice President and Portfolio Manager, two other
open-end investment companies in the Seligman Group of Investment
Companies.
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Seligman Financial Services, Inc.,
broker/dealer; Seligman Advisors, Inc., advisers; and Seligman Data
Corp., shareholder service agent; Vice President, the Seligman Group of
Investment Companies; and Seligman Services, Inc., broker/dealer; and
Treasurer, Seligman Holdings, Inc., holding company; and Seligman
Henderson Co., advisers; formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Senior Vice President, J. & W.
Seligman Trust Company, trust company.
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation and Corporate Secretary, J. & W.
Seligman & Co. Incorporated, investment managers and advisers; Corporate
Secretary, the Seligman Group of Investment Companies; Seligman Advisors,
Inc., advisers; Seligman Financial Services, Inc., broker/dealer; Seligman
Henderson Co., advisers; Seligman Services, Inc., broker/dealer; and
Seligman Data Corp., shareholder service agent; formerly, Secretary, J. &
W. Seligman Trust Company, trust company; and attorney, Seward and Kissel,
law firm.
THOMAS G. ROSE Treasurer
(39)
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 Fund and
Name and Compensation Accrued as part of Fund Complex
Position with Fund from Fund(1) Fund Expenses (1)(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
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director** N/A N/A N/A
John R. Galvin, Director $2,482.84 N/A $65,000.00
Alice S. Ilchman, Director 2,518.56 N/A 66,000.00
Frank A. McPherson, Director 2,482.84 N/A 65,000.00
John E. Merow, Director 2,518.56(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,518.56 N/A 66,000.00
James C. Pitney, Director 2,482.84 N/A 65,000.00
James Q. Riordan, Director 2,518.56 N/A 66,000.00
Robert L. Shafer, Director 2,518.56 N/A 66,000.00
James N. Whitson, Director 2,518.56(d) N/A 66,000.00(d)
</TABLE>
______________________
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1996.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired March 20, 1997.
(d) Deferred.
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. The total amounts of deferred
compensation (including interest) payable in respect of the Fund to Messrs.
Merow and Whitson as of December 31, 1996 were $47,424 and $11,086,
respectively. As of January 1, 1997, Mr. Merow no longer defers current
compensation. Mr. Pitney no longer defers current compensation; however, he has
accrued deferred compensation in the amount of $41,228 as of December 31, 1996.
The Fund has applied for, and expects to receive, exemptive relief that would
permit a director who has elected deferral of his or her fees to choose a rate
of return equal to either (i) the interest rate on short-term Treasury bills, or
(ii) the rate of return on the shares of any of the investment companies advised
by the manager, as designated by the director. The Fund may, but is not
obligated to, purchase shares of such investment companies to hedge its
obligations in connection with this deferral arrangement.
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
252,772 shares or 1.6% of the Fund's Class A Capital Stock at March 31, 1997. As
of that date, no Directors or Officers owned shares of the Fund's Class B or
Class D Capital Stock.
-7-
<PAGE>
<PAGE>
As of March 31, 1997, 2,121,471 Class A shares of the Fund, or 12.35% of the
Fund's capital stock and 13.71% 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.
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 $1,253,672 in 1996, $948,951 in 1995
and $945,288 in 1994, which was equivalent to annual rates of .49%, .51% and
.53%, respectively, of the average daily net assets of the Fund in 1996, 1995
and 1994.
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 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 Depositary 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 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 Subadvisory Agreement or interested persons of any such party)
and (2) the Subadviser shall not have notified
-8-
<PAGE>
<PAGE>
the Manager in writing at least 60 days prior to December 31 of any year that it
does not desire such continuance. The Subadvisory Agreement may be terminated at
any time by the Fund, on 60 days written notice to the Subadviser. The
Subadvisory Agreement will terminate automatically in the event of its
assignment or upon the termination of the Management Agreement.
For the years ended December 31, 1996 and 1995 and for the period June 1,
1994 through December 31, 1994, 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 plc.
Henderson plc, headquartered in London, is one of the largest independent money
managers in Europe. The Firm managed approximately $18.1 billion in assets as of
December 31, 1996 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 1940
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 1940 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
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<PAGE>
<PAGE>
increase or (ii) establish a new class of shares subject to the same payment
under the Plan as existing Class A shares, in which case the Class B shares will
thereafter convert into the new class instead of into Class A shares. No
material amendment to the Plan may be made except by a majority of both the
Directors and Qualified Directors.
For the year ended December 31, 1996, Seligman Financial Services, Inc.
("SFSI") received payments of $567,328 under the Plan in respect of Class A
shares, or 0.24% per annum of the average daily net assets of Class A shares.
This amount was used primarily to pay Service Organizations on a continuing
basis for providing personal services and/or maintenance of shareholder
accounts. For the period ended December 31, 1996, fees incurred by the Fund in
respect of Class B shares amounted to $14,563, or 1.00% per annum of the average
daily net assets of Class B shares. Of this amount, 0.725% per annum was paid
directly to FEP Capital, L.P. ("FEP") to compensate it for having funded, at the
time of sale (i) the 4% commission paid to selling brokers and (ii) a payment of
0.25% of sales to SFSI; 0.025% per annum was paid to SFSI; and the remaining
0.25% per annum was paid to SFSI which, in turn, made an equal payment to
Service Organizations for providing personal services and/or maintenance of
shareholder accounts. For the year ended December 31, 1996, fees incurred in
respect of Class D shares amounted to $146,973, or 1.00% per annum of the
average daily net assets of Class D shares. This amount was paid to SFSI and, in
the first twelve months after a sale, reimbursed it primarily for the 1% payment
made to dealers at the time of sale and for certain other direct distribution
costs. After the first twelve months, fees paid to SFSI are used to pay a
continuing fee to Service Organizations.
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 1996, 1995 and 1994, respectively, were
$333,393, $364,005 and $293,441.
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 A shares purchased at net asset value without an initial sales load due to
the size of the purchase are subject to a CDSL of 1% if such shares are redeemed
within eighteen months of purchase. 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.
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<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, 1996, the maximum offering price of the Fund's shares is
as follows:
CLASS A
Net asset value per Class A share.......................... $16.36
======
Maximum sales load (4.75% of offering price)............... .82
------
Offering price to public................................... $17.18
======
CLASS B AND CLASS D
Net asset value and offering price per share*.............. $15.47
======
__________
* 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 INITIAL SALES LOADS
REDUCTIONS AVAILABLE. Shares of any Seligman Mutual Fund sold with an initial
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 mutual
funds in the Seligman Group which are sold with an initial 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 Seligman Mutual
Funds sold with an initial sales load with the total net asset value of shares
of those mutual funds already owned that were sold with an initial 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 Seligman Mutual Fund on
which there was an initial 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 Seligman Mutual Fund on which
there was an initial sales load at the time of purchase will be taken into
account in orders placed through a dealer, however, only if SFSI is notified by
an investor or a dealer of the amount owned by the investor at the time the
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 initial sales loads in accordance with the sales load 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 an initial sales load of the other Seligman Mutual
Funds 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
Seligman Mutual Fund on which there was an initial sales load at the time of
purchase. Reduced initial 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.
Class A shares purchased without an initial sales load in accordance with
the sales load schedule in the Fund's prospectus, or pursuant to a Volume
Discount, Right of Accumulation or Letter of Intent are subject to a CDSL of 1%
on redemptions of such shares within eighteen months of purchase.
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<PAGE>
<PAGE>
PERSONS ENTITLED TO REDUCTIONS. Reductions in initial 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:
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 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" which have at least (i) $500,000 invested in
Seligman Mutual Funds or (ii) 50 eligible employees to whom such plan is made
available. 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 SFSI.
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").
FURTHER TYPES OF REDUCTIONS. Class A shares also may be issued without an
initial 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 (not to exceed the dollar value of such
redemption proceeds); 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; to other investment
companies in the Seligman Group in connection with a deferred fee arrangement
for outside directors; and to "eligible employee benefit plans" which have at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. "Eligible employee benefit plan"
means any plan or arrangement, whether or not tax qualified,
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<PAGE>
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.
The Fund may sell Class A shares at net asset value to present and retired
directors, trustees, officers, employees and their spouses (and family members
of the foregoing) of the Fund, the other investment companies in the Seligman
Group, the Manager, and other companies affiliated with the Manager. Family
members are defined to include lineal descendants and lineal ancestors, siblings
(and their spouses and children) and any company or organization controlled by
any of the foregoing. Such sales also may be made to employee benefit and thrift
plans for such persons and to any investment advisory, custodial, trust or other
fiduciary account managed or advised by the Manager or any affiliate. These
sales may be made for investment purposes only, and shares may be resold only to
the Fund.
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 NYSE 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
SFSI, an affiliate of the Manager, acts as general distributor of the shares
of the Fund and of the other Seligman Mutual Funds. 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 commissions 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 $37,555 in 1996, after an allowance of $290,069 as
commissions to dealers; $32,091 in 1995, after allowance of $241,684 as
commissions to dealers; and $16,143 in 1994, after allowance of $121,768 as
commissions to dealers. For the years ended December 31, 1996, 1995 and 1994,
SFSI retained CDSL charges from Class D shares amounting to $12,736, $3,349 and
$2,361, respectively.
SFSI has assigned its rights to collect any CDSL imposed on redemptions of
Class B shares to FEP. SFSI has also assigned its rights to substantially all of
the distribution fees in respect of Class B shares received by it pursuant to
the Plan (other than the portion of such fees used to make ongoing shareholder
servicing payments to Service Organizations as described in the Prospectus) to
FEP, which provides funding to SFSI to enable it to pay commissions to dealers
at the time of the sale of the related Class B shares. In connection with the
assignment of its rights to collect any CDSL and the distribution fees with
respect to Class B shares, SFSI receives payments from FEP based on the value of
Class B shares sold. The aggregate amount of such payments from FEP and the
Class B distribution fees retained by SFSI for the period ended December 31,
1996, was $11,089.
Effective April 1, 1995, Seligman Services, Inc. ("SSI"), an affiliate of
the Manager, became eligible to receive commissions from certain sales of Fund
shares, as well as distribution and service fees pursuant to the Plan. For the
year ended December 31, 1996 and the period April 1, 1995 through December 31,
1995, SSI received commissions of $15,257 and $2,981, respectively, from sales
of Fund shares. SSI also received distribution and service fees of $75,816 and
$39,543, respectively, pursuant to the Plan.
VALUATION
Net asset value per share of each class of the Fund is determined as of the
close of trading on the 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 Fund will also determine net asset value
for each class on each day in which there is a sufficient degree of trading in
the Fund's portfolio securities that the net asset value of Fund shares might be
materially affected. Net asset value per share for a class is computed by
dividing such class' share of the value of the net assets of the Fund (i.e., the
value of its assets less
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<PAGE>
liabilities) by the total number of outstanding shares of such class. All
expenses of the Fund, including the Manager's fee, are accrued daily and taken
into account for the purpose of determining net asset value. 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.
Generally, trading in foreign securities, as well as U.S. 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 Fund's 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, 1996 were 11.17%, 10.66%, and
13.15%, 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 investment to grow to the
amount which would have been received upon redemption (i.e., the average annual
compound rate of return). The total return for Class B shares of the Fund for
the period April 22, 1996 (inception) through December 31, 1996 was 0.63%. This
return was computed assuming that all of the dividends and distributions paid by
the Fund's Class B shares, if any, were reinvested over the relevant time
period. It was then assumed that at the end of the period the entire amount was
redeemed, subtracting the 5% CDSL. The average annual total returns for Class D
shares of the Fund for the one-year period ended December 31, 1996 and since
inception through December 31, 1996 were 14.84% and 12.78%, 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.
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, 1987 had a value of $3,441 on December
31, 1996, resulting in an aggregate total return of 244.07%. Table B illustrates
the total return (income and capital) on Class B shares of the Fund with
dividends invested and gain distributions, if any, taken in shares. It shows
that a $1,000 investment in Class B shares made on April 22, 1996
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(commencement of offering of Class B shares) had a value of $1,006, on December
31, 1996, resulting in an aggregate total return of 0.63%. Table C 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 $1,554 on December 31, 1996,
resulting in an aggregate total return of 55.43%. 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> <C>
1987 $ 825 $ 103 $0 $ 928
1988 780 171 0 951
1989 928 332 0 1,260
1990 933 344 0 1,277
1991 1,248 727 0 1,975
1992 1,277 927 0 2,204
1993 1,194 1,115 0 2,309
1994 986 1,160 0 2,146
1995 1,167 1,780 0 2,947
1996 1,226 2,215 0 3,441 244.07%
</TABLE>
TABLE B - CLASS B 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> <C>
1996 $ 892 $ 111 $0 $1,003 0.63%
</TABLE>
TABLE C - 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> <C>
1993 $965 $116 $0 $1,081
1994 780 207 0 987
1995 909 433 0 1,342
1996 942 612 0 1,554 55.43%
</TABLE>
1 For the ten years ended December 31, 1996; from commencement of offering of
Class D shares on May 3, 1993; and from commencement of offering of Class B
shares on April 22, 1996.
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 capital gain distributions that
would have been paid during the period on such shares assuming that each
dividend or capital gain 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 B or 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.
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<PAGE>
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
It is the intention of the Fund not to hold Annual Meetings of Shareholders.
The Directors may call Special Meetings of Shareholders for action by
shareholder vote as may be required by the 1940 Act or the Articles of
Incorporation.
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, 1996 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1996, 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.
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<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
Helps finance America's fledgling railroads through underwritings.
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.
Becomes a prominent underwriter of corporate securities, including New
York Mutual Gas Light Company, later part of Consolidated Edison.
Provides financial assistance to Mary Todd Lincoln and urges the Senate
to award her a pension.
Is appointed U.S. Navy fiscal agent by President Grant.
Become a leader in raising capital for America's industrial and urban
development.
...1900-1910
Helps Congress finance the building of the Panama Canal.
...1910s
Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
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.
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
Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
Establishes Investment Advisory Service.
...1940s
Helps shape the Investment Company Act of 1940.
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.
Assumes management of National Investors Corporation, today Seligman
Growth Fund, Inc.
Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
-17-
<PAGE>
<PAGE>
...1950-1989
Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
Introduces Seligman Select Municipal Fund and Seligman Quality Municipal
Fund, two closed-end funds that invest in high-quality municipal bonds.
In 1991 establishes a joint venture with Henderson plc, of London, known
as Seligman Henderson Co., to offer global and international investment
products.
Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
Launches Seligman Henderson Global Fund Series, Inc., which today
offers five separate series: Seligman Henderson International Fund,
Seligman Henderson Global Smaller Companies Fund, Seligman Henderson
Global Technology Fund, Seligman Henderson Global Growth Opportunities
Fund and Seligman Henderson Emerging Markets Growth Fund.
Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap
Value Fund.
-18-
<PAGE>
<PAGE>
________________________________________________________________________________
28TH ANNUAL REPORT
SELIGMAN
CAPITAL
FUND, INC.
December 31, 1996
[GRAPHIC]
________________________________________________________________________________
A Capital Appreciation Fund
Established in 1969
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[GRAPHIC]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Capital Fund, Inc., which contains information about the sales charges,
management fee, and other costs. Please read the prospectus carefully before
investing or sending money.
EQCA2 12/96
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND, INC.
- --------------------------------------------------------------------------------
A mutual fund that invests primarily in common stocks believed to provide
capital appreciation opportunities. Current income is not an objective.
<TABLE>
<CAPTION>
HIGHLIGHTS OF 1996
- ------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------------------------- -----------------------
CLASS A CLASS B* CLASS D CLASS A CLASS D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets (in thousands)............................ $259,514 $4,337 $19,974 $215,688 $9,137
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $16.36 $15.47 $15.47 $15.59 $14.94
With November 1996 Gain Distribution
Taken in Shares.................................. $18.20 $17.31 $17.31 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares..................... 16.74% 5.33% 15.84% -- --
- ----------------------------------------------------------------------------------------------------------------------
Distribution of Realized Gain per Share.............. $1.872 $1.872 $1.872 $2.298 $2.298
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of Average Net Assets...... $0.0107 $0.0189`D' $0.0183 $0.0109 $0.0202
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* From April 22, 1996 (commencement of operations).
`D' Annualized.
1
<PAGE>
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Seligman Capital Fund posted solid gains in 1996. Though its total return based
on the net asset value of Class A shares lagged that of the Standard & Poor's
500 Composite Stock Price Index (S&P 500), it outperformed the Fund's
competitive universe as measured by the Lipper Capital Appreciation Funds
Average. The Fund's investment results begin on page 6.
Driven by the outstanding performance of a small number of the largest
stocks, the US equity markets continued to advance in 1996, setting successive
new highs by rebounding from occasional sharp, short-term, setbacks. The S&P
500's total return for the year was 22.96%, and the Dow Jones Industrial Average
(DJIA) posted an exceptional total return of 28.91%.
In this environment, Seligman Capital Fund lagged the S&P 500 because it
generally invests in companies that are smaller than the large companies that
drove the increases of the S&P 500 in 1996. The Fund's weighted average market
capitalization is $12 billion, significantly less than the $39 billion weighted
average market capitalization of the S&P 500.
While the performance of the smaller-capitalized stocks lagged
larger-capitalized stocks in 1996, we remain confident that the Fund will
benefit from the strong long-term capital appreciation potential of its
investments. We believe that market participants will increasingly focus on
earnings growth and that Seligman Capital Fund's portfolio, which has a superior
overall projected earnings growth rate compared to the S&P 500, should therefore
benefit.
Currently, there are no clear indications that there will be either runaway
economic expansion or recession in 1997. Looking ahead, the environment for the
US financial markets and investors remains generally positive, given continued
modest economic growth, low inflation, and bipartisan efforts to balance the
federal budget without raising taxes. While we always recognize that there could
be further short-term volatility, we remain positive about the long-term outlook
for the equity markets and your Fund.
On a final note, the activity witnessed in the equity markets in 1996, where
large one-day increases followed abrupt corrections, is not unusual in the
challenging world of investing. We believe the best strategy for growth of
capital is long-term investing. A professional financial advisor can help you
formulate a long-term investment plan to help you seek your financial goals, and
can provide the insight and support needed to weather the day-to-day uncertainty
that accompanies investing. It is time, not timing, that counts when it comes to
investing.
A discussion with your Portfolio Manager and your Fund's portfolio of
investments follow this letter.
We thank you for your continued interest in Seligman Capital Fund, and look
forward to serving your investment needs in the many years to come.
By order of the Board of Directors,
/s/ WILLIAM C. MORRIS
- ----------------------------------
William C. Morris
Chairman
/s/ BRIAN T. ZINO
-------------------------------
Brian T. Zino
President
January 31, 1997
2
<PAGE>
<PAGE>
================================================================================
ANNUAL PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
The following is a discussion with your Portfolio Manager regarding Seligman
Capital Fund, and a chart and table comparing your Fund's performance to the
performance of the Standard & Poor's 500 Composite Stock Price Index (S&P 500)
and the Lipper Capital Appreciation Funds Average.
YOUR PORTFOLIO MANAGER
- --------------------------- LORIS D. MUZZATTI is a Managing Director of J. &
W. Seligman & Co. Incorporated, has been Vice
President and Portfolio Manager of Seligman
Capital Fund for the past eight years, and Vice
[Photograph] President and Portfolio Manager of Seligman Growth
Fund for the past year. Mr. Muzzatti is also Vice
President of Seligman Portfolios, Inc. and
Portfolio Manager of its Seligman Capital
Portfolio and the US portion of its Seligman
Global Growth Opportunities Portfolio, and Vice
President of Seligman Henderson Global Fund
Series, Inc. and Portfolio Manager of the US
portion of its Seligman Henderson Global Growth
- --------------------------- Opportunities Fund. He also manages a portion of
Seligman Growth Team: (from the firm's institutional accounts. Mr. Muzzatti
left) Louise Oh, Natalie joined Seligman in 1985 as a Vice President and
Billon, Louise Knight Portfolio Manager. He is assisted by a team of
(Administrative Assistant), seasoned investment professionals who are
David Levy, Kenneth Londoner, responsible for identifying companies that offer
(seated) Loris D. Muzzatti the greatest capital appreciation potential
(Portfolio Manager). Missing consistent with Seligman Capital Fund's
from photo: Michelle Borre objectives.
HOW DID SELIGMAN CAPITAL FUND PERFORM IN THE LAST 12 MONTHS?
"Seligman Capital Fund had a reasonable year, given that the markets were
propelled by the performance of larger-capitalized stocks than the Fund
generally invests in. The Fund's total return of 16.74%, based on the net asset
value of Class A shares, lagged the S&P 500 which posted a total return of
22.96% for the year, but outperformed the 16.11% total return of the Lipper
Capital Appreciation Funds Average."
WHICH ECONOMIC FACTORS AFFECTED THE FUND IN 1996?
"Economic expansion continued throughout 1996, supported by low levels of
inflation. This positive economic environment helped improve the corporate
profit picture, and provided a solid backdrop for the general equity markets and
the Fund's performance. The interest rate environment, however, was somewhat
erratic. Interest rates rose in the first half of the year due to growing fears
of inflation, but reversed course in the second half of the year as a more
complete picture of the economy emerged and no noticeable increases in inflation
occurred."
WHICH MARKET FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE LAST 12 MONTHS?
"Propelled by the strong appreciation of the largest companies in the markets,
indices such as the Dow Jones Industrial Average and the S&P 500 reached new
highs this year. While the general equity markets finished the year on a
positive note, June, July, and October corrections in the mid-sized company
market slowed the otherwise strong performance of the Fund."
WHAT WAS YOUR INVESTMENT STRATEGY?
"The Fund placed an emphasis on larger mid-sized companies with capitalizations
ranging from $500 million to $5 billion. Mid-sized companies reach earnings
levels that provoke a shift in a company's management style: The entrepreneurial
stage ends and professional management becomes necessary for the successful
completion of the expansion and development stage. Historically, this group has
had strong long-term capital appreciation potential.
3
<PAGE>
<PAGE>
================================================================================
ANNUAL PERFORMANCE OVERVIEW (continued)
- --------------------------------------------------------------------------------
"More specifically, the investment strategy for Seligman Capital Fund
focused on purchasing high-quality stocks. We favored companies whose corporate
executives had insider ownership, as this ensured that management goals were
aligned with shareholder interests. Positive cash flow was another key attribute
of the companies in the portfolio. Excess cash flow indicated that companies had
the means to fund their growth internally. Stocks reviewed for purchase also
displayed potential minimum earnings growth per share of 15% a year, and
currently the portfolio has an overall estimated earnings growth per share of
28% for 1997."
WHICH SECTORS IMPROVED THE FUND'S PERFORMANCE IN THE PAST YEAR?
"The Fund's overweighting in technology provided a broadly positive contribution
to the portfolio's performance. The Fund's technology holdings were increased
throughout the second half of the year, primarily by purchasing computer goods
and services companies such as Seagate Technology, and software stocks such as
Symantec. After substantial appreciation we took profits in Compaq Computer,
when the stock reached the high end of its historical valuation range.
"Finance was another strong sector in 1996, as companies benefited from the
decline in interest rates in the second half of the year. The Fund's strongest
performers included MBNA, which was held throughout the year, and Charles
Schwab, which was a new addition.
"The Fund also benefited from the strong performance of the new issue
market. A great part of the Fund's short-term capital gain came from the sale of
these stocks, as they achieved their target sell prices quickly. For example,
positions in Omnipoint and McLeod appreciated quickly and were sold."
WHICH SECTORS IMPAIRED THE FUND'S PERFORMANCE IN 1996?
"Health care was a difficult sector this year. As HMO companies suffered in the
first half of the year, we realigned the Fund's weighting into medical product
and biotechnology companies. Those areas of health care are experiencing strong
unit volume growth, whereas HMOs have been subject to increased utilization and
medical loss ratios. Additionally, the Fund's lack of holdings in the energy
sector prevented it from participating in the sector's strong appreciation.
However, Petroleum Geo-Services, which is a four-dimensional deep-sea mapping
company for the oil drilling industry, was purchased in the fourth quarter and
was a rewarding energy-related position for the portfolio. We will continue to
look for other opportunities in the energy sector in 1997."
WHAT IS THE OUTLOOK?
"Currently, the Fund is well positioned as its holdings have much higher
projected earnings growth for 1997 than the S&P 500. We anticipate that
investors will seek above-average earnings growth potential in 1997 if the
economy sustains its moderate growth levels without reigniting inflation. We
also believe that the performance of mid-sized companies has not met its full
potential. We will maintain a disciplined investment style, continuing to focus
on the highest quality when selecting stocks, as we expect that fundamentals
will become increasingly important to market participants in 1997."
4
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND, INC.
