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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. 54 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 29 [X]
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL FUND, INC.
(Exact name of registrant as specified in charter)
- --------------------------------------------------------------------------------
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
- --------------------------------------------------------------------------------
THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective (check appropriate box):
<TABLE>
<S> <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.
</TABLE>
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on March 27,
1998.
<PAGE>
<PAGE>
File No. 2-33566
811-1886
SELIGMAN CAPITAL FUND, INC.
POST-EFFECTIVE AMENDMENT NO. 54
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
- --------------------------- ----------------------
<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
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>
<PAGE>
<PAGE>
SELIGMAN
CAPITAL
FUND, INC.
PROSPECUTS
MAY 1, 1998
A
CAPITAL
APPRECIATION
FUND
IN ITS
30TH YEAR
[LOGO]
<PAGE>
<PAGE>
TABLE OF CONTENTS
SUMMARY OF FUND EXPENSES 2
FINANCIAL HIGHLIGHTS 3
ALTERNATIVE DISTRIBUTION SYSTEM 5
INVESTMENT OBJECTIVE, POLICIES AND RISKS 7
MANAGEMENT SERVICES 9
PURCHASE OF SHARES 10
TELEPHONE TRANSACTIONS 17
REDEMPTION OF SHARES 18
ADMINISTRATION, SHAREHOLDER SERVICES
AND DISTRIBUTION PLAN 20
EXCHANGE PRIVILEGE 21
FURTHER INFORMATION ABOUT
TRANSACTIONS IN THE FUND 23
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS 23
FEDERAL INCOME TAXES 24
SHAREHOLDER INFORMATION 26
ADVERTISING THE FUND'S PERFORMANCE 27
ORGANIZATION AND CAPITALIZATION 28
TIMES CHANGE ... VALUES ENDURE
<PAGE>
<PAGE>
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
For Retirement Plan Information--Toll-Free Telephone: (800) 445-1777
May 1, 1998
Seligman Capital Fund, Inc. (the "Fund") is a mutual fund which invests to
produce capital appreciation. Current income is not an objective. Investment
advisory and management services are provided to the Fund by J. & W. Seligman &
Co. Incorporated (the "Manager"). The Fund's distributor is Seligman Financial
Services, Inc., an affiliate of the Manager. For a description of the Fund's
investment objective and policies, including the risk factors associated with an
investment in the Fund, see "Investment Objective, Policies and Risks." There
can be no assurance that the Fund's investment objective will be achieved.
The Fund offers 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 gain 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.
<PAGE>
<PAGE>
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
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES FOR 1997 CLASS A CLASS B CLASS D
(as a percentage of average net assets) ------- ------- -------
<S> <C> <C> <C>
Management Fees ....................................... .48% .48% .48%
12b-1 Fees ............................................ .24% 1.00%* 1.00%*
Other Expenses ........................................ .33% .33% .33%
==== ==== ====
Total Fund Operating Expenses ......................... 1.05% 1.81% 1.81%
==== ==== ====
</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.
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) 5% annual return
and (2) redemption at the end of each time period .... Class A $58 $79 $103 $170
Class B+ 68 87 118 193
Class D 28 57 98 213
An investor would pay the following expenses on the
same investment, assuming no redemption .............. Class A $58 $79 $103 $170
Class B+ 18 57 98 193
Class D 18 57 98 213
</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.
+ The expenses shown for the ten-year period reflect the conversion of Class
B shares to Class A shares after 8 years.
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 1997 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.
"Per share operating performance" data is designed to allow investors to
trace the operating performance, on a per share basis, from the beginning net
asset value to the ending net asset value so that they can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amount.
"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,
----------------------------------------------------------------------------------------
1997(o) 1996(o) 1995(o) 1994(o) 1993 1992 1991
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ... $16.36 $15.59 $13.17 $15.95 $17.04 $16.66 $12.45
------ ------ ------ ------ ------ ------ ------
Net investment income (loss) ......... (.06) (.04) (.02) (.06) (.03) .02 .03
Net realized and unrealized
investment gain (loss) ............... 3.61 2.68 4.74 (1.12) .84 1.89 6.66
------ ------ ------ ------ ------ ------ ------
Increase (decrease) from investment
operations ........................... 3.55 2.64 4.72 (1.18) .81 1.91 6.69
Distributions from net gain realized . (2.43) (1.87) (2.30) (1.60) (1.90) (1.53) (2.48)
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset
value ................................ 1.12 .77 2.42 (2.78) (1.09) .38 4.21
------ ------ ------ ------ ------ ------ ------
Net asset value, end of year ......... $17.48 $16.36 $15.59 $13.17 $15.95 $17.04 $16.66
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: ............................... 22.28% 16.74% 37.32% (7.06)% 4.80% 11.56% 54.67%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....... 1.05% 1.07% 1.09% 1.13% 1.13% .96% 1.01%
Net investment income (loss) to
average net assets ................... (.29)% (.25)% (.11)% (.39)% (.17)% .11% .25%
Portfolio turnover ................... 104.33% 94.97% 103.60% 70.72% 46.84% 42.32% 42.20%
Average commission rate paid ......... $.0561 $.0537
Net assets, end of year (000s omitted) $284,214 $259,514 $215,688 $162,556 $196,212 $198,063 $172,676
<CAPTION>
CLASS A
-------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------
1990 1989 1988
------ ------ ------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ... $12.38 $10.41 $11.02
------ ------ ------
Net investment income (loss) ......... .06 .08 .04
Net realized and unrealized
investment gain (loss) ............... .11 3.25 .22
------ ------ ------
Increase (decrease) from investment
operations ........................... .17 3.33 .26
Distributions from net gain realized . (.10) (1.36) (.87)
------ ------ ------
Net increase (decrease) in net asset
value ................................ .07 1.97 (.61)
------ ------ ------
Net asset value, end of year ......... $12.45 $12.38 $10.41
====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: ............................... 1.38% 32.44% 2.47%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....... .92% .88% .99%
Net investment income (loss) to
average net assets ................... .47% .67% .36%
Portfolio turnover ................... 23.05% 49.51% 92.07%
Average commission rate paid .........
Net assets, end of year (000s omitted) $120,759 $124,623 $114,564
</TABLE>
- ---------
(o) Per share amounts for the years ended December 31, 1997, 1996, 1995 and
1994, are calculated based on average shares outstanding.
The data provided above reflects historical information and therefore has
not been adjusted to reflect (i) through April 10, 1991, the effect of the
increased management fee approved by shareholders on April 10, 1991, and (ii)
through December 31, 1992, 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
--------------------- ---------------------------------------
YEAR 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ---------------------------------------- TO
12/31/97(o) 12/31/96(o) 1997(o) 1996(o) 1995(o) 1994(o) 12/31/93
--------- --------- ----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ............. $15.47 $16.43 $15.47 $14.94 $12.82 $15.86 $16.43
------ ------ ------ ------ ------ ------ ------
Net investment loss .............................. (.18) (.10) (.18) (.16) (.14) (.33) (.08)
Net realized and unrealized investment gain (loss) 3.38 1.01 3.39 2.56 4.56 (1.11) 1.41
------ ------ ------ ------ ------ ------ ------
Increase (decrease) from investment operations ... 3.20 .91 3.21 2.40 4.42 (1.44) 1.33
Distributions from net gain realized ............. (2.43) (1.87) (2.43) (1.87) (2.30) (1.60) (1.90)
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset value ....... .77 (.96) .78 .53 2.12 (3.04) (.57)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ................... $16.24 $15.47 $16.25 $15.47 $14.94 $12.82 $15.86
====== ====== ====== ====== ====== ====== ======
Total Return Based on Net Asset Value: ........... 21.26% 5.33% 21.34% 15.84% 35.98% (8.75)% 8.12%
Ratios/Supplemental Data:
Expenses to average net assets ................... 1.81% 1.89%+ 1.81% 1.83% 2.02% 2.66% 2.26%+
Net investment loss to average net assets ........ (1.05)% (.99)%+ (1.05)% (1.00)% (1.06)% (2.28)% (1.32)%+
Portfolio turnover ............................... 104.33% 94.97%++ 104.33% 94.97% 103.60% 70.72% 46.84%+++
Average commission rate paid ..................... $.0561 $.0537++ $.0561 $.0537
Net assets, end of period (000s omitted) ......... $8,437 $4,337 $26,088 $19,974 $9,137 $3,179 $2,749
</TABLE>
- ---------
* Commencement of offering of shares.
(o) Per share amounts for the periods ended December 31, 1997, 1996, 1995 and
1994, are calculated on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ 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
4.75% of the reduced for
public offering certain purchases.
price. CDSL of 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
Distribution fee within 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. 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
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not readily marketable. The Fund may purchase restricted securities that can be
offered and sold to "qualified institutional buyers" under Rule 144A of the 1993
Act, and the Manager, acting pursuant to procedures approved by the Fund's Board
of Directors may determine, when appropriate, that specific Rule 144A securities
are liquid and not subject to the 15% limitation on illiquid securities. Should
this determination be made, the Manager, acting pursuant to such procedures,
will carefully monitor the security (focusing on such factors, among others, as
trading activity and availability of information) to determine that the Rule
144A security continues to be liquid. It is not possible to predict with
assurance exactly how the market for 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 are typically traded in Europe. GDRs are typically
traded in both Europe and the United States. 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.
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YEAR 2000 RISKS. The Fund is dependent upon service providers and their
computer systems for its day-to-day operations, and many of the Fund's service
providers in turn depend upon computer systems of other persons. Many computer
systems currently cannot properly recognize or process date sensitive
information relating to the year 2000 and beyond. The Manager, Seligman
Financial Services, Inc., and the Fund's custodian have been evaluating the
impact the year 2000 issue may have on their computer systems. They expect that
any modifications to their computer systems necessary to address the year 2000
issue will be made and tested in a timely manner. They are also working with
vendors and other persons whose systems are linked to theirs to obtain
satisfactory assurances regarding the year 2000 issue. Seligman Data Corp.,
which provides certain corporate and shareholder account services to the Fund at
cost, has informed the Fund that it does not expect that the cost to the Fund of
its services will increase materially as a result of the modifications to its
computer systems necessary to prepare for the year 2000. The costs of systems
remediation by persons other than Seligman Data Corp. will not be borne directly
by the Fund. There can be no assurance that the remedial actions taken by the
Fund's service providers will be sufficient or timely. Inadequate remediation
could have an adverse effect on the Fund's operations, including pricing and
securities trading and settlement, and the provision of shareholder services.
MANAGEMENT SERVICES
THE MANAGER. The Board of Directors provides broad supervision over the
affairs of the Fund. Pursuant to a Management Agreement approved by the Board
and the shareholders of the Fund, the Manager manages the investments of the
Fund and administers the business and other affairs of the Fund. The address of
the Manager is 100 Park Avenue, New York, NY 10017.
The Manager also serves as manager of 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 $20.2
billion at March 31, 1998. The Manager also provides investment management or
advice to institutional and other accounts having an aggregate value at March
31, 1998 of approximately $7.4 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
1997, the management fee paid by the Fund was equal to an annual rate of .48% 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, Class B and Class D shares for the year
ended December 31, 1997 amounted to 1.05%, 1.81% and 1.81%, respectively, of the
average daily net assets of such class.
Prior to March 30, 1998, the Manager was party to a Subadvisory Agreement
with Seligman Henderson
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Co. pursuant to which Seligman Henderson agreed to provide investment advisory
services to the Fund in respect of foreign assets to the extent requested by
the Manager. No such advice was ever provided and on March 30, 1998, the
Subadvisory Agreement terminated in accordance with its terms. The Manager
has no present plans to enter into similar subadvisory arrangements in respect
of the Fund.
