File No. 2-56805
811-2650
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 29 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 21 |X|
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SELIGMAN CASH MANAGEMENT FUND, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b) of rule 485
|X| on April 22, 1996 pursuant to paragraph (b) of rule 485
|_| 60 days after filing pursuant to paragraph (a)(i) of rule 485
|_| on (date) pursuant to paragraph (a)(i) of rule 485
|_| 75 days after filing pursuant to paragraph (a)(ii) of rule 485
|_| on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on February
20, 1996.
<PAGE>
File No. 2-56805
811-2650
SELIGMAN CASH MANAGEMENT FUND INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 29
PURSUANT TO RULE 481(A)
-----------------------
ITEM IN PART A OF FORM N-1A LOCATION IN PROSPECTUS
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1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Organization
and Capitalization
5. Management of the Fund Management Services
6. Capital Stock and Other Securities Net Asset Value Per Share;
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 Proceedings Not Applicable
LOCATION IN STATEMENT OF
ITEM IN PART B OF FORM N-1A ADDITIONAL INFORMATION
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information;
Appendix B
13. Investment Objectives and Policies Investment Objective And
Policies; 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
17. Brokerage Allocation Not Applicable
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing Purchase and Redemption of
of Securities Being Offered Fund Shares;
Net Asset Value Per Share
20. Tax Status Federal Income Taxes
(Prospectus)
21. Underwriters Not Applicable
22. Calculation of Performance Data Calculation of Yield; Net
of Money Market Funds Asset Value Per Share
23. Financial Statements Financial Statements
<PAGE>
SELIGMAN CASH MANAGEMENT FUND, INC.
100 Park Avenue
New York, NY 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450--all continental United States
For Retirement Plan Information--Toll-Free Telephone: (800) 445-1777
April 22, 1996
Seligman Cash Management Fund, Inc. (the "Fund") is a money market fund
which seeks to preserve capital and to maximize liquidity and current income by
investing in high-quality money market instruments. There can be no assurance
that the Fund's investment objectives will be achieved. For a description of the
Fund's investment objectives and policies, including the risk factors associated
with an investment in the Fund, see "Investment Objectives And Policies."
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
The Fund offers three classes of shares. Class A shares are sold subject to
an annual service fee of up to .25% of the average daily net asset value of the
Class A shares. Such service fee will not be charged until after April 30, 1997.
Class B shares and Class D shares are available only through an exchange of
shares of another mutual fund in the Seligman Group offering Class B shares
("Original Class B Shares") or Class D shares ("Original Class D Shares"),
respectively, or, through securities dealers or other financial intermediaries,
to facilitate periodic investments in Class B shares or Class D shares,
respectively, of other mutual funds in the Seligman Group. Class B shares are
sold without an initial sales load but are subject to a contingent deferred
sales load ("CDSL"), if applicable, of 5% on redemptions in the first year after
purchase of such shares (or, in the case of Class B shares acquired upon
exchange, the purchase of the Original Class B Shares), 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 load
but are subject to a CDSL of 1% imposed on certain redemptions within one year
of purchase (or, in the case of Class D shares acquired upon exchange, the
purchase of the Original Class D Shares). In addition, Class B shares and Class
D shares are each subject to an annual distribution fee of up to .75% and an
annual service fee of up to .25% of the average daily net asset value of their
respective class. 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 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.
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TABLE OF CONTENTS
PAGE
----
Summary Of Fund Expenses ............................ 2
Financial Highlights ................................ 3
Alternative Distribution System ..................... 4
Investment Objectives And Policies .................. 5
Management Services ................................. 7
Net Asset Value Per Share............................ 8
Purchase Of Shares .................................. 8
Right Of Accumulation In Purchases Of Shares
Of The Other Seligman Mutual Funds................ 12
Telephone Transactions............................... 12
Redemption Of Shares ................................ 13
Administration, Shareholder Services
And Distribution Plan.............................. 15
Exchange Privilege .................................. 16
Dividends............................................ 18
Federal Income Taxes ................................ 19
Shareholder Information ............................. 19
Yield ............................................... 21
Organization And Capitalization ..................... 21
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
---------------- ---------------- ----------------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
LOAD ALTERNATIVE) LOAD ALTERNATIVE) LOAD ALTERNATIVE)
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)....................... None None None
Sales Load on Reinvested Dividends.......................... None None None
Deferred Sales Load (as a percentage of
original purchase price or redemption
proceeds, whichever is lower)........................... None 5% in 1st year 1% in 1st year
4% in 2nd year None thereafter
3% in 3rd and
4th years
2% in 5th year
1% in 6th year
None thereafter
Redemption Fees............................................. None None None
Exchange Fees............................................... None None None
CLASS A CLASS B* CLASS D
-------- -------- --------
ANNUAL FUND OPERATING EXPENSES FOR 1995
(as a percentage of average net assets)
Management Fees............................................. .43% .43% .43%
12b-1 Fees+................................................. -- 1.00%** 1.00%**
Other Expenses ............................................. .43% .43% .43%
---- ----- -----
Total Fund Operating Expenses............................... .86% 1.86% 1.86%
==== ===== =====
</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 contingent deferred sales loads on Class B and Class D shares
are one-time charges paid only if shares are redeemed within six years or one
year of purchase, respectively (or, in the case of shares acquired upon
exchange, the purchase of the Original Class B Shares or Original Class D
Shares). The "Other Expenses" disclosed for Class D shares have been restated to
reflect the expense allocation methodology currently being used by the Fund. For
more information concerning a description of the various costs and expenses, see
"Management Services," "Purchase Of Shares" and "Redemption Of Shares" 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.
EXAMPLE
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5%
annual return and (2)
redemption at the end of each time period:..................Class A $ 9 $27 $ 48 $106
Class B++ $69 $88 $121 $192
Class D $29+++ $58 $101 $218
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5%
ANNUAL RETURN USED IN THIS EXAMPLE IS A HYPOTHETICAL RATE.
* Expenses for Class B shares are estimated because no shares of that Class
were outstanding in the year ended December 31, 1995.
** Includes an annual distribution fee of up to .75% and an annual service fee
of up to .25%. Pursuant to the Rules of the National Association of
Securities Dealers, Inc., the aggregate deferred sales loads and annual
distribution fees on Class B or 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 12b-1 plan, approved by shareholders in respect of Class A shares on
November 23, 1992, pursuant to which up to .25% of the Fund's Class A
Shares' average net assets may be paid to Seligman Financial Services, Inc.
for administration, shareholder services and distribution assistance is not
reflected in the Summary of Expenses since those fees will not be charged
until after April 30, 1997.
++ Assuming (1) 5% annual return and (2) no redemption at the end of the
period, the expenses on a $1,000 investment would be $19 for 1 year, $58
for 3 years and $101 for 5 years. The expenses shown for the ten-year
period reflect the conversion of Class B shares to Class A shares after 8
years.