- --------------------------------------------------------------------------------
DIVERSIFICATION OF ASSETS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
---------------------
ISSUES COST VALUE 1996 1995
-------- ------------ ------------ ------- -------
<S> <C> <C> <C> <C> <C>
NET CASH AND SHORT-TERM HOLDINGS ............ 2 $ 27,451,161 $ 27,451,161 9.7 4.5
-- ------------ ------------ ----- -----
COMMON STOCKS:
Automotive and Related....................... 1 2,973,797 5,640,000 2.0 2.7
Basic Materials.............................. 4 10,906,374 12,716,094 4.5 4.8
Business Services and Supplies............... 4 5,897,970 12,240,500 4.3 6.0
Computer Goods and Services.................. 14 31,791,363 46,553,750 16.4 7.1
Consumer Goods and Services.................. 7 12,196,825 18,545,313 6.5 9.4
Drugs and Health Care........................ 11 25,017,164 30,805,400 10.9 18.8
Financial Services........................... 11 28,557,424 40,944,687 14.4 11.5
Food and Food Services....................... -- -- -- -- 3.0
Industrial Goods and Services................ 3 7,051,422 8,333,250 2.9 2.5
Leisure and Related.......................... 6 17,258,624 21,796,250 7.7 7.3
Packaging.................................... -- -- -- -- 0.6
Printing and Publishing...................... 1 2,403,500 2,435,125 0.9 --
Retail Trade................................. 3 5,735,317 10,066,250 3.5 6.4
Software..................................... 8 15,677,326 23,788,631 8.4 12.3
Telecommunications........................... 10 18,628,472 22,470,662 7.9 3.1
Other........................................ 1 -- 37,958 -- --
-- ------------ ------------ ----- -----
84 184,095,578 256,373,870 90.3 95.5
-- ------------ ------------ ----- -----
NET ASSETS .................................. 86 $211,546,739 $283,825,031 100.0 100.0
== ============ ============ ===== =====
</TABLE>
5
<PAGE>
<PAGE>
================================================================================
PERFORMANCE COMPARISON CHART December 31, 1996
- --------------------------------------------------------------------------------
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, 1996, 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 Funds Average (Lipper Capital Average)
for the same period. The performances of Seligman Capital Fund Class B and D
shares are not shown in this chart, but are included in the table on page 7. 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 Average excludes the effect of sales
charges.
[The following table represents points that appear on the line chart
in the printed version]
Seligman Capital Fund - Class A
Seligman Seligman Lipper
Capital Fund Capital Fund Capital
With Sales Charge With Sales Charge S&P 500 Average
12/31/86 9,528.09 10,000.00 10,000.00 10,000.00
11,525.73 12,096.59 12,135.00 12,176.02
11,978.90 12,572.21 12,744.18 12,493.18
12,530.26 13,150.88 13,585.29 13,190.06
12/31/87 9,281.32 9,741.02 10,524.53 10,306.30
9,399.23 9,864.77 11,123.37 11,155.87
9,955.10 10,448.17 11,864.19 11,775.21
9,517.14 9,988.52 11,904.53 11,633.44
12/31/88 9,511.01 9,982.09 12,272.38 11,727.38
10,278.47 10,787.56 13,142.49 12,636.37
11,045.93 11,593.03 14,302.97 13,662.10
12,864.08 13,501.23 15,834.82 15,089.77
12/31/89 12,596.01 13,219.87 16,161.01 14,837.47
12,189.03 12,792.74 15,674.57 14,440.58
14,081.48 14,778.92 16,660.50 15,286.20
10,896.87 11,436.58 14,371.35 12,659.17
12/31/90 12,769.97 13,402.45 15,659.02 13,500.02
15,467.56 16,233.65 17,934.27 16,022.49
15,590.64 16,362.83 17,893.03 15,792.57
17,436.90 18,300.53 18,850.30 17,155.53
12/31/91 19,751.81 20,730.10 20,429.96 18,773.11
19,490.98 20,456.36 19,913.08 18,795.78
18,601.80 19,523.13 20,291.43 18,096.47
19,763.67 20,742.55 20,930.61 18,531.17
12/31/92 22,035.63 23,127.05 21,983.42 20,457.77
22,242.54 23,344.20 22,944.09 21,275.99
22,009.77 23,099.90 23,056.52 21,903.64
23,419.33 24,579.27 23,651.38 23,499.40
12/31/93 23,093.93 24,237.76 24,200.09 24,136.47
22,384.46 23,493.16 23,282.91 23,359.42
19,792.72 20,773.06 23,380.69 22,354.24
21,515.72 22,581.39 24,524.01 23,918.26
12/31/94 21,463.60 22,526.69 24,519.11 23,538.70
22,669.60 23,792.43 26,907.27 25,074.08
24,723.06 25,947.60 29,476.91 27,376.82
26,841.72 28,171.19 31,820.32 30,059.92
12/31/95 29,473.47 30,933.29 33,735.91 30,792.87
31,496.35 33,056.36 35,547.53 32,614.04
34,010.76 35,695.31 37,140.06 34,268.50
34,918.22 36,647.71 38,287.68 34,989.77
12/31/96 34,406.63 36,110.79 41,480.88 35,752.80
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
6
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND, INC.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS*
FOR PERIODS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------
CLASS B CLASS D
SINCE SINCE
INCEPTION THREE ONE FIVE 10 INCEPTION
4/22/96 MONTHS YEAR YEARS YEARS 5/3/93
----------- ------- ------ ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
With Sales Charge ................... n/a (6.14)% 11.17% 10.66% 13.15% n/a
Without Sales Charge ................ n/a (1.46) 16.74 11.74 13.70 n/a
CLASS B
With 5% CDSL ........................ 0.63% (6.06) n/a n/a n/a n/a
Without CDSL ........................ 5.33 (1.67) n/a n/a n/a n/a
CLASS D
With 1% CDSL ........................ n/a (2.55) 14.84 n/a n/a n/a
Without CDSL ........................ n/a (1.67) 15.84 n/a n/a 12.78%
S&P 500** ........................... 15.00`D' 8.34 22.96 15.22 15.27 18.29`D'`D'
LIPPER CAPITAL AVERAGE** ............ 4.69`D' 2.18 16.11 13.73 13.58 15.91`D'`D'
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
DECEMBER 31, 1996 SEPTEMBER 30, 1996 JUNE 30, 1996 MARCH 31, 1996 DECEMBER 31, 1995
------------------- -------------------- --------------- ---------------- --------------------
<S> <C> <C> <C> <C> <C>
CLASS A $16.36 $18.47 $17.99 $16.66 $15.59
CLASS B 15.47 17.60 17.18 16.43`D'`D'`D' n/a
CLASS D 15.47 17.60 17.18 15.94 14.94
</TABLE>
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
CAPITAL GAIN
------------------------------------------------
PAID REALIZED UNREALIZED'o'
-------------- -------------- -------------
CLASS A $1.872 $1.615 $4.145
CLASS B 1.872 1.615 4.145
CLASS D 1.872 1.615 4.145
The performances of Class B and 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.
- ----------
* Return figures reflect any change in price per share and assume the
reinvestment of dividends and capital gain distributions. Return
figures for Class A shares are calculated with and without the
effect of the initial 4.75% maximum sales charge. Class A share
returns reflect the effect of the 0.25% Administration, Shareholder
Services and Distribution Plan after January 1, 1993, only. Returns
for Class B shares are calculated with and without the effect of the
maximum 5% contingent deferred sales load ("CDSL"), charged only on
certain redemptions made within one year of the date of purchase,
declining to 1% in the sixth year and 0% thereafter. Returns for Class
D shares are calculated with and without the effect of the 1% CDSL,
charged only on certain redemptions made within one year of the
date of purchase. The rates of return will vary and the principal
value of an investment will fluctuate. Shares, if redeemed, may be
worth more or less than their original cost. Past performance is not
indicative of future investment results.
** The S&P 500 and the Lipper Capital Average are unmanaged benchmarks
that assume investment of dividends. The S&P 500 does not reflect fees
and sales charges and the Lipper Capital Average does not reflect
sales charges. The monthly performance of the Lipper Capital Average
is used in the Performance Comparison Chart and the Investment Results
per Share. Investors may not invest directly in an index or an
average.
'D' From April 30, 1996.
'D'`D' From April 30, 1993.
`D'`D'`D' As of April 22, 1996.
'o' Represents the per share amount of net unrealized appreciation of
portfolio securities as of December 31, 1996.
7
<PAGE>
<PAGE>
================================================================================
SELIGMAN CAPITAL FUND, INC.
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
DURING PAST THREE MONTHS
SHARES
-----------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/96
- ------------ ----------- -----------
Adaptec....................... 90,000 90,000
C-Cube Microsystems........... 80,000 80,000
Linear Technology............. 70,000 70,000
Maxim Integrated Products..... 100,000 100,000
Premisys Communications....... 60,000 60,000
Schwab (Charles).............. 100,000 100,000
Seagate Technology............ 100,000 100,000
Symantec...................... 200,000 200,000
3Com.......................... 50,000 50,000
Washington Mutual............. 100,000 100,000
SHARES
-----------------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/96
- -------------- ----------- ------------
Amgen......................... 30,000 50,000
Compaq Computer............... 40,000 --
EXCEL Communications.......... 125,000 --
Nordstrom..................... 55,000 --
Oxford Health Plans........... 40,000 --
PepsiCo....................... 220,000 --
Pharmacia & Upjohn............ 70,000 --
St. Jude Medical.............. 80,000 --
Travelers..................... 65,000 135,000*
UCAR International............ 125,000 --
Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
* Includes 50,000 shares received as a result of a 4-for-3 stock split.
LARGEST PORTFOLIO HOLDINGS
AT DECEMBER 31, 1996
SECURITY VALUE
- ----------- ----------
Microsoft................................ $8,268,750
Intel.................................... 6,546,875
Fiserv................................... 6,464,062
Travelers................................ 6,125,625
Harley-Davidson.......................... 5,640,000
WorldCom................................. 5,473,125
MBNA..................................... 5,291,250
Guidant.................................. 5,130,000
Infinity Broadcasting (Class A).......... 5,043,750
Home Depot............................... 5,012,500
8
<PAGE>
<PAGE>
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SELIGMAN CAPITAL FUND, INC.
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF 1996
GAIN DISTRIBUTION FOR
TAXABLE ACCOUNTS
A distribution of $1.872 per share, consisting of $0.669 from net long-term and
$1.203 from net short-term gain realized on investments from November 1995 to
October 1996, was paid on November 22, 1996, to Class A, B, 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 1996
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 on the sale 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 $16.65 for Class A shares, and $15.77 for Class B
and D shares.
A year-end statement of account showing activity for 1996, a Form 1099-DIV,
and if applicable, a Form 1099-B have been mailed to each shareholder. The Form
1099-B shows the proceeds of any redemptions paid to the shareholder during the
year and reported to the Internal Revenue Service as required by federal
regulations. Form 1099-DIV shows the amount of the distribution from gain on
investments paid to the shareholder during the year.
9
<PAGE>
<PAGE>
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PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS 90.3%
AUTOMOTIVE AND RELATED 2.0%
Harley-Davidson
Motorcycle manufacturer ................... 120,000 $ 5,640,000
------------
BASIC MATERIALS 4.5%
Minerals Technologies
Marketer of specialty
minerals and products ..................... 75,000 3,075,000
Nucor
Manufacturer of steel joints,
angles, and rounds ........................ 70,000 3,570,000
Olin
Chemicals, metals, and defense
products .................................. 100,000 3,762,500
Schulman, A
Manufacturer of plastics .................. 93,750 2,308,594
------------
12,716,094
------------
BUSINESS SERVICES
AND SUPPLIES 4.3%
HFS*
Franchiser of hotels;
residential real estate brokerage ......... 50,000 2,987,500
Interpublic Group of
Companies
Worldwide advertising agency .............. 100,000 4,750,000
Leap Group*
Designer of brand marketing
and advertising campaigns ................. 84,000 588,000
Snyder Communications*
Provider of marketing
services .................................. 145,000 3,915,000
------------
12,240,500
------------
COMPUTER GOODS
AND SERVICES 16.4%
Adaptec*
Manufacturer of computer
input-output systems ...................... 90,000 3,605,625
American Power Conversion
Producer of surge suppressors
and power conditioners .................... 60,000 1,638,750
Arrow Electronics*
Distributor of semiconductors
and other electrical components ........... 60,000 3,210,000
C-Cube Microsystems*
Designer and manufacturer of
video compression circuits ................ 80,000 2,955,000
Ceridian*
Computer services ......................... 100,000 4,050,000
Fiserv*
Data processing services .................. 175,000 6,464,062
Intel
Semiconductor/memory
circuits .................................. 50,000 6,546,875
Linear Technology
Designer and manufacturer of
analog integrated circuits ................ 70,000 3,071,250
Microchip Technology
Field programmable
microcontrollers .......................... 25,000 1,271,875
National Processing*
Provider of low-cost trans-
action processing services ................ 45,000 720,000
Seagate Technology
Global hard-disk drive supplier ........... 100,000 3,950,000
Tencor Instruments
Wafer inspection devices .................. 100,000 2,643,750
3Com
Supplier of adapter cards, hubs,
and routers for local area
computer networks ......................... 50,000 3,665,625
Xilinx*
Designer and manufacturer of
field programmable gate arrays ............ 75,000 2,760,938
------------
46,553,750
------------
CONSUMER GOODS
AND SERVICES 6.5%
Consolidated Cigar
Holdings (Class A)*
Manufacturer and
marketer of cigars ........................ 50,000 1,237,500
Estee Lauder (Class A)*
Cosmetics and toiletries .................. 65,000 3,306,875
Gucci Group
Manufacturer and marketer of
apparel ................................... 40,000 2,555,000
Landry's Seafood Restaurants*
Restaurant operator ....................... 55,000 1,185,938
</TABLE>
- ----------
See footnotes on page 13.
10
<PAGE>
<PAGE>
================================================================================
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
CONSUMER GOODS AND
SERVICES (continued)
Newell
Home furnishings .......................... 150,000 $ 4,725,000
Oakley*
Manufacturer of sunglasses ................ 200,000 2,175,000
Tommy Hilfiger*
Designer and distributor of
men's apparel ............................. 70,000 3,360,000
------------
18,545,313
------------
DRUGS AND HEALTH CARE 10.9%
Amgen*
Researcher and developer of
biological products ....................... 50,000 2,721,875
Biogen*
Developer of genetically
engineered drugs .......................... 40,000 1,545,000
Centocor
Developer of human health
care products for cancer and
cardiovascular diseases ................... 70,000 2,506,875
Columbia/HCA Healthcare
Health care facilities
and services .............................. 112,500 4,584,375
Guidant
Cardiac rhythm management
and coronary artery disease
intervention .............................. 90,000 5,130,000
HCIA*
Developer of integrated
clinical and financial
information systems ....................... 40,000 1,387,500
Humana*
Provider of managed health
care plans ................................ 100,000 1,912,500
Nitinol Medical Technologies*
Designer of medical devices
used in minimally invasive
procedures ................................ 100,000 1,231,250
Pfizer
Manufacturer of health care
consumer products and
specialty chemicals ....................... 50,000 4,143,750
Physio-Control International*
Manufacturer of an integrated
line of non-invasive emer-
gency cardiac defibrillators .............. 101,900 2,267,275
United Healthcare
Health maintenance
organization .............................. 75,000 3,375,000
------------
30,805,400
------------
FINANCIAL SERVICES 14.4%
Allmerica Financial
Property liability insurance .............. 62,500 2,093,750
Amerin*
Mortgage insurance provider ............... 165,000 4,238,437
Donaldson, Lufkin &
Jenrette Securities
Leading investment and
merchant bank ............................. 125,000 4,500,000
Greenpoint Financial
Bank holding company ...................... 100,000 4,725,000
MBNA
Issuer of bank credit cards ............... 127,500 5,291,250
Old Republic International
Holding company; subsidiaries
provide risk management
and reinsurance services .................. 60,000 1,605,000
Progressive (Ohio)
High-risk auto insurance .................. 50,000 3,368,750
St. Paul Bancorp
Holding company for
a savings bank ............................ 50,000 1,465,625
Schwab (Charles)
Financial services firm ................... 100,000 3,200,000
Travelers
Diversified financial services ............ 135,000 6,125,625
Washington Mutual
Regional finance company
for small- and mid-sized
businesses ................................ 100,000 4,331,250
------------
40,944,687
------------
INDUSTRIAL GOODS
AND SERVICES 2.9%
Ionics
Developer and manufacturer
of water treatment systems ................ 20,000 960,000
Maxim Integrated Products*
Linear and mixed-signal
integrated circuits ....................... 100,000 4,331,250
Petroleum Geo-Services
(ADRs)*
Four-dimensional deep-sea
mapping company for the
oil-drilling industry ..................... 78,000 3,042,000
------------
8,333,250
------------
</TABLE>
- ----------
See footnotes on page 13.
11
<PAGE>
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
LEISURE AND RELATED 7.7%
British Sky Broadcasting (ADRs)
Satellite-delivered
entertainment channel
in the UK ................................. 60,000 $ 3,150,000
Circus Circus Enterprises*
Casino hotels ............................. 100,000 3,437,500
Infinity Broadcasting (Class A)*
Owner/operator of radio
stations .................................. 150,000 5,043,750
MGM Grand*
Owner and operator of
resort and casino hotels .................. 100,000 3,487,500
Mirage Resorts*
Hotel/casino complex ...................... 140,000 3,027,500
Sun International Hotels*
Owner and operator of
resort and casino hotels .................. 100,000 3,650,000
------------
21,796,250
------------
PRINTING AND
PUBLISHING 0.9%
World Color Press*
Commercial printer and
distributor ............................... 126,500 2,435,125
------------
RETAIL TRADE 3.5%
Home Depot
Home improvement stores ................... 100,000 5,012,500
Office Depot*
Office supply retailer .................... 125,000 2,218,750
Saks Holdings*
Men's and women's
fashion retailer .......................... 105,000 2,835,000
------------
10,066,250
------------
SOFTWARE 8.4%
Activision*
PC CD-ROM-based
entertainment ............................. 80,000 1,010,000
DST Systems*
Mutual fund data processing
services .................................. 100,000 3,137,500
International Game Technology
Designer and manufacturer of
video games ............................... 125,000 2,281,250
Microsoft*
Microcomputer software .................... 100,000 8,268,750
Parametric Technology*
Developer of mechanical
design software ........................... 34,700 1,784,881
Shiva*
Global provider of remote
access solutions .......................... 25,000 868,750
Sterling Commerce*
Developer of electronic data
interchange software ...................... 100,000 3,525,000
Symantec*
Developer, marketer, and
supporter of application
development tools and
systems software products ................. 200,000 2,912,500
------------
23,788,631
------------
TELECOMMUNICATIONS 7.9%
Century Telephone Enterprises
Regional telephone services ............... 100,000 3,087,500
LCC International (Class A)*
Provider of radio frequency
engineering and network
design services to wireless
telecommunications
providers ................................. 65,000 1,174,062
Level One Communications*
Developer of integrated
circuits for high-speed
digital transmission ...................... 45,000 1,597,500
Madge Networks*
Worldwide supplier of
switched networking
solutions ................................. 71,400 709,537
McLeod (Class A)*
Provider of integrated local
and long distance
telecommunications
services .................................. 100,000 2,562,500
MRV Communications*
Manufacturer of
semiconductor laser diodes ................ 145,000 3,162,813
Premisys Communications*
Designer and manufacturer
of integrated access products
for telecommunications
service providers ......................... 60,000 2,025,000
TCSI*
Designer of software
solutions ................................. 58,000 366,125
</TABLE>
- ----------
See footnotes on page 13.
12
<PAGE>
<PAGE>
================================================================================
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
PRIN. AMT. VALUE
--------- ------------
<S> <C> <C>
TELECOMMUNICATIONS (continued)
360(degree) Communications*
Provider of cellular services 100,000shs. $ 2,312,500
WorldCom*
Long distance carrier ..................... 210,000 5,473,125
------------
22,470,662
------------
OTHER ........................................ 37,958
------------
TOTAL COMMON STOCKS
(Cost $184,095,578) ....................... 256,373,870
------------
SHORT-TERM HOLDINGS 9.0%
Canadian Imperial Bank of
Commerce, Grand Cayman,
Fixed Time Deposit,
6 1/2%, 1/2/1997 ...........................$12,465,000 12,465,000
Republic National Bank of
New York, Grand Cayman,
Fixed Time Deposit,
6 3/4%, 1/2/1997 ........................... 13,000,000 13,000,000
------------
TOTAL SHORT-TERM HOLDINGS
(Cost $25,465,000) ........................................ 25,465,000
------------
TOTAL INVESTMENTS 99.3%
(Cost $209,560,578) .................................... $281,838,870
OTHER ASSETS LESS
LIABILITIES 0.7% ...................................... 1,986,161
------------
NET ASSETS 100.0% ........................................ $283,825,031
============
</TABLE>
- ----------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
13
<PAGE>
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C> <C>
Investments, at value:
Common stocks (cost $184,095,578)....................................... $256,373,870
Short-term holdings (cost $25,465,000).................................. 25,465,000 $ 281,838,870
------------
Cash....................................................................... 480,709
Receivable for securities sold............................................. 3,897,986
Receivable for Capital Stock sold.......................................... 462,218
Investment in, and expenses prepaid to, shareholder service agent.......... 76,973
Receivable for dividends and interest...................................... 53,231
Other...................................................................... 22,608
-----------
Total Assets .............................................................. 286,832,595
-----------
LIABILITIES:
Payable for securities purchased........................................... 2,343,844
Payable for Capital Stock repurchased...................................... 187,822
Accrued expenses, taxes, and other......................................... 475,898
------------
Total Liabilities ......................................................... 3,007,564
------------
Net Assets ................................................................ $283,825,031
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000 shares authorized;
17,438,514 shares outstanding):
Class A.................................................................. $ 15,866,755
Class B.................................................................. 280,418
Class D.................................................................. 1,291,341
Additional paid-in capital................................................. 189,348,315
Accumulated net investment loss............................................ (99,738)
Undistributed net realized gain............................................ 4,859,648
Net unrealized appreciation of investments................................. 72,278,292
------------
Net Assets ................................................................ $283,825,031
============
NET ASSET VALUE PER SHARE:
Class A ($259,513,979 / 15,866,755 shares) ................................ $16.36
======
Class B ($4,337,298 / 280,418 shares) ..................................... $15.47
======
Class D ($19,973,754 / 1,291,341 shares) .................................. $15.47
======
</TABLE>
- ----------
See Notes to Financial Statements.
14
<PAGE>
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $7,223)........................ $ 1,153,257
Interest................................................................... 860,957
Other...................................................................... 62,563
-----------
Total Investment Income ................................................... $ 2,076,777
EXPENSES:
Management fee............................................................. 1,253,672
Distribution and service fees.............................................. 728,864
Shareholder account services............................................... 540,252
Registration............................................................... 83,404
Auditing and legal fees.................................................... 62,844
Shareholder reports and communications..................................... 60,972
Custody and related services............................................... 40,500
Directors' fees and expenses............................................... 28,968
Shareholders' meeting...................................................... 25,689
Miscellaneous.............................................................. 13,855
-----------
Total Expenses ............................................................ 2,839,020
-----------
Net Investment Loss ....................................................... (762,243)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments........................................... 28,165,196
Net change in unrealized appreciation of investments....................... 8,893,154
-----------
Net Gain on Investments ................................................... 37,058,350
-----------
Increase in Net Assets from Operations .................................... $36,296,107
===========
</TABLE>
- ----------
See Notes to Financial Statements.