PORTFOLIO MANAGEMENT. Richard R. Schmaltz is primarily responsible for the
day-to-day management of the Fund's portfolio as a member of the Seligman Growth
Team. Mr. Schmaltz joined the Manager in September 1996 as a Managing Director,
Director of Investments. In November 1997, Mr. Schmaltz also was named Director
of the Manager. From May 1993 to September 1996, Mr. Schmaltz was Director,
Investment Research at Neuberger and Berman. Prior thereto, Mr. Schmaltz was
Executive Vice President of McGlinn Capital. Mr. Schmaltz is also responsible
for the management of Seligman Growth Fund, Inc. and the Seligman Capital
Portfolio of Seligman Portfolios, Inc. ("SPI"). Additionally, he is responsible
for directing and overseeing the domestic investments of the Seligman Henderson
Global Growth Opportunities Fund, a series of Seligman Henderson Global Fund
Series, Inc., and the Seligman Henderson Global Growth Opportunities Portfolio
of SPI.
The Seligman Growth Team'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, the Lipper Capital
Appreciation Funds Average, the Lipper Mid Cap Funds Average and the Russell
Midcap Growth Index is included in the Fund's 1997 Annual Report to
Shareholders. Copies of the 1997 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 recognizes that in the
purchase and sale of portfolio securities, the Manager 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. 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 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
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.
High portfolio turnover involves correspondingly greater transactions costs and
a possible increase in short-term capital gains and losses. 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 believes such
changes will strengthen the Fund's portfolio. The portfolio turnover of the Fund
may exceed 100%.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager,
acts as general distributor of the Fund's shares. Its address is 100 Park
Avenue, New York, New York 10017.
The Fund issues three classes of shares: Class A shares are sold to
investors choosing the initial sales load alternative; Class B shares are sold
to investors choosing to pay no initial sales load, a
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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
determined after receipt of the purchase order plus, in the case of Class A
shares, a sales load which, except for shares purchased under one of the reduced
sales load plans, will vary with the size of the purchase as shown in the
schedule under "Class A Shares--Initial Sales Load" below.
THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE FUND IS $1,000; SUBSEQUENT
INVESTMENTS MUST BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR INVESTMENT OF
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE RIGHT TO RETURN
INVESTMENTS THAT DO NOT SATISFY THESE MINIMUMS. EXCEPTIONS TO THESE MINIMUMS ARE
AVAILABLE FOR ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK'r'
SERVICE. 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.
The minimum amount for initial investment in the Fund is $500 for investors
who purchase shares of the Fund through Merrill Lynch's MFA or MFA Select
Programs. There is no minimum investment required for investors who purchase
shares of the Fund through wrap fee programs.
Purchase orders placed for Class B shares must be for an amount less than
$250,000.
Orders received by an authorized dealer by the close of regular trading on
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 regular trading on 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
regular trading on 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 a postage-paid return envelope or directly to P.O. Box 9766,
Providence, RI 02940-9766. Checks for investment must be in U.S. dollars drawn
on a domestic bank. The check should be accompanied by an investment slip
(provided at the bottom of shareholder account statements) and include the
shareholder's name, address, account number, name of Fund and class of shares
(A, B or D). Checks sent directly to Seligman Data Corp. and received in good
order will be invested at the Fund's net asset value determined as of the close
of regular trading on the NYSE on that day plus, in the case of Class A shares,
any applicable sales load.
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. IF ONLY THE CLASS DESIGNATION IS
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MISSING, THE INVESTMENT WILL AUTOMATICALLY BE MADE IN CLASS A SHARES FOR NEW
ACCOUNTS, OR IN THE SHAREHOLDER'S EXISTING CLASS FOR ADDITIONAL PURCHASES.
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.
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.
Current shareholders may also purchase additional shares by having funds
electronically transferred directly from an employer, the Internal Revenue
Service or other government agency, or any institution capable of transmitting
payments through the Automated Clearing House ("ACH") network. Purchases may be
one-time transactions, or, for those institutions that offer direct deposit
programs, may be made on a systematic basis. To utilize this service, the
following bank information must be provided to the paying institution:
Mellon Bank, N.A.
ABA #043000261
A/C No. 600FFFNNNNNNNNNN
"600" IDENTIFIES THE SELIGMAN GROUP OF FUNDS, "FFF" IS THE FUND CODE
REPRESENTING THE FUND AND CLASS OF SHARES IN WHICH THE PURCHASE SHOULD BE MADE
(this code is available on the back of all shareholder account statements), AND
"NNNNNNNNNN" INDICATES THE SHAREHOLDER'S TEN-DIGIT ACCOUNT NUMBER. In addition,
the shareholder must indicate that this is a checking account at Mellon Bank.
For IRA and group retirement accounts, all electronic purchases will be
designated as current year contributions. For more information about this
service, please contact Seligman Data Corp.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Friday, as of the close of regular 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.
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. 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.
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
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"Administration, Shareholder Services and Distribution Plan."
CLASS A SHARES--SALES LOAD SCHEDULE
<TABLE>
<CAPTION>
SALES LOAD AS A REGULAR
PERCENTAGE OF 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
</TABLE>
- ----------
* 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."
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 NAV sales,
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 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
for each Plan 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 Accumula-tion
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 any Seligman Mutual Fund sold with an initial sales load
with the total net asset value of shares already owned that were sold with an
initial sales load, including 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
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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."
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 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 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) or other
retirement alliance program the sponsor of which has an agreement with SFSI
pursuant to which shares are made available at net asset value 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,
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<PAGE>
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.
CLASS D SHARES. Class D shares are sold without an initial sales load but
are subject to a 1% 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 redemptions 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 assign any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on redemptions 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 Morgan Stanley Dean Witter
& Co. ("Morgan Stanley") by certain Chilean institutional investors (i.e.,
pension plans, insurance companies and mutual funds). Upon redemption of such
shares within an eighteen-month period, Morgan Stanley will reimburse SFSI a pro
rata portion of the fee it received from SFSI at the time of sale of such
shares.
15
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<PAGE>
To minimize the application of a CDSL to a redemption, shares acquired
pursuant to the investment of dividends and capital gain 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 capital gain 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>
<S> <C>
Total shares to be redeemed
(122.449 @ $12.25) as follows: $1,500.00
=========
Dividend/Distribution shares
(5 @ $12.25) $61.25
Shares held more than 1 year
(100 @ $12.25) 1,225.00
Shares held less than 1 year subject to
CDSL (17.449 @ $12.25) 213.75
---------
Gross proceeds of redemption $1,500.00
Less CDSL (17.449 shares @
$12.00 = $209.39 X 1% = $2.09) (2.09)
---------
Net proceeds of redemption $1,497.91
=========
</TABLE>
For federal income tax purposes, the amount of the CDSL will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.
The CDSL will be waived or reduced in the following instances:
(a) on redemptions following the death or disability (as defined in section
72(m)(7) of the Internal Revenue Code of 1986, as amended (the "Code")) of a
shareholder or beneficial owner; (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, minimum distribution requirements after attainment of age
701/2 or, for accounts established prior to January 1, 1998, attainment of age
591/2, 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) in whole or in part, in connection
with systematic withdrawals; (f) in connection with participation in the Merrill
Lynch Small Market 401(k) Program; and (g) in connection with the redemption of
shares of the Fund if the Fund is combined with another Seligman Mutual Fund, 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.
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
16
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<PAGE>
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, has the ability to effect the following
transactions via telephone: (i) redemption of Fund shares with proceeds sent to
the address of record (up to $50,000 per day per fund account), (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. In addition, a shareholder who has current bank information on file
with Seligman Data Corp. may redeem shares via telephone and have the proceeds
transferred electronically from the shareholder's fund account to the
shareholder's predesignated bank account. See "Redemption of Shares." 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: Unless an election is made otherwise on the Account Application, a
shareholder and the shareholder's broker/dealer of record, as designated on the
Account Application, will automatically receive telephone services. A
shareholder must provide bank information on the Account Application or a
supplemental election form in order to have redemptions via telephone sent to
the shareholder's bank account.
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 form available from the broker-dealer of
record.
For accounts registered as IRAs: Telephone services will include only
exchanges or address changes.
For corporations or group retirement plans: Telephone redemptions are not
permitted. Additionally, group retirement plans are not permitted to change a
dividend or gain distribution option. 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's custodian or trustee, and
provide a telephone services election form signed by each plan participant.
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
17
<PAGE>
<PAGE>
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.
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 9759, Providence, RI 02940-9759; 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
certified or registered mail. Return receipt is advisable; however, this may
increase mailing time. 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 guaran-
18
<PAGE>
<PAGE>
tee. A signature guarantee is not required if redemption proceeds are
transferred electronically to the shareholder's predesignated bank account.
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 regular
trading on the NYSE (normally 4:00 p.m. Eastern time) 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 regular trading
on the NYSE on that day, less any applicable CDSL. Repurchase orders received
from authorized dealers after the close of regular trading on the NYSE or not
received by SFSI prior to the close of business, will be executed at the net
asset value determined as of the close of regular trading on the NYSE on the
next trading day, less any applicable CDSL. Shares held in a "street name"
account with a broker/dealer may be sold to the Fund only through a
broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares may be
made once per day, in an amount of up to $50,000 per fund account. Proceeds will
be sent to the address of record. A shareholder whose bank is a member of the
ACH network and who has current bank information on file may have redemption
proceeds transferred electronically to the shareholder's predesignated bank
account. Telephone redemption requests received by Seligman Data Corp. at (800)
221-2450 by the close of regular trading on the NYSE (normally, 4:00 p.m.
Eastern time) will be processed at the Fund's net asset value determined as of
the close of business on that day. Redemption requests by telephone will not be
accepted within 30 days following an address change. IRAs, group retirement
plans, corporations and trusts for which the name of the current trustee does
not appear in the account registration 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, less any
applicable CDSL, will be sent to the 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
19
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<PAGE>
investment dealer within seven calendar days after acceptance of the repurchase
order and will be made payable to the investment dealer. Redemptions via
telephone to the shareholder's bank account will be transferred electronically
within five business days. 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. No interest is
earned on the redemption proceeds during this time. 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 regular trading on 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- 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
20
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<PAGE>
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,
1997 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 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, 1997 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.
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
Seligman Mutual Funds. 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 period for which the original shares were held.
21
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Class B shareholders of the Fund exercising the exchange privilege will
continue to be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL schedule relating to the new Class B shares. In addition,
Class B shares of the Fund acquired 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 such shares were
exchanged.
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 each of which seeks
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.)
SELIGMAN VALUE FUND SERIES, INC. consists of the Seligman Large-Cap Value
Fund and the Seligman Small-Cap Value Fund, each of which seeks long-term
capital appreciation by investing in equity securities of value companies
primarily located in the U.S.
All permitted exchanges will be based on the net asset values of the
respective funds determined at the close of regular trading on the NYSE on that
day. Telephone requests for exchanges received by the close of regular trading
on the NYSE (normally 4:00 p.m. Eastern time) by Seligman Data Corp. at (800)
221-2450, will be processed as of the close of business on that day. Requests
received after the close of regular trading on the NYSE will be processed at the
net asset values per share calculated the following busi-
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ness 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 Systematic Withdrawal Plan
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
Seligman Mutual Funds 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.
DIVIDENDS AND CAPITAL GAIN 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.
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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 and sent to the shareholder's address of
record, or, if elected by a shareholder who has current bank information on file
with Seligman Data Corp., electronically deposited into the shareholder's
predesignated bank account. Such deposits will normally be credited to the
shareholder's bank account in 3 to 4 business days after the payable date of the
dividend or gain distribution.
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 informa-tion about telephone services, see
"Telephone Transactions." These elections must be received by Seligman Data
Corp. before the record date for the dividend or gain distribution in order to
be effective for such dividend or gain distribution. For information on how to
have dividend or gain distributions electronically deposited into a
shareholder's bank account, contact Seligman Data Corp.