+++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be $19.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights for the Fund's Class A shares and Class D shares
for the periods presented below have been audited by Deloitte & Touche LLP,
independent auditors. This information, which is derived from the financial and
accounting records of the Fund, should be read in conjunction with the financial
statements and notes contained in the Fund's 1995 Annual Report, which is
incorporated by reference in the Fund's Statement of Additional Information,
copies of which may be obtained by calling or writing the Fund at the telephone
numbers or address provided on the cover page of this Prospectus. Financial
highlights are not presented for the Class B shares because no shares of that
Class were outstanding during the periods set forth below.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from the Fund's beginning
net asset value to its ending net asset value so that they may understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amount.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, invested dividends paid at net asset value, and then sold their
shares at the net asset value per share on the last day of the period. Total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-----------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment
income .051 .034 .024 .030 .053 .074 .084 .066 .059 .060
Dividends paid
or declared (.051) (.034) (.024) (.030) (.053) (.074) (.084) (.066) (.059) (.060)
------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Net asset value,
end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN BASED
ON NET ASSET VALUE.. 5.18% 3.46% 2.40% 3.10% 5.53% 7.53% 8.76% 6.88% 6.13% 6.18%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average
net assets.......... .86% .82% .77% .76% .79% .80% .80% .93% .83% .87%
Net investment income
to average net
assets. 5.06% 3.41% 2.37% 3.04% 5.34% 7.40% 8.46% 6.63% 5.96% 6.00%
Net assets, end of
period
(000's omitted) $177,395 $194,406 $173,902 $193,158 $260,297 $287,518 $321,481 $344,664 $354,588 $349,221
Without management
fee waiver or
expense
reimbursement:**
Net investment income
per share $ .023 $ .029 $ .052
Ratios:
Expenses to average
net assets...... .86% .85% .86%
Net investment
income to average
net assets 2.28% 2.95% 5.28%
</TABLE>
CLASS D
-----------------------
YEAR ENDED
DECEMBER 31, 5/3/93*
------------ TO
1995 1994 12/31/93
---- ---- --------
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $ 1.000 $ 1.000 $1.000
Net investment
income ............. .040 .024 .003
Dividends paid
or declared ........ (.040) (.024) (.003)
------- ------- ------
Net asset value,
end of period ........ $ 1.000 $ 1.000 $ 1.000
======= ======= =======
TOTAL RETURN BASED
ON NET ASSET VALUE.. 4.08% 2.35% .30%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average
net assets.......... 1.90% 1.90% 1.74%+
Net investment income
to average net
assets. 4.02% 2.32% 1.39%+
Net assets, end of
period
(000's omitted) .... $ 14,554 $ 3,458 $ 26
Without management
fee waiver or
expense
reimbursement:**
Net investment income
per share ........ $ .013 $ .002
Ratios:
Expenses to average
net assets...... 3.23% 1.83%+
Net investment
income to average
net assets ..... .99% 1.30%+
- -------------
* Commencement of offering of Class D shares.
** For the years 1991 to 1993, the Manager, at its discretion, waived a
discretion, reimbursed a portion of the expenses of Class D shares.
+ Annualized.
The data provided above for the Class A shares reflects historical
information and therefore has not been adjusted to reflect the effect of the
increased management fee approved by shareholders on April 10, 1991 or the
Administration, Shareholder Services and Distribution Plan which was approved on
November 23, 1992, payment of which may commence after April 30, 1997.
3
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers three classes of shares: Class A shares, Class B shares and
Class D shares, each of which may be acquired by investors at net asset value.
Class A shares are sold to all investors except as described below. Class B
shares and Class D shares are offered only (1) to investors who wish to exchange
their Class B or Class D shares of another mutual fund in the Seligman Group
("Original Shares") for Class B or Class D shares, respectively, of the Fund and
(2) to investors who, using the services of securities dealers or other
financial intermediaries, intend to make periodic investments in Class B or
Class D shares of other mutual funds in the Seligman Group by exchanging their
Class B or Class D shares of the Fund. Class B or Class D shares of another
mutual fund in the Seligman Group may only be exchanged for Class B or Class D
shares, respectively, of the Fund. Class B shares are sold to investors choosing
to pay no initial sales load, a higher distribution fee and, with respect to
redemptions within six years of purchase (or, in the case of shares acquired
through an exchange, of the purchase of the Original Shares), a CDSL, and who
desire shares to convert automatically to Class A shares after eight years.
Class D shares are subject to a higher distribution fee and, with respect to
redemptions of shares within one year of purchase (or, in the case of shares
acquired through an exchange, of the purchase of the Original Shares), a CDSL.
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 the distribution and other expenses of each
class. Class A shares currently do not bear distribution expenses. Class B and
Class D shares bear a distribution expense, which will cause such shares to pay
lower dividends than the Class A shares. In addition, Class B shares will be
converted into Class A shares after a conversion period of approximately eight
years, and thereafter investors will be subject to lower ongoing fees. Shares
purchased through the reinvestment of dividends on Class B shares also will
convert automatically to Class A shares together with the underlying shares on
which they were earned. 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 ongoing expenses as set forth below. The primary
differences between Class B and Class D shares are that Class D shares are
subject to a shorter CDSL period but Class B shares automatically convert to
Class A shares after eight years, resulting in a reduction in ongoing fees.
Investors in Class B shares should take into account whether they intend to
redeem their shares within the CDSL period and, if not, whether they intend to
remain invested until the end of the conversion period and thereby take
advantage of the reduction in ongoing fees resulting from the conversion into
Class A shares. Other investors, however, may elect to purchase Class D shares
if they determine that it is advantageous to have all their assets invested
initially and they are uncertain as to the length of time they intend to hold
their assets in the Fund or another mutual fund in the Seligman Group for which
the exchange privilege is available. Although Class D shareholders are subject
to a shorter CDSL period at a lower rate, they forgo the Class B automatic
conversion feature, making their investment subject to higher distribution fees
4
<PAGE>
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.
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE
SALES LOAD DAILY NET ASSETS) OTHER INFORMATION
---------- ------------------ -----------------
CLASS A None Service fee of --
.25%. (This fee will
not be assessed
through April 30,
1997. Payments
may commence
after that date.)
CLASS B None Service fee of .25%; CDSL of:
Distribution fee of 5% in 1st year
.75% until conversion 4% in 2nd year
3% in 3rd and
4th years
2% in 5th year
1% in 6th year
0% after 6th year.
CLASS D None Service fee of CDSL of 1% on
.25%; Distribution redemption
fee of .75%. within one year of
purchase of
the Original
Class D Shares.
* 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.
Investors who intend to purchase shares of the Fund primarily as a vehicle
for exchanges into Class B or Class D shares of other funds in the Seligman
Group may choose to purchase Class B or Class D shares of the Fund. This will
permit participation in the Automatic Dollar-Cost-Averaging Service (see
"Shareholder Information" below) and, more generally, will make exchanges for
Class B or Class D shares of other funds possible. (It is not possible to
exchange Class A shares of the Fund for Class B or Class D shares of any other
Seligman Mutual Fund.) Moreover, the six-year or one-year period during which
the CDSL is in effect will commence upon purchase of Class B or Class D shares,
respectively, of the Fund. By comparison, if an investor purchases Class A
shares of the Fund and redeems these periodically to invest in Class B or Class
D shares of other Seligman Mutual Funds, the CDSL period will not commence until
the purchase of the other funds. However, investors should weigh these
advantages against the higher ongoing expenses of the Class B and Class D shares
compared with the Class A shares, which will result in a lower dividend payment.
INVESTMENT OBJECTIVES AND POLICIES
The Fund is an open-end diversified management investment company, as
defined in the 1940 Act, or mutual fund, incorporated in Maryland in 1976.
The investment objective of the Fund is to preserve capital and to maximize
liquidity and current income. To the extent the Fund emphasizes preservation of
capital and liquidity, current income could be lessened. There can be no
assurance that the Fund's investment objectives will be attained. The value of
securities in the Fund generally can be expected to vary inversely with changes
in prevailing interest rates.
Shares of the Fund offer individuals, fiduciaries, corporations and
institutions a liquid investment in a professionally managed portfolio invested
in money market instruments. By combining the assets of shareholders, the Fund
seeks the higher yields offered by money market instruments of larger
denominations which are not available to smaller investors. Moreover,
shareholders of the Fund are relieved of the detailed bookkeeping and operating
procedures normally associated with investments in money market instruments such
as scheduling maturities, surveying markets to obtain favorable yields,
evaluating credit risks and safeguarding the receipts, custody and delivery of
the securities.
The Fund seeks to maintain a constant net asset value of $1.00 per share;
there can be no assurance that the Fund will be able to do so. In an effort to
maintain a stable net asset value, the Fund uses the amortized cost method of
valuing its securities.
The Fund will invest only in U.S. dollar-denominated securities having a
remaining maturity of 13 months (397 days) or less and will maintain a
5
<PAGE>
dollar-weighted average portfolio maturity of 90 days or less. The Fund will
limit its investments to those securities that, in accordance with guidelines
adopted by the Board of Directors, present minimal credit risks. Accordingly,
the Fund will not purchase any security (other than a U.S. Government security)
unless (i) it is rated in one of the two highest rating categories assigned to
short-term debt securities by at least two nationally recognized statistical
rating organizations ("NRSRO's") such as Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's Corporation ("S&P"), or (ii) if not so rated,
it is determined to be of comparable quality. Determinations of the comparable
quality will be made in accordance with procedures established by the Directors.