15
<PAGE>
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
---- ----
<S> <C> <C>
OPERATIONS:
Net investment loss.......................................................... $ (762,243) $ (254,453)
Net realized gain on investments............................................. 28,165,196 35,184,301
Net change in unrealized appreciation of investments......................... 8,893,154 24,927,528
----------- -----------
Increase in net assets from operations....................................... 36,296,107 59,857,376
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A.................................................................... (26,567,200) (27,349,482)
Class B.................................................................... (409,321) --
Class D.................................................................... (2,122,695) (1,044,584)
----------- -----------
Decrease in net assets from distributions.................................... (29,099,216) (28,394,066)
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-----------------------
YEAR ENDED DECEMBER 31,
-----------------------
CAPITAL SHARE TRANSACTIONS:* 1996 1995
---- ----
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A...................................... 1,942,799 733,030 33,837,665 10,961,004
Class B...................................... 254,282 -- 4,295,072 --
Class D...................................... 557,039 290,741 9,125,387 4,369,424
Exchanged from associated Funds:
Class A...................................... 3,292,043 1,028,684 56,774,849 15,769,810
Class B...................................... 18,524 -- 311,768 --
Class D...................................... 523,994 132,768 8,588,724 1,987,004
Shares issued in payment of gain distributions:
Class A...................................... 1,456,987 1,729,508 24,258,766 24,834,625
Class B...................................... 24,565 -- 387,386 --
Class D...................................... 126,975 62,511 2,002,437 860,777
--------- --------- ---------- ----------
Total.......................................... 8,197,208 3,977,242 139,582,054 58,782,644
--------- --------- ---------- ----------
Cost of shares repurchased:
Class A...................................... (1,456,803) (1,250,270) (25,036,508) (18,467,977)
Class B...................................... (3,999) -- (64,181) --
Class D...................................... (186,463) (62,080) (2,985,744) (883,945)
Exchanged into associated Funds:
Class A...................................... (3,206,843) (743,367) (53,969,312) (10,921,916)
Class B...................................... (12,954) -- (213,574) --
Class D...................................... (341,956) (60,208) (5,510,258) (881,945)
--------- --------- ---------- ----------
Total.......................................... (5,209,018) (2,115,925) (87,779,577) (31,155,783)
--------- --------- ---------- ----------
Increase in net assets from capital
share transactions.......................... 2,988,190 1,861,317 51,802,477 27,626,861
========= ========= ---------- ----------
Increase in net assets....................................................... 58,999,368 59,090,171
NET ASSETS:
Beginning of year............................................................ 224,825,663 165,735,492
------------ ------------
End of year (including accumulated net investment loss of
$99,738 and $89,966, respectively)........................................ $283,825,031 $224,825,663
============ ============
</TABLE>
- ----------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
16
<PAGE>
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Capital Fund, Inc. (the "Fund") offers three classes of shares. All
shares existing prior to May 3, 1993, the commencement of Class D shares, were
classified as Class A shares. The Fund began offering Class B shares on April
22, 1996. 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 A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
charge but are subject to a contingent deferred sales load ("CDSL") of 1% on
redemptions within eighteen months of purchase. Class B 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 CDSL, if applicable, of
5% on redemptions in the first year after purchase, declining to 1% in the sixth
year and 0% thereafter. 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 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 CDSL of 1% imposed on certain redemptions made
within one year of purchase. 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 certain class expenses, and has exclusive voting rights with respect to any
matter on 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 values 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. For the year ended December 31, 1996, distribution and service fees
were the only class-specific expenses.
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 realized 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 US Government
obligations and short-term investments, for the year ended December 31, 1996,
amounted to $231,002,881 and $226,481,468, respectively.
17
<PAGE>
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
At December 31, 1996, 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 $78,825,346 and $6,547,054, 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, 1996, was equivalent to an
annual rate of 0.49% of the average daily net assets of the Fund.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $37,555 from sales of Class A shares, after commissions of
$290,069 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, 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,
1996, fees paid aggregated $567,328, or 0.24% per annum of the average daily net
assets of Class A shares.
Under the Plan, with respect to Class B and Class D shares, 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 B and Class D shares for which the organizations are
responsible; and fees, for Class D shares only, 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.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
of this fee to a third party (the "Purchaser"), which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the year ended December 31, 1996, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $14,563 and $146,973, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the
year ended December 31, 1996, such charges amounted to $12,736.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amount of such payments
and the Class B shares distribution fees retained by the Distributor for the
year ended December 31, 1996, was $11,089.
18
<PAGE>
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
Seligman Services, Inc., an affiliate of the Manager, is 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 year ended December 31, 1996,
Seligman Services, Inc. received commissions of $15,257 from sales of shares of
the Fund. Seligman Services, Inc. also received distribution and service fees of
$75,816, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $520,962 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 $16,000 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, 1996, of
$99,738 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.
19
<PAGE>
<PAGE>
================================================================================
FINANCIAL HIGHTLIGHTS
- --------------------------------------------------------------------------------
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 each Class'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 each Class'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.
Average commission rate paid represents the average commissions paid by the
Fund to purchase or sell portfolio securities. It is determined by dividing the
total commission dollars paid by the number of shares purchased and sold during
the period for which commissions were paid. This rate is provided for periods
beginning January 1, 1996.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
1996o 1995'o' 1994'o' 1993 1992
-------- ------- ------ ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of year.......... $15.59 $13.17 $15.95 $17.04 $16.66
------ ------ ------ ------ ------
Net investment income (loss)................ (.04) (.02) (.06) (.03) .02
Net realized and unrealized
investment gain (loss)................... 2.68 4.74 (1.12) .84 1.89
------ ------ ------ ------ ------
Increase (decrease) from
investment operations.................... 2.64 4.72 (1.18) .81 1.91
Distributions from net gain realized........ (1.87) (2.30) (1.60) (1.90) (1.53)
------ ------ ------ ------ ------
Net increase (decrease) in
net asset value.......................... .77 2.42 (2.78) (1.09) .38
------ ------ ------ ------ ------
Net asset value, end of year................ $16.36 $15.59 $13.17 $15.95 $17.04
====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE: 16.74% 37.32% (7.06)% 4.80% 11.56%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.............. 1.07% 1.09% 1.13% 1.13% .96%
Net investment income (loss)
to average net assets.................... (.25)% (.11)% (.39)% (.17)% .11%
Portfolio turnover.......................... 94.97% 103.60% 70.72% 46.84% 42.32%
Average commission rate paid................ $.0537
Net assets, end of year (000s omitted)...... $259,514 $215,688 $162,556 $196,212 $198,063
</TABLE>
- ----------
See footnotes on page 21.
20
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CLASS B CLASS D
--------- -----------------------------------------------------
4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
TO -------------------------------------- TO
12/31/96'o' 1996'o' 1995'o' 1994'o' 12/31/93
----------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period........ $16.43 $14.94 $12.82 $15.86 $16.43
------ ------ ------ ------ ------
Net investment income (loss)................ (.10) (.16) (.14) (.33) (.08)
Net realized and unrealized
investment gain (loss)................... 1.01 2.56 4.56 (1.11) 1.41
------ ------ ------ ------ ------
Increase (decrease) from
investment operations.................... .91 2.40 4.42 (1.44) 1.33
Distributions from net gain realized........ (1.87) (1.87) (2.30) (1.60) (1.90)
------ ------ ------ ------ ------
Net increase (decrease) in
net asset value.......................... .96 .53 2.12 (3.04) (.57)
------ ------ ------ ------ ------
Net asset value, end of period.............. $15.47 $15.47 $14.94 $12.82 $15.86
====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE: 5.33% 15.84% 35.98% (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.............. 1.89%+ 1.83% 2.02% 2.66% 2.26%`D'
Net investment loss
to average net assets.................... (.99)%`D' (1.00)% (1.06)% (2.28)% (1.32)%`D'
Portfolio turnover.......................... 94.97%`D'`D' 94.97% 103.60% 70.72% 46.84%`D'`D'`D'
Average commission rate paid................ $.0537`D'`D' $.0537
Net assets, end of period (000s omitted) ... $4,337 $19,974 $9,137 $3,179 $2,749
</TABLE>
- ----------
* Commencement of offering of shares.
'o' Per share amounts for the periods ended December 31, 1996, 1995, and
1994, are calculated based on average shares outstanding.
`D' Annualized.
`D'`D' For the year ended December 31, 1996.
`D'`D'`D' For the year ended December 31, 1993.
See Notes to Financial Statements.
21
<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,
1996, 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, 1996 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, 1996, 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
January 31, 1997
22
<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
SENIOR 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,
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
DIRECTOR OR TRUSTEE,
Various Organizations
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
PRESIDENT AND MANAGING DIRECTOR,
J. & W. Seligman & Co. Incorporated
CHAIRMAN AND PRESIDENT, Seligman Data Corp.
- ----------
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
23
<PAGE>
<PAGE>
File No. 2-33566
811-1886
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, 1996; Financial Highlights for Class B shares from
April 22, 1996 (commencement of offering) to December 31, 1996.
Financial Highlights for Class D shares from May 3, 1993
(commencement of offering) to December 31, 1996.
Part B: Required Financial Statements are included in the Fund's Annual
Report to Shareholders, dated December 31, 1996, which is
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements include: Portfolio of
Investments as of December 31, 1996; Statement of Assets and
Liabilities as of December 31, 1996; Statement of Operations for
the year ended December 31, 1996; Statements of Changes in Net
Assets for the years ended December 31, 1996 and 1995; Notes to
Financial Statements; Financial Highlights for the five years
ended December 31, 1996 for the Fund's Class A shares, for the
period April 22, 1996 (commencement of offering) through December
31, 1996 for the Fund's Class B shares and for the period May 3,
1993 (commencement of offering) through December 31, 1996 for the
Fund's Class D shares; Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except Exhibits marked
with an asterisk (*) which are incorporated herein.
(1) Articles of Incorporation of Registrant.*
(2) By-laws of the Corporation.*
(3) Not applicable.
(4) Specimen certificate of Class D Capital Stock. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 46, filed on April 23,
1993.)
(4a) 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.*
(6a) Copy of Amended Sales Agreement between Seligman Financial Services, Inc.
and Dealers. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 52, filed on April 19, 1996.)
(6b) Form of Sales Agreement between Seligman Financial Services, Inc. and
Dean Witter Reynolds, Inc.*
(6c) Form of Sales Agreement between Seligman Financial Services, Inc. and
Dean Witter Reynolds, Inc. with respect to certain Chilean institutional
investors.*
(6d) Form of Dealer Agreement between Seligman Financial Services, Inc. and
Smith Barney Inc.*
(7) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated is
incorporated by reference to Exhibit 7 of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29, 1997.
(7a) Deferred Compensation Plan for Directors of Seligman Group of Funds is
incorporated by reference to Exhibit 7a of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29, 1997.
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company.*
(9) Not applicable.
(10) Opinion and Consent of Counsel.*
(11) Report and Consent of Independent Auditors.*
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 24. Financial Statements and Exhibits (continued)
(12) Not applicable.
(13) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 52, filed on April
19, 1996.)
(13a) Purchase Agreement for Initial Capital between Registrant's Class D
shares and J. & W. Seligman & Co. Incorporated.*
(14) The Seligman IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(14a) The Seligman Simple IRA Plan Set-Up Kit.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(14b) The Seligman Simple IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(15) Form of Administration, Shareholder Services and Distribution Plan of
Registrant.
(Incorporated by reference to Registrant's Post-Effective Amendment No.
52, filed on April 19, 1996.)
(15a) Form of Administration, Shareholder Services and Distribution Agreement
between Seligman Financial Services, Inc. and Dealers. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 52, filed on April
19, 1996.)
(16) Schedule of Computation of Performance Data provided in Registration
Statement in response to Item 22.*
(17) Financial Data Schedules 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 February 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.
Item 26. Number of Holders of Securities.
(1) (2)
Numbers of Record
Title of Class Holders as of March 31, 1997
-------------- ----------------------------
Class A Common Stock 10,100
Class B Common Stock 448
Class D Common Stock 2,311
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 27. Indemnification
Reference is made to the provisions of Articles Twelfth and Thirteenth
of Registrant's Amended and Restated Articles of Incorporation filed
as Exhibit 24(b)(1) and Article IV of Registrant's Amended and
Restated By-laws filed as Exhibit 24(b)(2) to this Post-Effective
Amendment No. 53 to the Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised by the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser - The Manager
also serves as investment manager to seventeen 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 Municipal Fund Series,
Inc., Seligman Municipal Series Trust, Seligman New Jersey Municipal
Fund, Inc., Seligman Pennsylvania Municipal Fund Series, Seligman
Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman
Select Municipal Fund, Inc., Seligman Value Fund Series, Inc. and
Tri-Continental Corporation.
The Subadviser also serves as subadviser to nine 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., certain portfolios of
Seligman Portfolios, Inc., Seligman Value Fund Series, 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. 801-15798 and SEC File
No. 801-40670, filed on August 7, 1996 and October 2, 1996,
respectively).
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 Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.
Seligman Value Fund Series, Inc.
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
(b) Name of each director, officer or partner of Registrant's
principal underwriter named in response to Item 21:
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of March 31, 1997
(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 None
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
Ed Lynch* Senior Vice President, Director None
of Marketing
Mark R. Gordon* Senior Vice President, National None
Sales Manager
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
Karen J. Bullot* Vice President, Retirement Plans None
John Carl* Vice President, Marketing None
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
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Bradford C. Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Christopher J. Derry Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
Andrew Draluck Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
</TABLE>
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of March 31, 1997
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Jonathan G. Evans Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
Michael C. Forgea Regional Vice President None
32 W. Anapamu Street #186
Santa Barbara, CA 93101
David Gardner Regional Vice President None
2504 Clublake Trail
McKinney, TX 75070
Carla A. Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Mark Lien Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
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
Tim O'Connell Regional Vice President None
14872 Summerbreeze Way
San Diego, CA 92128
Juliana Perkins Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
David Petzke Regional Vice President None
1673 Montelena Court
Carson City, NV 89703
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
Kelli A. Wirth-Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
Jeffrey S. Dean* Assistant Vice President, None
Annuity Product Manager
</TABLE>
<PAGE>
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of March 31, 1997
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Sandra Floris* Assistant Vice President, Order Desk None
Keith Landry* Assistant Vice President, Order Desk None
Gail S. Cushing* Assistant Vice President, National None
Accounts Manager
Frank P. Marino* Assistant Vice President, None
Mutual Fund Product Manager
Joseph M. McGill* Assistant Vice President and None
Compliance Officer
Jack Talvy* Assistant Vice President, Internal None
Marketing Services Manager
Joyce Peress* Assistant Secretary None
</TABLE>
* The principal business address of each of these directors and/or
officers is 100 Park Avenue, New York, NY 10017.
(c) Not applicable.
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 years ended December 31, 1996, 1995, and 1994, the
approximate cost of these services were:
1996 1995 1994
---- ---- ----
Class A Shares $50,400 $43,800 $44, 994
Class B Shares 800 -- --
Class D Shares 10,200 2,000 1,697
Item 32. Undertakings - The Registrant undertakes, (1) to furnish a copy of
the Registrant's latest annual report, upon request and without
charge, to every person to whom a prospectus is delivered and (2)
if requested to do so by the holders of at least ten percent of its
outstanding shares, to call a meeting of shareholders for the
purpose of voting upon the removal of a director or directors and
to assist in communications with other shareholders as required by
Section 16(c) of the Investment Company Act of 1940.
<PAGE>
<PAGE>
File No. 2-33566
811-1886
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 53 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 28th day of April, 1997.
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. 53 has been
signed below by the following persons in the capacities indicated on April 28,
1997.
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
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, 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 )
<PAGE>
<PAGE>
File No. 2-33566
811-1886
SELIGMAN CAPITAL FUND, INC.
Post-Effective Amendment No. 53 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
24(b)(1) Amended and Restated Articles of Incorporation
24(b)(2) Amended and Restated By-laws
24(b)(6) Copy of Amended Distributing Agreement
24(b)(6)(b) Form of Sales Agreement between Seligman Financial
Services, Inc. and Dean Witter Reynolds, Inc.
24(b)(6)(c) Form of Sales Agreement between Seligman Financial
Services, Inc. and Dean Witter Reynolds, Inc. with
respect to certain Chilean institutional investors.
24(b)(6)(d) Form of Dealer Agreement between Seligman Financial
Services, Inc. and Smith Barney Inc.
24(b.11) Auditors Consent
24(b)(8) Copy of Custody Agreement
24(b)(10) Opinion and Consent of Counsel
24(b)(11) Consent of Independent Auditors
24(b)(13)(a) Form of Purchase Agreement of Fund's Class D Shares
24(b)(16) Performance Data Schedules
24(b)(17) Financial Data Schedules
Other Exhibits Power of Attorney
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as....................... `D'
The numerical symbol theta shall be expressed as.............. `o'
The registered trademark symbol shall be expressed as......... 'r'
The service mark symbol shall be expressed as................. 'sm'
<PAGE>
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
of
UNION CAPITAL FUND, INC.
THIS IS TO CERTIFY that UNION CAPITAL FUND, INC., a corporation
organized and existing under and by virtue of the laws of the State of Maryland,
hereby amends and restates its charter to read in is entirety as follows:
FIRST: I, the subscriber, Donald P. de Brier, whose post office address
is 48 Wall Street, New York, N. Y., being at least twenty-one years of age, do,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, form a corporation.
SECOND: Name. The name of the corporation (which is hereinafter called
the "Corporation") is
SELIGMAN CAPITAL FUND, INC.
THIRD: Purposes and Powers. The purpose for which the Corporation is
formed and the business or objects to be carried on or promoted by it are to
engage in the business of holding, investing and reinvesting its funds in
securities, and in connection therewith, to hold part or all of its funds in
cash, to acquire by purchase, subscription, contract, exchange or otherwise, and
to own, hold for investment, resale or otherwise, sell, assign, negotiate,
exchange, transfer or otherwise dispose of, or turn to account or realize upon,
and generally to deal in and with, all forms of stocks, bonds, debentures,
notes, evidences of interest, evidences of indebtedness, warrants, and other
securities, irrespective of their form, the name by which they may be described,
or the character or form of the entities by which they are issued or created
(hereinafter sometimes called "Securities"); and, subject to the provisions of
these Articles of Incorporation, to make payment thereof by any lawful means; to
exercise any and all rights, powers and privileges of individual ownership or
interest in respect of any and all such Securities, including the right to vote
thereon and to consent and otherwise act with respect thereto; to do any and all
acts and things for the preservation, protection, improvement and enhancement in
value of any and all such Securities; to acquire or become interested in any
such Securities as aforesaid, irrespective of whether or not such Securities be
fully paid or subject to further payments, and to make payments thereon as
called for or in advance of calls or otherwise;
And, in general, to do any or all such other things in connection with
the objects and purposes of the Corporation hereinbefore set forth, as are, in
the opinion of the Board of Directors of the Corporation, necessary, incidental,
relative or conducive to the attainment of such objects and purposes; and to do
such acts and things, and to exercise any and all such
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powers to the same extent as a natural person might or could lawfully do to the
full extent authorized or permitted to a corporation under any laws that may be
now or hereafter applicable or available to the Corporation.
In addition, the Corporation may issue, sell, acquire through purchase,
exchange, or otherwise hold, dispose of, resell, transfer, reissue or cancel
shares of its capital stock in any manner and to the extent now or hereafter
permitted by the laws of Maryland and by these Articles of Incorporation.
The foregoing matters shall each be construed as purposes, objects and
powers, and none of such matters shall be in any way limited by reference to, or
inference from, any other of such matters or any other Article of these Articles
of Incorporation, but shall be regarded as independent purposes, objects and
powers and the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms or the
general powers of the Corporation now or hereafter conferred by the laws of the
State of Maryland, nor shall the expression of one thing be deemed to exclude
another, although it be of like nature, not expressed.
Nothing herein contained shall be construed as giving the Corporation
any rights, powers or privileges not permitted to it by law.
FOURTH: Principal Office. The post office address of the principal
office of the Corporation in this State is c/o The Corporation Trust
Incorporated, First Maryland Building, 25 South Charles Street, Baltimore,
Maryland. The resident agent of the Corporation is The Corporation Trust
Incorporated, the post office address of which is First Maryland Building, 25
South Charles Street, Baltimore, Maryland. Said resident agent is a Corporation
of the State of Maryland.
If the By-Laws so provide, the Board of Directors of the Corporation
shall have power to hold is meetings and, subject to the provisions of the laws
of Maryland, to keep the books of the Corporation outside of said State at such
places as may from time to time be designated by the Board of Directors.
FIFTH: Capital Stock. A. The total number of shares of all classes of
stock which the Corporation has authority to issue is 500,000,000 shares of
capital stock (par value of $1.00 per share), amounting to an aggregate par
value of $500,000,000. All such shares are intitially classified as "Common
Stock." The Board of Directors of the Corporation may classify or reclassify any
unissued shares of capital stock (which classes shall share ownership of
specifically allocated assets but may have differing dividend, distribution, and
other rights, as hereinafter contemplated) whether or not such shares have been
previously classifed or reclassified from time to time by setting or changing in
any one or more respects the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock.
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B. No holder of shares of the capital stock of the Corporation shall be
entitled as such, as a matter or right, to purchase or subscribe for any part of
any new or additional issue of stock or securities of the Corporation.
C. All shares of the capital stock of the Corporation now or hereafter
authorized shall be "subject to redemption" and "redeemable," in the sense used
in the General Laws of the State of Maryland authorizing the formation of
corporations. In the absence of any contrary specification as to the purpose for
which shares of the capital stock of the Corporation are redeemed or repurchased
by it, all shares of any class so redeemed or repurchased shall thereafter have
the status of authorized but unissued capital stock of the Corporation.
D. All classes of the Common Stock of the Corporation shall represent
the same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights with any other shares of capital stock; provided,
however, that not withstanding anything in the charter of the Corporation to the
contrary:
1. Each class of shares may be subject to such front-end
sales charges as may be established by the Board of
Directors from time to time in accordance with the
Investment Company Act of 1940, as amended, and applicable
rules and regulations of the National Association of
Securities Dealers, Inc.
2. Each class of 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 of 1940, as amended, and applicable
rules and regulations of the National Association of
Securities Dealers, Inc.
3. 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 amoung
the various 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,
dividend, distributions and liquidation rights of the
shares of that class.
4. At such time as may be determined by the Board of
Directors and reflected in Articles Supplementary
establishing a class, shares of a particular class shall
be automatically converted to 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 of the shares does not
constitute a taxable event under federal income tax law.
The Board of Directors, in its sole discretion, may
suspend any conversion provision if such opinion is no
longer available.
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5. As to any matter with respect to which a separate vote
of any class is required by the Investment Company Act of
1940, as amended, or by the Maryland General Corporation
Law (including, without limitation, approval of any plan,
agreement or other arrangement referred to in subsection
(3) above), such requirement as to a separate vote by that
class shall apply in lieu of single class voting. As to
any matter that does not affect the interest of a
particular class, only the holders of shares of the
affected classes hall be entitled to vote.
E. The terms of the common stock as further 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 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 (e) 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 and
Class A shares as determined by the Corporation on the
date of conversion.
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(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 provision 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 manner 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.
SIXTH: Directors. The Corporation has ten directors in office, and the
names of the ten directors in office are as follows:
Lane W. Adams Douglas R. Nichols, Jr.
Fred E. Brown Robert G. Olmsted
Stanley R. Currie James C. Pitney
William McBride Love B. W. Robertson
John E. Merow Robert L. Shafer
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The number of directors in office may be changed from time to time in such
lawful manner as the By-Laws of the Corporation shall provide.
SEVENTH: Provisions for Defining, Limiting and Regulating the Powers of
the Corporation, Directors and Shareholders.
A. Board of Directors. The Board of Directors shall have the general
management and control of the business and property of the Corporation, and may
exercise all the powers of the Corporation, except such as are by law or by
these Articles of Incorporation or by the By-Laws conferred upon or reserved to
the shareholders. In furtherance and not in limitation of the powers conferred
by law, the Board of Directors is hereby empowered:
1. To authorize the issuance and sale, from time to
time, of shares of the capital stock of the Corporation,
whether for cash at not less than the par value thereof or
for such other consideration as the Board of Directors may
deem advisable, in the manner and to the extent now or
hereafter permitted by the laws of Maryland; provided,
however, that the consideration (or the value thereof as
determined by the Board of Directors) per share to be
received by the Corporation upon the sale of any shares of
its capital stock (including treasury shares) shall not be
less than the net asset value (determined as provided in
Article NINTH hereof) per share of such capital stock
outstanding at the time (determined by the Board of
Directors) as of which the computation of such net asset
value shall be made.
2. To authorize the execution and performance by the
Corporation of an agreement or agreements, which may be
exclusive contracts, with Seligman Distributor, Inc., a
Delaware corporation, or any other person, as distributor,
providing for the distribution of shares of the capital stock
of the Corporation. Such agreement or agreements may provide
for the charge by the Corporation of a premium over the net
asset value (determined as provided in Article NINTH hereof)
of such shares, which premium shall not exceed an amount
equal to 9% of the sum of such net asset value plus such
premium, and the payment or allowance of a commission or
discount by the Corporation to such distributor, and may
further provide for the reallowance by such distributor of
commissions or concessions from such commission or discount;
provided, however, that such commission or discount shall not
exceed the amount of the aforementioned premium. Any such
agreement or agreements shall provide that any such
distributor may purchase shares of the capital stock of the
Corporation from the Corporation only to the extent that it
shall have received purchase orders therefor, that the
distributor shall not make
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any short sales of the shares of the capital stock of the
Corporation, and that the distributor shall not sell any
shares of the capital stock of the Corporation to officers or
directors of the Corporation, of the distributor or of any
corporation or association furnishing managerial or
supervisory services to the Corporation, or to any such
corporation or association, unless the distributor is advised
that the purchases are for investment, that the shares
purchased will not be resold except through redemption or
repurchase by or on behalf of the Corporation and that the
purchasers will advise the distributor of any sales of shares
so purchased made less than two months after the date or
purchase.
3. To specify, in instances in which it may be
desirable, that shares of the capital stock of the
Corporation repurchased by it are not repurchased for
retirement and to specify the purposes for which such shares
are repurchased.