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 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. A transfer or exchange of all
shares (closing an account), between the record date and payable date, will
result in the value of dividends or gain distributions being paid to the new
fund account in accordance with the option on the closed account, unless
Seligman Data Corp. is instructed otherwise.
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 shareholders, whether received
in cash or reinvested in additional shares. 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
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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 a
shareholder. Such distributions are not eligible for the dividends received
deduction allowed to corporate shareholders. Shareholders receiving
distributions in the form of additional shares issued by the Fund will be
treated for federal income tax purposes as having received a distribution in an
amount equal to the fair market value on the date of distribution of the shares
received. Individual shareholders will be subject to federal income tax on
distributions of net capital gains at a maximum rate of 28% if designated as
derived from the Fund's capital gains from property held for more than one year
and at a maximum rate of 20% if designated as derived from the Fund's capital
gains from property held for more than eighteen months.
Any gain or loss realized upon a sale or redemption of shares in the Fund by
a shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. Individual shareholders
will be subject to federal income tax on net capital gain at a maximum rate of
28% in respect of shares held for more than one year and at a maximum rate of
20% in respect of shares held for more than eighteen months. Net capital gain of
a corporate shareholder is taxed at the same rate as ordinary income. 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 gain 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
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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 or (212) 850-1864 in the New York
City area. Information about shareholder accounts may be requested by writing
Shareholder Services, Seligman Data Corp. at the same address or by calling
toll-free (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 INSURE PROMPT DELIVERY OF DISTRIBUTION
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 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 check for at least
$100 in conjunction with the monthly investment option, or a check for at least
$250 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. By
utilizing the Invest-A-Check'r' Service to establish an account, you are
agreeing to continue the service until the Fund's minimum investment is met. If
you elect to cancel the service prior to meeting the minimum, your account may
be subject to closure. (See "Terms and Conditions.")
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
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.) If the dividends are to
be invested in a new fund account, the first investment must meet the required
minimum purchase amount for such fund.
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A shareholder may also direct that dividends payable on shares of other
companies be transferred electronically to purchase shares of any Seligman
Mutual Fund if the other company provides this service. See "Purchase of Shares"
or contact Seligman Data Corp. for more information.
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.
SYSTEMATIC WITHDRAWAL PLAN permits payments in fixed amounts of $50 or
more at regular intervals to be made to a shareholder who owns or purchases
shares worth $5,000 or more held as book credits. Payments will be sent by check
to the address designated by the shareholder or, if elected by a shareholder who
has current bank information on file with Seligman Data Corp., electronically
deposited into the shareholder's predesignated bank account. Such deposits will
normally be credited to the shareholder's bank account in 2 to 3 business days
after the shares are redeemed from the shareholder's fund account. 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 or Class D shares may elect to use this plan immediately, although certain
withdrawals may be subject to a CDSL. (See "Terms and Conditions.")
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.
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 PLANS. Shares of the Fund may be purchased for:
--Individual Retirement Accounts (IRAs), including Traditional IRAs, Roth
IRAs and Education 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
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(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 Services, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's Class A, Class B and Class D shares, the Lipper analysis assumes
investment of all dividends and distributions paid but does not take into
account applicable sales loads. The Fund may also refer in advertisements or in
other promotional material to articles, comments, listings and columns in the
financial press pertaining to the Fund's performance. Examples of such financial
and other press publications include Barron's, Business Week, CDA/Weisenberger
Mutual Funds Investment Report, Christian Science Monitor, Financial Planning,
Financial Times, Financial World, Forbes, Fortune, Individual Investor,
Investment Advisor, Investors Business Daily, Kiplinger's, Los Angeles Times,
MONEY Magazine, Morningstar, Inc., Pensions and Investments, Smart Money, The
New York Times, U.S.A. Today, U.S. News and World Report, The Wall Street
Journal, Washington Post, Worth Magazine and Your Money.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end diversified management investment company
incorporated under the laws of the state of Maryland in 1968. The Fund is
authorized to issue 500,000,000 shares of common stock, each with a par value of
$1.00, divided into three classes. Each share of the Fund's Class A, Class B and
Class D common stock is equal as to earnings, assets and voting privileges,
except that each class bears its own separate distribution and, potentially,
certain other class expenses and has exclusive voting rights with respect to any
matter to which a separate vote of any class is required by the 1940 Act or
Maryland law. The Fund has adopted a Plan (the "Multiclass Plan") pursuant to
Rule 18f-3 under the 1940 Act permitting the issuance and sales of multiple
classes of common stock. In accordance with the Articles of Incorporation, the
Board of Directors may authorize the creation of additional classes of common
stock with such characteristics as are permitted by the Multiclass Plan and Rule
18f-3. The 1940 Act requires that where more than one class exists, each class
must be preferred over all other classes in respect of assets specifically
allocated to such class. Shares have non-cumulative voting rights, do not have
preemptive or subscription rights and are transferable.
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APPENDIX
MANAGEMENT FEE
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Fund pays to the Manager promptly after the end of
each month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Fund at the close of
business on the previous business day. The term "Applicable Percentage" means
the amount (expressed as a percentage and rounded to the nearest one millionth
of one percent) obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
The term "Fee Amount" means the sum on an annual basis of:
.55 of 1% of the first $4 billion of Fee Base,
.50 of 1% of the next $2 billion of Fee Base,
.475 of 1% of the next $2 billion of Fee Base, and
.45 of 1% of Fee Base in excess of $8 billion.
The term "Fee Base" as of any day means the sum of the net assets at the
close of business on the previous day of each of the investment companies
registered under the 1940 Act for which the Manager or any affiliated company
acts as investment adviser or manager (including the Fund).
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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 and certain waiver of probate procedures 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.
By utilizing the Invest-A-Check'r' Service to establish an account, you are
agreeing to continue the service until the Fund's minimum investment amount is
met. If you elect to cancel the service prior to meeting the minimum, your
account may be subject to closure. 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 check for at least $100 in connection with monthly investment
options or a check for at least $250 in connection with the quarterly investment
option. If a shareholder uses the Invest-A-Check'r' Service to make an IRA or
group retirement plan investment, the purchase will be credited as a current
year contribution.
SYSTEMATIC WITHDRAWAL PLAN
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 of each month designated by the shareholder (or on the prior
business day if the day specified falls on a weekend or holiday), less, in the
case of Class B or Class D shares, any applicable CDSL. Systematic 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 plan, a Class B or Class D
shareholder who requests both dividends and capital gain distributions in
additional shares may withdraw up to 12% or 10%, respectively, of the value of
the shareholder's fund account (at the time of election) per annum, without the
imposition of a CDSL. A minimum payment amount of $50 per cycle is needed to
establish this plan. 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. The plan 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 plan 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 Plan 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.
5/98
30
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SELIGMAN
CAPITAL FUND, INC.
[LOGO]
EQCAI 5/98
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
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
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, 1998. 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 gain
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
-1-
<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 1997,
1996 or 1995.
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 4).
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. High portfolio turnover involves correspondingly greater transactions
costs and a possible increase in short-term capital gains or losses. 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, 1997
and 1996 were 104.33% and 94.97%, 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 received 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.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive
(60) Officer and Chairman of the ExecutiveCommittee
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 Services, Inc.,
broker/dealer; and Carbo Ceramics Inc., ceramic
proppants for oil and gas industry; Director,
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 Advisors,
Inc., advisers; Seligman Holdings, Inc., holding
company; 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
(45) Committee
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; Chairman, 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 Advisors, Inc., advisers; Seligman
Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company.
RICHARD R. SCHMALTZ* Director and Member of the Executive Committee
(57)
Director and Managing Director, Director of
Investments, J. & W. Seligman & Co. Incorporated;
Director of Seligman Henderson Co. and Trustee
Emeritus of Colby College; formerly, Director,
Investment Research at Neuberger & Berman from May
1993 to September 1996 and Executive Vice President
of McGlinn Capital from July 1987 to May 1993.
-4-
<PAGE>
<PAGE>
JOHN R. GALVIN Director
(68)
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, National Committee on
U.S.-China Relations, National Defense University;
the Institute for Defense Analysis; and Raytheon
Co., electronics; formerly, Director, USLIFE
Corporation, life insurance; Ambassador, U.S. State
Department for negotiations in Bosnia; Distinguished
Policy Analyst at Ohio State University and Olin
Distinguished Professor of National Security Studies
at the United States Military Academy. From June,
1987 to June, 1992, he was the Supreme Allied
Commander, Europe and the Commander-in-Chief, United
States European Command.
Tufts University, Packard Avenue, Medford, MA 02155
ALICE S. ILCHMAN Director
(63)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment Companies;
and the Committee for Economic Development;
Chairman, The Rockefeller Foundation, charitable
foundation; formerly, Trustee, The Markle
Foundation, philanthropic organization; and
Director, NYNEX, telephone company; and
International Research and Exchange Board,
intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(65)
Director, various corporations; Director or Trustee,
the Seligman Group of Investment Companies;
Kimberly-Clark Corporation, consumer products; Bank
of Oklahoma Holding Company; Baptist Medical Center;
Oklahoma Chapter of the Nature Conservancy; Oklahoma
Medical Research Foundation; and National Boys and
Girls Clubs of America; Chairman; President,
Oklahoma Foundation for Excellence in Education; and
Member of the Business Roundtable and National
Petroleum Council; formerly, Chairman of the Board
and Chief Executive Officer, Kerr-McGee Corporation,
diversified energy company; Chairman, Oklahoma City
Public Schools Foundation; and Director, Federal
Reserve System's Kansas City Reserve Bank; and the
Oklahoma City Chamber of Commerce.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW Director
(68)
Retired Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies; Director,
Commonwealth Industries, Inc., manufacturer of
aluminum sheet products; the Foreign Policy
Association; Municipal Art Society of New York; the
U.S. Council for International Business; The New
York and Presbyterian Hospital; Chairman, American
Australian Association; The New York and
Presbyterian Hospital Care Network, Inc.;
Vice-Chairman, U.S.-New Zealand Council; Member of
the American Law Institute and Council on Foreign
Relations.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(55)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; Trustee, The 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
-5-
<PAGE>
<PAGE>
JAMES C. PITNEY Director
(71)
Retired Partner, Pitney, Hardin, Kipp & Szuch, law
firm; Director or Trustee, the Seligman Group of
Investment Companies; and Director, Public
Broadcasting Service (PBS); formerly, Director,
Public Service Enterprise Group.
Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(70)
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; and Public Broadcasting
Service (PBS); formerly, Co-Chairman of the Policy
Council of the Tax Foundation; Director and Vice
Chairman, Mobil Corporation; Director, Tesoro
Petroleum Companies, Inc.; Dow Jones & Co., Inc.;
and Director and President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
ROBERT L. SHAFER Director
(65)
Director, various corporations; Director or Trustee,
the Seligman Group of Investment Companies;
formerly, Vice President, Pfizer Inc.,
pharmaceuticals; Director, USLIFE Corporation, life
insurance.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(63)
Director, Sammons Enterprises, Inc.; Director or
Trustee, the Seligman Group of Investment Companies;
C-SPAN; and CommScope, Inc., manufacturer of coaxial
cables; formerly, Executive Vice President and Chief
Operating Officer, Sammons Enterprises, Inc.; and
Director, Red Man Pipe and Supply Company, piping
and other materials.
5949 Sherry Lane, Suite 1900, Dallas, TX 75225
LAWRENCE P. VOGEL Vice President
(41)
Senior Vice President, Finance, J. & W. Seligman &
Co. Incorporated, investment managers and advisers;
Seligman Financial Services, Inc., broker/dealer;
and Seligman Data Corp., shareholder service agent;
Vice President, the Seligman Group of Investment
Companies; and Seligman Services, Inc.,
broker/dealer; and Treasurer, Seligman Henderson
Co., advisers; formerly, Director, Seligman
Advisors, Inc., advisers; and Treasurer, Seligman
Holdings, Inc., holding company.