These standards must be satisfied at the time an investment is made. If the
quality of the investment later declines, the Fund may continue to hold the
investment, subject in certain circumstances to a finding by the Board of
Directors that disposing of the investment would not be in the Fund's best
interest.
Presently, the Fund only invests in either U.S. Government securities or
securities that are rated in the top category by Moody's and S&P. However, the
Fund is permitted to invest up to 5% of its assets in securities rated in the
second highest rating category by two NRSRO's, provided that not more than the
greater of 1% of its total assets or $1,000,000 are invested in any one such
security.
The Fund invests in high-quality money market instruments, including the
following:
U.S. GOVERNMENT, AGENCY AND INSTRUMENTALITY OBLIGATIONS. These securities
include direct obligations issued by the U.S. Treasury, such as bills, notes and
bonds, and marketable obligations issued by a U.S. Government agency or
instrumentality, having maturities not exceeding 13 months (397 days).
Agency and instrumentality securities include those issued by the Small
Business Administration, General Services Administration and Farmers Home
Administration, each of which are guaranteed by the U.S. Treasury. Other such
securities are supported by the right of the issuer to borrow from the Treasury,
such as securities of Federal Home Loan Banks, while certain other securities
are supported only by the credit of the agency or instrumentality itself, such
as securities issued by the Federal National Mortgage Administration.
BANK OBLIGATIONS. These instruments include obligations of domestic banks
(including foreign branches) and foreign banks with maturities not exceeding 13
months (397 days) including negotiable certificates of deposit, bank notes,
bankers' acceptances, fixed time deposits and commercial paper. Investment in
such obligations will be limited at the time of investment to the obligations of
the 100 largest domestic banks in terms of assets which are subject to
regulatory supervision by the U.S. Government or state governments and the
obligations of the 100 largest foreign banks in terms of assets with branches or
agencies in the United States. Fixed time deposits, unlike negotiable
certificates of deposit, generally do not have a market and may be subject to
penalties for early withdrawal of funds.
Investments in foreign banks and foreign branches of United States banks
involve certain risks not generally associated with investments in domestic
banks. While domestic banks are required to maintain certain reserves and are
subject to other regulations, such requirements and regulations may not apply to
foreign branches. Investments in foreign banks and branches may also be subject
to other risks, including future political and economic developments, the
seizure or nationalization of foreign deposits and the establishment of exchange
controls or other restrictions.
COMMERCIAL PAPER AND SHORT-TERM CORPORATE DEBT SECURITIES. Commercial paper
includes short-term unsecured promissory notes with maturities not exceeding
nine months issued in bearer form by bank holding companies, corporations and
finance companies. Investments in commercial paper issued by bank holding
companies will be limited at the time of investment to the 100 largest U.S. bank
holding companies in terms of assets.
6
<PAGE>
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements under
which it acquires a money market instrument, qualified for purchase by the Fund,
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 usually are for short periods, such as one week or less,
but may be for longer periods. Although the Fund may enter into repurchase
agreements with respect to any money market instruments qualified for purchase,
such agreements generally involve U.S. Government securities. The Fund may enter
into repurchase agreements with broker/dealers and commercial banks. 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 of the underlying
securities and loss of interest.
The Fund will not invest more than 10% of its assets in repurchase
agreements of more than one week's duration and in fixed time deposits, other
than overnight deposits, subject to withdrawal penalties.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
brokers, dealers and financial institutions provided that cash, or equivalent
collateral, equal to at least 100% of the market value of the securities loaned
is maintained by the borrower with the Fund. During the time such securities are
on loan, the borrower will pay the Fund any income accruing thereon and the Fund
may invest the cash collateral and earn additional income or may receive an
agreed upon fee from the borrower who has delivered equivalent collateral. The
Fund will not lend more than 25% of the value of its total assets, and it is not
intended that payments received on account of interest paid on securities loaned
will exceed 10% of the annual gross income of the Fund without offset for
realized short-term capital losses, if any.
SECURITIES TRADING. The Fund may trade investments to take advantage of
short-term market movements. This may result in high portfolio turnover. The
Fund does not anticipate incurring significant brokerage or transaction expenses
since portfolio transactions ordinarily will be made directly with the issuer,
money market dealer, or other financial institution on a net price basis.
The foregoing investment policies are not fundamental and the 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 objectives of seeking to preserve capital and to maximize
liquidity and current income 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 of the Fund present at a shareholders'
meeting if more than 50% of the outstanding shares of the Fund are represented
at the meeting in person or by proxy.
MANAGEMENT SERVICES
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, J. & W. Seligman & Co. Incorporated (the "Manager")
manages the investments of the Fund and administers the business and other
affairs of the Fund. The address of the Manager is 100 Park Avenue, New York, NY
10017.
The Manager also serves as manager of sixteen other investment companies
which, together with the Fund, comprise the "Seligman Group." These companies
are Seligman Capital Fund, Inc., Seligman Common Stock Fund, Inc., Seligman
Communications and Information Fund, Inc., Seligman Frontier Fund, Inc.,
Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman High Income Fund Series, Seligman Income Fund, Inc., Seligman New
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Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt Fund Series,
Seligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman
Select Municipal Fund, Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman
Tax-Exempt Series Trust and Tri-Continental Corporation. At February 29, 1996,
the aggregate assets of the Seligman Group were approximately $11.9 billion. The
Manager also provides investment management or advice to institutional accounts
having an aggregate value of approximately $3.9 billion at February 29, 1996.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Fund. Mr. Morris owns a majority
of the outstanding voting securities of the Manager.
The Manager also 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 record-keeping 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 for its services,
calculated daily and payable monthly, equal to a per annum percentage of the
Fund's daily net assets. For the year ended December 31, 1995, the management
fee paid by the Fund was equal to .43% of the Fund's average daily net assets.
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.
In 1995, total expenses of the Fund's Class A and Class D shares amounted
to .86% and 1.90%, respectively, of the average daily net assets of such class.
No Class B shares of the Fund were outstanding during this period.
NET ASSET VALUE PER SHARE
The net asset value per share of the Fund is determined as of the close of
trading on the New York Stock Exchange (normally 4:00 p.m., Eastern time) on
days on which the New York Stock Exchange is open for business. Net asset value
is calculated separately for each class. The Fund's assets are valued on the
basis of amortized cost, which involves valuing a portfolio instrument at its
cost initially and thereafter assuming a constant amortization to maturity of
any discount or premium regardless of the impact of fluctuating interest rates
on the market value of the instrument. Under present policies, the Fund invests
only in securities which have a maturity of 13 months (397 days) or less at the
date of purchase. The Fund also maintains a weighted average portfolio maturity
of 90 days or less. These policies are followed in order for the Fund to
maintain a constant net asset value of $1.00 per share although there is no
assurance that it will be able to do so on a continuous basis.
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, NY 10017.
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). THE FUND RESERVES THE RIGHT TO RETURN INVESTMENTS WHICH DO NOT MEET
THESE MINIMUMS. ADDITIONALLY, THE FUND RESERVES THE RIGHT TO REFUSE ANY ORDER
FOR THE PURCHASE OF SHARES. EXCEPTIONS TO THESE MINIMUMS ARE AVAILABLE FOR
ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK(R) SERVICE OR
THE SELIGMAN TIME HORIZON MATRIXSM.
No purchase order may be placed for Class B shares for an amount of
$250,000 or more; or for Class D shares for an amount of $4,000,000 or more.
Each class of shares are continuously offered for sale at their net asset
value next determined after a pur-chase order is received and becomes effective.
A purchase order becomes effective on a day on which the Fund is open for
business when Mellon Bank, N.A. receives, or converts the purchase amount into
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Federal funds, i.e., monies of member banks within the Federal Reserve System
held at a Federal Reserve Bank. Shares purchased at the close of business on the
day an order becomes effective are entitled to receive income dividends that
day. SFSI reserves the right to refuse any purchase order. Class A shares are
subject to an annual service fee of up to .25% of the average daily net asset
value of the Class A shares. Such fee may not be charged until after April 30,
1997. Class B shares and Class D shares are subject to an annual service fee of
up to .25% and an annual distribution fee of up to .75% of the average daily net
asset value of their respective class.