4. To authorize the execution and performance by the
Corporation of an agreement or agreements with Seligman or
any other person whereby, subject to the control of the Board
of Directors, the investment and other operations of the
Corporation shall be managed by Seligman or such other
person.
The Corporation may in its By-Laws confer powers on the Board of
Directors in addition to the foregoing and in addition to the powers expressly
conferred by statute.
B. Voting Powers: The presence in person or by proxy of the holders of
one-third of the shares of the capital stock of the Corporation outstanding and
entitled to vote thereat shall constitute a quorum at any meetings of the
shareholders. If at any meeting of the shareholders there be less than a quorum
present, the shareholders present at such meeting may, without further notice,
adjourn the same from time to time until a quorum shall attend, but no business
shall be transacted at any such adjourned meeting, except such as might have
been lawfully transacted had the meeting not been adjourned. Notwithstanding any
provision of law requiring any action to be taken or authorized by the holders
of a greater proportion than a majority of the shares of capital stock of the
Corporation entitled to vote thereon, such action shall be valid and effective
if taken or authorized by the affirmative vote of the holders of a majority of
the shares of the capital stock of the Corporation outstanding and entitled to
vote thereon.
C. Dividends. The Corporation shall distribute to its shareholders in
the form of dividends, at such times and in such manner as the Board of
Directors shall determine, in cash or in stock or rights to subscribe to stock
of the Corporation, or in property or otherwise, amounts substantially equal to
the net income of the Corporation from dividends and interest after deduction of
operating expenses, taxes applicable to such income, and reserves set aside out
of such income.
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In addition, the Board of Directors is empowered to distribute, from
time to time, in such form as the Board of Directors may determine, additional
dividends from any assets of the Corporation legally available for the payment
thereof (excluding unrealized appreciation of the Corporation's assets),
provided that each shareholder be notified at the time of payment of each such
dividend of the account or accounts from which it was paid.
EIGHTH: Redemptions and Repurchases.
A. The Corporation shall under some circumstances redeem, and may
under other circumstances repurchase, shares of its capital stock as follows:
1. Obligation of the Corporation to Redeem Shares. Each
holder of shares of any class shall be entitled at his
option to require the Corporation to redeem all or any
part of the shares of capital stock of that class owned by
such holder, upon written or telegraphic request to the
Corporation or its designated agent, accompanied by
surrender of the certificate or certificates for such
shares, or such other evidence of ownership as shall be
specified by the Board of Directors, for the proportionate
interest per share in the assets of the Corporation
belonging to that class, or the cash equivalent thereof
(being the net asset value of such shares determined as
provided in Article NINTH hereof, less the amount of any
applicable contingent deferred sales charge payable on
such redemption), subject to and in accordance with the
provisions of paragraph B of this Article.
2. Right of the Corporation to Repurchase Shares. In
addition the Board of Directors may, from time to time in
its discretion, authorize the officers of the Corporation
to repurchase shares of its capital stock, either directly
or through an agent, subject to and in accordance with the
provisions of paragraph B of this Article. The price to be
paid by the Corporation upon any such repurchase shall be
determined, in the discretion of the Board of Directors,
in accordance with any provision of the Investment Company
Act of 1940 or any rule or regulation thereunder,
including any rule or regulation made or adopted pursuant
to Section 22 of the Investment Company act of 1940 by the
Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act
of 1934.
3. Redemption of Accounts. In addition the Board of
Directors may, from time to time in its discretion,
authorize the Corporation to require the redemption of all
or any part of the outstanding Shares of any Class or all
or any part of the outstanding Shares of any shareholder,
for the proportionate interest per Share in the assets of
the Corporation belonging to that Class or shareholder, or
the cash equivalent thereof (being the net
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asset value per Share of that Class determined as provided
in Article NINTH hereof), subject to and in accordance
with the provisions of paragraph B of this Article, upon
the sending of written notice thereof to each shareholder
any of whose Shares are so redeemed and on such terms and
conditions as the Board of Directors shall deem advisable.
B. The following provisions shall be applicable with respect to
redemptions and repurchases of shares of of capital stock of the Corporation
pursuant to paragraph A hereof:
1. Certificates for shares of capital stock to be
redeemed or repurchased shall be surrendered in proper
form for transfer, together with such proof of the
authenticity of signatures as may be required by
resolution of the Board of Directors.
2. Payment of the redemption or repurchase price
by the Corporation or its designated agent shall be made
in cash within seven days after the time used for
determination of the redemption or repurchase price, but
in no event prior to delivery to the Corporation, or its
designated agent, of the certificate or certificates for
the shares of capital stock so redeemed or repurchased or
of such other evidence of ownership as shall be specified
by the Board of Directors; except that any payment may be
made in whole or in part in securities or other assets of
the Corporation, if, in the event of the closing of the
New York Stock Exchange or the happening of any event at
any time prior to actual payment which makes the
liquidation of Securities in orderly fashion impractical
or impossible, the Board of Directors shall determine that
payment in cash would be prejudicial to the best interests
of the remaining shareholders of the Corporation. In
making any such payment in whole or in part in Securities
or other assets of the Corporation, the Corporation shall,
as nearly as may be practicable, deliver Securities or
other assets of a market value (determined in the manner
provided in Article NINTH hereof) representing the same
proportionate interest in the Securities and other assets
of the Corporation belonging to that Class as is
represented by the shares so to be paid for. Delivery of
the Securities included in any such payment shall be made
as promptly as any necessary transfers on the books of the
several corporations whose Securities are to be delivered
may be made.
3. The right of the holder of shares of capital
stock redeemed or repurchased by the Corporation, as
provided in this Article, to receive dividends thereon and
all other rights of such holder with respect to such
shares shall forthwith cease and terminate from and after
the time as of which the redemption or repurchase price of
such shares has been determined (except the right of such
holder to receive (a) the redemption or repurchase price
of such shares from the Corporation or its designated
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agent, in cash and/or in securities or other assets of the
Corporation, and (b) any dividend to which such holder had
previously become entitled as the record holder of such
shares on the record date for such dividend).
NINTH: Determination of Net Asset Value. For the purposes referred to in
Articles SEVENTH and EIGHTH hereof, the net asset value of shares of the capital
stock of the Corporation shall be determined by or pursuant to the direction of
the Board of Directors in accordance with the following provisions:
A. Such net asset value on any day shall be computed as follows:
The net asset value of each share of such stock shall
be the quotient obtained by dividing the "net value of the
assets" of the Corporation by the total number of shares
at the time deemed to be outstanding (including shares
sold whether paid for and issued or not, and excluding
shares redeemed or repurchased on the basis of previous
determined values, whether paid for, received and held in
treasury, or not).
The "net value of the assets" shall be the "gross
value" after deducting the amount of all expenses incurred
and accrued and unpaid, such reserves as may be set up to
cover taxes and any other liabilities, and such other
deductions as in the opinion of the officers of the
Corporation are in accordance with accepted accounting
practice.
The "gross value" of the assets shall be the amount of
all cash and receivables and the market value of all
Securities and other assets held by the Corporation at the
time as of which the determination is made. Securities
held shall be valued at market value or, in the absence of
readily available market quotations, at fair value, both
as determined pursuant to methods approved by the Board of
Directors and in accordance with applicable statutes and
regulations.
B. The Board of Directors is empowered, in its absolute discretion,
to establish other methods for determining such net asset value whenever such
other methods are deemed by it to be necessary or desirable in order to enable
the Corporation to comply with any provision of the Investment Company Act of
1940 or any rule or regulation thereunder, including any rule or regulation made
or adopted pursuant to Section 22 of the Investment Company Act of 1940 by the
Securities and Exchange Commission or any securities association registered
under the Securities Exchange Act of 1934.
TENTH: Determination Binding. Any determination made by or pursuant to
the direction of the Board of Directors in good faith and in accordance with
accepted accounting practice, as to the amount of the assets, obligations or
liabilities of the Corporation, as to the amount of the net income of the
Corporation from dividends and interest for any period or amounts at any time
legally available for the payment of dividends, as to the amount of any
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reserves or charges set up and the propriety thereof, as to the time of or
purpose for creating any reserves or charges, as to the use, alteration or
cancellation of any reserves or charges (whether or not any obligation or
liability for which such reserves or charges shall have been created shall have
been paid or discharged or shall be then or thereafter required to be paid or
discharged), as to the price or closing bid or asked price of any Security owned
or held by the Corporation, as to the market value of any Security or fair value
of any other asset owned by the Corporation, as to the number of shares of the
Corporation issued or issuable, as to the impracticability or impossibility of
liquidating Securities in orderly fashion, as to the extent to which it is
practicable to deliver the proportionate interest in the Securities and other
assets of the Corporation represented by any shares redeemed or repurchased in
payment for any such shares, as to the method of payment for any such shares,
redeemed or repurchased, or as to any other matters relating to the issue, sale,
redemption, repurchase, and/or other acquisition or disposition of Securities or
shares of capital stock of the Corporation shall be final and conclusive and
shall be binding upon the Corporation and all holders of shares of its capital
stock, past, present and future, and shares of the capital stock of the
Corporation are issued and sold on the condition and understanding that any and
all such determinations shall be binding as aforesaid. No provision of these
Articles of Incorporation shall be effective to (a) bind any person to waive
compliance with any provision of the Securities Act of 1933 or the Investment
Company Act of 1940 or of any valid rule, regulation or order of the Securities
and Exchange Commission thereunder, or (b) protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
ELEVENTH: Amendments. The Corporation reserves the right to take any
lawful action and to make any amendment of these Articles of Incorporation,
including the right to make any amendment which changes the terms of any shares
of the capital stock of the Corporation of any class now or hereafter authorized
by classification, reclassification, or otherwise, and to make any amendment
authorizing any sale, lease, exchange or transfer of the property and assets of
the Corporation as an entirety, or substantially as an entirety, with or without
its good will and franchise, if a majority of all the shares of capital stock of
the Corporation at the time issued and outstanding and entitled to vote, vote in
favor of any such action or amendment, or consent thereto in writing, and
reserves the right to make any amendment of these Articles of Incorporation in
any form, manner or substance now or hereafter authorized or permitted by law.
TWELFTH: Liability. A director or officer of the Corporation shall not
be liable to the Corporation or its shareholders for monetary damages for breach
of fiduciary duty as a Director or Officer, except to the extent such exemption
from liability or limitation thereof is not permitted by law (including the
Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended).
No amendment, modification or repeal of this Article Twelfth shall
adversely affect any right or protection of a Director or Officer that exists at
the time of such amendment, modification or repeal.
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THIRTEENTH: Indemnification of Directors, Officers and Employees. The
Corporation shall indemnify to the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended) any person made or threatened to be made a party to any
action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a Director, Officer or employee of the Corporation or
serves or served at the request of the Corporation any other enterprise as a
Director, Officer or employee. To the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended), expenses incurred by any such person in defending any
such action, suit or proceeding shall be paid or reimbursed by the Corporation
promptly upon receipt by it of an undertaking of such person to repay such
expenses if it shall ultimately be determined that such person is not entitled
to be indemnified by the Corporation. The rights provided to any person by this
Article shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a Director,
Officer or employee as provided above. No amendment of this Article Thirteenth
shall impair the rights of any person arising at any time with respect to events
occurring prior to such amendment. For purposes of this Article Thirteenth, the
term "Corporation" shall include any predecessor of the Corporation and any
constituent corporation (including any constituent of a constituent) absorbed by
the Corporation in a consolidation or merger; the term "other enterprise" shall
include any corporation, partnership, joint venture, trust or employee benefit
plan; service "at the request of the Corporation" shall include service as a
Director, Officer or employee of the Corporation which imposes duties on, or
involves services by, such Director, Officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed to
be indemnifiable expenses; and action by a person with respect to any employee
benefit plan which such person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be deemed to be action not
opposed to the best interests of the Corporation.
* * * *
The foregoing amendment and restatement of the Articles of Incorporation
of the corporation has been duly advised by the Board of Directors and approved
by the stockholders of the Corporation.
IN WITNESS WHEREOF, UNION CAPITAL FUND, INC. has caused these Articles
of Amendment and Restatement to be signed in its name and on its behalf by its
President witnessed by its Secretary, and the said officers of the Corporation
further also acknowledged said instrument to be the corporate act of the
Corporation and stated under the penalties of perjury that to the best of their
knowledge, information and belief the matters and facts therein set forth with
respect to approval are true in all material respects, all on April 22, 1982.
UNION CAPITAL FUND, INC.
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By /s/ Ronald T. Schroeder
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Ronald T. Schroeder,
President
Witness:
/s/ Carl J. White
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AMENDED AND RESTATED
BY-LAWS
OF
SELIGMAN CAPITAL FUND, INC.
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SELIGMAN CAPITAL FUND, INC.
BY-LAWS
ARTICLE I.
SHAREHOLDERS' MEETINGS.
SECTION 1. PLACE OF HOLDING MEETINGS. Each meeting of shareholders shall
be held at the office of the Corporation in the City of Baltimore, Maryland, or
at such other place within the United States as may be fixed by the Board of
Directors.
SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders of
the Corporation shall be held during the 31-day period commencing April 15 of
each year on such day and at such hour as may from time to time be designated by
the Board of Directors and stated in the notice of such meeting, for the
transaction of such business as may properly be brought before the meeting;
provided, however, that an annual meeting of shareholders shall not be required
to be held in any year in which none of the following is required to be acted on
by shareholders pursuant to the Investment Company Act of 1940: election of
directors; approval of the investment advisory agreement; ratification of the
selection of independent public accountants and approval of a distribution
agreement.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders for
any purpose or purposes may be called by the Chairman of the Board, the
President, a majority of the Board of Directors or a majority of the Executive
Committee and shall be called by the Secretary upon the written request of the
holders of shares entitled to not less than twenty-five percent of all the votes
entitled to be cast at such meeting. Such request shall state the purpose or
purposes of such meeting and the matters proposed to be acted on thereat. The
Secretary shall inform such shareholders of the reasonably estimated cost of
preparing and mailing such notice of meeting, and upon payment to the
Corporation of such costs the Secretary shall give notice stating the purpose or
purposes of the meeting, as required in this Article and by law, to all
shareholders entitled to notice of such meeting. No special meeting need be
called upon the request of the holders of shares entitled to cast less than a
majority of all votes entitled to be cast at such meeting, to consider any
matter which is substantially the same as a matter voted upon at any special
meeting of shareholders held during the preceding twelve months.
SECTION 4. NOTICE OF SHAREHOLDERS' MEETINGS. Not less than ten days nor
more than ninety days before the date of every shareholders' meeting, the
Secretary shall give to each shareholder entitled to vote at or to notice of
such meeting, written or printed notice stating the time and place of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, either by mail or presenting it to him personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the shareholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
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SECTION 5. QUORUM. At any meeting of shareholders, the presence in
person or by proxy of shareholders entitled to cast one-third of the votes
thereat shall constitute a quorum. If at any meeting of the shareholders there
shall be less than a quorum present, the holders of a majority of the shares
present at such meeting may, without further notice, adjourn the same from time
to time until a quorum shall attend, but no business shall be transacted at any
such adjourned meeting, except such as might have been lawfully transacted had
the meeting not been adjourned.
SECTION 6. VOTING. A majority of the votes cast at a meeting of
shareholders, at which a quorum is present, shall be sufficient to take or
authorize action upon any matter which may properly come before the meeting,
unless more than a majority of votes cast is required by law or by the Articles
of Incorporation.
With respect to all shares having voting rights (a) a shareholder may
vote the shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, provided
that no proxy shall be valid after eleven months from its date unless otherwise
provided in the proxy and (b) in all elections for directors every shareholder
shall have the right to vote, in person or by proxy, the shares owned of record
by him, for as many persons as there are directors to be elected and for whose
election he has a right to vote.
SECTION 7. CONDUCT OF SHAREHOLDERS' MEETINGS. Each meeting of
shareholders shall be presided over by the Chairman of the Board, or if he is
not present, by the President or a Vice-President of the Corporation designated
by the Chairman of the Board to act as Chairman of the meeting, or if none of
the foregoing is present, by a Chairman to be elected at the meeting. The
Secretary of the Corporation, or if he is not present, an Assistant Secretary,
or if neither is present, a secretary to be named at the meeting, shall act as
secretary of the meeting.
ARTICLE II.
BOARD OF DIRECTORS.
SECTION 1. NUMBER; TERM. The business and affairs of the Corporation
shall be managed under the direction of a Board of ten members, but from time to
time such number may be increased to not more than twenty or decreased to not
less than three, by vote of a majority of the entire Board of Directors,
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors so made by the Board.
At each annual meeting of shareholders the shareholders shall elect
directors to hold office until the next annual meeting or until their successors
are elected and qualify, subject to the right of removal granted by law.
Directors need not be shareholders.
SECTION 2. VACANCIES. Any vacancy occurring in the Board of Directors
for any cause other than by reason of an increase in the number of directors may
be filled by the vote of a majority of the remaining directors, although such
majority is less than a quorum. Any vacancy occurring by reason of an increase
in the number of directors may be filled by action of a majority of the entire
Board of
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Directors. A director elected by the Board of Directors to fill a vacancy shall
be elected to hold office until the next annual meeting of shareholders or until
his successor is elected and qualifies.
SECTION 3. MEETINGS. Meetings of the Board of Directors, regular or
special, may be held at any place in or out of the State of Maryland as the
Board may from time to time determine or as shall be specified or filed in the
respective notices or waivers of notice thereof.
Regular meetings of the Board shall be held at such time as the Board
may from time to time determine. No notice need be given of regular meetings of
the Board.
Special meetings of the Board may be held at any time upon call of the
Chairman of the Board, at the request of the Executive Committee or of a
majority of the directors, by the Secretary, by oral, telegraphic or written
notice duly served on or sent or mailed to each director not less than two days
before such meeting. Such notice need not include a statement of the business to
be transacted, at, or the purpose of, such special meeting. A written waiver of
notice, signed by the director entitled to such notice and filed with the
records of the meeting, whether before or after the holding thereof, or actual
attendance at the meeting, shall be deemed equivalent to the giving of notice to
such director.
At all meetings of the Board, a majority of the entire Board, but not
less than two directors, shall constitute a quorum for the transaction of
business. If there be less than a quorum present at any meeting of the Board, a
majority of those present may adjourn the meeting from time to time.
The action of a majority of the directors present at a meeting at which
a quorum is present shall be the action of the Board unless the concurrence of a
greater proportion is required for such action by statute, the Articles of
Incorporation or these By-Laws.
SECTION 4. BOARD OPERATIONS COMMITTEE. The Board of Directors may
appoint those of its members who are not interested persons (as defined in the
Investment Company Act of 1940) of the Corporation as a Board Operations
Committee, which committee shall have the authority generally to direct the
operations of the Board of Directors including (a) the nomination for
appointment by the Board from among the members of the Board Operations
Committee of the members of the Audit Committee, the Director Nominating
Committee and the Portfolio Transactions Committee, (b) the nomination for
appointment by the Board of such other committees, if any, as the Board
Operations Committee shall determine, (c) the power of the Board to select legal
counsel for the Corporation, (d) the recommendation to the Board of (i) matters
to be submitted to the shareholders of the Corporation for consideration and
(ii) the recommendations to be made to the shareholders with respect thereto,
and (e) control of the agenda for meetings or other action of the Board.
SECTION 5. AUDIT COMMITTEE. The Board of Directors may appoint those of
its members nominated by the Board Operations Committee for that purpose as an
Audit Committee, such committee to be composed of two or more directors. The
Audit Committee shall (a) recommend independent public accountants for selection
by the Board, (b) review the scope of audit, accounting and financial internal
controls and the quality and adequacy of the Corporation's accounting staff with
the independent public accountants and such other persons as may be deemed
appropriate, (c) review
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reports of the independent public accountants and comment to the Board when
warranted, (d) report to the Board at least once each year and at such other
times as the committee deems desirable, and (e) be directly available at all
times to the independent public accountants and responsible officers of the
Corporation for consultation on audit, accounting and related financial matters.
SECTION 6. DIRECTOR NOMINATING COMMITTEE. The Board of Directors may
appoint those of its members nominated by the Board Operations Committee for
that purpose as a Director Nominating Committee, such committee to be composed
of two or more directors. The Director Nominating Committee shall recommend to
the Board a slate of persons to be nominated for election as directors by the
shareholders at each annual meeting of shareholders and a person to be elected
to fill any vacancy occurring for any reason in the Board.
SECTION 7. PORTFOLIO TRANSACTIONS COMMITTEE. The Board of Directors may
appoint those of its members nominated by the Board Operations Committee for
that purpose as a Portfolio Transactions Committee, such committee to be
composed of two or more directors. The Portfolio Transactions Committee shall
maintain familiarity with, report to the Board concerning, and make such
recommendations to the Board as it may deem appropriate with respect to, the
practices followed in the handling of orders to buy and sell portfolio
securities for the Corporation.
SECTION 8. EXECUTIVE COMMITTEE. The Board of Directors may appoint those
of its members nominated by the Board Operations Committee for that purpose as
an Executive Committee, such committee to be composed of two or more directors.
In the intervals between meetings of the Board, the Executive Committee shall
have the power of the Board to (a) determine the value of securities and assets
owned by the Corporation, (b) elect or appoint officers of the Corporation to
serve until the next meeting of the Board and (c) take such action as may be
necessary to manage the portfolio security loan business of the Corporation.
All action by the Executive Committee shall be recorded and reported to
the Board at its meeting next succeeding such action.
SECTION 9. OTHER COMMITTEES. The Board of Directors may appoint from
among its members other committees composed of two or more directors which shall
have such powers as may be delegated or authorized by the resolution appointing
them.
SECTION 10. COMMITTEE PROCEDURES. The Board of Directors may at any
time, in conformity with the recommendations of the Board Operations Committee,
change the members of any committee, fill vacancies or discharge any committee.
In the absence of any member of any committee, the member or members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an interested person (as
defined in the Investment Company Act of 1940) of the Corporation.
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Each committee may fix its own rules of procedure and may meet as and
when provided by those rules.
A majority of the members of the Board Operations Committee, and two or
more members of any other committee, shall constitute a quorum unless the Board
shall otherwise provide.
Copies of the minutes of all meetings of committees other than the
Nominating Committee and the Executive Committee shall be distributed to the
Board unless the Board shall otherwise provide.
SECTION 11. TELEPHONE MEETINGS. Members of the Board of Directors or a
committee of the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time. Participation
in a meeting by these means constitutes presence in person at the meeting.
SECTION 12. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent to such action is signed by
all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
SECTION 13. COMPENSATION OF DIRECTORS. The Board of Directors shall have
the authority to fix the compensation of the directors for services in any
capacity.
ARTICLE III.
OFFICERS.
SECTION 1. OFFICERS. The executive officers of the Corporation shall be
elected by the Board of Directors and shall be a Chairman of the Board, who
shall be the chief executive officer of the Corporation, a President, one or
more Vice-Presidents, a Secretary and a Treasurer. The Chairman of the Board
shall be selected from among the directors. The Board may also appoint such
other officers, employees and agents as it may deem appropriate. Any two or more
offices, except those of President and Vice-President, may be held by the same
person but no person shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law, the Articles of
Incorporation or these By-Laws to be executed, acknowledged or verified by two
or more officers.
SECTION 2. TERM. Officers shall serve for one year and until their
successors are elected and shall qualify, but any officer may be removed (except
as a director) by action of a majority of the entire Board of Directors
whenever, in the judgment of the Board, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
SECTION 3. AUTHORITY AND DUTIES. All officers and agents of the
Corporation shall have such authority and perform such duties in the management
of the property and affairs of the
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Corporation as generally pertain to their respective offices, as well as such
authority and duties as may be determined by resolution of the Board of
Directors.
Without limiting the generality of the foregoing and subject to the
provisions of the Articles of Incorporation of the Corporation and to the order
of the Board of Directors, the Treasurer shall be the chief financial and
accounting officer of the Corporation and as such shall receive, or cause to be
received, and give, or cause to be given, receipt for all funds and securities
paid or delivered to, or for the account of the Corporation; shall cause such
funds and securities to be deposited for the account of the Corporation; with
such custodians as may be designated by the Board of Directors; shall pay or
cause to be paid out of the funds of the Corporation all just debts of the
Corporation upon their maturity; shall maintain, or cause to be maintained,
accurate records of all receipts, disbursements, assets, liabilities and
transactions of the Corporation; shall see that adequate audits thereof are
regularly made; and shall, when required by the Board of Directors, render
accurate statements of the condition of the Corporation.
SECTION 4. COMPENSATION OF OFFICERS. The Board of Directors may
determine what, if any, compensation shall be paid to officers of the
Corporation.
ARTICLE IV.
INDEMNIFICATION.