FRANK J. NASTA Secretary
(33)
Senior Vice President, Law and Regulation and
Corporate Secretary, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Secretary, the Seligman Group of Investment
Companies; Seligman Financial Services, Inc.,
broker/dealer; Seligman Henderson Co., advisers;
Seligman Services, Inc., broker/dealer; and Seligman
Data Corp., shareholder service agent; formerly,
Senior Vice President, Law and Regulation and
Corporate Secretary, Seligman Advisors, Inc.,
advisers; and an attorney at Seward and Kissel, law
firm.
THOMAS G. ROSE Treasurer
(40)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent.
-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
Richard R. Schmaltz, Director N/A N/A N/A
Fred E. Brown, Director Emeritus** N/A N/A N/A
John R. Galvin, Director $1,554.80 N/A $69,000.00
Alice S. Ilchman, Director 1,487.16 N/A 65,000.00
Frank A. McPherson, Director 1,522.88 N/A 66,000.00
John E. Merow, Director 1,487.16 N/A 65,000.00
Betsy S. Michel, Director 1,554.80 N/A 69,000.00
James C. Pitney, Director 1,476.52 N/A 64,000.00
James Q. Riordan, Director 1,533.52 N/A 67,000.00
Robert L. Shafer, Director 1,533.52 N/A 67,000.00
James N. Whitson, Director 1,544.16(d) N/A 68,000.00(d)
</TABLE>
- ----------------------
(1) For the year ended December 31, 1997. Effective January 16, 1998, the per
meeting fee for Directors was increased by $1,000, which is allocated among
all Funds in the Fund Complex.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired as Director and designated Director Emeritus 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 amount of deferred
compensation (including interest) payable in respect of the Fund to Mr. Whitson
as of December 31, 1997 was $13,248. Messrs. Merow and Pitney no longer defer
current compensation; however, they have accrued deferred compensation in the
amounts of $49,899 and $43,380, respectively, as of December 31, 1997. The Fund
has applied for and received 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
214,803 shares or 1.34% of the Fund's Class A Capital Stock at March 31, 1998.
As of that date, no Directors or Officers owned shares of the Fund's Class B or
Class D Capital Stock.
As of March 31, 1998, 1,927,911 Class A shares of the Fund, or 10.70% of the
Fund's capital stock and 12.06% of the Fund's Class A capital stock then
outstanding were registered in the name of State of Wisconsin Public Emp. Def.
Comp. Plan, c/o National Defined Compensation, P.O. Box 20629, Columbus, OH
43220-0629.
-7-
<PAGE>
<PAGE>
MANAGEMENT AND EXPENSES
Under the Management Agreement, dated December 29, 1988, as amended April
10, 1991, subject to the control of the Board of Directors, J. & W. Seligman &
Co. Incorporated (the "Manager") manages the investment of the assets of the
Fund, including making purchases and sales of portfolio securities consistent
with the Fund's investment objectives and policies, and administers its business
and other affairs. The Manager provides the Fund with such office space,
administrative and other services and executive and other personnel as are
necessary for Fund operations. The Manager pays all the compensation of the
directors of the Fund who are employees or consultants of the Manager and of the
officers and employees of the Fund. The Manager also provides senior management
for Seligman Data Corp., the Fund's shareholder service agent.
The Fund pays the Manager a management fee for its services, calculated
daily and payable monthly, based on a percentage of the daily net assets of the
Fund. The method for determining this percentage is set forth in the Appendix to
the Prospectus. The management fee amounted to $1,470,669 in 1997, $1,253,672 in
1996 and $948,951 in 1995, which was equivalent to annual rates of .48%, .49%
and .51%, respectively, of the average daily net assets of the Fund in 1997,
1996 and 1995.
The Fund pays all its expenses other than those assumed by the Manager,
including brokerage commissions, administration, shareholder services and
distribution fees, fees and expenses of independent attorneys and auditors,
taxes and governmental fees including fees and expenses for qualifying the Fund
and its shares under Federal and state securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder 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.
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 Compliance Officer, 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
Compliance Officer, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires
-8-
<PAGE>
<PAGE>
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 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, 1997, Seligman Financial Services, Inc.
("SFSI"), an affiliate of the Manager, received payments of $659,640 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 year ended December 31, 1997, fees
incurred by the Fund in respect of Class B shares amounted to $66,618, 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, 1997, fees
incurred in respect of Class D shares amounted to $235,145, 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.
-9-
<PAGE>
<PAGE>
PORTFOLIO TRANSACTIONS
The Management Agreement recognizes that in the purchase and sale of
portfolio securities the Manager 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 for its 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 to be beneficial to the
Fund. In addition, the Manager is 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 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 desire to buy or sell the same
security at the same time, the securities purchased or sold are allocated by the
Manager 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 1997, 1996 and 1995, respectively, were
$583,515, $333,393 and $364,005.
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.
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, 1997, the maximum offering price of the Fund's shares is
as follows:
CLASS A
Net asset value per Class A share.......................... $17.48
Maximum sales load (4.75% of offering price)............... .87
------
Offering price to public................................... $18.35
=====
CLASS B
Net asset value and offering price per share*.............. $16.24
=====
-10-
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<PAGE>
CLASS D
Net asset value and offering price per share**............. $16.25
=====
- ----------
* 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 any Seligman Mutual Fund sold with an initial
sales load with the total net asset value of shares already owned that were sold
with an initial sales load, including 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 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" in the back
of 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.
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.
-11-
<PAGE>
<PAGE>
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 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.
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
-12-
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<PAGE>
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 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 $22,246 in 1997, after an
allowance of $172,103 as commissions to dealers; $37,555 in 1996, after an
allowance of $290,069 as commissions to dealers; and $32,091 in 1995, after
allowance of $241,684 as commissions to dealers. For the years ended December
31, 1997, 1996 and 1995, SFSI retained CDSL charges from Class D shares and on
certain redemptions of Class A shares occurring within eighteen months of
purchase amounting to $18,613, $12,736 and $3,349, 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 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 year ended December 31, 1997 and the
period ended December 31, 1996 were $10,089 and $11,089, respectively.
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
years ended December 31, 1997 and 1996 and the period April 1, 1995 through
December 31, 1995, SSI received commissions of $7,630, $15,257 and $2,981,
respectively, from sales of Fund shares. SSI also received distribution and
service fees of $90,061, $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 regular 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,
Martin Luther King, Jr. 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 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 management fee, are accrued daily and taken into account for the
purpose of determining the net asset value of
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<PAGE>
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 regular trading on 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 regular trading on 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 regular trading on 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, 1997 were 16.44%, 12.71%, and
15.75%, 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 gain 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 determined
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 average annual total returns for Class B
shares of the Fund for the one-year period ended December 31, 1997 and the
period April 22, 1996 (inception) through December 31, 1997 were 16.26% and
13.43%, respectively. This return was computed assuming that all of the
dividends and gain 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 applicable CDSL (5%
for the one-year period and 4% for the period since inception). The average
annual total returns for Class D shares of the Fund for the one-year period
ended December 31, 1997 and the period May 3, 1993 (inception) through December
31, 1997 were 20.34% and 14.56%, respectively. These returns were computed
assuming that all of the dividends and gain 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, 1988 had a value of $4,317 on December
31, 1997, resulting in an aggregate total return of 331.75%. 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 (commencement
of offering of Class B shares) had a value of $1,238, on December 31, 1997,
after subtracting the 4% CDSL, resulting in an aggregate total return of 23.78%.
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 $1,886 on December
31, 1997, resulting in an aggregate total return of 88.59%. 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.
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<PAGE>
TABLE A - CLASS A SHARES
<TABLE>
<CAPTION>
VALUE OF
YEAR VALUE OF INITIAL VALUE OF GAIN DIVIDENDS TOTAL
ENDED(1) INVESTMENT(2) DISTRIBUTION INVESTED TOTAL VALUE(2) RETURN(1),(3)
- ------ ---------------- ------------ -------- ------------ --------
<S> <C> <C> <C> <C> <C>
12/31/88 $ 900 $ 76 $-- $ 976
12/31/89 1,070 223 -- 1,293
12/31/90 1,076 234 -- 1,310
12/31/91 1,440 587 -- 2,027
12/31/92 1,472 789 -- 2,261
12/31/93 1,379 991 -- 2,370
12/31/94 1,139 1,064 -- 2,203
12/31/95 1,348 1,677 -- 3,025
12/31/96 1,414 2,117 -- 3,531
12/31/97 1,510 2,807 4,317 331.75%
</TABLE>
TABLE B - CLASS B SHARES
<TABLE>
<CAPTION>
VALUE OF
YEAR/PERIOD VALUE OF INITIAL VALUE OF GAIN DIVIDENDS TOTAL
ENDED(1) INVESTMENT(2) DISTRIBUTION INVESTED TOTAL VALUE(2) RETURN(1),(3)
- ------ ----------- ------------ -------- ------------ ------
<S> <C> <C> <C> <C> <C>
12/31/96 $ 942 $ 111 $-- $1,053
12/31/97 949 289 -- 1,238 23.78%
</TABLE>
TABLE C - CLASS D SHARES
<TABLE>
<CAPTION>
VALUE OF
YEAR/PERIOD VALUE OF INITIAL VALUE OF GAIN DIVIDENDS TOTAL
ENDED(1) INVESTMENT(2) DISTRIBUTION INVESTED TOTAL VALUE(2) RETURN(1),(3)
- ------- ----------- ------------ -------- ------------ -------
<S> <C> <C> <C> <C> <C>
12/31/93 $ 965 $ 116 $-- $1,081
12/31/94 780 207 -- 987
12/31/95 909 433 -- 1,342
12/31/96 942 612 -- 1,554
12/31/97 989 897 -- 1,886 88.59%
</TABLE>
(1) For the ten years ended December 31, 1997; 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 and CDSL, if applicable, 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.
-15-
<PAGE>
<PAGE>
The total return and average annual total return of the Class A shares quoted
through December 31, 1992 do 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 do 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, 801 Pennsylvania, 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, 1997
contains a schedule of the investments as of December 31, 1997, as well as
certain other financial information as of that date. The financial statements
and notes included in the Annual Report, and the Independent Auditor's Report
thereon, are incorporated herein by reference. The Annual Report will be
furnished without charge to investors who request copies of this Statement of
Additional Information.
-16-
<PAGE>
<PAGE>
APPENDIX
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the
oldest of eight brothers, arrived in the United States from Germany. He earned
his living as a pack peddler in Pennsylvania, and began sending for his
brothers. The Seligmans became successful merchants, establishing businesses in
the South and East.
Backed by nearly thirty years of business success - culminating in the
sale of government securities to help finance the Civil War - Joseph Seligman,
with his brothers, established the international banking and investment firm of
J. & W. Seligman & Co. In the years that followed, the Seligman Complex played a
major role in the geographical expansion and industrial development of the
United States.