PURCHASES BY CHECK. Checks for investment in Class A shares must be in U.S.
dollars drawn on a domestic bank and should be made payable to the "Seligman
Group of Funds" and sent to P.O. BOX 3936, NEW YORK, NY 10008-3936. Class B and
Class D shares are sold only through securities dealers and other financial
intermediaries. A check received from an investor for the purchase of Class B or
Class D shares will be returned to the investor.
Checks which are drawn on a member bank of the Federal Reserve System and
received by Seligman Data Corp. by 1:00 p.m. ordinarily will be converted into
Federal funds and used to purchase shares within one business day following
receipt. Checks drawn on banks which are not members of the Federal Reserve
System may take longer to be converted.
Seligman Data Corp. will charge a $10.00 service fee for checks returned to
it as uncollectable. This charge may be deducted from the shareholder's account
that requested the purchase. For the protection of the Fund and its
shareholders, no redemption proceeds will be remitted to a shareholder with
respect to shares purchased by check (unless certified) until Seligman Data
Corp. receives notice that the check has cleared, which may be up to 15 days
from the credit of the shares to the shareholder's account.
PURCHASES BY FEDERAL RESERVE WIRE SYSTEM. An investor's bank may be able to
transmit Federal funds to Mellon Bank, N.A. via the Federal Reserve Wire System.
If funds are transmitted in this way and received by Mellon Bank, N.A. prior to
1:30 p.m., Eastern time, on days which the New York Stock Exchange ("NYSE") is
open, the order will be effective on that day, i.e., the money will be invested
and will start earning dividends.
Wires received by Mellon Bank, N.A. after 1:30 p.m., Eastern time, or on
days which the NYSE is closed will be invested on the next business day.
If choosing this method for opening an account, an investor should call
Seligman Data Corp. to obtain an account number before wiring the investment and
then instruct the bank to "wire transfer" the investment to:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15259
ABA #043000261
Credit: Seligman Cash Management Fund, Inc.
Class A
A/C #107-1302
For credit to:
[Shareholder's Name]
[Shareholder's Account Number]
Although the Fund makes no charge for this service, the transmitting bank
may impose a wire service fee.
Class B shares and Class D shares are sold only through securities dealers
and other financial intermediaries. Funds received from an investor by wire
transfer for the purchase of Class B or Class D shares will be returned to the
investor.
LIMITATION ON PURCHASES OF CLASS B AND CLASS D SHARES. Class B and Class D
shares of the Fund are available only through an exchange of Class B and Class D
shares of another mutual fund in the Seligman Group, respectively ("Original
Class B Shares" and "Original Class D Shares" and, collectively, "Original
Shares"), or, through Service Organizations (as defined under "Administration,
Shareholder Services and Distribution Plan"), to facilitate periodic investments
in other mutual funds in the Seligman Group by exchanging Class B or Class D
shares of the Fund for Class B or Class D shares of such other funds. Examples
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<PAGE>
include the Automatic Dollar-Cost-Averaging Service (see "Shareholder
Information" below) or any periodic investment or market-timing service offered
by a Service Organization. For administrative reasons, Service Organizations may
also purchase Class B or Class D shares in connection with an investment to be
allocated among Class B or Class D shares of several other mutual funds in the
Seligman Group pursuant to the Seligman Time Horizon MatrixSM, an asset
allocation program.
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
(or, in the case of Class B shares acquired upon exchange, within six years of
the purchase of the Original Class B Shares) at rates set forth in the table
below, charged as a percentage of the current net asset value or the original
purchase price, whichever is less.
YEARS SINCE PURCHASE CDSL
- -------------------- -----
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%
Class B shares are also subject to an annual distribution fee of up to .75%
and an annual distribution fee of up to .25% of the average daily net asset
value of the Class B shares. SFSI will make a 4% payment to dealers in respect
of purchases of Class B shares. Approximately eight years after purchase, Class
B shares will convert automatically into Class A shares of the Fund, which are
subject to an annual service fee of 25% but no distribution fee. Shares
purchased through the reinvestment of dividends on Class B shares also will
convert automatically to Class A shares together 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 on to 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 through use of the exchange privilege will
be subject to the Fund's CDSL schedule if such schedule is higher or longer than
the CDSL schedule relating to the Class B shares of the fund from which the
exchange has been made.
CLASS D SHARES. Class D shares are subject to a CDSL of 1% imposed on
certain redemptions within one year of purchase (or, in the case of Class D
shares acquired upon exchange, within one year of the purchase of the Original
Class D Shares) and are subject to an annual distribution fee of up to .75% and
an annual service fee of up to .25% of the average daily net asset value of the
Class 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.
CONTINGENT DEFERRED SALES LOAD. A CDSL will be imposed on any redemption of
Class B shares or Class D shares which were purchased (or were acquired in
exchange for Original Shares which were purchased) during the preceding six
years (for Class B shares) or twelve months (for Class D shares); however, no
CDSL will be imposed on the redemption of shares acquired through the investment
of dividends or distributions from any Class B or Class D shares within the
Seligman Group of Mutual Funds or on any shares received through an exchange of
such 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 (or at the time of sale of the Original Shares).
To minimize the application of a CDSL to a redemption, shares received
through an exchange of Original Shares which were acquired pursuant to the
investment of dividends and distributions, and shares acquired pursuant to the
investment of dividends of the Class B or Class D shares (all of which are not
subject to a CDSL) will be redeemed first; followed by shares purchased, or
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<PAGE>
received through an exchange of the Original Shares, which have been held for at
least six years (with respect to Class B) or at least one year (with respect to
Class D). Shares purchased, or received through an exchange of the Original
Shares which were held for the longest period of time within the applicable CDSL
period will then be redeemed.
For example, assume an investor exchanges $100 worth of Original Class D
Shares in January for 100 ($1.00 per share) Class D shares of the Fund. During
the first year, 5 additional shares were acquired through investment of
dividends. In January of the following year, an additional $50 worth of Original
Class D Shares (which are less than 6 months old) were exchanged for 50 ($1.00
per share) Class D shares of the Fund. In March of that year, the investor
chooses to redeem $125 from the account which now holds 155 shares with a total
value of $155 ($1.00 per share). The CDSL for this transaction would be
calculated as follows:
Total Shares and Value:
Dividend shares (5 shs. @ $1.00) $ 5.00
Shares held more than one year
(100 shs. @ $1.00) 100.00
Shares held less than one year
Subject to CDSL (50 shs. @ $1.00) 50.00
Total Shares to be Redeemed
(125 shs. @ $1.00) as follows:
Dividend Shares 5.00
Shares held more than one year 100.00
Shares held less than one year
(subject to CDSL) 20.00
-------
Gross Redemption Proceeds $125.00
Less CDSL (20 shares @
$1.00 = $20 x 1% = $.20) .20
-------
Net proceeds of redemption $124.80
=======
For Federal income tax purposes, the amount of the CDSL will reduce the
gain or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.
The CDSL will be waived or reduced in the following instances:
(a) on redemptions following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended
(the "Code"); (b) in connection with (i) distributions from retirement plans
qualified under section 401(a) of the Code when such redemptions are necessary
to make distributions to plan participants (such payments include, but are not
limited to death, disability, retirement, or separation of service), (ii)
distributions from a custodial account under Code section 403(b)(7) or an
individual retirement account ("IRA") due to death, disability, or attainment of
age 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) pursuant to an automatic cash
withdrawal service; and (f) in connection with the redemption of Class B or
Class D shares of the Fund if it is combined with another mutual fund in the
Seligman Group, or another similar reorganization transaction.
If, with respect to a redemption of any Class B or Class D shares, which
where were sold by a dealer (or which were acquired through an exchange of
Original 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 thereof paid by
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
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<PAGE>
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the mutual funds in the Seligman
Group. In some instances, these bonuses or incentives may be offered only to
certain dealers which employ registered representatives who have sold or may
sell a significant amount of shares of the Fund and/or certain other funds
managed by the Manager during a specified period of time. Such bonus or other
incentive may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered representatives
and members of their families to places within or outside the United States. The
cost to SFSI of such promotional activities and payments shall be consistent
with the Rules of the National Association of Securities Dealers, Inc., as then
in effect.