The Corporation may indemnify any person, made a party to any action by
or in the right of the Corporation to procure a judgment in its favor, by reason
of the fact that he, his testator or intestate, is or was a director or officer
of the Corporation, against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with the defense of such
action, or in connection with an appeal therein, except in relation to matters
as to which such director or officer is adjudged to have breached his duty to
the Corporation as such director or officer. Such indemnification shall in no
case include amounts paid in settling or otherwise disposing of a threatened
action, or a pending action with or without court approval, or expenses incurred
in defending a threatened action, or a pending action which is settled or
otherwise disposed of without court approval.
The Corporation may indemnify any person made, or threatened to be made,
a party to an action or proceeding other than one by or in the right of the
Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, which any director or officer of the Corporation
served in any capacity at the request of the Corporation, by reason of the fact
that he, his testator or intestate, was a director or officer of the Corporation
or served such other corporation in any capacity, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonably believed to be in the best interests of the
Corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any such civil or criminal action or proceeding by judgment, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not in
itself create a presumption that any such director
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or officer did not act, in good faith, for a purpose which he reasonably
believed to be in the best interests of the Corporation or that he had
reasonable cause to believe that his conduct was unlawful.
A person who has been wholly successful, on the merits or otherwise, in
the defense of a civil or criminal action or proceeding of the character
described in the first two paragraphs of this Article shall be entitled to
indemnification as authorized in such paragraphs. Except as provided in the
preceding sentence, any indemnification under such paragraphs, unless ordered by
a court, shall be made by the Corporation, only if authorized in the specific
case:
(A) By the Board of Directors acting by a quorum
consisting of directors who are not parties to such action
or proceeding upon a finding that the director or officer
has met the standard of conduct set forth in the first or
second paragraph of this Article, as the case may be, or,
(B) If such a quorum is not obtainable with due
diligence:
(1) By the Board of Directors upon
the opinion in writing of independent
legal counsel that indemnification is
proper in the circumstances because the
applicable standards of conduct set forth
in such paragraphs has been met by such
director or officer, or
(2) By the shareholders upon a
finding that the director or officer has
met the applicable standard of conduct set
forth in such paragraphs.
Expenses, including attorneys' fees, incurred in defending a civil or
criminal action or proceeding may be paid by the Corporation in advance of the
final disposition of such action or proceeding if authorized under the preceding
sentence, subject to repayment to the Corporation by the person receiving such
advancement in case he is ultimately found not to be entitled to indemnification
or, where indemnification is granted, to the extent the expenses so advanced by
the Corporation exceed the indemnification to which he is entitled.
Nothing herein shall affect the right of any person to be awarded
indemnification, including attorneys' fees, by a court in accordance with law.
If any expenses or other amounts are paid by way of indemnification,
otherwise than by court order or action by the shareholders, the Corporation
shall, not later than the next annual meeting of shareholders unless such
meeting is held within three months from the date of such payment, and, in any
event, within fifteen months from the date of such payment, mail to its
shareholders of record at the time entitled to vote for the election of
directors a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
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To the extent permitted by law, the provisions of this Article shall
apply to all alleged or actual causes of action, whenever heretofore or
hereafter accrued, asserted against any person designated in the first two
paragraphs hereof.
Indemnification provided for in this Article shall not be deemed
exclusive of any other rights to which any person may lawfully be entitled under
any By-Law, agreement, vote of shareholders, or otherwise.
No provision of this Article shall protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
ARTICLE V.
CAPITAL STOCK.
SECTION 1. CERTIFICATES OF STOCK. Each shareholder shall be entitled to
a certificate or certificates which shall represent and certify the number of
whole shares of stock owned by him in the Corporation. Each certificate shall be
signed by the Chairman of the Board, President or a Vice-President and
countersigned by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer and shall be sealed with the corporate seal. The signatures
may be either manual or facsimile signatures and the seal may be either
facsimile or any other form of seal. In case any officer who has signed any
certificate ceases to be an officer of the Corporation before the certificate is
issued, the certificate may nevertheless be issued by the Corporation with the
same effect as if the officer had not ceased to be such officer as of the date
of its issue.
SECTION 2. LOST CERTIFICATES. The Board of Directors may determine the
conditions upon which a new certificate of stock may be issued in place of a
certificate which is alleged to have been lost, destroyed or stolen. It may, in
its discretion, require the owner of such certificate to give bond, with
sufficient surety, to the Corporation to indemnify it against any loss or claim
which may arise by reason of the issuance of a new certificate.
SECTION 3. RECORD DATES; CLOSING OF TRANSFER BOOKS. The Board of
Directors may fix, in advance, a date as the record date for the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders, or shareholders entitled to receive payment of any dividend or the
allotment of any rights, or in order to make a determination of shareholders for
any other proper purpose. Such date in any case shall be not more than ninety
days, and in the case of a meeting of shareholders, not less than ten days,
prior to the date of the action that requires such determination.
SECTION 4. STOCK LEDGER. An original or duplicate stock ledger
containing the names and addresses of all shareholders and the number of shares
of each class held by each shareholder, shall be kept by the Secretary at the
office of the Corporation in the City of New York, or in Jersey City, New
Jersey, or at such other office or agency of the Corporation in the City of New
York and Jersey City, as the Board of Directors may from time to time by
resolution determine.
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ARTICLE VI.
CHECKS, NOTES, ETC.
All checks and drafts on the Corporation's bank accounts and all bills
of exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers, or agent or agents, as shall be thereunto authorized from time to time
by the Board of Directors.
ARTICLE VII.
BOOKS AND RECORDS.
The books of the Corporation other than the original or duplicate stock
ledger may be kept at such place or places in or out of the State of Maryland as
the Board of Directors may from time to time determine.
ARTICLE VIII.
SEAL.
The Board of Directors shall provide a suitable corporate seal, in such
form and bearing such inscriptions as they may determine.
ARTICLE IX.
FISCAL YEAR.
The fiscal year of the Corporation shall be the calendar year, subject,
however, to change from time to time by the Board of Directors.
ARTICLE X.
CUSTODIAN.
All securities and funds of the Corporation shall be held by one or more
custodians each of which shall be a bank or trust company having not less than
$2,500,000 aggregate capital, surplus and undivided profits, as shown by its
last published report, provided any such custodian can be found ready and
willing to act.
The terms of custody of such securities and funds shall include
provisions to the effect that the custodian shall deliver securities owned by
the Corporation only (a) upon sales of such securities for the account of the
Corporation and receipt by the custodian of payment therefor, (b) when such
securities are called, redeemed or retired or otherwise become payable, (c) in
exchange for or upon conversion into other securities alone or other securities
and cash, whether pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (d) upon conversion of such
securities
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pursuant to their terms into other securities, (e) upon exercise of
subscription, purchase or other similar rights represented by such securities,
(f) for the purpose of exchanging interim receipts or temporary securities for
definitive securities, (g) for the purpose of redeeming in kind shares of the
capital stock of the Corporation, (h) for loans of securities by the
Corporation, or (i) for other proper corporate purposes.
Such terms of custody shall also include provisions to the effect that
the custodian shall deliver funds of the Corporation only (a) upon the purchase
of securities for the portfolio of the Corporation and the delivery of such
securities to the custodian, (b) for the repurchase or redemption of shares of
the capital stock of the Corporation, (c) for the payment of dividends, taxes,
management or supervisory fees or operating expenses, (d) for payments in
connection with the conversion, exchange or surrender of securities owned by the
Corporation, (e) for payments in connection with the return of securities loaned
by the Corporation or the reduction of cash collateral, or (f) for other proper
corporate purposes.
Upon the resignation or inability of any such custodian to serve, the
Corporation shall (a) use its best efforts to obtain a successor custodian, (b)
require the funds and securities of the Corporation held by the custodian to be
delivered to the successor custodian, and (c) in the event that no successor
custodian can be found, submit to the shareholders of the Corporation, before
permitting delivery of such funds and securities to anyone other than a
successor custodian, the question whether the Corporation shall be dissolved or
shall function without a custodian; provided, however, that nothing herein
contained shall prevent the termination of any agreement between the Corporation
and any such custodian by the affirmative vote of the holders of a majority of
the outstanding shares of the capital stock of the Corporation entitled to vote.
Such terms of custody shall further provide that, pending appointment of
a successor custodian or a vote of the shareholders to function without a
custodian, a custodian shall not deliver funds and other property of the
Corporation to the Corporation, but may deliver them to a bank or trust company
of its own selection having not less than $2,500,000 aggregate capital, surplus,
and undivided profits, as shown by its last published report, as custodian for
the Corporation to be held under terms similar to those under which they were
held by the retiring custodian.
Subject to such rules, regulations and orders as the Securities and
Exchange Commission may adopt, the Corporation may authorize or direct a
custodian to deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
custodian.
The Corporation may also have such transfer agents and registrars of the
shares of its capital stock as the Board of Directors shall from time to time
determine. The Board of Directors may employ and fix the powers, rights, duties,
responsibilities, privileges, immunities, and compensation of any such
custodian, transfer agent, or registrar, subject however, in the case of any
such custodian, to the foregoing provision of this paragraph.
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As used herein, the term "receipt by the custodian of payment" shall
include the receipt of (a) a certified or official bank check, (b) any advice
that funds have been or will be credited to the account of the custodian at a
clearing agency registered under the Securities Exchange Act of 1934, or (c) a
bank wire from a correspondent bank of the custodian. As used herein, the term
"delivery of such securities to the custodian" shall include the receipt of (a)
securities in bearer form or in proper form for transfer, or (b) any advice that
securities have been credited to the account of the custodian at a clearing
agency registered under the Securities Exchange Act of 1934, or at the Federal
Reserve Bank of New York.
ARTICLE XI.
AMENDMENTS.
The Board of Directors is authorized and empowered to make, alter or
repeal the By-Laws of the Corporation, in any manner not inconsistent with the
laws of the State of Maryland or the Articles of Incorporation of the
Corporation.
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DISTRIBUTING AGREEMENT
DISTRIBUTING AGREEMENT, dated as of January 1, 1993, between SELIGMAN
CAPITAL FUND, INC., a Maryland corporation (the "Fund"), and SELIGMAN FINANCIAL
SERVICES, INC., a Delaware corporation ("Seligman Financial Services").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. Exclusive Distributor. The Fund hereby agrees that Seligman Financial
Services shall be for the period of this Agreement exclusive agent for
distribution within the United States and its territories, and Seligman
Financial Services agrees to use its best efforts during such period to
effect such distribution of shares of Capital Stock ("Shares") of the Fund;
provided, however, that nothing herein shall prevent the Fund, if it so
elects, from selling or otherwise distributing its Shares directly to any
persons other than dealers. The Fund understands that Seligman Financial
Services also acts as agent for distribution of the shares of capital stock
or beneficial interest of other open-end investment companies which have
entered into management agreements with J. & W. Seligman & Co. Incorporated
(the "Manager").
2. Sales of Shares. Seligman Financial Services is authorized, as agent for
the Fund and not as principal, (a) to sell Shares of the Fund to such
dealers as Seligman Financial Services may select pursuant to the terms of
written sales agreements (which may also relate to sales of shares of
capital stock or shares of beneficial interest of other open-end investment
companies which have entered into management agreements with the Manager),
in form or forms approved by the Fund, and (b) to sell Shares of the Fund
to other purchasers on such terms as may be provided in the then current
prospectus of the Fund relating to such Shares; provided, however, that no
sales of Shares shall be confirmed by Seligman Financial Services at any
time when, according to advice received by Seligman Financial Services from
the Fund, the officers of the Fund have for any reason sufficient to them
temporarily or permanently suspended or discontinued the sale and issuance
of the Shares. Each sale of Shares shall be effected by Seligman Financial
Services only at the applicable price determined by the Fund in the manner
prescribed in its then current prospectus relating to such Shares. Seligman
Financial Services shall comply with all applicable laws, rules and
regulations including, without limiting the generality of the foregoing,
all rules or regulations made or adopted pursuant to Section 22 of the
Investment Company Act of 1940 (the "1940 Act") by the Securities and
Exchange Commission or any securities association registered under the
Securities Exchange Act of 1934.
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The Fund agrees, as long as its Shares may legally be issued, to fill all
orders confirmed by Seligman Financial Services in accordance with the
provisions of this Agreement.
3. Repurchase Agent. Seligman Financial Services is authorized, as agent for
the Fund and not as principal, to accept offers for resale to the Fund and
to repurchase on behalf of the Fund Shares of the Fund at net asset values
determined by the Fund in conformity with its then current prospectus
relating to such Shares.
4. Compensation. As compensation for the services of Seligman Financial
Services under this Agreement, Seligman Financial Services shall be
entitled to receive the sales charge, determined in conformity with the
Fund's then current prospectus relating to such Shares, on all sales of
Shares of the Fund confirmed by Seligman Financial Services hereunder and
for which payment has been received, less the dealers' concession allowed
in respect of such sales. In addition, in accordance with the terms of the
Fund's Administration, Shareholder Services and Distribution Plan (the
"Plan"), the Fund may make payments from time to time to Seligman Financial
Services in accordance with the terms and limitations of, and for the
purposes set forth in the Plan.
5. Expenses. Seligman Financial Services agrees promptly to pay or reimburse
the Fund for all expenses (except expenses incurred by the Fund in
connection with the preparation, printing and distribution of any
prospectus or report or other communication to shareholders, to the extent
that such expenses are incurred to effect compliance with any Federal or
State law or to enable such distribution to shareholder(s) (a) of printing
and distributing copies of any prospectus and of preparing, printing and
distributing any other material used by Seligman Financial Services in
connection with offering Shares of the Fund for sale, and (b) of
advertising in connection with such offering. The Fund agrees to pay all
expenses in connection with the registration of Shares of the Fund under
the Securities Act of 1933 (the "Act"), all fees and related expenses which
may be incurred in connection with the qualification of Shares of the Fund
for sale in such States (as well as the District of Columbia, Puerto Rico
and other territories) as Seligman Financial Services may designate, and
all expenses in connection with maintaining facilities for the issue and
transfer of its Shares, of supplying information, prices and other data to
be furnished by it hereunder, and through Union Data Service Center, Inc.,
of all data processing and related services related to the share
distribution activity contemplated hereby.
The Fund agrees to execute such documents and to furnish such information
as may be reasonably necessary, in the discretion of the Directors of the
Fund, in connection with the qualification of Shares of the Fund for sale
in such States (as well as the District of Columbia, Puerto Rico and other
territories) as
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Seligman Financial Services may designate. Seligman Financial Services also
agrees to pay all fees and related expenses connected with its own
qualification as a broker or dealer under Federal or State laws and, except
as otherwise specifically provided in this Agreement or agreed to by the
Fund, all other expenses incurred by Seligman Financial Services in
connection with the sale of Shares of the Fund as contemplated in this
Agreement (including the expenses of qualifying the Fund as a dealer or
broker under the laws of such States as may be designated by Seligman
Financial Services, if deemed necessary or advisable by the Fund).
It is understood and agreed that any payments made to Seligman Financial
Services pursuant to the Plan may be used to defray some or all of the
expenses incurred by Seligman Financial Services pursuant to this
Agreement.
6. Prospectus and Other Information. The Fund represents and warrants to and
agrees with Seligman Financial Services that:
(a) A registration statement, including one or more prospectuses relating
to the Shares, has been filed by the Fund under the Act and has become
effective. Such registration statement, as now in effect and as from
time to time hereafter amended, and also any other registration
statement relating to the Shares which may be filed by the Fund under
the Act which shall become effective, is herein referred to as the
"Registration Statement", and any prospectus or prospectuses filed by
the Fund as a part of the Registration Statement, as the "Prospectus".
(b) At all times during the term of this Agreement, except when the
officers of the Fund have suspended or discontinued the sale and
issuance of Shares of the Fund as contemplated by Section 2 hereof,
the Registration Statement and Prospectus will conform in all respects
to the requirements of the Act and the rules and regulations of the
Securities and Exchange Commission, and neither of such documents will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statement therein not misleading, except that the foregoing does not
apply to any statements or omissions in either of such documents based
upon written information furnished to the Fund by Seligman Financial
Services specifically for use therein.
The Fund agrees to prepare and furnish to Seligman Financial Services from
time to time a copy of its Prospectus, and authorizes Seligman Financial
Services to use such Prospectus, in the form furnished to Seligman
Financial Services from time to time, in connection with the sale of the
Fund's Shares. The Fund also agrees to furnish Seligman Financial Services
from time to time,
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for use in connection with the sale of such Shares, such information with
respect to the Fund and its Shares as Seligman Financial Services may
reasonably request.
7. Reports. Seligman Financial Services will prepare and furnish to the
Directors of the Fund at least quarterly a written report complying with
the requirements of Rule 12b-1 under the 1940 Act setting forth all amounts
expended under the Plan and the purposes for which such expenditures were
made.
8. Indemnification. (a) The Fund will indemnify and hold harmless Seligman
Financial Services and each person, if any, who controls Seligman Financial
Services within the meaning of the Act against any losses, claims, damages
or liabilities to which Seligman Financial Services or such controlling
person may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's Registration Statement
or Prospectus or any other written sales material prepared by the Fund
which is utilized by Seligman Financial Services in connection with the
sale of Shares or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
(in the case of the Registration Statement and Prospectus) necessary to
make the statements therein not misleading or (in the case of such other
sales material) necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; and will
reimburse Seligman Financial Services and each such controlling person for
any legal or other expenses reasonably incurred by Seligman Financial
Services or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Fund will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus in
conformity with written information furnished to the Fund by Seligman
Financial Services specifically for use therein; and provided, further,
that nothing herein shall be so construed as to protect Seligman Financial
Services against any liability to the Fund or its security holders to which
Seligman Financial Services would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence, in the performance of its
duties, or by reason of the reckless disregard by Seligman Financial
Services of its obligations and duties under this Agreement. This indemnity
agreement will be in addition to any liability which the Fund may otherwise
have.
(b) Seligman Financial Services will indemnify and hold harmless the Fund,
each of its Directors and officers and each person, if any, who
controls the Fund within
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the meaning of the Act, against any losses, claims, damages or
liabilities to which the Fund or any such Director, officer or
controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any sales material not
prepared by the Fund which is utilized in connection with the sale of
Shares or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or (in the case of the Registration Statement and Prospectus)
necessary to make the statements therein not misleading or (in the
case of such other sales material) necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, in the case of the Registration Statement and
Prospectus to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in conformity with written information furnished to the Fund
by Seligman Financial Services specifically for use therein; and
Seligman Financial Services will reimburse any legal or other expenses
reasonably incurred by the Fund or any such Director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Seligman
Financial Services may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
9. Effective Date. This Agreement shall become effective upon its execution by
an authorized officer of the respective parties to this Agreement, but in
no event prior to shareholder approval of the Plan.
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10. Term of Agreement. This Agreement shall continue in effect until December
31 of the year in which it is first effective and through December 31 of
each year thereafter if such continuance is approved in the manner required
by the 1940 Act and the rules thereunder and Seligman Financial Services
shall not have notified the Fund 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 penalty on 60 days' written notice to the other party by vote of a
majority of the Directors of the Fund who are not interested persons (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Plan or any agreement related
thereto, or by vote of a majority of the outstanding voting securities of
the Fund (as defined in the 1940 Act). This Agreement shall automatically
terminate in the event of its assignment (as defined in the 1940 Act).
11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require,
or to impose any duty upon, either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and Seligman Financial Services have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.
SELIGMAN CAPITAL FUND, INC.
By __________________________________
Ronald T. Schroeder, President
SELIGMAN FINANCIAL SERVICES, INC.
By __________________________________
Donald R. Pitti, President
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AGREEMENT
AGREEMENT made this 18th day of April 1997 between Dean Witter Reynolds
Inc., a corporation organized under the laws of the State of Delaware (the
"Broker"), and Seligman Financial Services, Inc., a corporation organized under
the laws of the State of New York (the "Sponsor").
WITNESSETH
WHEREAS, the Broker is a securities firm registered under the Securities
Exchange Act of 1934, as amended to date, engaged in the business of selling
shares of investment companies ("Investment Companies") registered under the
Investment Company Act of 1940, as amended to date (the "1940 Act"); and
WHEREAS, the Sponsor is engaged in the business of sponsoring,
distributing securities of, or rendering management and investment advisory
services to Investment Companies (all such Investment Companies of the Sponsor
being referred to herein as "Sponsored Funds"); and
WHEREAS, the Broker and the Sponsor wish to enter into an Agreement with
each other as a precondition or additional condition to the Broker distributing
or selling, or continuing to distribute or sell, any Sponsored Funds.
NOW THEREFORE, the parties agree as follows:
1. The Sponsor agrees not to contact any account executives or other
personnel of the Broker in writing, by telephone, in person or by any other
means or to provide such account executives or any other personnel of the Broker
with any written materials for the purpose of soliciting and promoting the sale
of any shares of the Sponsored Funds (i.e., wholesaling activities) unless
approved by a branch manager (upon whose approval you may rely), a Regional
Sales Manager, a Senior Vice President or any higher ranking officer of the
Broker unless otherwise advised by an officer of the External Mutual Funds
Department. All regional or national marketing efforts must be coordinated with
and reviewed by the appropriate Regional Sales Manager and/or an officer of the
External, Mutual Funds Department. This provision is not intended to prohibit
contacts related to client servicing requirements in the normal course of
business, including routine mailings to the Broker's employees and registered
representatives of other broker/dealers regarding developments related to
specific Sponsored Funds, such as dividend changes, meetings of shareholders, as
well as routine mailings to the Broker's employees and registered
representatives of other broker/dealers regarding the objectives,
characteristics and performance of specific funds or to prohibit contacts
related to requirements of the 1940 Act or other applicable law, as long as, in
each case, the intent is to inform rather than to solicit new business.
Information sent from the Sponsor regarding new or existing Sponsored Funds, as
long as it is not part of a promotional effort, will not be considered
solicitation of new business. Any promotional or marketing efforts for an
existing fund and all marketing efforts related to the introduction of a new or
additional Sponsored Fund (consistent with clause 3) may not be undertaken
without the prior written consent of a Senior Vice
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President or higher ranking officer of the Broker. Copies of all such mailings
to the Broker's employees will be sent to R. Michael Silvestro, External Mutual
Funds Marketing, at Two World Trade Center, 69th Floor, New York, NY 10048.
2. The Sponsor agrees not to directly or indirectly contact in writing,
by telephone, in person or by any other means any customers of the Broker
(including employees of the Broker) who have purchased shares of any of the
Sponsored Funds through the Broker in connection with the potential purchase of
shares of any additional Sponsored Fund without the prior written consent of a
Senior Vice President or higher ranking officer of the Broker. This provision is
not intended to prohibit contacts related to client servicing requirements in
the normal course of business, including materials that are routinely included
in and with account statements, confirmations, annual and semi-annual reports,
year-end tax reports, and dividend payments sent to all shareholders of any
Sponsored Funds, or to prohibit contacts related to requirements of the 1940 Act
or other applicable law, as long as, in each case, the intent is to inform
investors rather than to solicit new business. Information sent from the Sponsor
regarding new or existing Sponsored Funds, as long as it is not part of a
promotional effort, will not be considered solicitation of new business. Copies
of all such mailings to the Broker's customers will be sent to R. Michael
Silvestro, External Mutual Funds Marketing, at Two World Trade Center, 69th
Floor, New York, NY 10048.
3. The Sponsor will not sell any shares of additional Sponsored Funds
through the Broker (other than those currently covered by the Dealer Agreement)
pursuant to any dealer Agreement between the Broker and the Sponsor without the
prior written consent of a Senior Vice President or higher ranking officer of
the Broker. This is not intended to prohibit dividend reinvestment, exchanges or
direct investments into any additional Sponsored Funds initiated by customers or
employees of the Broker who are already shareowners in Sponsored Funds.
4. The names and addresses and other information concerning customers of
the Broker are and shall remain sole property of the Broker, provided such
information is supplied by the Broker or by its customers with regard to such
customers' accounts with the Broker. The Sponsor will not communicate the names,
addresses and other information concerning customers of the Broker who have
purchased shares of any of the Sponsored Funds through the Broker to any third
party unless required to do so by statute, regulation or process of a court of
competent jurisdiction; the Sponsor agrees to notify the Broker of any such
compelled disclosure within ten (10) days of the disclosure, provided such
notice is possible and practical within ten (10) days of the disclosure. This
prohibition is not intended to preclude the use of such list by outside vendors
on behalf of the Sponsor for the purpose of servicing or locating shareholder
accounts.
5. The parties to this Agreement acknowledge that a breach of clause 2
and/or 4 will affect the Broker; specifically, direct sales initiated willfully
by the Sponsor to customers of the Broker and any direct sales to these
customers by a third party who has obtained such customer list from the Sponsor
constitutes a material breach of clause 2 and/or 4 (subject to the exceptions
noted in clause 6 below) and may damage the Broker in a significant manner. In
the event the Sponsor or any successor entity or person under the control of the
Sponsor violates clause 2 and/or 4 of this Agreement, the Sponsor or its
successor will be liable to pay out of its assets an
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amount the arbitrators referred to in clause 14 below determine to be fair and
reasonable under the circumstances.