THE SELIGMAN COMPLEX:
.... Prior to 1900
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 $3 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 to the public 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>
Portfolio of Investments
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS 99.6%
BASIC MATERIALS 3.6%
Minerals Technologies
Marketer of specialty minerals
and products 75,000 $ 3,407,813
Nucor
Manufacturer of steel joints,
angles, and rounds 70,000 3,381,875
Olin
Manufacturer of chemicals,
metals, and defense products 100,000 4,687,500
-----------
11,477,188
-----------
CAPITAL GOODS 3.2%
Gulfstream Aerospace*
Designer, developer,
manufacturer, and marketer of
business jet aircraft 170,000 4,972,500
Rayovac*
Manufacturer of general and
hearing aid batteries 145,000 2,791,250
Vishay Intertechnology*
Developer and manufacturer of
electronic resistive systems 100,000 2,362,500
-----------
10,126,250
-----------
CONSUMER CYCLICALS 12.3%
AccuStaff*
Provider of temporary
personnel services 115,000 2,645,000
American Skiing*
Owner and operator of
alpine resorts 210,000 3,123,750
Barnes & Noble*
Owner and operator of retail
book stores and superstores 150,000 5,006,250
CapStar Hotel*
Owner and manager of
upscale hotels 100,000 3,431,250
Harley-Davidson
Manufacturer of motorcycles 115,000 3,148,125
Interpublic Group of Companies
Worldwide advertising agency 150,000 7,471,875
Jones Apparel Group*
Designer and marketer of
women's clothing 150,000 6,450,000
Mirage Resorts*
Manager of casinos
in Las Vegas 210,000 4,777,500
Snyder Communications*
Provider of marketing services 90,000 3,285,000
-----------
39,338,750
-----------
CONSUMER STAPLES 14.8%
Bergen Brunswig (Class A)
Diversified drug and health
care distributor 50,000 2,106,250
Beringer Wine Estates (Class B)*
Producer of California
table wines 50,000 1,900,000
Cardinal Health
Health care service provider
involved in pharmaceutical
distribution 45,000 3,380,625
Clorox
Manufacturer and marketer of
household consumer products 50,000 3,953,125
Coca-Cola Enterprises
Manufacturer and marketer
of soft drinks and
consumer products 280,000 9,957,500
Dial
Manufacturer and marketer of
personal care, household, and
laundry products 220,000 4,578,750
Estee Lauder (Class A)
Manufacturer and marketer
of cosmetics and toiletries 75,000 3,857,813
Fresh Del Monte Produce*
Producer, distributor, and
marketer of fresh produce 335,000 4,899,375
Kroger*
Operator of supermarkets and
convenience stores 100,000 3,693,750
McKesson
Provider of health care
products and services 45,000 4,868,438
Newell
Manufacturer and marketer
of home furnishings 90,000 3,825,000
-----------
47,020,626
-----------
</TABLE>
- ----------
See footnotes on page 11.
- ----
8
<PAGE>
<PAGE>
================================================================================
Portfolio of Investments
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
DRUGS AND HEALTH CARE 10.4%
Biogen*
Developer of genetically
engineered drugs 65,000 $ 2,368,437
Covance*
Provider of medical laboratory
and testing services 330,000 6,558,750
Humana*
Provider of managed
health care plans 200,000 4,150,000
KOS Pharmaceuticals*
Developer of pharmaceutical
products for cardiovascular and
respiratory diseases 120,000 1,848,750
Pfizer
Manufacturer of health care
consumer products and
specialty chemicals 60,000 4,473,750
US Surgical
Developer, manufacturer, and
marketer of stapling devices for
surgical procedures 170,000 4,983,125
Universal Health Services (Class B)*
Owner and operator of
acute-care hospitals 175,000 8,815,625
-----------
33,198,437
-----------
ENERGY 4.9%
Barrett Resources*
Explorer, developer, and
producer of oil and gas 125,000 3,781,250
Bayard Drilling Technologies*
Provider of contract
land drilling services 84,700 1,376,375
EVI*
Manufacturer of engineered
oil field products 25,000 1,293,750
Gulf Indonesia Resources* (Indonesia)
Developer and producer of
oil and natural gas 50,000 1,100,000
Petroleum Geo-Services (ADRs)*
(Norway)
Four-dimensional deep-sea
mapping company for the
oil-drilling industry 78,000 5,050,500
Transocean Offshore
Provider of contract
drilling services 65,000 3,132,188
-----------
15,734,063
-----------
FINANCIAL SERVICES 20.2%
AFLAC
Provider of supplemental
insurance at the work site 65,000 3,323,125
Amerin*
Mortgage insurance provider 47,000 1,327,750
Donaldson, Lufkin & Jenrette Securities
Leading investment and
merchant bank 65,000 5,167,500
MBNA
Issuer of bank credit cards 270,000 7,374,375
Nationwide Financial Services
(Class A)
Insurance provider 155,000 5,599,375
Old Republic International
Holding company, subsidiaries
provide risk management and
reinsurance services 90,000 3,346,875
Peoples Heritage Financial Group
Operator of three savings bank
subsidiaries in Maine, New
Hampshire, and Massachusetts 75,000 3,464,063
Progressive (Ohio)
High-risk auto insurance 50,000 5,993,750
Provident Companies
Provider of health and
life insurance 120,000 4,635,000
Schwab (Charles)
Financial services firm 235,000 9,855,312
SouthTrust
Operator of SouthTrust
Bank N.A. 70,000 4,436,250
Travelers
Provider of diversified
financial services 180,000 9,697,500
-----------
64,220,875
-----------
</TABLE>
- ----------
See footnotes on page 11.
----
9
<PAGE>
<PAGE>
================================================================================
Portfolio of Investments
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
MEDIA AND BROADCASTING 2.4%
CBS
Operator of broadcasting,
industrial, and technology
businesses 256,500 $ 7,550,719
-----------
PRINTING AND PUBLISHING 1.1%
Petersen Companies*
Publisher of special-interest
magazines 60,000 1,380,000
World Color Press*
Commercial printer and
distributor 80,000 2,125,000
-----------
3,505,000
-----------
SAVINGS AND LOAN
COMPANIES 8.0%
GreenPoint Financial
Bank holding company 100,000 7,256,250
Ocwen Financial*
Financial services holding
company specializing in the
acquisition and resolution
of non-performing or
underperforming loans 160,000 4,070,000
St. Paul Bancorp
Holding company for a
savings bank 135,000 3,535,312
TCF Financial
National bank holding company 130,000 4,411,875
Washington Mutual
Financial services company 100,000 6,378,125
-----------
25,651,562
-----------
TECHNOLOGY 14.5%
Activision*
Developer and publisher of
interactive entertainment
software 80,000 1,435,000
Adaptec*
Manufacturer of computer
input-output systems 90,000 3,346,875
Arrow Electronics*
Distributor of semiconductors
and other electrical components 120,000 3,892,500
BMC Software*
Developer of computer
software solutions 60,000 3,933,750
Ceridian*
Provider of computer services 100,000 4,581,250
Fiserv*
Provider of data
processing services 130,000 6,402,500
Gartner Group (Class A)*
Provider of information
technology consulting and
training products and services 95,000 3,544,687
Linear Technology
Designer and manufacturer of
analog integrated circuits 55,000 3,165,938
Maxim Integrated Products*
Designer and manufacturer of
linear and mixed-signal
integrated circuits 160,000 5,530,000
Symantec*
Developer, marketer, and
supporter of application
development tools and
systems software products 95,000 2,098,906
Synopsys*
Supplier of integrated circuit
design software 130,000 4,715,680
Xilinx*
Designer and manufacturer of
field programmable gate arrays 105,000 3,675,000
-----------
46,322,086
-----------
TELECOMMUNICATIONS 4.2%
Century Telephone Enterprises
Provider of regional
telephone services 100,000 4,981,250
QUALCOMM*
Developer, manufacturer, and
marketer of communications
systems and products 75,000 3,789,844
WorldCom*
Long-distance carrier 150,000 4,542,187
-----------
13,313,281
-----------
OTHER 46,152
-----------
TOTAL COMMON STOCKS
(Cost $229,358,272) 317,504,989
-----------
</TABLE>
- ----------
See footnotes on page 11.
- ----
10
<PAGE>
<PAGE>
================================================================================
Portfolio of Investments
December 31, 1997
<TABLE>
<CAPTION>
PRIN. AMT. VALUE
---------- -----
<S> <C> <C>
SHORT-TERM HOLDINGS 7.0%
Bank of Montreal,
Grand Cayman
Fixed Time Deposit,
6 3/8%, 1/2/1998 $11,100,000 $ 11,100,000
First National Bank of Chicago,
Grand Cayman
Fixed Time Deposit,
6 5/8%, 1/2/1998 11,100,000 11,100,000
------------
TOTAL SHORT-TERM HOLDINGS
(Cost $22,200,000) 22,200,000
------------
TOTAL INVESTMENTS 106.6%
(Cost $251,558,272) 339,704,989
OTHER ASSETS
LESS LIABILITIES (6.6)% (20,965,927)
------------
NET ASSETS 100.0% $318,739,062
============
</TABLE>
- ----------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
----
11
<PAGE>
<PAGE>
================================================================================
Statement of Assets and Liabilities
December 31, 1997
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Common stocks (cost $229,358,272)........................ $317,504,989
Short-term holdings (cost $22,200,000)................... 22,200,000 $339,704,989
------------
Cash........................................................................ 143,861
Receivable for securities sold.............................................. 2,132,779
Receivable for Capital Stock sold........................................... 1,486,178
Receivable for interest and dividends....................................... 90,976
Expenses prepaid to shareholder service agent............................... 66,276
Other....................................................................... 38,941
------------
Total Assets................................................................ 343,664,000
------------
LIABILITIES:
Payable for securities purchased............................................ 21,450,008
Payable for Capital Stock repurchased....................................... 2,913,034
Accrued expenses, taxes, and other.......................................... 561,896
------------
Total Liabilities........................................................... 24,924,938
------------
Net Assets.................................................................. $318,739,062
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000
shares authorized; 18,387,035 shares outstanding):
Class A................................................................... $ 16,261,858
Class B................................................................... 519,430
Class D................................................................... 1,605,747
Additional paid-in capital.................................................. 200,817,561
Accumulated net investment loss............................................. (106,527)
Undistributed net realized gain............................................. 11,494,276
Net unrealized appreciation of investments.................................. 88,146,717
------------
Net Assets.................................................................. $318,739,062
============
NET ASSET VALUE PER SHARE:
Class A ($284,213,616 / 16,261,858 shares).................................. $17.48
======
Class B ($8,437,348 / 519,430 shares)....................................... $16.24
======
Class D ($26,088,098 / 1,605,747 shares).................................... $16.25
======
</TABLE>
- ----------
See Notes to Financial Statements.
- ----
12
<PAGE>
<PAGE>
================================================================================
Statement of Operations
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $7,884)........ $ 1,478,136
Interest................................................... 682,835
Other...................................................... 144,380
-----------
Total Investment Income..................................................... $ 2,305,351
EXPENSES:
Management fee............................................. 1,470,669
Distribution and service fees.............................. 961,403
Shareholder account services............................... 586,635
Shareholder reports and communications..................... 123,973
Registration............................................... 102,731
Custody and related services............................... 67,000
Auditing and legal fees.................................... 65,477
Directors' fees and expenses............................... 20,548
Miscellaneous.............................................. 28,396
-----------
Total Expenses.............................................................. 3,426,832
-----------
Net Investment Loss......................................................... (1,121,481)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments........................... 46,191,130
Net change in unrealized appreciation of investments....... 15,868,425
-----------
Net Gain on Investments..................................................... 62,059,555
-----------
Increase in Net Assets from Operations ..................................... $60,938,074
===========
</TABLE>
- ----------
See Notes to Financial Statements.