RIGHT OF ACCUMULATION IN PURCHASES
OF SHARES OF THE OTHER SELIGMAN
MUTUAL FUNDS
Since Class A shares are offered to investors at no sales load, only those
shares of the Fund owned as a result of an exchange of shares from another
mutual fund in the Seligman Group on which a sales load was paid will be
included for purposes of determining a shareholder's eligibility for a reduced
sales load on additional investments in Class A shares of the Seligman Mutual
Funds sold with a front-end sales load, as described in each fund's prospectus.
To receive the reduced sales load on such additional investments, the
shareholder or dealer will have to notify SFSI at the time of such additional
investment of the value of the shares of the Fund acquired through an exchange
and the value of the additional investment to be included in the calculation of
the reduced sales load.
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER/DEALER REPRESENTATIVE, will have the ability to effect the following
transactions via telephone: (i) redemption of Fund shares, (ii) exchange of Fund
shares for shares of the same class of another Seligman Mutual Fund, (iii)
change of a dividend option, and (iv) change of address. These services are
separate from the Fund's existing Expedited Redemption Service, which is
primarily to wire a transfer or redemption proceeds to a shareholder's bank
account. All telephone transactions are effected through Seligman Data Corp. at
(800) 221-2450.
FOR INVESTORS WHO PURCHASE SHARES BY COMPLETING AND SUBMITTING AN ACCOUNT
APPLICATION (EXCEPT THOSE ACCOUNTS REGISTERED AS TRUSTS WHERE THE TRUSTEE AND
SOLE BENEFICIARY ARE NOT THE SAME PERSON, CORPORATIONS OR GROUP RETIREMENT
PLANS): Unless an election is made otherwise on the Account Application, a
shareholder and the shareholder's broker-dealer of record, as designated on the
Account Application, will automatically receive telephone transaction services.
FOR INVESTORS WHO PURCHASE SHARES THROUGH A BROKER/DEALER AND DO NOT SUBMIT
AN ACCOUNT APPLICATION: Telephone services for a shareholder and the
shareholder's representative may be elected by completing a supplemental
election application available from the broker-dealer of record.
FOR ACCOUNTS REGISTERED AS IRAS: Telephone services will include only
exchanges or address changes.
FOR ACCOUNTS REGISTERED AS TRUSTS (UNLESS THE TRUSTEE AND SOLE BENEFICIARY
ARE THE SAME PERSON), CORPORATIONS OR GROUP RETIREMENT PLANS: Telephone
redemptions are not permitted. Additionally, group retirement plans are not
permitted to change a dividend or gain distribution option.
All Seligman Mutual Funds with the same account number (i.e., registered
exactly the same) as an existing account, including any new Seligman Mutual Fund
in which the shareholder invests in the future, will automatically include
telephone services if the existing account has telephone services. Telephone
services may also be elected at any time on a supplemental election application.
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<PAGE>
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone services, authorizes each of the other owners to effect telephone
transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares via telephone. In
these circumstances, the shareholder or the shareholder's representative should
consider using other redemption or exchange procedures. (See "Redemption of
Shares" below.) Use of these other redemption or exchange procedures will result
in the request being processed at a later time than if a telephone transaction
had been used, and the Fund's net asset value may fluctuate during such periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These will
include: recording all telephone calls requesting account activity, requiring
that the caller provide certain requested personal and/or account information at
the time of the call for the purpose of establishing the caller's identity, and
sending a written confirmation of redemptions, exchanges or address changes to
the address of record each time activity is initiated by telephone. As long as
the Fund and Seligman Data Corp. follow instructions communicated by telephone
that were reasonably believed to be genuine at the time of their receipt,
neither they nor any of their affiliates will be liable for any loss to the
shareholder caused by an unauthorized transaction. In any instance where the
Fund or Seligman Data Corp. is not reasonably satisfied that instructions
received by telephone are genuine, the requested transaction will not be
executed, and neither they nor any of their affiliates will be liable for any
losses which may occur due to a delay in implementing the transaction. If the
Fund or Seligman Data Corp. does not follow the procedures described above, the
Fund or Seligman Data Corp. may be liable for any losses due to unauthorized or
fraudulent instructions. Telephone transactions must be effected through a
representative of Seligman Data Corp., i.e., requests may not be communicated
via Seligman Data Corp.'s automated telephone answering system. Shareholders, of
course, may refuse or cancel telephone services. Telephone services may be
terminated by a shareholder at any time by sending a written request to Seligman
Data Corp. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A SHAREHOLDER'S
BROKER/DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHAREHOLDER. Written
acknowledgment of termination of telephone services will be sent to the
shareholder at the address of record.
REDEMPTION OF SHARES
Upon receipt by Seligman Data Corp. of a proper request, the Fund will
redeem shares at their net asset value next determined less, with respect to
Class B shares and Class D shares, a CDSL, if applicable.
FOR THE PROTECTION OF THE FUND AND ITS SHAREHOLDERS, NO REDEMPTION PROCEEDS
WILL BE REMITTED WITH RESPECT TO SHARES PURCHASED BY CHECK (UNLESS CERTIFIED)
UNTIL THE FUND 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. INVESTORS
DESIRING TO MAKE EARLIER USE OF THE EXPEDITED OR CHECK REDEMPTION SERVICES
(DESCRIBED BELOW) SHOULD HAVE MONEY WIRED TO MELLON BANK, N.A. AS SET FORTH
ABOVE.
REGULAR REDEMPTION PROCEDURE. A shareholder may redeem shares in book
credit form without charge (except a CDSL, if applicable) at any time BY SENDING
A WRITTEN REQUEST to Seligman Data Corp., 100 Park Avenue, New York, NY 10017.
The redemption request must be signed by all persons in whose name the shares
are registered. A shareholder may redeem shares that are not in book credit form
by surrendering certificates in proper form to the same address. Certificates
should be sent by registered mail. Share certificates must be endorsed for
transfer or accompanied by an endorsed stock power assigned by all share owners
exactly as their name(s) appear(s) on the account registration. The
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<PAGE>
shareholder's letter of instruction or endorsed stock power should specify the
Fund name, account number, class of shares (A, B or D) and the number of shares
or dollar amount to be redeemed. The Fund cannot accept conditional redemption
requests. If the redemption proceeds are (i) $50,000 or more, (ii) to be paid to
someone other than the shareholder of record (regardless of the amount) or (iii)
to be mailed to other than the address of record (regardless of the amount), the
signature(s) of the shareholder(s) must be guaranteed by an eligible financial
institution including, but not limited to, the following: banks, trust
companies, credit unions, securities brokers and dealers, savings and loan
associations and participants in the Securities Transfer Association Medallion
Program (STAMP), the Stock Exchanges Medallion Program (SEMP) or the New York
Stock Exchange Medallion Signature Program (MSP). The Fund reserves the right to
reject a signature guarantee where it is believed that the Fund will be placed
at risk by accepting such guarantee. A signature guarantee is also necessary in
order to change the account registration. Notarization by a notary public is not
an acceptable signature guarantee. ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED
BY SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY CORPORATIONS, EXECUTORS,
ADMINISTRATORS, TRUSTEES, CUSTODIANS OR RETIREMENT PLANS. FOR FURTHER
INFORMATION WITH RESPECT TO REDEMPTION REQUIREMENTS, PLEASE CONTACT THE
SHAREHOLDER SERVICES DEPARTMENT OF SELIGMAN DATA CORP. FOR ASSISTANCE.
EXPEDITED REDEMPTION SERVICE. The Expedited Redemption Service allows a
shareholder whose shares are held in book credit form to request redemptions by
telephone or by letter to Seligman Data Corp. without a signature guarantee. If
a shareholder intends to use this Service, it should be elected on the Account
Application at the time it is first filed. If a shareholder wishes to add this
service subsequent to the establishment of an account, the shareholder must
provide a signature guaranteed letter of instruction that includes bank account
information.