6. Any unintentional or immaterial or accidental breach of the terms of
this Agreement on the part of the Sponsor shall not constitute a violation of
the terms of this Agreement for the purposes of clause 5 hereof or otherwise.
Notwithstanding the foregoing, Sponsor agrees that Broker shall be entitled to
equitable relief to limit or stop any injury to the Broker. Without limiting the
generality of the foregoing, contacting a person or entity whom the Sponsor does
not know to be a customer of the Broker or who is also a customer of other
brokers shall not be a breach of this Agreement.
7. The provisions of this Agreement pertaining to Broker employees shall
not apply to any person once such person is no longer associated with the
Broker. The provisions of this Agreement pertaining to customer of the Broker
shall not apply to any customer who has requested that the "Broker of Record" on
their account(s) be changed to another broker/dealer or to "No Dealer of
Record."
8. The term "Sponsor" as used in this Agreement shall include the
Sponsor and any successor entity thereto and any "affiliated persons", as
defined in the 1940 Act, of the Sponsor or any successor entity thereto, other
than the Sponsored Funds.
9. This Agreement shall survive the termination of any selling,
distribution or underwriting Agreement to which the Broker and the Sponsor are
both parties and is intended to supersede or modify any contrary provision set
forth in any such Agreement. No provision of this Agreement shall limit the
right of the Broker or the Sponsor to terminated any selling, distribution or
underwriting Agreement to which the Broker and the Sponsor are both parties. The
rights of the Broker and the Sponsor under this Agreement are in addition to any
rights that the Broker and the Sponsor may have under any applicable law.
10. This Agreement may be terminated by either party on 90 days' written
notice to the other party; provided, however, that if this Agreement is
terminated by the Sponsor, the provisions of clauses 2,4,5,6 and 7 shall
continue in effect for a period of five years from the date hereof.
11. This Agreement may be amended or modified only by a further written
Agreement between the parties hereto.
12. If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
13. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which constitute both one and the same
instrument.
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14. In the event a dispute arises between the Sponsor and the Broker
about any of the terms of this Agreement, the parties agree to submit the
dispute to arbitration before the New York Stock Exchange, National Association
of Securities Dealers, Inc. or the American Arbitration Association at the
option of the party alleged to have breached the Agreement. Broker's application
to a court of law for an injunction or temporary restraining notice will not
constitute a waiver by Broker of its right to arbitration as set forth in this
paragraph. Judgment on the arbitration award may be entered in any state or
federal court having jurisdiction.
15. The Broker and the Sponsor mutually warrant that each will keep this
Agreement confidential except as required by law, regulation, rule or process of
a court of competent jurisdiction or in response to a request from any
regulatory agency.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
DEAN WITTER REYNOLDS INC.
Two World Trade Center
New York, NY 10048
BY: _________________________________
Name: Richard M. DeMartini
Title: President and Chief Operating
Officer, Dean Witter Capital
SELIGMAN FINANCIAL SERVICES, INC.
100 Park Avenue
New York, NY 10017
BY: __________________________________
Name: Stephen Hodgdon
Title: President
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April 15, 1997
Mr. A. James Bach
Dean Witter Reynolds, Inc.
Senior Vice President
Two World Trade Center
New York, New York 10048
Dear Mr. Bach:
This will confirm the agreement between you (the "Dealer") and Seligman
Financial Services, Inc. ("SFSI").
1. Scope. SFSI acts as principal underwriter to certain investment
companies registered under the Investment Company Act of 1940, as amended (each,
a "Fund"). SFSI is engaging the Dealer to assist in marketing shares of each
Fund ("Shares") to any institutional investor (i.e. pension plans, insurance
companies, investment companies) located in Chile, willing to purchase Shares
having a net asset value equal to at least $1 million.
2. Compensation. In accordance with the prospectus of each Fund, SFSI
will pay the Dealer a fee (the "Fee") on sales of Shares as follows: 1.00% of
sales up to but not including $2 million; .80% of sales from $2 million up to
but not including $3 million; .50% of sales from $3 million up to but not
including $5 million; and .25% of sales from $5 million and above. The
calculations of the Fee will be based on assets held by a "single person" as
defined in each Fund's prospectus.
3. Refunds for Early Redemption or Nonfulfillment of Letter of Intent.
(a) If any Investor, with respect to whose purchase of Shares compensation has
been paid pursuant to paragraph 2, redeems any Shares within eighteen months of
purchase, the Dealer will repay SFSI an amount equal to such compensation
multiplied by (i) a fraction, of which the numerator is equal to the number of
such Shares, and the denominator is equal to the number of Shares purchased by
such Investor during the eighteen-month period preceding the redemption and
further multiplied by (ii) a fraction, of which the numerator is equal to the
number of days remaining in the eighteen-month period commencing with the
purchase of the Shares being redeemed, and the denominator is equal to 548. To
the extent any Investor redeeming Shares has purchased Shares on more than one
date, such Investor shall be considered to redeem Shares in the order they were
purchased for the purposes of this paragraph. (b) In the event the Dealer has
been paid compensation for Shares purchased pursuant to a Letter of Intent and
Investor fails to purchase Shares having a net asset value equal to at least $1
million pursuant to the Letter of Intent, the Dealer will repay to SFSI all
compensation paid pursuant to paragraph 2 with respect to the Shares purchased
by such Investor.
4. Undertakings. The Dealer will perform its services under this
agreement in compliance with the terms of its separate Sales Agreement with SFSI
and instructions received from time to time from SFSI and in compliance with all
applicable laws, including any Chilean laws that may be applicable. The Dealer
assumes full responsibility for complying with any registration, licensing or
other relevant
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laws affecting its solicitation activities, and specifically acknowledges that
neither SFSI nor any Fund has taken steps to qualify Shares for sale in any
jurisdiction outside the United States, including Chile. The Dealer will not
engage in any solicitation activities in any jurisdiction or in any manner in
which it is unlawful for it to do so.
5. Status. The Dealer shall not be an employee, agent or officer of SFSI
but shall have the status of an "independent contractor." The Dealer shall not
render any investment advice to any person or organization on behalf of SFSI.
The Dealer is not authorized to act in any way on behalf of SFSI. Without
limiting the generality of the foregoing, the Dealer is not authorized to enter
into any agreement or undertaking on behalf of SFSI with any person or
organization.
6. Term. This agreement is terminable at any time by either the Dealer
or SFSI upon written notice to the other but no such termination shall affect
the obligation of SFSI to pay the Fee under paragraph 2 with respect to any
Investor's subscription for Shares received by SFSI or the Fund's shareholder
servicing agent prior to the time of such termination or the obligation of the
Dealer to refund any fee under paragraph 3.
7. Miscellaneous. This agreement is made in accordance with and shall be
governed by the laws of the State of New York applicable to contracts made and
performed entirely therein. This agreement contains the entire agreement of the
parties with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements or understandings in regard to the subject matter
hereof. This agreement may be amended only by a written instrument executed by
the party against whom enforcement of such amendment is sought. This agreement
is not assignable by either party in any manner, by operation of law or
otherwise, without the written consent of the non-assigning party.
Please confirm that this letter accurately sets forth our entire
understanding by signing below.
Very truly yours,
Edward F. Lynch
Senior Vice President
CONFIRM:
Dean Witter Reynolds, Inc.
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
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SMITH BARNEY INC.
MUTUAL FUND DEALER AGREEMENT
TO THE UNDERSIGNED DISTRIBUTOR:
Ladies and Gentlemen:
We understand that you are principal distributor of shares of certain mutual
funds ("Funds") registered with the Securities and Exchange Commission under the
Investment Company Act of 1940 ("1940 Act"). You desire that Smith Barney Inc.
("Smith Barney") act as a dealer with respect to the sale of Shares to its
customers. In consideration of the mutual covenants stated below, you and Smith
Barney agree as follows:
1. Purchase of Shares at Public Offering Price. Smith Barney will use such
efforts to sell Shares as it in its sole discretion determines, and will
not be required to sell any specified or minimum number of Shares of any
Fund. Sales of Shares through Smith Barney will be at the public offering
price of such Shares (the net asset value of the Shares plus any applicable
sales charge), as determined in accordance with the then effective
prospectus(es) and statement(s) of additional information used in
connection with the offer and sale of the Shares (collectively, the
"Prospectus"). The public offering price may reflect scheduled variations
in or the elimination of sales charges on sales of Shares either generally
to the public or in connection with special purchase plans, as described in
the Prospectus. Smith Barney agrees to apply any scheduled variation in or
waivers of sales charges uniformly to all customers meeting the
qualifications therefor as specified in the Prospectus.
2. Rights of Accumulation and Letters of Intent. With respect to Funds sold
with an initial sales charge, Smith Barney's customers will be entitled to
reduced sales charges on purchases made under any letter of intent or right
of accumulation described in the Prospectus. In such case, the concession
from the public offering price retained by Smith Barney will be based upon
such reduced sales charge; however, if a Smith Barney customer fails to
fulfill a letter of intent, thereafter you will pay Smith Barney the amount
required to reflect the appropriate concession based on the actual
purchases made by the customer. When placing wire trades, Smith Barney
agrees to advise you of any letter of intent executed by its customer or
any available right of accumulation.
3. Exchanges and Redemptions. Exchanges of Shares between Funds and
redemptions of Shares by a Fund or repurchases of Shares by you will be
effected in the manner and upon the terms described in the Prospectus.
Exchanges will be subject to such restrictions and charges as are provided
for in the Prospectus. Redemptions and repurchases will be subject to any
applicable contingent deferred sales charges, redemption fees or other
charges as are provided for in the Prospectus. Any order placed by Smith
Barney for the repurchase or
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redemption of Shares is subject to the timely receipt by you or the
pertinent Fund's transfer agent of all required documents in good order.
4. Handling and Receipt of Orders. The handling and settlement of purchase,
exchange and redemption orders will be subject to the provisions of the
Prospectus and such further procedures you and Smith Barney determine to be
appropriate from time-to-time, consistent with this Agreement. Orders which
Smith Barney receives prior to the close of business as defined in the
Prospectus and placed with you within the applicable time frame set forth
in or consistent with the Prospectus shall be executed at the public
offering price next computed after they are received by Smith Barney. You
will provide such assistance to Smith Barney in processing orders as Smith
Barney reasonably requests. Smith Barney will be responsible for the
accuracy, timeliness and completeness of purchase, redemption or exchange
orders it transmits to you by wire or telephone. All orders shall be
subject to your confirmation. Smith Barney shall purchase Shares on behalf
of its customers only through you, and shall sell Shares on behalf of its
customers only to you or the applicable fund or its redemption agent. No
wire orders under $1000 may be placed for initial purchases. The Funds
reserve the right, without prior notice, to suspend or withdraw the sale of
Shares.
5. Shareholder Servicing. If you and Smith Barney agree, on an ongoing basis
Smith Barney will provide shareholder servicing to its customers who
maintain investments in Shares. In so doing, Smith Barney and its employees
and representatives may provide the following services, among others:
answer customer inquiries regarding the Funds and customer investments
therein; assist customers in changing dividend options; answer questions
about special investment and withdrawal plans, and assist customers in
enrolling in such plans; distribute reports and materials relating to the
Funds to customers; assist in the establishment and maintenance of accurate
customer accounts and records, including assisting in processing changes in
addresses and other customer information; and assist in processing
purchase, exchange and redemption orders.
6. Compensation and Expenses
A. With respect to Shares which are sold with an initial sales charge,
Smith Barney will retain such concessions from the public offering price as
are specified in the Prospectus. With respect to Shares which are not sold
with an initial sales charge, you will pay commissions to Smith Barney at
such rates as you and Smith Barney may determine from time-to-time,
consistent with this Agreement and as set for in the Prospectus. No
concession will be paid to Smith Barney for the investment of dividends in
additional shares. Consistent with the Prospectus and applicable law and
regulation, from time-to-time you and Smith Barney may determine that Smith
Barney will retain the full amount of initial sales charges and/or that you
will pay Smith Barney additional compensation in connection with Smith
Barney's sales of shares.
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B. If Smith Barney provides shareholder services pursuant to Paragraph 5 of
this Agreement, you will pay Smith Barney ongoing service fees at such
rates as you and Smith Barney may determine from time-to-time. Such
payments shall be consistent with applicable law and regulation and this
Agreement and shall be subject to the terms and conditions set forth in the
plan of distribution adopted under Rule 12b-1 under the 1940 Act (a "12b-1
Plan") by the relevant Fund. Your obligation to make payments to Smith
Barney under this Subparagraph 6B shall survive any termination of this
Agreement, and shall continue, subject to Section 15 hereof, so long as
Smith Barney provides shareholder services described in Paragraph 5 of this
Agreement to its customers who hold Shares.
C. You will pay Smith Barney ongoing trail commission compensation with
respect to holdings by Smith Barney of Shares of Funds with respect to
which you pay such compensation generally to dealers, at such rates as you
and Smith Barney may determine from time-to-time. Payments under this
Subparagraph 6C may be in addition to the payment of service fees as
described in Subparagraph 6B of this Agreement, and are subject to
applicable law and regulation and this Agreement, and shall be subject to
the terms and conditions, set forth in the 12b-1 Plan adopted by the
relevant Fund. Your obligation to make payments to Smith Barney under this
Subparagraph 6C shall survive any termination of this Agreement, and shall
continue, subject to Section 15 hereof, so long as Smith Barney's customers
maintain their investments in Shares.
D. With respect to expenses not specifically addressed elsewhere in this
Agreement, each party hereto will be responsible for the expenses it incurs
in acting hereunder. Consistent with the Prospectus and applicable law and
regulation, from time-to-time you and Smith Barney may determine that you
will pay or reimburse Smith Barney for expenses it incurs in connection
with selling Shares.
7. State Registration of Fund Shares. You agree to advise Smith Barney in
writing on a current basis of the identity of those states and
jurisdictions in which the Shares are registered or qualified for sale to
the public.
8. NASD Regulation. Each party to this Agreement represents that it is a
member of the National Association of Securities Dealers, Inc. ("NASD") and
each party agrees to notify the other should it cease to be such a member.
Termination of such membership shall terminate this Agreement and shall
relieve you of your payment obligations under Paragraph 6 hereof. With
respect to the sale of Shares hereunder, you and Smith Barney agree to
abide by the Conduct Rules of the NASD, including but not limited to the
following:
A. Smith Barney shall not withhold placing customers orders for Shares so
as to profit itself as a result of such withholding. Smith Barney shall not
purchase any Shares from you other than for its own investment or to cover
purchase orders already received by it from its customers.
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B. If any Shares purchased by Smith Barney are repurchased by the Fund
which issued such Shares or by you for the account of that Fund, or are
tendered for redemption, within seven (7) business days after confirmation
by you of the original purchase order for such Shares, no compensation as
set forth in Paragraph 6 above will be payable to Smith Barney with respect
to such Shares, and Smith Barney will refund to you the full amount of any
such compensation paid or allowed to it on the original sale. You agree to
notify Smith Barney in writing of any such repurchase or redemption within
ten (10) business days of the date on which the redemption is requested or
Share certificates are tendered to you, the pertinent Fund or its transfer
agent. Termination or cancellation of this Agreement will not relieve the
parties from the requirements of this subparagraph.
C. Neither party to this Agreement will, as principal, purchase any Shares
from a customer at a price lower than the net asset value next determined
by or for the Fund that issued such Shares. Nothing in this subparagraph
shall prevent Smith Barney from selling Shares for a customer to you or to
the Fund which issued such Shares at the net asset value then quoted by or
for such Fund (less any applicable contingent deferred sales charge or
other charges) and charging a fair commission or service fee for handling
the transaction.
D. Smith Barney shall be responsible for properly advising its customers as
to the appropriate class of Shares in which to invest.
9. Suspension or Withdrawal of Offering. You reserve the right to suspend
sales of Shares of any Fund or withdraw any offering of Shares entirely.
10. Provision of Materials. At your expense, you will furnish Smith Barney with
current prospectuses and statements of additional information of the Funds
(including any supplements thereto), periodic reports to Fund shareholders
and marketing and other materials you have prepared relating to the Funds
to be furnished to dealers generally, in such quantities as Smith Barney
reasonably requests.
11. No Agency; Representations by Smith Barney Concerning the Funds. Smith
Barney is not for any purpose employed or retained or authorized to act as
broker, agent or employee of any Fund or, except for the limited purpose
set forth in Paragraph 4, of you. Smith Barney and its agents and employees
are not authorized to make any representations concerning the Funds or
their Shares except those contained in or consistent with the Prospectus
and such other written materials you provide relating to the Funds or other
statements or representations, written or oral, which you furnish or make
to Smith Barney about the Funds.
12. Prospectus Delivery. Smith Barney will provide each of its customers
purchasing Shares with the pertinent prospectus(es) prior to or at the time
of purchase. Smith Barney will provide any customer who so requests with
the pertinent statement(s) of additional information.
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13. Liability and Indemnification
A. You agree to be liable for, to hold Smith Barney, its officers,
directors and employees harmless from and to indemnify each of them for any
losses and costs arising from: (i) any of your actions, and the actions of
your employees and affiliates, relating to the sale of Fund shares,
including but not limited to any statements or representations contained in
any sales or other material relating to the Funds you or your affiliates
provide to Smith Barney or any other statements or representations, written
or oral, concerning the Funds that you, your employees and your affiliates
make to Smith Barney, provided that, at the time Smith Barney provides such
materials to its Customers, such material is reasonably believed by Smith
Barney to be current; (ii) any material misstatement in or omission of a
material fact from a Fund's current prospectus or statement of additional
information; and (iii) any failure of any Fund or its Shares to be properly
registered and available for sale under any applicable federal law and
regulation or the laws and regulations of any state, any U.S. territory or
the District of Columbia when you have represented to Smith Barney that the
Fund and its Shares are so registered and qualified; and (iv) any of your
actions, or the actions of your affiliates, relating to the processing of
purchase, exchange and redemption orders and the servicing of shareholder
accounts. You shall not be liable for any consequential damages.
B. Smith Barney agrees to be liable for, to hold you, your officers,
directors and employees harmless from and to indemnify them from any losses
and costs arising from: (i) any statements or representations that Smith
Barney or its employees make concerning the Funds that are inconsistent
with either the pertinent Funds' current prospectus and statement of
additional information or any other material you have provided or any other
statements or representations, written or oral, you have made to Smith
Barney relating to the Funds; (ii) any sale of Shares of a Fund where the
Fund or its Shares were not properly registered or qualified for sale in
any state, any U.S. territory or the District of Columbia, when you have
indicated to Smith Barney that the Fund and its Shares were not properly
registered and qualified; and (iii) any of Smith Barney's actions relating
to the processing of purchase, exchange and redemption orders and the
servicing of shareholder accounts. Smith Barney shall not be liable for any
consequential damages.
C. The provisions of this Paragraph 13 shall survive the termination of
this Agreement.
14. Arbitration. If a dispute arises between you and Smith Barney with respect
to this Agreement which the parties are unable to resolve themselves, it
shall be settled by arbitration in accordance with the then-existing NASD
Code of Arbitration Procedure ("NASD Code"). The parties agree, that to the
extent permitted by the NASD Code, the arbitrator(s) shall be selected from
the securities industry.
15. Miscellaneous. This Agreement shall be governed by the laws of New York
State. This Agreement may be amended only upon the written agreement of
both parties hereto, and may be terminated by either party on ten days'
written notice to the other. If your payments
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to Smith Barney under Subparagraphs 6B and/or 6C hereunder in whole or in
part are financed by a Fund in accordance with its 12b-1 Plan, then with
respect to such Fund this Agreement (a) is subject to annual approval by
vote of such Fund's board of directors or trustees and a majority of those
directors/trustees who are not "interested persons" (as defined in the 1940
Act) of the Fund and have no direct or indirect financial interest in the
operation of the 12b-1 Plan adopted by such Fund or in any agreement
related thereto ("Disinterested Directors") cast in person at a meeting
called for the purpose of voting on such approval and (b) is terminable,
without penalty, at any time by such Fund by a vote of a majority of the
Disinterested Directors or by vote of the holders of a majority of the
voting securities (as such term is defined in the 1940 Act) of such Fund
upon 60 days' notice in writing to you. Smith Barney agrees to provide to
you and each such Fund's board of directors or trustees such information as
you and such Fund's board of directors or trustees may reasonably request
in order to enable you and the board to fulfill the requirements of Rule
12b-1 and such Fund's 12b-1 Plan. In the event of the termination of such a
12b-1 Plan by a Fund's board of directors or trustees or shareholders, you
and Smith Barney agree to negotiate in good faith with respect to whether
and to what extent you will continue to make payments from your own
resources to Smith Barney as required by Subparagraphs 6B and 6C hereunder.
This Agreement constitutes the entire agreement between you and Smith
Barney and supersedes all prior oral or written agreements (except for the
Telephone Exchange Agreement dated October 14, 1993 between the parties)
between you and Smith Barney and its predecessors relating to the sale of
Shares.
Sincerely,
SMITH BARNEY INC.
By: ___________________________
Dated: ___________________________
AGREED AND ACCEPTED:
Distributor Name: ___________________________
Fund Complex: ___________________________
By: ___________________________
Dated: ___________________________
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CUSTODY AGREEMENT
THIS AGREEMENT made the day of , 19 , by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the
laws of the state of Missouri, having its trust office located at 127 West 10th
Street, Kansas City, Missouri 64105 ("Custodian"), and SELIGMAN CAPITAL FUND,
INC., a Maryland corporation, having its principal office and place of business
at One Bankers Trust Plaza, New York, New York 10006 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian and Recordkeeper of the securities and monies of Fund and its now
existing and future established portfolios (individually referred to herein as
Portfolio); and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian as
custodian of the Fund which is to include:
A. Appointment as custodian of the securities and monies at any time
owned by each Portfolio of the Fund; and
B. Appointment as agent to perform certain accounting and recordkeeping
functions required of a duly registered investment company in
compliance with applicable provisions of federal, state, and local
laws, rules and regulations including, as may be required:
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1. Providing information necessary for Fund and each Portfolio to
file required financial reports; maintaining and preserving
required books, accounts and records as the basis for such
reports; and performing certain daily functions in connection
with such accounts and records, and
2. Calculating daily net asset value of each Portfolio of the Fund,
and
3. Acting as liaison with independent auditors.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Board of Directors of Fund appointing Custodian as
custodian hereunder and approving the form of this Agreement; and
B. Resolutions of the Board of Directors of Fund designating certain
persons to give instructions on behalf of Fund to Custodian and
authorizing Custodian to rely upon such instructions.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Fund will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as
practicable, and from time to time thereafter, all portfolio
securities acquired by it and monies then owned by it (except as
permitted by the Investment Company Act of 1940) or from time to time
coming into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies not so
delivered. All securities so delivered to Custodian (other than bearer
securities) shall be registered in the name of Fund or its nominee, or
of a nominee of Custodian, or shall be properly endorsed and in form
for transfer satisfactory to Custodian.
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B. Delivery of Accounts and Records
Fund shall turn over to Custodian all of the Fund's relevant accounts
and records previously maintained by it. Custodian shall be entitled
to rely conclusively on the completeness and correctness of the
accounts and records turned over to it by Fund, and Fund shall
indemnify and hold Custodian harmless of and from any and all
expenses, damages and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy or other deficiency of
such accounts and records or in the failure of Fund to provide any
portion of such or to provide any information needed by the Custodian
knowledgeably to perform its function hereunder.
C. Delivery of Assets to Third Parties
Custodian will receive delivery of and keep safely the assets of Fund
delivered to it from time to time and the assets of each Portfolio
segregated in a separate account. Custodian will not deliver, assign,
pledge or hypothecate any such assets to any person except as
permitted by the provisions of this Agreement or any agreement
executed by it according to the terms of Section 3.S. of this
Agreement. Upon delivery of any such assets to a subcustodian pursuant
to Section 3.S. of this agreement, Custodian will create and maintain
records identifying those assets which have been delivered to the
subcustodian as belonging to the applicable Portfolio of the Fund. The
Custodian is responsible for the safekeeping of the securities and
monies of Fund only until they have been transmitted to and received
by other persons as permitted under the terms of this Agreement,
except for securities and monies transmitted to United Missouri Bank
of Kansas City, N.A. (UMBKC), United Missouri Trust Company of New
York (UMBTC), First National Bank of Chicago (FNBC) for which
Custodian remains responsible. Custodian shall also be responsible for
the monies and securities of Fund(s) held by eligible foreign
subcustodians to the extent the domestic custodian
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with which the Custodian contracts is responsible to Custodian.
Custodian may participate directly or indirectly through a
subcustodian in the Depository Trust Company, Treasury/Federal Reserve
Book Entry System, Participant Trust Company or other depository
approved by the Fund (as such entities are defined at 17 CFR Section
270.17f-4(b)).