----
13
<PAGE>
<PAGE>
================================================================================
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1997 1996
------------ ------------
OPERATIONS:
<S> <C> <C>
Net investment loss .......................................... $ (1,121,481) $ (762,243)
Net realized gain on investments ............................. 46,191,130 28,165,196
Net change in unrealized appreciation of investments.......... 15,868,425 8,893,154
------------ ------------
Increase in Net Assets from Operations ....................... 60,938,074 36,296,107
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ................................................... (35,225,045) (26,567,200)
Class B ................................................... (1,063,047) (409,321)
Class D ................................................... (3,268,410) (2,122,695)
------------ ------------
Decrease in Net Assets from Distributions .................... (39,556,502) (29,099,216)
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------
YEAR ENDED DECEMBER 31,
--------------------------
1997 1996
----------- ----------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares:
<S> <C> <C> <C> <C>
Class A ...................... 722,658 1,942,799 12,694,774 33,837,665
Class B ...................... 203,299 254,282 3,394,305 4,295,072
Class D ...................... 282,020 557,039 4,666,806 9,125,387
Exchanged from associated Funds:
Class A ...................... 7,393,028 3,292,043 134,946,924 56,774,849
Class B ...................... 71,826 18,524 1,180,425 311,768
Class D ...................... 451,710 523,994 7,177,305 8,588,724
Shares issued in payment of
gain distributions:
Class A ...................... 1,869,785 1,456,987 31,392,717 24,258,766
Class B ...................... 62,796 24,565 981,506 387,386
Class D ...................... 201,933 126,975 3,156,217 2,002,437
----------- ---------- ------------ ------------
Total ........................... 11,259,055 8,197,208 199,590,979 139,582,054
----------- ---------- ------------ ------------
Cost of shares repurchased:
Class A ...................... (2,300,687) (1,456,803) (41,032,182) (25,036,508)
Class B ...................... (24,413) (3,999) (414,612) (64,181)
Class D ...................... (278,783) (186,463) (4,611,613) (2,985,744)
Exchanged into associated Funds:
Class A ...................... (7,289,681) (3,206,843) (133,177,110) (53,969,312)
Class B ...................... (74,496) (12,954) (1,227,418) (213,574)
Class D ...................... (342,474) (341,956) (5,595,585) (5,510,258)
----------- ---------- ------------ ------------
Total ........................... (10,310,534) (5,209,018) (186,058,520) (87,779,577)
----------- ---------- ------------ ------------
Increase in Net Assets from
Capital Share Transactions ...... 948,521 2,988,190 13,532,459 51,802,477
=========== ========== ------------ ------------
Increase in Net Assets ....................................... 34,914,031 58,999,368
NET ASSETS:
Beginning of year............................................. 283,825,031 224,825,663
------------ ------------
End of Year (including accumulated net investment loss of
$106,527 and $99,738, respectively) .......................... $318,739,062 $283,825,031
============ ============
</TABLE>
- ----------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
- ----
14
<PAGE>
<PAGE>
================================================================================
Notes to Financial Statements
1. Multiple Classes of Shares -- 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 18 months of purchase.
Class B shares are sold without an initial sales charge but are subject to a
distribution fee of 0.75%, 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 of 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%, a service fee of up to 0.25% on an annual basis, and a CDSL, if
applicable, of 1% imposed on 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 other 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 -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. Security Valuation -- 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, at the mean of bid and
asked prices. Short-term holdings maturing in 60 days or less are valued
at amortized cost.
b. Federal Taxes -- There is no provision for federal income 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. Security Transactions and Related Investment Income -- 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. Multiple Class Allocations -- 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 attributable to
a particular class, are charged directly to such class. For the year ended
December 31, 1997, distribution and service fees were the only
class-specific expenses.
e. Distributions to Shareholders -- The treatment for financial statement
purposes of distributions made to shareholders during the year from net
investment income or net realized gains 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
reclassification will have no effect on net assets, results of operations,
or net asset value per share of the Fund.
3. Purchases and Sales of Securities -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the year ended December 31, 1997, amounted to $304,915,507 and $305,843,943,
respectively.
At December 31, 1997, 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 $96,597,313 and $8,450,596, respectively.
4. Management Fee, Administrative Services, and Other Transactions -- 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 reflected in the Statement of Operations represents 0.48% per annum of the
Fund's average daily net assets.
----
15
<PAGE>
<PAGE>
================================================================================
Notes to Financial Statements
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $22,246 from sales of Class A shares, after commissions of
$172,103 were 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,
1997, fees incurred aggregated $659,640 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, for Class D shares only, fees for providing other distribution
assistance of up to 0.75% on an annual basis of such average daily net assets.
Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of 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 provides 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, 1997, 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 $66,618 and $235,145, respectively.
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase and on certain redemptions
of Class A shares occurring within 18 months of purchase. For the year ended
December 31, 1997, such charges amounted to $18,613.
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, 1997, amounted to $10,089.
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, 1997, Seligman Services, Inc. received commissions of $7,630 from the sales
of shares of the Fund. Seligman Services, Inc. also received distribution and
service fees of $90,061, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $551,394 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, Seligman Services, Inc., and/or Seligman Data
Corp.
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, 1997, of
$106,527 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.
- ----
16
<PAGE>
<PAGE>
================================================================================
Financial Highlights
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, 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.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at 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 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. Total returns for periods
of less than one year are not annualized.
"Average commission rate paid" represents the average commission 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,
-------------------------------------------------------------------------
1997(o) 1996(o) 1995(o) 1994(o) 1993
--------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ............... $ 16.36 $ 15.59 $ 13.17 $ 15.95 $ 17.04
--------- --------- --------- --------- ---------
Net investment loss .............................. (.06) (.04) (.02) (.06) (.03)
Net realized and unrealized investment
gain (loss)....................................... 3.61 2.68 4.74 (1.12) .84
--------- --------- --------- --------- ---------
Increase (Decrease) from Investment
Operations ....................................... 3.55 2.64 4.72 (1.18) .81
Distributions from net gain realized ............. (2.43) (1.87) (2.30) (1.60) (1.90)
--------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Asset Value ....... 1.12 .77 2.42 (2.78) (1.09)
--------- --------- --------- --------- ---------
Net Asset Value, End of Year ..................... $ 17.48 $ 16.36 $ 15.59 $ 13.17 $ 15.95
========= ========= ========= ========= =========
TOTAL RETURN BASED ON NET ASSET VALUE: 22.28% 16.74% 37.32% (7.06)% 4.80%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................... 1.05% 1.07% 1.09% 1.13% 1.13%
Net investment loss to average net assets ........ (.29)% (.25)% (.11)% (.39)% (.17)%
Portfolio turnover ............................... 104.33% 94.97% 103.60% 70.72% 46.84%
Average commission rate paid ..................... $ .0561 $ .0537
Net Assets, End of Year (000s Omitted) ........... $ 284,214 $ 259,514 $ 215,688 $ 162,556 $ 196,212
</TABLE>
- ----------
See footnotes on page 18.
----
17
<PAGE>
<PAGE>
================================================================================
Financial Highlights
<TABLE>
<CAPTION>
CLASS B CLASS D
----------------------- ------------------------------------------------------
YEAR 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ------------------------------------------- TO
12/31/97(o) 12/31/96(o) 1997(o) 1996(o) 1995(o) 1994(o) 12/31/93
----------- ----------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of Year ........... $ 15.47 $ 16.43 $ 15.47 $ 14.94 $ 12.82 $ 15.86 $ 16.43
------- ------- ------- ------- ------- ------- -------
Net investment loss .......................... (.18) (.10) (.18) (.16) (.14) (.33) (.08)
Net realized and unrealized
investment gain (loss) ....................... 3.38 1.01 3.39 2.56 4.56 (1.11) 1.41
------- ------- ------- ------- ------- ------- -------
Increase (Decrease) from Investment
Operations ................................... 3.20 .91 3.21 2.40 4.42 (1.44) 1.33
Distributions from net gain realized ......... (2.43) (1.87) (2.43) (1.87) (2.30) (1.60) (1.90)
------- ------- ------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value ... .77 (.96) .78 .53 2.12 (3.04) (.57)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Year ................. $ 16.24 $ 15.47 $ 16.25 $ 15.47 $ 14.94 $ 12.82 $ 15.86
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: ....... 21.26% 5.33% 21.34% 15.84% 35.98% (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ............... 1.81% 1.89%+ 1.81% 1.83% 2.02% 2.66% 2.26%+
Net investment loss to average net assets .... (1.05)% (.99)%+ (1.05)% (1.00)% (1.06)% (2.28)% (1.32)%+
Portfolio turnover ........................... 104.33% 94.97%++ 104.33% 94.97% 103.60% 70.72% 46.84%+++
Average commission rate paid ................. $ .0561 $ .0537++ $ .0561 $ .0537
Net Assets, End of Year (000s omitted) ....... $ 8,437 $ 4,337 $26,088 $19,974 $ 9,137 $ 3,179 $ 2,749
</TABLE>
- ----------
* Commencement of offering of shares.
(o) Per share amounts for the years ended December 31, 1997, 1996, 1995, and
1994, are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
See Notes to Financial Statements.
- ----
18
<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,
1997, 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, 1997, 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, 1997, 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 30, 1998
- --------------------------------------------------------------------------------
----
19
<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, 1997; Financial Highlights for Class B shares from
April 22, 1996 (commencement of offering) to December 31, 1997;
Financial Highlights for Class D shares from May 3, 1993
(commencement of offering) to December 31, 1997.
Part B: Required Financial Statements, which are included in the Fund's
Annual Report to Shareholders dated December 31, 1997, are
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements include: Portfolio of
Investments as of December 31, 1997; Statement of Assets and
Liabilities as of December 31, 1997; Statement of Operations for
the year ended December 31, 1997; Statements of Changes in Net
Assets for the years ended December 31, 1997 and 1996; Notes to
Financial Statements; Financial Highlights for the five years
ended December 31, 1997 for the Fund's Class A shares, for the
period April 22, 1996 (commencement of offering) through
December 31, 1997 for the Fund's Class B shares and for the period
May 3, 1993 (commencement of offering) through December 31, 1997
for the Fund's Class D shares; Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except Exhibits marked
with an asterisk (*) which are incorporated herein.
(1) Articles of Incorporation of Registrant. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 53, filed April 28, 1997.)
(2) By-laws of the Corporation. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 53, filed April 28, 1997.)
(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.)
(6) Copy of Amended Distributing Agreement between Registrant and Seligman
Financial Services, Inc. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 53, filed April 28, 1997.)
(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. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 53, filed April 28, 1997.)
(6c) Form of Sales Agreement between Seligman Financial Services, Inc. and
Dean Witter Reynolds, Inc. with respect to certain Chilean institutional
investors. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 53, filed April 28, 1997.)
(6d) Form of Dealer Agreement between Seligman Financial Services, Inc. and
Smith Barney Inc. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 53, filed April 28, 1997.)
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
Item 24. Financial Statements and Exhibits (continued)
(7) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(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 Capital Fund.*
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 53, filed April 28, 1997.)
(9) Not applicable.
(10) Opinion and Consent of Counsel. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 53, filed April 28, 1997.)
(11) Report and Consent of Independent Auditors.*
(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. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 53, filed April
28, 1997.)
(14) The Seligman Roth/Traditional IRA Information Kit. (Incorporated by
reference to Exhibit q(1) of Registration Statement No. 333-50295, Form
N-2, filed on April 16, 1998.)
(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.)
(14c) Qualified Plan and Trust Basic Plan Document. (Incorporated by reference
to Exhibit q(4) to Registration No. 333-50295, Form N-2, filed on April
16, 1998.)
(14d) Flexible Standardized 401(k) Profit Sharing Plan Adoption Agreement.
(Incorporated by reference to Exhibit q(5) to Registration No. 333-50295,
Form N-2, filed on April 16, 1998.)
(14e) Flexible Nonstandardized Safe Harbor 401(k) Profit Sharing Plan Adoption
Agreement. (Incorporated by reference to Exhibit q(6) to Registration No.
333-50295, Form N-2, filed on April 16, 1998.)
(14f) Simplified Employee Pension Plan. (Incorporated by reference to Exhibit
14(f) to Registration No. 2-10835, Post-Effective Amendment No. 76, filed
on April 29, 1998.)
(14g) Educational IRA. (Incorporated by reference to Exhibit 14(f) to
Registration No. 2-10835, Post-Effective Amendment No. 76, filed on April
29, 1998.)
(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. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 53, filed April 28, 1997.)
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
(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.)
Other Exhibits: Power of Attorney*
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, 1998
-------------- ----------------------------
Class A Common Stock 9,237
Class B Common Stock 973
Class D Common Stock 2,507
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 Registrant's 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 Manager has an investment advisory service division which
provides investment management or advice to private clients. The list
required by this Item 28 of officers and directors of the Manager,
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,
pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-15798), which was filed on March 31, 1998.