Under the Expedited Redemption Service, Seligman Data Corp. will use
reasonable commercial efforts to send the proceeds of shares redeemed, if $1,000
or more, on the next business day by wire to the shareholder's account at a
domestic commercial bank which is a member of the Federal Reserve System or to a
correspondent bank if the shareholder's bank is not a member. Failure of a
correspondent bank to notify the shareholder's bank immediately may result in a
delay in crediting the proceeds to the shareholder's bank account. Accordingly,
proceeds may not necessarily be available to shareholders on the next business
day. Proceeds of less than $1,000 and at the shareholder's option, any other
amounts, will be mailed to the shareholder's address of record.
Requests for expedited redemptions will not be accepted unless your account
has a value of $2,000 or more and the Fund has a certified Taxpayer
Identification Number on file. For information about the circumstances under
which a shareholder may bear the risk for a fraudulent redemption via telephone,
see "Telephone Transactions" above.
TELEPHONE REDEMPTIONS. In addition to the Expedited Redemption Service,
regular telephone redemptions of uncertificated shares may be made once per day,
in an amount up to $50,000 per account. Redemption proceeds will be by check
only and sent to the shareholder's address of record.
Telephone redemption requests, including Expedited Redemption, received by
Seligman Data Corp. at (800) 221-2450 between 8:30 a.m. and 4:00 p.m. Eastern
time, on any business day, will be processed as of the close of business on that
day. All telephone redemption checks will be sent within seven calendar days and
will be payable to all of the registered owners on the account. Redemption
requests to be payable by check will not be accepted within 30 days following an
address change. Keogh Plans, IRAs or other retirement plans are not eligible for
telephone redemptions.The Fund reserves the right to suspend or terminate its
telephone redemption services at any time without notice.
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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.
The Fund will not accept orders from securities dealers for the repurchase
of shares. Shares transferred to dealers will be subject to the redemption
requirements of the Fund and Seligman Data Corp.
CHECK REDEMPTION SERVICE. The Check Redemption Service allows a shareholder
to request Seligman Data Corp. to provide redemption checks to be drawn on the
shareholder's account in amounts of $500 or more. The shareholder may elect to
use this service on the Account Application or by later written request to
Seligman Data Corp. Shares for which certificates have been issued will not be
available for redemption under this service. Holders of Class B shares may use
this service, although check redemptions of Class B shares will be subject to a
CDSL. Holders of Class D shares may use this service if the Original Class D
shares relating thereto were purchased more than one year from the time of
redemption. Dividends continue to be earned until the check clears for payment.
Use of this Service is subject to Boston Safe Deposit and Trust Co. rules and
regulations covering checking accounts.
There is no charge for use of checks. When honoring a check that was
processed for payment, Boston Safe Deposit and Trust Co. will cause the Fund to
redeem exactly enough full and fractional shares from an account to cover the
amount of the check. If shares are owned jointly, redemption checks will need to
be signed by all persons unless otherwise elected on the Account Application, in
which case a single signature will be acceptable.
The shareholder should be certain there are adequate shares in the account
to cover the amount of checks written. If insufficient shares are in the
account, the check will be returned marked "insufficient funds." Seligman Data
Corp. will charge a $10.00 processing fee for any check redemption draft
returned as uncollectable. This charge may be deducted from the account that the
check was drawn against.
Check Redemption books cannot be reordered unless the account has a value
of $2,000 or more and the Fund has a certified Taxpayer Identification Number on
file.
Cancelled checks will be returned to a shareholder under separate cover the
month after they clear. Redemption checks cannot be certified. The Check
Redemption Service may be terminated at any time by the Fund or Boston Safe
Deposit and Trust Co. See "Terms and Conditions" on page 23.
GENERAL. 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.
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 Class A, Class B and Class D shares.
Payments under the Plan may include, but are not limited to: (i) compensation to
securities dealers and other organizations ("Service Organizations") for
providing distribution assistance with respect to assets invested in the Fund,
(ii) compensation to Service Organizations for providing administration,
accounting and other shareholder services with respect to Fund shareholders, and
(iii) otherwise promoting the sale of shares of the Fund, including paying for
the preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying SFSI's costs incurred in connection with its marketing
15
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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 may reimburse 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 such shares. Such payments are not currently being made but may
commence after April 30, 1997. It is expected that the proceeds from the
distribution fee in respect of Class A shares will be used primarily to
compensate Service Organizations which enter into agreements with SFSI. Such
Service Organizations will receive from SFSI a continuing fee of up to .25% on
an annual basis, payable quarterly, of the average daily net assets of Class A
shares attributable to the particular Service Organization for providing
personal service and/or the maintenance of shareholder accounts. The fee payable
from time to time is, within such limit, determined by the Directors of the
Fund.
The Plan, as it relates to Class A shares, was approved by the Directors on
March 19, 1992 and by the shareholders of the Fund on November 23, 1992. The
Plan is reviewed by the Directors annually.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class B and Class D shares at an annual rate of up to 1% of the respective
average daily net asset value of the Class B and Class D shares. Proceeds from
the Class B and Class D distribution fee are used primarily to compensate
Service Organizations for administration, shareholder services and distribution
assistance (including a continuing fee of up to .25% on an annual basis of the
average daily net asset value of Class B and Class D shares attributable to
particular Service Organizations for providing personal service and/or the
maintenance of shareholder accounts) and will initially be used by SFSI to
defray certain expenses of the payment of 4% (in the case of Class B shares) or
1% (in the case of Class D shares) made by it to Service Organizations at the
time of the sale (or at the time of sale of the Original 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. 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 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, 1995 by the Class D shares pursuant to the Plan was 1%
per annum of the average daily net assets of Class D shares. The Plan as it
relates to Class B shares was approved by the Directors on March 21, 1996. The
Plan is reviewed by the Directors annually.
Seligman Services, Inc. ("SSI"), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts as 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
Class A shares of the Fund which were acquired through an exchange of
shares of any mutual fund in the Seligman Group which is sold with a front-end
sales load plus any additional shares acquired through invested dividends or
gain distributions on such shares, and all cash dividends declared for the month
to the date of the exchange, may be reexchanged at net asset value for Class A
shares of any of the other mutual funds in the Seligman Group in states where
such shares may be sold.
However, if such Class A shares were acquired through direct purchase and
not an exchange, the shares (plus any additional shares acquired through
invested dividends on such shares) and all cash dividends declared for the month
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to the date of the exchange, must be exchanged at the applicable public offering
price, which includes a front-end sales load.
Class B shares may be exchanged for Class B shares of any other mutual fund
in the Seligman Group and Class D shares may be exchanged for Class D shares of
any other mutual fund in the Seligman Group, in each case at net asset value. If
shares that are subject to a CDSL are exchanged for shares of another fund, for
purposes of assessing the CDSL payable upon the disposition of the exchanged
shares, the calculation of the one year or six year holding period shall begin
on the original date of purchase.
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.
Exchange may be made by mail, or by telephone, if the shareholder has
telephone services. The Seligman Mutual Funds available under the Exchange
Privilege are:
o SELIGMAN CAPITAL FUND, INC. seeks aggressive capital appreciation. Current
income is not an objective.
o 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.
o 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.
o 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.
o SELIGMAN GROWTH FUND, INC. seeks longer-term growth in capital value and an
increase in future income.
o SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. consists of the Seligman Henderson
International Fund, the Seligman Henderson Global Growth Opportunities Fund,
the Seligman Henderson Global Smaller Companies Fund and the Seligman
Henderson Global Technology Fund, each of which seeks long-term capital
appreciation primarily by investing in companies either globally or
internationally.
o SELIGMAN HIGH INCOME FUND SERIES seeks high current income by investing in
debt securities. The fund consists of the U.S. Government Securities Series
(which does not currently offer Class B shares) and the High-Yield Bond
Series.
o SELIGMAN INCOME FUND, INC. seeks high current income and the possibility of
improvement of future income and capital value.
o SELIGMAN NEW JERSEY TAX-EXEMPT FUND, INC. invests in investment grade New
Jersey tax-exempt securities. (Does not currently offer Class B shares.)
o SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES invests in investment grade
Pennsylvania tax-exempt securities. (Does not currently offer Class B shares.)
o SELIGMAN TAX-EXEMPT FUND SERIES, INC. consists of several State Series and a
National Series. The National Tax-Exempt Series seeks to provide maximum
income exempt from Federal income taxes; individual state series, each seeking
to maximize income exempt from Federal income taxes and from personal income
taxes in designated states, are available for Colorado, Georgia, Louisiana,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon
and South Carolina. (Does not currently offer Class B shares.)
o SELIGMAN TAX-EXEMPT SERIES TRUST includes the California Tax-Exempt Quality
Series, the California Tax-Exempt High-Yield Series, the Florida Tax-Exempt
Series and the North Carolina Tax-Exempt Series, each of which invests in
tax-exempt securities of its designated state. (Does not currently offer Class
B shares.)