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D. Registration of Securities
Custodian will hold stocks and other registerable portfolio securities
of Fund registered in the name of Fund or its nominee or in the name
of any nominee of Custodian for whose fidelity and liability Custodian
will be fully responsible, or in street certificate form, so-called,
with or without any indication of fiduciary capacity. Unless otherwise
instructed, Custodian will register all such portfolio securities in
the name of its authorized nominee, as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder
or in any provision of any subsequent Federal tax law exempting such
transaction from liability for stock transfer taxes. All securities,
and the ownership thereof by a Portfolio of the Fund, which are held
by Custodian hereunder, however, shall at all times be identifiable on
the records of the Custodian. The Fund agrees to hold Custodian and
its nominee harmless for any liability as a record holder of
securities held in custody.
E. Exchange of Securities
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of the applicable Portfolio of
the Fund for other securities or cash issued or paid in connection
with any reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or otherwise, and
will deposit any such securities in accordance with the terms of any
reorganization or protective plan. Without instructions, Custodian is
authorized to exchange securities held by it in temporary form for
securities in definitive form, to effect an exchange of shares when
the par value of the stock is changed, and, upon receiving payment
therefor, to surrender bonds or other securities held by it at
maturity or when advised of an earlier mandatory call for redemption,
except that Custodian shall receive instructions prior to surrendering
any convertible security.
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Pursuant to this paragraph, the Custodian will inform the Fund of such
corporate actions and capital changes when it is informed of them
through the publications it subscribes to.
F. Purchases of Investments of the Fund
Fund will, on each business day on which a purchase of securities
shall be made by it, deliver to Custodian instructions which shall
specify with respect to each such purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer through
whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of such named Portfolio, but only insofar
as monies are available therein for such purpose, and receive the
portfolio securities so purchased by such named Portfolio, except that
Custodian may in its sole discretion advance funds to the Fund which
may result in an overdraft because the monies held by the Custodian on
behalf of the Fund are insufficient to pay the total amount payable
upon such purchase. Such payment will be made only upon receipt by
Custodian of the securities so purchased in form for transfer
satisfactory to Custodian.
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Custodian agrees to promptly inform Fund of any failures by sellers to
make proper deliveries of securities purchased by the Fund.
G. Sales and Deliveries of Investments of the Fund - Other than Options
and Futures
Fund will, on each business day on which a sale of investment
securities of Fund has been made, deliver to Custodian instructions
specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or
cause to be delivered the securities thus designated as sold for
the account of such Portfolio to the broker or other person
specified in the instructions relating to such sale, such
delivery to be made only upon receipt of payment therefor in such
form as is satisfactory to Custodian, with the understanding that
Custodian may deliver or cause to be delivered securities for
payment in accordance with the customs prevailing among dealers
in securities. Custodian agrees to promptly inform
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Fund of any failures of purchasers to make proper payment for
securities sold by Fund.
H. Purchases or Sales of Security Options, Options on Indices and
Security Index Futures Contracts
Fund will, on each business day on which a purchase or sale of the
following options and/or futures shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
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f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
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e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of the applicable
Portfolio of the Fund:
1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in such instructions by way of pledge or hypothecation to secure
any loan incurred by a Portfolio of the Fund; provided, however,
that the securities shall be released only upon payment to
Custodian of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already
made, further securities may be released or caused to be released
for that purpose upon receipt of instructions. Upon receipt of
instructions, Custodian will pay, but only from funds available
for such purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release securities
held in custody to the borrower designated in such instructions;
provided, however, that the securities will be released only upon
deposit with Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned securities.
Upon receipt of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
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J. Routine Matters
Custodian will, in general, attend to all routine and mechanical
matters in connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with securities or other property of Fund
except as may be otherwise provided in this Agreement or directed from
time to time by the Board of Directors of Fund.
K. Deposit Account
Custodian will open and maintain a special purpose deposit account(s)
in the name of Custodian on behalf of each Portfolio (Accounts),
subject only to draft or order by Custodian upon receipt of
instructions. All monies received by Custodian from or for the account
of a Portfolio shall be deposited in said Accounts. Barring events not
in the control of the Custodian such as strikes, lockouts or labor
disputes, riots, war or equipment or transmission failure or damage,
fire, flood, earthquake or other natural disaster, action or inaction
of governmental authority or other causes beyond its control, at 9:00
a.m., Kansas City time, on the second business day after deposit of
any check into Fund's Account, Custodian agrees to make Fed Funds
available to the appropriate Portfolio of the Fund in the amount of
the check. Deposits made by Federal Reserve wire will be available to
the Fund immediately and ACH wires will be available to the Fund on
the next business day. Income earned on the portfolio securities will
be credited to the applicable Portfolio of the Fund based on the
schedule attached as Exhibit A, except that income earned on portfolio
securities held by domestic subcustodians other than UMBKC, UMBTC,
Bank of New York (previously Irving Trust Company and hereinafter
referred to as BONY) and Morgan Guaranty and Trust Company (MGT) will
be credited when received. The Custodian will be entitled to reverse
any credited amounts where credits have been made and monies are not
finally collected. If monies are collected after such
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reversal, the Custodian will credit the applicable Portfolio in that
amount. Custodian may open and maintain an Account in such other banks
or trust companies as may be designated by it and by properly
authorized resolution of the Board of Directors of Fund, such Account,
however, to be in the name of Custodian on behalf of the applicable
portfolio of the Fund and subject only to its draft or order.
L. Income and other Payments to Fund
Custodian will:
1. Collect, claim and receive and deposit for the Account of each
Portfolio of the Fund all income and other payments which become
due and payable on or after the effective date of this Agreement
with respect to the securities deposited under this Agreement,
and credit the account of the applicable Portfolio of the Fund in
accordance with the schedule attached hereto as Exhibit A, except
that income earned on portfolio securities held by domestic
subcustodians other than UMBKC, UMBTC, BONY, and MGT will be
credited when received. Income from foreign securities and assets
held by eligible foreign subcustodians shall be credited by
Custodian upon receipt of income from the domestic subcustodian
contracting with the foreign eligible subcustodians. If, for any
reason, the Fund is credited with income that is not subsequently
collected, Custodian may reverse that credited amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
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a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
notice of which is contained in publications of the
type to which a custodian for investment companies
normally subscribes for such purpose; and
b. the endorsement for collection, in the name of the
applicable Portfolio of the Fund, of all checks, drafts or
other negotiable instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to instructions.
Unless prior instructions have been received to the contrary,
Custodian will, without further instructions, sell any rights held for
the account of Fund on the last trade date prior to the date of
expiration of such rights.
M. Payment of Dividends and other Distributions
On the declaration of any dividend or other distribution on the shares
of Capital Stock of any Portfolio ("Portfolio Shares") by the Board of
Directors of Fund, Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of said Board of
Directors certified by the Secretary or an
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Assistant Secretary of Fund wherein there shall be set forth the
record date as of which shareholders entitled to receive such dividend
or other distribution shall be determined, the date of payment of such
dividend or distribution, and the amount payable per share on such
dividend or distribution. Except if the ex-dividend date and the
reinvestment date of any dividend are the same, in which case funds
shall remain in the Custody Account, on the date specified in such
Resolution for the payment of such dividend or other distribution,
Custodian will pay out of the monies held for the account of the
applicable Portfolio of the Fund, insofar as the same shall be
available for such purposes, and wire to the account of the Dividend
Disbursing Agent for Fund, such amount as may be necessary to pay the
amount per share payable in cash on Portfolio Shares issued and
outstanding on the record date established by such Resolution.
N. Shares of Fund Purchased by Fund
Whenever any Portfolio Shares are repurchased or redeemed by Fund,
Fund or its agent shall advise Custodian of the aggregate dollar
amount to be paid for such shares and shall confirm such advice in
writing. Upon receipt of such advice, Custodian shall charge such
aggregate dollar amount to the Account of Portfolio and either deposit
the same in the account maintained for the purpose of paying for the
repurchase or redemption of Portfolio Shares or deliver the same in
accordance with such advice. Custodian shall not have any duty or
responsibility to determine that Fund Shares have been removed from
the proper shareholder account or accounts or that the proper number
of such shares have been canceled and removed from the shareholder
records.
O. Shares of Fund Purchased from Fund
Whenever Portfolio Shares are purchased from Fund, Fund will deposit
or cause to be deposited with Custodian the amount received for such
shares. Custodian
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shall not have any duty or responsibility to determine that Portfolio
Shares purchased from Fund have been added to the proper shareholder
account or accounts or that the proper number of such shares have been
added to the shareholder records.
P. Proxies and Notices
Custodian will promptly deliver or mail or have delivered or mailed to
Fund all proxies properly signed, all notices of meetings, all proxy
statements and other notices, requests or announcements affecting or
relating to securities held by Custodian for Fund and will, upon
receipt of instructions, execute and deliver or cause its nominee to
execute and deliver or mail or have delivered or mailed such proxies
or other authorizations as may be required. Except as provided by this
Agreement or pursuant to instructions hereafter received by Custodian,
neither it nor its nominee will exercise any power inherent in any
such securities, including any power to vote the same, or execute any
proxy, power of attorney, or other similar instrument voting any of
such securities, or give any consent, approval or waiver with respect
thereto, or take any other similar action.
Q. Disbursements
Custodian will pay or cause to be paid insofar as funds are available
for the purpose, bills, statements and other obligations of Fund
(including but not limited to obligations in connection with the
conversion, exchange or surrender of securities owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
R. Daily Statement of Accounts
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Custodian will, within a reasonable time, render to Fund as of the
close of business on each day, a detailed statement of the amounts
received or paid and of securities received or delivered for the
account of Fund during said day. Custodian will, from time to time,
upon request by Fund, render a detailed statement of the securities
and monies held for Fund under this Agreement, and Custodian will
maintain such books and records as are necessary to enable it to do so
and will permit such persons as are authorized by Fund including
Fund's independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded, will
permit federal and state regulatory agencies to examine the
securities, books and records. Upon the written instructions of Fund
or as demanded by federal or state regulatory agencies, Custodian will
instruct any subcustodian to give such persons as are authorized by
Fund including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, to permit federal and state regulatory agencies to examine
the books, records and securities held by subcustodian which relate to
Fund. Fund will be entitled to receive reports produced by the
Custodian's portfolio accounting system, including without limitation,
those listed on Exhibit C hereof.
S. Appointment of Subcustodians
1. Notwithstanding any other provisions of this Agreement, all of or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by Custodian and approved by
the Fund's Board of Directors. Any such subcustodian must have
the qualifications required for custodian under the Investment
Company Act of 1940, as amended. The subcustodian may participate
directly or indirectly in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System, Participant Trust
Company
16
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or other depository approved by the Fund (as such entities are
defined at 17 CFR Sec. 270.17f-4(b)). The appointment of UMBKC or
any other subcustodian, depository or clearing agency used by the
Custodian and approved by the Fund will not relieve Custodian of
any of its obligations hereunder except as provided in Section
3.C hereof. The Custodian will comply with Section 17f-4 of the
Investment Company Act of 1940, as amended, as to depositories
and clearing agencies used by Custodian and approved the Fund.
The Custodian will not be entitled to reimbursement by Fund for
any fees or expenses of any subcustodian, depository or clearing
agency.
2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts reasonably necessary to effect Fund's
foreign securities transactions, may be held in the custody of
one or more banks or trust companies acting as subcustodians,
according to Section 3.S.1; and thereafter, pursuant to a written
contract or contracts as approved by Fund's Board of Directors,
may be transferred to an account maintained by such subcustodian
with an eligible foreign custodian, as defined in Rule
17f-5(c)(2), provided that any such arrangement involving a
foreign custodian shall be in accordance with the provisions of
Rule 17f-5 under the Investment Company Act of 1940 as that Rule
may be amended from time to time.
T. Accounts and Records
Custodian, with the direction and as interpreted by the Fund, Fund's
accountants and/or other tax advisors, will prepare and maintain as
complete, accurate and current all accounts and records required to be
maintained by Fund under the Internal Revenue Code of 1986 ("Code") as
amended and under the general Rules
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and Regulations under the Investment Company Act of 1940 ("Rules") as
amended, and as agreed upon between the parties and will preserve said
records in the manner and for the periods prescribed in said Code and
Rules, or for such longer period as is agreed upon by the parties.
Custodian relies upon Fund to furnish, in writing, accurate and timely
information to complete Fund's records and perform daily calculation
of the Fund's net asset value, as provided in Section 3.W. below.
Custodian shall incur no liability and Fund shall indemnify and hold
harmless Custodian from and against any liability arising from any
failure of Fund to furnish such information in a timely and accurate
manner, even if Fund subsequently provides accurate but untimely
information. It shall be the responsibility of Fund to furnish
Custodian with the declaration, record and payment dates and amounts
of any dividends or income and any other special actions required
concerning each of its securities when such information is not readily
available from generally accepted securities industry services or
publications.
U. Accounts and Records Property of Fund
Custodian acknowledges that all of the accounts and records maintained
by Custodian pursuant to this Agreement are the property of Fund, and
will be made available to Fund for inspection or reproduction within a
reasonable period of time, upon demand. Custodian will assist Fund's
independent auditors, or upon approval of Fund, or upon demand, any
regulatory body having jurisdiction over the Fund or Custodian, in any
requested review of Fund's accounts and records but shall be
reimbursed for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews. Upon receipt
from Fund of the necessary information, Custodian will supply
necessary data for Fund's completion of any necessary tax returns,
questionnaires, periodic reports to
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Shareholders and such other reports and information requests as Fund
and Custodian shall agree upon from time to time.
V. Adoption of Procedures
Custodian and Fund may from time to time adopt procedures as they
agree upon, and Custodian may conclusively assume that no procedure
approved by Fund, or directed by Fund, conflicts with or violates any
requirements of its prospectus, "Articles of Incorporation", Bylaws,
or any rule or regulation of any regulatory body or governmental
agency. Fund will be responsible to notify Custodian of any changes in
statutes, regulations, rules or policies which might necessitate
changes in Custodian's responsibilities or procedures.
W. Calculation of Net Asset Value
Custodian will calculate Fund's net asset value, in accordance with
Fund's prospectus, once daily. Custodian will prepare and maintain a
daily evaluation of securities for which market quotations are
available by the use of outside services normally used and contracted
for this purpose; all other securities will be evaluated in accordance
with Fund's instructions. Custodian will have no responsibility for
the accuracy of the prices quoted by these outside services or for the
information supplied by Fund or upon instructions.
X. Overdrafts
If Custodian shall in its sole discretion advance funds to the account
of the Fund which results in an overdraft because the monies held by
Custodian on behalf of the Fund are insufficient to pay the total
amount payable upon a purchase of securities as specified in Fund's
instructions or for some other reason, the amount of the overdraft
shall be payable by the Fund to Custodian upon demand and shall bear
an interest rate determined by Custodian from the date advanced until
the date of payment. Custodian shall have a lien on the assets of the
Fund in the amount of any outstanding overdraft.
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4. INSTRUCTIONS.
A. The term "instructions", as used herein, means written or facsimile
instructions or advice to Custodian from two designated
representatives of Fund. Certified copies of resolutions of the Board
of Directors of Fund naming two or more designated representatives to
give instructions in the name and on behalf of Fund, may be received
and accepted from time to time by Custodian as conclusive evidence of
the authority of any two designated representatives to act for Fund
and may be considered to be in full force and effect (and Custodian
will be fully protected in acting in reliance thereon) until receipt
by Custodian of notice to the contrary. Unless the resolution
delegating authority to any person to give instructions specifically
requires that the approval of anyone else will first have been
obtained, Custodian will be under no obligation to inquire into the
right of the person giving such instructions to do so. Notwithstanding
any of the foregoing provisions of this Section 4. no authorizations
or instructions received by Custodian from Fund, will be deemed to
authorize or permit any director, trustee, officer, employee, or agent
of Fund to withdraw any of the securities or similar investments of
Fund upon the mere receipt of such authorization or instructions from
such director, trustee, officer, employee or agent.
Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgement if required at the discretion of
Custodian) of the instructions of any two designated representatives
of Fund, will undertake to deliver for Fund's account monies,
(provided such monies are on hand or available) in connection with
Fund's transactions and to wire transfer such monies to such broker,
dealer, subcustodian, bank or other agent specified in such
instructions.
B. If oral instructions are permitted pursuant to Section 4.A. hereunder,
no later than the next business day immediately following such oral
instruction the Fund will
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send Custodian written confirmation of such oral instruction. At
Custodian's sole discretion, Custodian may record on tape, or
otherwise, any oral instruction whether given in person or via
telephone, each such recording identifying the parties, the date and
the time of the beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall hold harmless and indemnify Fund from and against any
loss or liability arising out of Custodian's failure to comply with
the terms of this Agreement or arising out of Custodian's negligence
or bad faith. Custodian may request and obtain the advice and opinion
of counsel for Fund, or of its own counsel with respect to questions
or matters of law, and it shall be without liability to Fund for any
action taken or omitted by it in good faith, in conformity with such
advice or opinion. If Custodian reasonably believes that it could not
prudently act according to the instructions of the Fund or the Fund's
counsel, it may in its discretion, with notice to the Fund, not act
according to such instructions.
B. Custodian may rely upon the advice of Fund and upon statements of
Fund's public accountants and other persons believed by it in good
faith, to be expert in matters upon which they are consulted, and
Custodian shall not be liable for any actions taken, in good faith,
upon such statements.
C. If Fund requires Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable
for payment of monies or in any other way, Custodian, upon notice to
Fund given prior to such actions, shall be and be kept indemnified by
Fund in an amount and form satisfactory to Custodian against any
liability on account of such action.
D. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or
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paper reasonably appearing to it to be genuine and to have been
properly executed and shall, unless otherwise specifically provided
herein, be entitled to receive as conclusive proof of any fact or
matter required to be ascertained from Fund hereunder, a certificate
signed by the Fund's President, or other officer specifically
authorized for such purpose.
E. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The validity of the issue of any securities purchased by or for
Fund, the legality of the purchase thereof or evidence of
ownership required by Fund to be received by Custodian, or the
propriety of the decision to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the Capital
Stock of Fund, or the sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any stock
dividend.
F. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
received by it on behalf of Fund, until Custodian actually receives
such money, provided only that it shall advise Fund promptly if it
fails to receive any such money in the ordinary course of business,
and use its best efforts and cooperate with Fund toward the end that
such money shall be received.
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G. Custodian shall not be responsible for loss occasioned by the acts,
neglects, defaults or insolvency of any broker, bank, trust company,
or any other person with whom Custodian may deal in the absence of
negligence, or bad faith on the part of Custodian, except as provided
in Section 3.S.1 hereof.
H. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section
3.S.2. must, provide Fund for its approval, agreements with banks or
trust companies which will act as subcustodians for Fund pursuant to
Section 3.S of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
the Fee Schedule attached hereto as Exhibit B which may be changed from
time to time as agreed to in writing by Custodian and Fund. Custodian may
charge such compensation against monies held by it for the account of Fund.
Custodian will also be entitled, notwithstanding the provisions of Sections
5.C. or 5.D. hereof, to charge against any monies held by it for the
account of Fund the amount of any loss, damage, liability, advance, or
expense for which it shall be entitled to reimbursement under the
provisions of this Agreement including fees or expenses due to Custodian
for other services provided to the Fund by the Custodian. Custodian will
not be entitled to reimbursement by Fund for any loss or expenses of any
subcustodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other party
hereto and received not less than ninety (90) days prior to the date upon
which such termination will take effect. If the Custodian terminates this
Agreement, the Fund may extend the effective date of the termination ninety
(90) days by written request to the Custodian thirty (30) days prior to the
end of the initial ninety (90) days notice period unless the Custodian in
good faith could not perform the duties hereunder. Upon termination of this
Agreement, Fund will pay to Custodian such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to such
date and Fund will use its best efforts to obtain a
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successor custodian. Unless the holders of a majority of the outstanding
shares of "Capital Stock" of Fund vote to have the securities, funds and
other properties held under this Agreement delivered and paid over to some
other person, firm or corporation specified in the vote, having not less
the Two Million Dollars ($2,000,000) aggregate capital, surplus and
undivided profits, as shown by its last published report, and meeting such
other qualifications for custodian as set forth in the Bylaws of Fund, the
Board of Directors of Fund will, forthwith upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian a bank or
trust company having such qualifications. Custodian will, upon termination
of this Agreement, deliver to the successor custodian so specified or
appointed, at Custodian's office, all securities then held by Custodian
hereunder, duly endorsed and in form for transfer, all funds and other
properties of Fund deposited with or held by Custodian hereunder, or will
co-operate in effecting changes in book-entries at the Depository Trust
Company or in the Treasury/Federal Reserve Book-Entry System pursuant to 31
CFR Sec. 306.118. In the event no such vote has been adopted by the
stockholders of Fund and no written order designating a successor custodian
has been delivered to Custodian on or before the date when such termination
becomes effective, then Custodian will deliver the securities, funds and
properties of Fund to a bank or trust company at the selection of Custodian
and meeting the qualifications for custodian, if any, set forth in the
Bylaws of Fund and having not less that Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report. Upon either such delivery to a successor custodian,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such bank or trust company will be the successor
custodian under this Agreement and will be entitled to reasonable
compensation for its services. In the event that no such successor
custodian can be found, Fund will submit to its shareholders, before
permitting delivery of the cash and securities owned by Fund to anyone
other than a successor custodian, the question of whether Fund will be
liquidated
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or function without a custodian. Notwithstanding the foregoing requirement
as to delivery upon termination of this Agreement, Custodian may make any
other delivery of the securities, funds and property of Fund which is
permitted by the Investment Company Act of 1940, Fund's Certificate of
Incorporation and Bylaws then in effect or apply to a court of competent
jurisdiction for the appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings received by
Fund at One Bankers Trust Plaza, New York, New York 10006 such other
address as Fund may have designated to Custodian in writing, will be deemed
to have been properly given to Fund hereunder; and notices, requests,
instructions and other writings received by Custodian at its offices at 127
West 10th Street, Kansas City, Missouri 64105, or to such other address as
it may have designated to Fund in writing, will be deemed to have been
properly given to Custodian hereunder.
9. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement shall become effective at the close of business on the
________ day of ________________, 19__.
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F. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
H. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between
such issuer and Fund unless the Fund directs the Custodian otherwise.
I. This Agreement may not be assigned by either party without prior
written consent of the other party.
J. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder, such statutes, rules and regulations shall be
deemed to control and supersede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:_______________________________
Gerard P. Dipoto, Jr.
Senior Vice President
ATTEST:
_________________________
Cheryl J. Naegler
Assistant Secretary
SELIGMAN CAPITAL FUND, INC.
By:_______________________________
Title:____________________________
ATTEST:
____________________
Secretary
27
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<PAGE>
SULLIVAN & CROMWELL
48 Wall Street
New York, New York 10005
June 18, 1969
Union Capital Fund, Inc.
65 Broadway
New York, New York 10006
Dear Sirs:
In connection with Registration Statement on Form S-5 ("Registration
Statement") which you are filing with the Securities and Exchange Commission for
the purpose of registering under the Securities Act of 1933 (the "Act")
2,500,000 shares (the "Shares") of your Common Stock ($1 Par Value), we have
examined such corporate records, certificates and other documents and such
questions of law as we have considered necessary or appropriate for the purposes
of this opinion and, on the basis of such examination, advise you that, in our
opinion, when the Shares have been duly authorized by the Board of Directors and
sold and delivered as contemplated by the Registration Statement and the
Purchase Agreement referred to therein and the Registration Statement has been
effective under the Securities Act of 1933, such Shares will be legally issued,
fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm therein. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933 or the
Rules and Regulations of the Securities and Exchange Commission.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Seligman Capital Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 53 to Registration
Statement No. 2-33566 of our report dated January 31, 1997, appearing in the
Annual Report to Shareholders for the year ended December 31, 1996, incorporated
by reference in the Statement of Additional Information, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is also
part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 25, 1997
<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 D
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 30, 1993. 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 Share is 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 ___ day
of April, 1993 ("Purchase Date").
SELIGMAN CAPITAL FUND, INC.