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
Item 29. Principal Underwriters
(a) The names of each investment company (other than the Registrant)
for which Registrant's principal underwriter is currently
distributing securities of the Registrant and also acts as a
principal underwriter, depositor or investment adviser are as
follows:
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.
(b) Name of each director, officer or partner of Registrant's
principal underwriter named in response to Item 21:
Seligman Financial Services, Inc.
As of March 31, 1998
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board
and Chief Executive
Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director None
FRED E. BROWN* Director Director Emeritus
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
DAVID F. STEIN* Director None
STEPHEN J. HODGDON* President None
CHARLES W. KADLEC* Chief Investment Strategist 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
JONATHAN G. EVANS Senior Vice President of Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
BRADLEY W. LARSON Senior Vice President of Sales, None
367 Bryan Drive Regional Sales Manager
Alamo, CA 94526
BRUCE TUCKEY Senior Vice President of Sales None
41644 Chathman Drive
Novi, MI 48375
</TABLE>
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
Seligman Financial Services, Inc.
As of March 31, 1998
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
ANDREW VEASEY Senior Vice President of Sales None
14 Woodside Drive
Rumson, NJ 07760
MICHELLE L. MCCANN Vice President, Manager, Retirement None
Plans Marketing
SCOTT H. NOVAK Vice President, Insurance Products None
Manager
MICHAEL R. SANDERS Vice President, Product Manager None
Managed Money Services
CHARLES L. VON BREITENBACH, II* Vice President, Product Manager None
Managed Money Services
ROBERT T. HAUSLER* Vice President, Global Mutual Funds, None
Product Management
MARSHA E. JACOBY* Vice President, Offshore Funds None
WILLIAM W. JOHNSON* Vice President, Order Desk None
TRACY A. SALOMON* Vice President, Retirement None
Marketing Manager
HELEN SIMON* Vice President, Sales None
Administration Manager
J. BRERETON YOUNG* Vice President, Mutual Funds None
Product Manager
PETER J. CAMPAGNA Vice President, Regional Retirement None
1130 Green Meadow Court Plans Manager
Acworth, GA 30102
MASON S. FLINN Vice President, Regional Retirement None
159 Varennes Plans Manager
San Francisco, CA 94133
CHARLES E. WENZEL Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
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
241 110th Avenue SE
Bellevue, WA 98004
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
KENNETH DOUGHERTY Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
ANDREW DRALUCK Regional Vice President None
4016 E. Williams Drive
Phoenix, AZ 85024
EDWARD S. FINOCCHIARO Regional Vice President None
120 Screenhouse Lane
Duxbury, MA 02332
</TABLE>
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
Seligman Financial Services, Inc.
As of March 31, 1998
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
MICHAEL C. FORGEA Regional Vice President None
32 W. Anapamu Street #186
Santa Barbara, CA 93101
DAVID GARDNER Regional Vice President None
2403 Cayenne Drive
McKinney, TX 75070
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine Drive
Houston, TX 77077
T. WAYNE KNOWLES Regional Vice President None
104 Morninghills Court
Cary, NC 27511
JUDITH L. LYON Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
DAVID MEYNCKE Regional Vice President None
4957 Cross Pointe Drive
Oldsmar, FL 34677
TIM O'CONNELL Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
THOMAS PARNELL Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
JULIANA PERKINS Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
DAVID PETZKE Regional Vice President None
4016 Saint Lucia Street
Boulder, CO 80301
NICHOLAS ROBERTS Regional Vice President None
200 Broad Street, Apt. 2225
Stamford, CT 06901
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
STEVE WILSON Regional Vice President None
83 Kaydeross Park
Saratoga Springs, NY 12866
KELLI A. WIRTH-DUMSER Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
<PAGE>
<PAGE>
File No. 2-33566
811-1886
PART C. OTHER INFORMATION (continued)
Seligman Financial Services, Inc.
As of March 31, 1998
</TABLE>
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
JEFFREY S. DEAN* Assistant Vice President, Marketing None
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
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
* The principal business address of each of these directors and/or
officers is 100 Park Avenue, New York, NY 10017.
Item 30. Location of Accounts and Records
(1) Investors Fiduciary Trust Company
801 Pennsylvania
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, 1997, 1996 and 1995, the
approximate cost of these services were:
</TABLE>
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Class A Shares $48,800 $50,400 $43,800
Class B Shares 3,700 800 --
Class D Shares 12,600 10,200 2,000
</TABLE>
Item 32. Undertakings - The Registrant undertakes, (1) to furnish a copy of
the Registrant's latest annual report, upon request and without
charge, to every person to whom a prospectus is delivered and (2) if
requested to do so by the holders of at least ten percent of its
outstanding shares, to call a meeting of shareholders for the purpose
of voting upon the removal of a director or directors and to assist
in communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
<PAGE>
<PAGE>
File No. 2-33566
811-1886
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 54 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 29 day of April, 1998.
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. 54 has been
signed below by the following persons in the capacities indicated on April 29,
1998.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/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
</TABLE>
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
Richard R. Schmaltz, 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. 54 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
<TABLE>
<CAPTION>
Form N-1A Item No. Description
- ------------------ -----------
<C> <S>
24(b)(7)(a) Deferred Compensation Plan for Directors
24(b)(11) Consent of Independent Auditors
24(b)(17) Financial Data Schedules
Other Exhibit Power of Attorney
</TABLE>
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as................. 'r'
The service mark symbol shall be expressed as......................... 'sm'
<PAGE>
<PAGE>
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
SELIGMAN CAPITAL FUND, INC.
("FUND")
1. Election to Defer Payments. Any member of the Board of Directors (herein, a
"Director") of the Fund may elect to have payment of that Director's annual
retainer or meeting fees or both for Board service deferred as provided in this
Plan. The election shall be made in writing prior to, and to take effect from,
the beginning of a calendar year. For any Director in the year in which this
Plan is adopted or for a person elected a director in other than the last
calendar month of a year, the election shall be made within 30 days after that
event and prior to, and to take effect from, the beginning of the calendar
quarter next ensuing after that event. Elections shall continue in effect until
terminated in writing, any such termination to take effect on the first day of
the calendar year beginning after receipt of the notice of termination. An
election shall be irrevocable as to payments deferred in conformity with that
election.
2. Deferred Payment Account. Each deferred retainer or fee shall be credited at
the time when it otherwise would have been payable to an account to be
established in the name of the Director on the books of the Fund (the "Deferred
Payment Account") adjusted for notional investment experience as hereinafter
described.
3. Return on Deferred Payment Account Balance. (a) For purposes of measuring the
investment return on his Deferred Payment Account, the Director may elect to
have the aggregate amount of his deferred compensation (or a specified portion
thereof) receive a return (i) at a rate equal to the return earned on
three-month U.S. Treasury Bills at the beginning of each calendar quarter (the
"Treasury Bill Rate") and such interest shall be credited to the account
quarterly at the end of each calendar quarter, or (ii) at a rate of return
(positive or negative) equal to the rate of return on the shares of any of the
registered investment companies managed by J. & W. Seligman & Co. Incorporated
("Seligman") or any other entity controlling, controlled by, or under common
control with (as such terms are defined in the Investment Company Act of 1940)
Seligman (each, a "Notional Fund"), assuming reinvestment of dividends and
distributions from the Notional Funds. (b) A Director may amend his designation
of investment return as of the end of each calendar quarter by giving written
notice to the President of the Fund at least 30 days prior to the end of such
calendar quarter. A timely change to a Director's designation of investment
return shall become effective on the first day of the calendar quarter following
receipt by the President of the Fund (the "President").
4. Notional Investment Experience. Amounts credited to a Deferred Payment
Account shall be periodically adjusted for notional investment experience. In
each case such notional investment experience shall be determined by treating
the Deferred Payment Account as though an equivalent dollar amount had been
invested and reinvested in one or more of the Notional Funds. The Notional Funds
used as a basis for determining notional investment experience with respect to
any Director's Deferred Payment Account shall be designated by the Director in
writing by instrument of election substantially in the form attached hereto as
Exhibit C and may be changed prospectively by similar written election effective
as of the first day of any calendar quarter. The President may from time to time
limit the Notional Funds available for purposes of such election. If at any time
any Notional Fund that has previously been
<PAGE>
<PAGE>
designated by a Director as a notional investment shall cease to exist or shall
be unavailable for any reason, or if the Director fails to designate one or more
Notional Funds pursuant to this Section 4, the President may, at his discretion
and upon notice to the Director, treat any amounts notionally invested in such
Notional Fund (whether representing past amounts credited to a Director's
Deferred Payment Account or subsequent fee deferrals or both) as having been
invested at the Treasury Bill Rate, only until such time as the Director shall
have made another investment election in accordance with the foregoing
procedures. Deferred Payment Accounts shall continue to be adjusted for notional
investment experience until distributed in full in accordance with the
distribution method elected by the Director pursuant to Section 5 hereof.
5. Payment of Deferred Amounts. All amounts credited to an account pursuant
to any election by the Director made as provided in Section 1 hereof shall be
paid to the Director
(a) in, or beginning in, the calendar year following the calendar year
in which the Director ceases to be a Director of the Fund, or
(b) in, or beginning in, the calendar year following the earlier of the
calendar year in which the Director ceases to be a Director of the
Fund or attains age 70,
and shall be paid
(c) in a lump sum payable on the first day of the calendar year in which
payment is to be made, or
(d) in 10 or fewer installments, payable on the first day of each year
commencing with the calendar year in which payment is to begin, all
as the Director shall specify in making the election. If the payment
is to be made in installments, the amount of each installment shall
be equal to a fraction of the total of the amounts in the account at
the date of the payment the numerator of which shall be one and the
denominator of which shall be the then remaining number of unpaid
installments (including the installment then to be paid). If the
Director dies at any time before all amounts in the account have
been paid, such amounts shall be paid at that time in a lump sum to
the beneficiary or beneficiaries designated by the Director in
writing to receive such payments or in the absence of such a
designation to the estate of the Director.
The Board of Directors may, in the case of an unforseeable emergency, at its
sole discretion accelerate the payment of any unpaid amount for any or all
Directors. For purposes of this paragraph, an unforseeable emergency is severe
financial hardship to the Director resulting from a sudden and unexpected
illness or accident of the Director or of a dependent (as defined in section
152(a) of the Internal Revenue Code) of the Director, loss of the Director's
property due to casualty, or other similar extraordinary and unforseeable
circumstances arising as a result of events beyond the control of the Director.
Payment due to an unforseeable emergency may not be made to the extent that such
hardship is or may be relieved (i) through reimbursement or compensation by
insurance or otherwise; (ii) by liquidation of the Director's assets, to the
extent the liquidation of such assets would not itself cause severe financial
hardship, or (iii) by cessation of deferrals under the Plan. Examples of what
are not considered to be unforseeable emergencies include the need to send a
Director's child to college or the desire to purchase a home.
<PAGE>
<PAGE>
Withdrawals of amounts because of an unforseeable emergency are only permitted
to the extent reasonably necessary to satisfy the emergency need.
6. Assignment. No deferred amount or unpaid portion thereof may be assigned
or transferred by the Director except by will or the laws of descent and
distribution.
7. Withholding Taxes. The Fund shall deduct from all payments any federal,
state or local taxes and other charges required by law to be withheld with
respect to such payments.
8. Nature of Rights; Nonalienation. A Director's rights to deferred payment
under the Plan shall be solely those of an unsecured general creditor of the
Fund, and any payments by the Fund pursuant to the Plan will be made solely from
the Fund's general assets and property. The Fund will be under no obligation to
purchase, hold or dispose of any investment for the specific benefit of any
Director but, if the Fund should choose to purchase shares of any Notional Fund
in order to cover all or a portion of its obligations under the Plan, then such
investments will continue to be a part of the general assets and property of the
Fund. A Director's rights under the Plan may not be transferred, assigned,
pledged or otherwise alienated, and any attempt by the Director to do so shall
be null and void.