By:_________________________________
Name:
Title:
J. & W. SELIGMAN & CO. INCORPORATED
By:_________________________________
Name:
Title:
<PAGE>
<PAGE>
SELIGMAN CAPITAL FUND, INC. - CLASS A
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN COMPUTATION FOR THE 10.00 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 4.75% MAXIMUM OFFERING PRICE EQUALS $13.35
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
- --------------------------------------------------------------------------------
31-Dec-86 12.72 74.906 74.906 $952.80
31-Jan-87 0.000000 14.01 0.085 0.000 74.906 1,049.43
28-Feb-87 0.000000 15.05 0.162 0.000 74.906 1,127.34
20-Mar-87 0.130000 G 15.64 0.216 0.623 75.529 1,181.27
31-Mar-87 15.26 0.247 0.000 75.529 1,152.57
30-Apr-87 0.000000 15.07 0.329 0.000 75.529 1,138.22
31-May-87 0.000000 15.29 0.414 0.000 75.529 1,154.84
30-Jun-87 15.86 0.496 0.000 75.529 1,197.89
31-Jul-87 0.000000 16.43 0.581 0.000 75.529 1,240.94
31-Aug-87 0.000000 17.21 0.666 0.000 75.529 1,299.85
30-Sep-87 16.59 0.748 0.000 75.529 1,253.03
31-Oct-87 0.000000 12.09 0.833 0.000 75.529 913.15
30-Nov-87 0.000000 11.06 0.915 0.000 75.529 835.35
22-Dec-87 1.250000 G 10.86 0.975 8.693 84.222 914.65
31-Dec-87 11.02 1.000 0.000 84.222 928.13
31-Jan-88 0.000000 10.71 1.085 0.000 84.222 902.02
29-Feb-88 0.000000 11.31 1.164 0.000 84.222 952.55
31-Mar-88 11.16 1.249 0.000 84.222 939.92
30-Apr-88 0.000000 11.14 1.332 0.000 84.222 938.23
31-May-88 0.000000 10.90 1.416 0.000 84.222 918.02
30-Jun-88 11.82 1.499 0.000 84.222 995.50
31-Jul-88 0.000000 11.31 1.584 0.000 84.222 952.55
31-Aug-88 0.000000 10.80 1.668 0.000 84.222 909.60
30-Sep-88 11.30 1.751 0.000 84.222 951.71
31-Oct-88 0.000000 11.16 1.836 0.000 84.222 939.92
30-Nov-88 0.000000 10.78 1.918 0.000 84.222 907.91
23-Dec-88 0.870000 G 10.26 1.981 7.142 91.364 937.39
31-Dec-88 10.41 2.003 0.000 91.364 951.10
31-Jan-89 0.000000 10.95 2.088 0.000 91.364 1,000.44
28-Feb-89 0.000000 10.97 2.164 0.000 91.364 1,002.26
31-Mar-89 11.25 2.249 0.000 91.364 1,027.85
30-Apr-89 0.000000 11.92 2.332 0.000 91.364 1,089.06
31-May-89 0.000000 12.40 2.416 0.000 91.364 1,132.91
30-Jun-89 12.09 2.499 0.000 91.364 1,104.59
31-Jul-89 0.000000 12.92 2.584 0.000 91.364 1,180.42
31-Aug-89 0.000000 13.66 2.668 0.000 91.364 1,248.03
30-Sep-89 14.08 2.751 0.000 91.364 1,286.41
31-Oct-89 0.000000 13.41 2.836 0.000 91.364 1,225.19
30-Nov-89 0.000000 13.50 2.918 0.000 91.364 1,233.41
22-Dec-89 1.360000 G 11.97 2.978 10.381 101.745 1,217.89
31-Dec-89 12.38 3.003 0.000 101.745 1,259.60
31-Jan-90 0.000000 11.10 3.088 0.000 101.745 1,129.37
28-Feb-90 0.000000 11.49 3.164 0.000 101.745 1,169.05
31-Mar-90 11.98 3.249 0.000 101.745 1,218.91
30-Apr-90 0.000000 12.04 3.332 0.000 101.745 1,225.01
31-May-90 0.000000 13.54 3.416 0.000 101.745 1,377.63
30-Jun-90 13.84 3.499 0.000 101.745 1,408.15
31-Jul-90 0.000000 13.34 3.584 0.000 101.745 1,357.28
<PAGE>
<PAGE>
31-Aug-90 0.000000 11.84 3.668 0.000 101.745 1,204.66
21-Sep-90 0.000000 11.21 3.726 0.000 101.745 1,140.56
30-Sep-90 10.71 3.751 0.000 101.745 1,089.69
31-Oct-90 0.000000 10.60 3.836 0.000 101.745 1,078.50
30-Nov-90 0.000000 11.88 3.918 0.000 101.745 1,208.73
28-Dec-90 0.100000 G 12.33 3.995 0.825 102.570 1,264.69
31-Dec-90 12.45 4.003 0.000 102.570 1,277.00
31-Jan-91 0.000000 13.37 4.088 0.000 102.570 1,371.36
28-Feb-91 0.000000 14.53 4.164 0.000 102.570 1,490.34
31-Mar-91 15.08 4.249 0.000 102.570 1,546.76
30-Apr-91 0.000000 14.79 4.332 0.000 102.570 1,517.01
31-May-91 0.000000 16.07 4.416 0.000 102.570 1,648.30
30-Jun-91 15.20 4.499 0.000 102.570 1,559.06
31-Jul-91 0.000000 16.28 4.584 0.000 102.570 1,669.84
31-Aug-91 0.000000 16.97 4.668 0.000 102.570 1,740.61
30-Sep-91 17.00 4.751 0.000 102.570 1,743.69
31-Oct-91 0.000000 17.33 4.836 0.000 102.570 1,777.54
30-Nov-91 0.000000 16.99 4.918 0.000 102.570 1,742.66
26-Dec-91 2.480000 G 15.91 4.989 15.988 118.558 1,886.26
31-Dec-91 16.66 5.003 0.000 118.558 1,975.18
31-Jan-92 0.000000 16.86 5.088 0.000 118.558 1,998.89
29-Feb-92 0.000000 17.22 5.167 0.000 118.558 2,041.57
31-Mar-92 16.44 5.252 0.000 118.558 1,949.09
30-Apr-92 0.000000 16.48 5.334 0.000 118.558 1,953.84
31-May-92 0.000000 16.32 5.419 0.000 118.558 1,934.87
30-Jun-92 15.69 5.501 0.000 118.558 1,860.18
31-Jul-92 0.000000 16.41 5.586 0.000 118.558 1,945.54
31-Aug-92 0.000000 16.32 5.671 0.000 118.558 1,934.87
21-Sep-92 0.000000 16.84 5.729 0.000 118.558 1,996.52
30-Sep-92 16.67 5.753 0.000 118.558 1,976.36
31-Oct-92 0.000000 17.32 5.838 0.000 118.558 2,053.42
30-Nov-92 0.000000 18.28 5.921 0.000 118.558 2,167.24
28-Dec-92 1.530000 G 16.86 5.997 10.759 129.317 2,180.28
31-Dec-92 17.04 6.005 0.000 129.317 2,203.56
01-Jan-93 0.000000 17.00 6.008 0.000 129.317 2,198.39
31-Jan-93 0.000000 17.07 6.090 0.000 129.317 2,207.44
28-Feb-93 0.000000 16.38 6.167 0.000 129.317 2,118.21
31-Mar-93 0.000000 17.20 6.252 0.000 129.317 2,224.25
30-Apr-93 0.000000 16.30 6.334 0.000 129.317 2,107.87
31-May-93 0.000000 17.15 6.419 0.000 129.317 2,217.79
30-Jun-93 0.000000 17.02 6.501 0.000 129.317 2,200.98
31-Jul-93 0.000000 16.70 6.586 0.000 129.317 2,159.59
31-Aug-93 0.000000 17.63 6.671 0.000 129.317 2,279.86
30-Sep-93 0.000000 18.11 6.753 0.000 129.317 2,341.93
31-Oct-93 0.000000 17.83 6.838 0.000 129.317 2,305.72
30-Nov-93 0.000000 17.55 6.921 0.000 129.317 2,269.51
28-Dec-93 1.900000 G 15.88 6.997 15.472 144.789 2,299.25
31-Dec-93 0.000000 15.95 7.005 0.000 144.789 2,309.38
31-Jan-94 0.000000 16.41 7.090 0.000 144.789 2,375.99
28-Feb-94 0.000000 16.45 7.167 0.000 144.789 2,381.78
30-Mar-94 0.000000 15.49 7.249 0.000 144.789 2,242.78
31-Mar-94 0.000000 15.46 7.252 0.000 144.789 2,238.44
30-Apr-94 0.000000 15.11 7.334 0.000 144.789 2,187.76
31-May-94 0.000000 14.66 7.419 0.000 144.789 2,122.61
29-Jun-94 0.000000 13.79 7.499 0.000 144.789 1,996.64
30-Jun-94 0.000000 13.67 7.501 0.000 144.789 1,979.27
<PAGE>
<PAGE>
31-Jul-94 0.000000 14.12 7.586 0.000 144.789 2,044.42
31-Aug-94 0.000000 15.22 7.671 0.000 144.789 2,203.69
15-Sep-94 0.000000 15.28 7.712 0.000 144.789 2,212.38
21-Sep-94 0.000000 14.75 7.729 0.000 144.789 2,135.64
30-Sep-94 0.000000 14.86 7.753 0.000 144.789 2,151.56
31-Oct-94 0.000000 15.25 7.838 0.000 144.789 2,208.03
30-Nov-94 0.000000 14.65 7.921 0.000 144.789 2,121.16
14-Dec-94 1.600000 G 12.74 7.959 18.184 162.973 2,076.28
31-Dec-94 0.000000 13.17 8.005 0.000 162.973 2,146.35
31-Jan-95 0.000000 13.24 8.090 0.000 162.973 2,157.76
28-Feb-95 0.000000 13.57 8.167 0.000 162.973 2,211.54
31-Mar-95 0.000000 13.91 8.252 0.000 162.973 2,266.95
28-Apr-95 0.000000 14.00 8.329 0.000 162.973 2,281.62
30-Apr-95 0.000000 14.00 8.334 0.000 162.973 2,281.62
31-May-95 0.000000 14.26 8.419 0.000 162.973 2,323.99
30-Jun-95 0.000000 15.17 8.501 0.000 162.973 2,472.30
31-Jul-95 0.000000 15.97 8.586 0.000 162.973 2,602.68
31-Aug-95 0.000000 16.23 8.671 0.000 162.973 2,645.05
21-Sep-95 0.000000 16.78 8.729 0.000 162.973 2,734.69
30-Sep-95 0.000000 16.47 8.753 0.000 162.973 2,684.17
31-Oct-95 0.000000 16.30 8.838 0.000 162.973 2,656.46
17-Nov-95 2.298000 g 14.36 8.885 26.080 189.053 2,714.80
24-Nov-95 14.39 8.904 0.000 189.053 2,720.47
30-Nov-95 0.000000 14.83 8.921 0.000 189.053 2,803.66
20-Dec-95 0.000000 14.71 8.975 0.000 189.053 2,780.97
31-Dec-95 0.000000 15.59 9.005 0.000 189.053 2,947.34
04-Jan-96 0.000000 15.18 9.016 0.000 189.053 2,869.82
31-Jan-96 0.000000 15.81 9.090 0.000 189.053 2,988.93
29-Feb-96 0.000000 16.27 9.170 0.000 189.053 3,075.89
31-Mar-96 0.000000 16.66 9.255 0.000 189.053 3,149.62
30-Apr-96 0.000000 17.68 9.337 0.000 189.053 3,342.46
24-May-96 0.000000 18.94 9.403 0.000 189.053 3,580.66
31-May-96 0.000000 18.69 9.422 0.000 189.053 3,533.40
05-Jun-96 0.000000 18.95 9.436 0.000 189.053 3,582.55
30-Jun-96 0.000000 17.99 9.504 0.000 189.053 3,401.06
16-Jul-96 0.000000 16.02 9.548 0.000 189.053 3,028.63
31-Jul-96 0.000000 16.54 9.589 0.000 189.053 3,126.94
06-Aug-96 0.000000 17.26 9.605 0.000 189.053 3,263.05
31-Aug-96 0.000000 17.24 9.674 0.000 189.053 3,259.27
30-Sep-96 0.000000 18.47 9.756 0.000 189.053 3,491.81
31-Oct-96 0.000000 17.79 9.841 0.000 189.053 3,363.25
15-Nov-96 1.872000 G 16.65 9.882 21.256 210.309 3,501.64
30-Nov-96 0.000000 16.89 9.923 0.000 210.309 3,552.12
31-Dec-96 0.000000 16.36 10.008 0.000 210.309 3,440.66
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)^N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - 13.15%
N = NUMBER OF YEARS - 10
ERV = ENDING REDEEMABLE VALUE $3,440.66
TOTAL RETURN FOR PERIOD 244.07%
<PAGE>
<PAGE>
SELIGMAN CAPITAL FUND, INC. - CLASS B
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN (LESS CDSL) FOR THE 0.69 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 0.00% MAXIMUM OFFERING PRICE - $16.4300
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
- -------------------------------------------------------------------------------
22-Apr-96 0.000000 16.4300 60.864 60.864 $1,000.00
30-Apr-96 0.000000 16.9000 0.022 0.000 60.864 1,028.60
31-May-96 0.000000 17.8500 0.107 0.000 60.864 1,086.42
30-Jun-96 0.000000 17.1800 0.189 0.000 60.864 1,045.64
31-Jul-96 0.000000 15.7800 0.274 0.000 60.864 960.43
31-Aug-96 0.000000 16.4400 0.359 0.000 60.864 1,000.60
30-Sep-96 0.000000 17.6000 0.441 0.000 60.864 1,071.21
31-Oct-96 0.000000 16.9400 0.526 0.000 60.864 1,031.04
31-Oct-96 0.000000 14.7200 0.526 0.000 60.864 895.92
15-Nov-96 1.872000 G 15.7700 0.567 7.225 68.089 1,073.76
30-Nov-96 0.000000 15.1500 0.608 0.000 68.089 1,031.55
30-Nov-96 0.000000 15.9800 0.608 0.000 68.089 1,088.06
31-Dec-96 0.000000 15.4700 0.693 0.000 68.089 1,053.34
LESS CDSL 47.08
--------
1,006.26
========
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)^N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - N/A
N = NUMBER OF YEARS - 0.693
ERV = ENDING REDEEMABLE VALUE $1,006.26
TOTAL RETURN (LESS CDSL) 0.63%
TOTAL RETURN FOR PERIOD 0.63%
<PAGE>
<PAGE>
SELIGMAN CAPITAL FUND- CLASS D
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN COMPUTATION FOR THE 3.67 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 0.00% MAXIMUM OFFERING PRICE EQUALS $16.430
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
- --------------------------------------------------------------------------------
03-May-93 0.000000 16.43 60.864 60.864 $1,000.00
31-May-93 0.000000 17.15 0.077 0.000 60.864 1,043.82
30-Jun-93 0.000000 17.01 0.159 0.000 60.864 1,035.30
31-Jul-93 0.000000 16.68 0.244 0.000 60.864 1,015.21
31-Aug-93 0.000000 17.60 0.329 0.000 60.864 1,071.21
30-Sep-93 0.000000 18.07 0.411 0.000 60.864 1,099.81
29-Oct-93 0.000000 17.78 0.490 0.000 60.864 1,082.16
31-Oct-93 0.000000 17.78 0.496 0.000 60.864 1,082.16
30-Nov-93 0.000000 17.49 0.578 0.000 60.864 1,064.51
28-Dec-93 1.900000 g 15.82 0.655 7.310 68.174 1,078.51
31-Dec-93 0.000000 15.86 0.663 0.000 68.174 1,081.24
31-Jan-94 0.000000 16.31 0.748 0.000 68.174 1,111.92
28-Feb-94 0.000000 16.32 0.825 0.000 68.174 1,112.60
30-Mar-94 0.000000 15.34 0.907 0.000 68.174 1,045.79
31-Mar-94 0.000000 15.31 0.910 0.000 68.174 1,043.74
30-Apr-94 0.000000 14.93 0.992 0.000 68.174 1,017.84
31-May-94 0.000000 14.46 1.077 0.000 68.174 985.80
29-Jun-94 0.000000 13.56 1.156 0.000 68.174 924.44
30-Jun-94 0.000000 13.44 1.159 0.000 68.174 916.26
31-Jul-94 0.000000 13.86 1.244 0.000 68.174 944.89
31-Aug-94 0.000000 14.92 1.329 0.000 68.174 1,017.16
15-Sep-94 0.000000 14.98 1.370 0.000 68.174 1,021.25
30-Sep-94 0.000000 14.57 1.411 0.000 68.174 993.30
31-Oct-94 0.000000 14.93 1.496 0.000 68.174 1,017.84
30-Nov-94 0.000000 17.49 1.578 0.000 68.174 1,192.36
14-Dec-94 1.600000 G 12.41 1.616 8.790 76.964 955.12
31-Dec-94 0.000000 12.82 1.663 0.000 76.964 986.68
31-Jan-95 0.000000 12.87 1.748 0.000 76.964 990.53
28-Feb-95 0.000000 13.16 1.825 0.000 76.964 1,012.85
31-Mar-95 0.000000 13.50 1.910 0.000 76.964 1,039.01
30-Apr-95 0.000000 13.58 1.992 0.000 76.964 1,045.17
31-May-95 0.000000 13.81 2.077 0.000 76.964 1,062.87
30-Jun-95 0.000000 14.68 2.159 0.000 76.964 1,129.83
31-Jul-95 0.000000 15.44 2.244 0.000 76.964 1,188.32
31-Aug-95 0.000000 15.69 2.329 0.000 76.964 1,207.57
30-Sep-95 0.000000 15.91 2.411 0.000 76.964 1,224.50
31-Oct-95 0.000000 15.73 2.496 0.000 76.964 1,210.64
22-Nov-95 2.298000 G 13.77 2.556 12.844 89.808 1,236.66
30-Nov-95 0.000000 14.22 2.578 0.000 89.808 1,277.07
31-Dec-95 0.000000 14.94 2.663 0.000 89.808 1,341.73
31-Jan-96 0.000000 15.14 2.748 0.000 89.808 1,359.69
29-Feb-96 0.000000 15.57 2.827 0.000 89.808 1,398.31
31-Mar-96 0.000000 15.94 2.912 0.000 89.808 1,431.54
30-Apr-96 0.000000 16.90 2.995 0.000 89.808 1,517.76
31-May-96 0.000000 17.85 3.079 0.000 89.808 1,603.07
30-Jun-96 0.000000 17.18 3.162 0.000 89.808 1,542.90
31-Jul-96 0.000000 15.78 3.247 0.000 89.808 1,417.17
31-Aug-96 0.000000 16.44 3.332 0.000 89.808 1,476.44
30-Sep-96 0.000000 17.60 3.414 0.000 89.808 1,580.62
<PAGE>
<PAGE>
31-Oct-96 0.000000 16.94 3.499 0.000 89.808 1,521.35
15-Nov-96 1.872000 G 15.77 3.540 10.661 100.469 1,584.40
30-Nov-96 0.000000 15.98 3.581 0.000 100.469 1,605.49
31-Dec-96 0.000000 15.47 3.666 0.000 100.469 1,554.26
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)^N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - 12.78%
N = NUMBER OF YEARS - 3.666
ERV = ENDING REDEEMABLE VALUE $1,554.26
TOTAL RETURN FOR PERIOD 55.43%
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/John R. Galvin (L.S.)
-----------------------
John R. Galvin
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
her attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in her name and stead, in her capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/Alice S. Ilchman (L.S.)
------------------------
Alice S. Ilchman
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/Frank A. McPherson (L.S.)
-------------------------
Frank A. McPherson
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/John E. Merow (L.S.)
---------------------
John E. Merow
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
her attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in her name and stead, in her capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/Betsy S. Michel (L.S.)
-----------------------
Betsy S. Michel
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/William C. Morris (L.S.)
--------------------------
William C. Morris
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 31st day of March, 1997.
/s/James C. Pitney (L.S.)
----------------------
James C. Pitney
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/James Q. Riordan (L.S.)
----------------------
James Q. Riordan
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/Ronald T. Schroeder (L.S.)
-------------------------
Ronald T. Schroeder
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/Robert L. Shafer (L.S.)
-----------------------
Robert L. Shafer
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/James N. Whitson (L.S.)
-----------------------
James N. Whitson
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
CAPITAL FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/Brian T. Zino (L.S.)
---------------------
Brian T. Zino
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELIGMAN CAPITAL FUND, INC. CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 209561
<INVESTMENTS-AT-VALUE> 281839
<RECEIVABLES> 4488
<ASSETS-OTHER> 506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 286833
<PAYABLE-FOR-SECURITIES> 2344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 664
<TOTAL-LIABILITIES> 3008
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 206787
<SHARES-COMMON-STOCK> 15867<F1>
<SHARES-COMMON-PRIOR> 13839<F1>
<ACCUMULATED-NII-CURRENT> (100)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4860
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 72278
<NET-ASSETS> 259514<F1>
<DIVIDEND-INCOME> 1079<F1>
<INTEREST-INCOME> 804<F1>
<OTHER-INCOME> 58<F1>
<EXPENSES-NET> (2542)<F1>
<NET-INVESTMENT-INCOME> (601)<F1>
<REALIZED-GAINS-CURRENT> 28165
<APPREC-INCREASE-CURRENT> 8893
<NET-CHANGE-FROM-OPS> 36296
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (26567)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5235<F1>
<NUMBER-OF-SHARES-REDEEMED> (4664)<F1>
<SHARES-REINVESTED> 1457<F1>
<PAGE>
<PAGE>
<NET-CHANGE-IN-ASSETS> 58999
<ACCUMULATED-NII-PRIOR> (90)
<ACCUMULATED-GAINS-PRIOR> 6546
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1174<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2542<F1>
<AVERAGE-NET-ASSETS> 237920<F1>
<PER-SHARE-NAV-BEGIN> 15.59<F1>
<PER-SHARE-NII> (0.04)<F1>
<PER-SHARE-GAIN-APPREC> 2.68<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (1.87)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 16.36<F1>
<EXPENSE-RATIO> 1.07<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> 002
<NAME> SELIGMAN CAPITAL FUND, INC. CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-22-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 209561
<INVESTMENTS-AT-VALUE> 281839
<RECEIVABLES> 4488
<ASSETS-OTHER> 506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 286833
<PAYABLE-FOR-SECURITIES> 2344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 664
<TOTAL-LIABILITIES> 3008
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 206787
<SHARES-COMMON-STOCK> 280<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> (100)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4860
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 72278
<NET-ASSETS> 4337<F1>
<DIVIDEND-INCOME> 7<F1>
<INTEREST-INCOME> 6<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (27)<F1>
<NET-INVESTMENT-INCOME> (14)<F1>
<REALIZED-GAINS-CURRENT> 28165
<APPREC-INCREASE-CURRENT> 8893
<NET-CHANGE-FROM-OPS> 36296
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (409)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 273<F1>
<NUMBER-OF-SHARES-REDEEMED> (17)<F1>
<PAGE>
<PAGE>
<SHARES-REINVESTED> 24<F1>
<NET-CHANGE-IN-ASSETS> 58999
<ACCUMULATED-NII-PRIOR> (90)
<ACCUMULATED-GAINS-PRIOR> 6546
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 27<F1>
<AVERAGE-NET-ASSETS> 2107<F1>
<PER-SHARE-NAV-BEGIN> 16.43<F1>
<PER-SHARE-NII> (0.10)<F1>
<PER-SHARE-GAIN-APPREC> 1.01<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (1.87)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 15.47<F1>
<EXPENSE-RATIO> 1.89<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B only. All other data are fund level.
</FN>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 004
<NAME> SELIGMAN CAPITAL FUND, INC. CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 209561
<INVESTMENTS-AT-VALUE> 281839
<RECEIVABLES> 4488
<ASSETS-OTHER> 506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 286833
<PAYABLE-FOR-SECURITIES> 2344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 664
<TOTAL-LIABILITIES> 3008
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 206787
<SHARES-COMMON-STOCK> 1291<F1>
<SHARES-COMMON-PRIOR> 612<F1>
<ACCUMULATED-NII-CURRENT> (100)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4860
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 72278
<NET-ASSETS> 19974<F1>
<DIVIDEND-INCOME> 67<F1>
<INTEREST-INCOME> 51<F1>
<OTHER-INCOME> 5<F1>
<EXPENSES-NET> (270)<F1>
<NET-INVESTMENT-INCOME> (147)<F1>
<REALIZED-GAINS-CURRENT> 28165
<APPREC-INCREASE-CURRENT> 8893
<NET-CHANGE-FROM-OPS> 36296
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (2123)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1081<F1>
<NUMBER-OF-SHARES-REDEEMED> (529)<F1>
<SHARES-REINVESTED> 127<F1>
<PAGE>
<PAGE>
<NET-CHANGE-IN-ASSETS> 58999
<ACCUMULATED-NII-PRIOR> (90)
<ACCUMULATED-GAINS-PRIOR> 6546
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 73<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 270<F1>
<AVERAGE-NET-ASSETS> 14697<F1>
<PER-SHARE-NAV-BEGIN> 14.94<F1>
<PER-SHARE-NII> (0.16)<F1>
<PER-SHARE-GAIN-APPREC> 2.56<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (1.87)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 15.47<F1>
<EXPENSE-RATIO> 1.83<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
<PAGE>