9. Status of Director. Nothing in the Plan nor any election hereunder shall
be construed as conferring on any Director the right to remain a Director of the
Fund or to receive fees at any particular rate.
10. Amendment and Acceleration. The Board of Directors may at any time at
its sole discretion amend or terminate this Plan, provided that no such
amendment or termination shall adversely affect the right of Directors to
receive deferred amounts credited to their account.
11. Administration. The Plan shall be administered by the President or by
such person or persons as the President may designate to carry out
administrative functions hereunder. The President shall have complete discretion
to interpret and administer the Plan in accordance with its terms, and his
determinations shall be binding on all persons.
Amended as of March 19, 1998
<PAGE>
<PAGE>
EXHIBIT A
SELIGMAN INVESTMENT COMPANIES
DEFERRED COMPENSATION PLAN
ELECTION FORM
Pursuant to the Deferred Compensation Plan for Directors, as amended as
of March 19, 1998, (the "Plan") adopted by each of the Seligman Investment
Companies (the "Funds"), I hereby elect to have ___% of my annual retainer fees
and ___% of my meeting fees for service to the Funds deferred as provided in the
Plan. This election will take effect at such time as is provided in section 1 of
the Plans, and shall continue in effect until terminated in writing, any such
termination to take effect of the first day of the next calendar year beginning
after receipt of the notice of termination.
The Deferred Compensation Plan Return Designation Form attached hereto
indicates the percentage of each of the above amounts that should earn the
designated returns. Such designations shall remain in effect until changed by
submission of a new form as provided in the Plan.
All amounts deferred with respect to any Fund and the earnings thereon
made pursuant to any election by me shall be credited to an account for my
benefit and shall be paid to me:
Check (a) or (b)
_______ (a) in, or beginning in, the calendar year following the
calendar year in which I cease to be a director of the
Fund, or
_______ (b) in, or beginning in, the calendar year following the
earlier of the calendar year in which I cease to be a
director of the Fund or attain age 70,
and shall be paid
Check (c) or (d)
_______ (c) in a lump sum payable on the first day of the calendar
year in which payment is to be made, or
_______ (d) in 10 or fewer installments, payable on the first day of
each year commencing with the calendar year in which
payment is to begin.
If (d) is selected, enter number of annual installments _________.
If the payment is to be made in installments, the amount of each
installment shall be equal to a fraction of the total of the amounts in the
account at the date of the payment the numerator of which shall be one and the
denominator of which shall be the then remaining number of unpaid installments
(including the installment then to be paid). If I die at any time before all
amounts in the account have been paid, such amounts shall be paid at that time
in a lump sum to the beneficiary or beneficiaries designated by me on the
attached Beneficiary Designation Form or in the absence of such a designation
to my estate.
- --------------------------- -------------------------------
Date Signature
<PAGE>
<PAGE>
EXHIBIT B
DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION FORM
I hereby designate the following beneficiary or beneficiaries to receive at my
death the amounts held in my Deferred Payment Accounts from my participation in
the Deferred Compensation Plans for Directors/Trustees of all registered
investment companies advised by J. & W. Seligman & Co. Incorporated for which I
serve as a director or trustee (the "Plans").
A. PRIMARY BENEFICIARY(IES)
1. Name:________________________________________ % Share: _________________
Address:________________________________________________________________
Relationship:_________________ DOB: ________ Social Security #:_________
Trustee Name and Date (if beneficiary is a trust):______________________
Trustee of Trust:_______________________________________________________
2. Name:________________________________________ % Share: _________________
Address:________________________________________________________________
Relationship:_________________ DOB: ________ Social Security #:_________
Trustee Name and Date (if beneficiary is a trust):______________________
Trustee of Trust:_______________________________________________________
B. CONTINGENT BENEFICIARY(IES)
1. Name:________________________________________ % Share: _________________
Address:________________________________________________________________
Relationship:_________________ DOB: ________ Social Security #:_________
Trustee Name and Date (if beneficiary is a trust):______________________
Trustee of Trust:_______________________________________________________
2. Name:________________________________________ % Share: _________________
Address:________________________________________________________________
Relationship:_________________ DOB: ________ Social Security #:_________
Trustee Name and Date (if beneficiary is a trust):______________________
Trustee of Trust:_______________________________________________________
<PAGE>
<PAGE>
I understand that I may revoke or amend the above designation at any time. I
understand that payment will be made to my Contingent Beneficiary(ies) only if
there is no surviving Primary Beneficiary(ies). I further understand that if I
am not survived by any Primary or Contingent Beneficiaries, payment will be made
to my estate as set forth under the Plans.
- --------------------------- -------------------------------
Date Signature
-------------------------------
Participant's Name Printed
<PAGE>
<PAGE>
EXHIBIT C
SELIGMAN INVESTMENT COMPANIES
DEFERRED COMPENSATION PLANS
RETURN DESIGNATION FORM
I elect to have my deferred compensation for all registered investment companies
advised by J. & W. Seligman & Co. Incorporated for which I serve as a Director
or Trustee deemed to be invested as specified below:
<TABLE>
<CAPTION>
% Allocation
% Allocation for accumulated
for future fees balances
--------------- ---------------
<S> <C> <C>
At the prevailing three-month U.S. Treasury Bill Rate
Seligman Capital Fund, Inc.
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Emerging Markets Growth Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Growth Opportunities Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Smaller Companies Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Technology Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson International Fund
Seligman High Income Fund Series -
Seligman High-Yield Bond Series
Seligman High Income Fund Series -
Seligman U.S. Government Securities Series
Seligman Income Fund, Inc.
Seligman Value Fund Series, Inc. -
Seligman Large-Cap Value Fund
Seligman Value Fund Series, Inc. -
Seligman Small-Cap Value Fund
Tri-Continental Corporation
Total 100% 100%
</TABLE>
I acknowledge that I may amend this Return Designation in the manner,
and at such time as permitted, under the Plans. Furthermore, I acknowledge that
in certain circumstances, and pursuant to Section 4 of the Plans, the President
may at his discretion, and upon notice to me, disregard the designations made
above and cause all or a portion of my Deferred Account to receive a return
equal to the prevailing three-month U.S. Treasury Bill Rate.
- ---------------------- ---------------------------------------
Date Signature
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Seligman Capital Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 54 to Registration
Statement No. 2-33566 of our report dated January 30, 1998, appearing
in the Annual Report to Shareholders for the year ended December 31, 1997,
which is incorporated by reference in the Statement of Additional Information,
which is included in such Registration Statement, and to the references to
us under the captions "Financial Highlights" in the Prospectus and "General
Information" in the Statement of Additional Information, which are also
included in such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 24, 1998
<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, 1998.
/s/Richard R. Schmaltz (L.S.)
-------------------------------------
Richard R. Schmaltz
<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-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 251558
<INVESTMENTS-AT-VALUE> 339705
<RECEIVABLES> 3774
<ASSETS-OTHER> 185
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 343664
<PAYABLE-FOR-SECURITIES> 21450
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3475
<TOTAL-LIABILITIES> 24925
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 219205
<SHARES-COMMON-STOCK> 16262<F1>
<SHARES-COMMON-PRIOR> 15867<F1>
<ACCUMULATED-NII-CURRENT> (107)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11494
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 88147
<NET-ASSETS> 284214<F1>
<DIVIDEND-INCOME> 1332<F1>
<INTEREST-INCOME> 615<F1>
<OTHER-INCOME> 130<F1>
<EXPENSES-NET> (2880)<F1>
<NET-INVESTMENT-INCOME> (803)<F1>
<REALIZED-GAINS-CURRENT> 46191
<APPREC-INCREASE-CURRENT> 15869
<NET-CHANGE-FROM-OPS> 60938
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (35225)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8115<F1>
<NUMBER-OF-SHARES-REDEEMED> (9590)<F1>
<SHARES-REINVESTED> 1870<F1>
<NET-CHANGE-IN-ASSETS> 34914
<ACCUMULATED-NII-PRIOR> (100)
<ACCUMULATED-GAINS-PRIOR> 4860
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1325<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2880)<F1>
<AVERAGE-NET-ASSETS> 273886<F1>
<PER-SHARE-NAV-BEGIN> 16.36<F1>
<PER-SHARE-NII> (0.06)<F1>
<PER-SHARE-GAIN-APPREC> 3.61<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (2.43)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 17.48<F1>
<EXPENSE-RATIO> 1.05<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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 251558
<INVESTMENTS-AT-VALUE> 339705
<RECEIVABLES> 3774
<ASSETS-OTHER> 185
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 343664
<PAYABLE-FOR-SECURITIES> 21450
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3475
<TOTAL-LIABILITIES> 24925
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 219205
<SHARES-COMMON-STOCK> 519<F1>
<SHARES-COMMON-PRIOR> 280<F1>
<ACCUMULATED-NII-CURRENT> (107)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11494
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 88147
<NET-ASSETS> 8437<F1>
<DIVIDEND-INCOME> 32<F1>
<INTEREST-INCOME> 15<F1>
<OTHER-INCOME> 3<F1>
<EXPENSES-NET> (121)<F1>
<NET-INVESTMENT-INCOME> (71)<F1>
<REALIZED-GAINS-CURRENT> 46191
<APPREC-INCREASE-CURRENT> 15869
<NET-CHANGE-FROM-OPS> 60938
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (1063)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 275<F1>
<NUMBER-OF-SHARES-REDEEMED> (99)<F1>
<SHARES-REINVESTED> 63<F1>
<NET-CHANGE-IN-ASSETS> 34914
<ACCUMULATED-NII-PRIOR> (100)
<ACCUMULATED-GAINS-PRIOR> 4860
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (121)<F1>
<AVERAGE-NET-ASSETS> 6662<F1>
<PER-SHARE-NAV-BEGIN> 15.47<F1>
<PER-SHARE-NII> (0.18)<F1>
<PER-SHARE-GAIN-APPREC> 3.38<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (2.43)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 16.24<F1>
<EXPENSE-RATIO> 1.81<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-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 251558
<INVESTMENTS-AT-VALUE> 339705
<RECEIVABLES> 3774
<ASSETS-OTHER> 185
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 343664
<PAYABLE-FOR-SECURITIES> 21450
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3475
<TOTAL-LIABILITIES> 24925
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 219205
<SHARES-COMMON-STOCK> 1606<F1>
<SHARES-COMMON-PRIOR> 1291<F1>
<ACCUMULATED-NII-CURRENT> (107)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11494
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 88147
<NET-ASSETS> 26088<F1>
<DIVIDEND-INCOME> 114<F1>
<INTEREST-INCOME> 53<F1>
<OTHER-INCOME> 11<F1>
<EXPENSES-NET> (426)<F1>
<NET-INVESTMENT-INCOME> (248)<F1>
<REALIZED-GAINS-CURRENT> 46191
<APPREC-INCREASE-CURRENT> 15869
<NET-CHANGE-FROM-OPS> 60938
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (3269)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 734<F1>
<NUMBER-OF-SHARES-REDEEMED> (621)<F1>
<SHARES-REINVESTED> 202<F1>
<NET-CHANGE-IN-ASSETS> 34914
<ACCUMULATED-NII-PRIOR> (100)
<ACCUMULATED-GAINS-PRIOR> 4860
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 114<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (426)<F1>
<AVERAGE-NET-ASSETS> 23515<F1>
<PER-SHARE-NAV-BEGIN> 15.47<F1>
<PER-SHARE-NII> (0.18)<F1>
<PER-SHARE-GAIN-APPREC> 3.39<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (2.43)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 16.25<F1>
<EXPENSE-RATIO> 1.81<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
<PAGE>