All permitted exchanges will be based on the net asset values of the
respective funds determined at the close of the NYSE on that day. Telephone
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requests for exchanges received between 8:30 a.m. and 4:00 p.m. Eastern time, on
any business day, by Seligman Data Corp. at (800) 221-2450, will be processed as
of the close of business on that day. The registration of an account into which
an exchange is made must be identical to the registration of the account from
which shares are exchanged. When establishing a new account by an exchange of
shares, the shares being exchanged must have a value of at least the minimum
initial investment required by the mutual fund into which the exchange is being
made. The method of receiving distributions, unless otherwise indicated, will be
carried over to the new fund account, as will telephone services. Account
services, such as Invest-A-Check(R) Service, Directed Dividends, Automatic Cash
WithdrawaL Service and Check Writing Privilege 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 proper form.
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 a shareholder 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.
DIVIDENDS
The Fund declares as a dividend substantially all of its net investment
income each day that the NYSE is open for business. The Fund's net investment
income for a Saturday, Sunday or holiday is declared as a dividend on the
preceding business day.
Dividends are paid on the 25th day of each month (the "payable date") and
invested in additional shares on the payable date using the net asset value of
the ex-dividend date or, at the shareholder's election, paid in cash. However,
if the 25th day of the month falls on a weekend or holiday on which the Fund or
Mellon Bank, N.A. is closed, the dividend will be paid on the previous business
day. Shareholders may elect (1) to receive dividends in shares or (2) to receive
dividends in cash. Cash dividends are paid by check. If the payment option you
prefer is not listed, contact Seligman Data Corp. at (800) 221-2450 to request
information on other available options. If no election is made, dividends will
be credited to the shareholder's account in additional shares of the Fund. Class
B and Class D shares acquired through the payment of a dividend and credited to
a share-holder's account are not subject to a CDSL. In the case of prototype
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retirement plans, dividends are automatically reinvested in additional shares.
Shareholders may elect to change their dividend option 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. A change in election must be received by Seligman Data Corp. before
the record date for a dividend in order to be effective for such dividend.
The per share dividends from net investment income on Class B shares and on
Class D shares will be lower than the per share dividends on Class A shares as a
result of the distribution fee applicable with respect to Class B shares and
Class D shares. Per share dividends of the two classes may also differ as a
result of differing class expenses.
Shareholders exchanging shares of one mutual fund for shares of another
mutual fund in the Seligman Group will continue to receive dividends and gains
as elected prior to such exchange unless otherwise specified. In the event that
a shareholder redeems all shares in the shareholder's Fund account, the
shareholder will receive on the redemption payment date the amount of all
dividends declared for the period up to and including the date of redemption of
the shares.
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 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 are taxed at
ordinary income rates to the shareholders, whether received in cash or
reinvested in additional shares, and are not eligible for the dividends received
deduction for corporations.
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 by the Fund.
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 DIVIDENDS AND
DISTRIBUTIONS 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 SHAREHOLDERS ACCOUNT AND OFFSET AGAINST ANY UNDISTRIBUTED
DIVIDENDS. THE FUND ALSO RESERVES THE RIGHT TO CLOSE ANY ACCOUNT WHICH DOES NOT
HAVE A CERTIFIED TAXPAYER IDENTIFICATION NUMBER.
SHAREHOLDER INFORMATION
Shareholders will be sent reports semi-annually regarding the Fund. General
information about the Fund may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, NY 10017 or by telephoning the
Corporate Communications/Investor Relations Department toll-free at (800)
221-7844 from all continental United States or (212) 850-1864 in New York State
and the Greater New York City area. Information about shareholder accounts may
be requested by writing Shareholder Services, Seligman Data Corp, at the same
address or by toll-free telephone (800) 221-2450 from all continental United
States. Seligman Data Corp. may be telephoned Monday through Friday (except
holidays), between the hours of 8:30 a.m. and 6:00 p.m. Eastern time and calls
will be answered by a service representative.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BALANCE,
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MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS,
FORM 1099-DIVS AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF
DIVIDEND CHECKS, ACCOUNT STATEMENTS AND OTHER INFORMATION, SELIGMAN DATA CORP.
SHOULD BE NOTIFIED IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGES. ADDRESS
CHANGES MAY BE TELEPHONED TO SELIGMAN DATA CORP. IF THE SHAREHOLDER HAS
TELEPHONE SERVICES. FOR MORE INFORMATION ABOUT TELEPHONE SERVICES, SEE
"TELEPHONE TRANSACTIONS" ABOVE.
ACCOUNT SERVICES. Shareholders are sent confirmation of financial
transactions in their account. Other investor services are available. These
include:
INVEST-A-CHECK(R) SERVICE enables a shareholder to authorize additional
purchases of shares automatically by electroniC funds transfer from a savings or
checking account, if the bank that maintains the account is a member of the
Automated Clearing House ("ACH"), or by preauthorized checks to be drawn on the
shareholder's checking account at regular monthly intervals for 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 with a $100 minimum in
conjunction with the monthly investment option, or a $250 minimum in conjunction
with the quarterly investment option. (See "Terms and Conditions" on page 23.)
AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder to exchange a
specified amount, at regular monthly intervals in fixed amounts of $100 or more,
or regular quarterly intervals in fixed amounts of $250 or more, from shares of
a given class of the Fund into shares of the same class of any other Seligman
Mutual Fund(s) registered in the same name. The shareholder's Fund account must
have a value of at least $5,000 at the initiation of the service. Exchanges will
be made at the public offering price.
DIVIDENDS FROM OTHER INVESTMENTS permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in additional
shares of the Fund. (Dividend checks must meet or exceed the required minimum
purchase amount and include the shareholder's name, account number, the name of
the Fund and the class of shares in which the investment is to be made.)
AUTOMATIC CD TRANSFER SERVICE permits a shareholder to instruct a bank to
invest the proceeds of a maturing bank certificate of deposit ("CD") in shares
of any designated Seligman Mutual Fund. Shareholders who wish to use this
service should contact Seligman Data Corp. or a broker to obtain the necessary
documentation. Banks may charge a penalty on CD assets withdrawn prior to
maturity. Accordingly, it will not normally be advisable to liquidate a CD
before its maturity.
AUTOMATIC CASH WITHDRAWAL SERVICE permits payments at regular intervals to
be made to a shareholder who owns or purchases shares worth $5,000 or more held
as book credits. Holders of Class B shares may elect to use this service
immediately, although certain withdrawals may be subject to a CDSL. Please
contact Seligman Data Corp. at (800) 221-2450 for more information. Holders of
Class D Shares may elect to use this service if the Original Class D Shares
relating thereto were purchased more than one year from the time of payment.
(See "Terms and Conditions" on page 23.)
DIRECTED DIVIDENDS allows a shareholder to pay dividends to another person
or to direct the payment of such dividends to another Seligman Mutual Fund for
purchase at net asset value. Dividends on Class A, Class B and Class D shares
may only be directed to shares of the same class of another Seligman Mutual
Fund.
OVERNIGHT DELIVERY to service shareholder requests is available for a
$15.00 fee which may be deducted from a shareholder's account, if requested.
COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of
charge for the current year and most recent prior year. Copies of year-end
statements for prior years back to 1977 are available for a fee of $10.00 per
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year, per account, with a maximum charge of $150 per account. Statement requests
should be forwarded, along with a check, to Seligman Data Corp.
TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for all
types of tax-deferred retirement plans. By contacting your investment dealer or
SFSI, you may obtain plans, plan forms and custody agreements for:
--Individual Retirement Accounts (IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and
certain non-profit organizations who wish to make deferred compensation
arrangements; and
--Pension and Profit Sharing Plans for sole proprietorships, individuals,
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 no account application has 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.
YIELD
From time to time the Fund advertises its "yield" and "effective yield"
each of which are calculated separately for Class A, Class B and Class D shares.
THESE YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO
INDICATE FUTURE PERFORMANCE. The "yield" of a class refers to the income
generated by an investment in the class over a seven-day period (which period
will be stated in the advertisement). This income is then "annualized." That is,
the amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in the class is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment.
ORGANIZATION AND CAPITALIZATION
The Fund is a diversified, open-end management investment company,
incorporated in Maryland on July 12, 1976 and which commenced operations in
1977.
Each share of the capital stock of the Fund has a par value of 1 cent per
share. The Fund is 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 sale of
multiple classes of common stock. In accordance with the Articles of
Incorporation, the Board of Directors may authorize the creation of additional
classes of common stock with such characteristics as are permitted by the
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. Each share is fully paid and
non-assessable, and each is freely transferable.
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APPENDIX
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Fund will pay to the Manager promptly after the end
of each month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Fund at the close of
business on the previous business day. For this purpose, 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:
.45 of 1% of the first $4 billion of Fee Base,
.425 of 1% of the next $2 billion of Fee Base,
.40 of 1% of the next $2 billion of Fee Base, and
.375 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 at the close of
business on the day payment is received. If a check in payment of a purchase of
Fund shares is dishonored for any reason, Seligman Data Corp. will cancel the
purchase and may redeem additional shares, if any, held in a shareholder's
account in an amount sufficient to reimburse the Fund for any loss it may have
incurred and charge a $10.00 return check fee. Shareholders will receive
dividends from investment income in shares or in cash according to the option
elected. Dividend options may be changed by notifying Seligman Data Corp. These
option changes must be received by Seligman Data Corp. on or before the record
date for the dividend in order to be effective for that dividend. Stock
certificates will not be issued, unless requested. Replacement stock
certificates will be subject to a surety fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The
application is subject to acceptance by thE shareholder's bank and Seligman Data
Corp. The electronic funds transfer ("ACH debit") or preauthorized check in the
amount specified will be drawn automatically on your 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 net asset value at the close of business on the
same date. After the initial investment, the value of shares held in a
shareholder's account must equal not less than two regularly scheduled
investments. If an ACH debit or preauthorized check is not honored by the
shareholder's bank, or if the value of shares held falls below the required
minimum, the Invest-A-Check(R) Service may be suspended. In the event that a
check is returned uncollectable, Seligman DatA Corp. will cancel the purchase,
redeem shares held in the shareholder's account for an amount sufficient to
reimburse the Fund for any loss it may have incurred as a result, and charge a
$10.00 return check fee. This fee may be deducted from the shareholder's
account. The Invest-A-Check(R) Service may be reinstated upon written request
indicating that the causE of interruption has been corrected. The
Invest-A-Check(R) Service may be terminated by the shareholder or Seligman DatA
Corp. at any time by written notice. The shareholder agrees to hold the Fund and
its agents free from all liability which may result from acts done in good faith
and pursuant to these terms. Instructions for establishing Invest-A-Check(R)
Service are given on the Account Application. In the event a shareholder
exchanges all of the shares from one mutual fund in the Seligman Group to
another, the shareholder must re-apply for the Invest-A-Check(R) Service in the
Seligman Mutual Fund into which the exchange was made. Accounts established in
conjunction with the Invest-A-Check(R) Service must be accompanied by a minimum
initial investment of at least $100 in connection with the monthly investment
option or $250 in connection with the quarterly investment option. If a
shareholder uses the Invest-A-Check(R) Service to make an IRA investment, the
purchase will be credited as a current year contribution. If a shareholder uses
the Invest-A-Check(R) Service to make an investment in a pension or profit
sharing plan, the purchase will be credited as a current year employer
contribution. In the event of a partial exchange, Invest-A-Check(R) Service will
be continued, subject to the above conditions, in the Seligman Mutual Fund from
which the exchange was made.
AUTOMATIC CASH WITHDRAWAL SERVICE
The Automatic Cash Withdrawal Service is available to Class A shareholders,
to Class B shareholders and to Class D shareholders with respect to Class D
shares held for one year or more. A sufficient number of full and fractional
shares will be redeemed to provide the amount required for a scheduled payment.
Redemptions will be made at the asset value at the close of business on the
specific day designated by the shareholder of each month (or on the prior
business day if the day specified falls on a weekend or holiday), less, in the
case of Class B shares, any applicable CDSL. A shareholder may change the amount
of scheduled payments or may suspend payments by written notice to Seligman Data
Corp. at least ten days prior to the effective date of such a change or
suspension. The Service may be terminated by the shareholder at any time by
writing to Seligman Data Corp. Seligman Data Corp. also reserves the right to
terminate the Service. It will be terminated upon proper notification of the
death or legal incapacity of the shareholder. This Service is considered
terminated in the event a withdrawal of shares, other than to make scheduled
withdrawal payments, reduces the value of shares remaining on deposit to less
than $5,000. Continued payment in excess of dividend income invested will reduce
and ultimately exhaust capital.
CHECK REDEMPTION SERVICE
The Check Redemption Service is available to all Class A shareholders, to
Class B shareholders and to Class D shareholders with respect to Class D shares
held for one year or more.
If shares are held in joint names, all shareholders must sign the Check
Redemption section of the Account Application. All checks will require all
signatures unless a lesser number is indicated in the Check Redemption section.
Accounts in the names of corporations, trusts, partnerships, etc. must list all
authorized signatories.
In all cases, each signator guarantees the genuineness of the other
signature(s). Checks may not be drawn for less than $500.
The shareholder authorizes Boston Safe Deposit and Trust Co. to honor the
checks drawn by the shareholder on the account of Seligman Cash Management Fund,
Inc. and to effect a redemption of sufficient shares in the shareholder's
account to cover payment of the check and, in the case of Class B shares, any
applicable CDSL.
Boston Safe Deposit and Trust Co. shall be liable only for its own
negligence. Seligman Cash Management Fund, Inc. will not be liable for any loss,
expense or cost arising out of check redemptions. Seligman Cash Management Fund,
Inc. reserves the right to change, modify or terminate this Service at any time
upon notification mailed to the address of record of the shareholder(s).
Seligman Data Corp. will charge a $10.00 service fee for any check
redemption draft returned marked "unpaid". This fee may be deducted from the
account the check was drawn against. NO REDEMPTION PROCEEDS WILL BE REMITTED TO
SHAREHOLDERS WITH RESPECT TO SHARES PURCHASED BY CHECK (UNLESS CERTIFIED) UNTIL
SELIGMAN DATA CORP. RECEIVES NOTICE THAT THE CHECK HAS CLEARED WHICH MAY BE UP
TO 15 DAYS FROM THE CREDIT OF THE SHARES TO THE SHAREHOLDER'S ACCOUNT.
4/96
23
<PAGE>
SELIGMAN
CASH
MANAGEMENT
FUND, INC.
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J.&W. Seligman & Co. Incorporated
100 Park Avenue
New York, New York 10017
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan &Cromwell
125 Broad Street
New York, New York, 10004
EQCS1 4/96
PROSPECTUS
April 22, 1996
[Logo]
A Money Market Fund
In Its 21st Year
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
April 22, 1996
SELIGMAN CASH MANAGEMENT FUND, INC.
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone (800) 221-2450 all continental United States
For Retirement Plan Information - Toll Free Telephone (800) 445-1777
This Statement of Additional Information expands upon and supplements the
information contained in the current Prospectus of Seligman Cash Management
Fund, Inc., (the "Fund") dated April 22, 1996. It should be read in conjunction
with the Prospectus, which may be obtained by writing or calling the Fund at the
above address or telephone numbers. This Statement of Additional Information,
although not in itself a Prospectus, is incorporated by reference into the
Prospectus in its entirety.
The Fund offers three classes of shares. Class A shares may be purchased at
net asset value. Class A shares are sold subject to an annual service fee of up
to .25% of the average daily net asset value of the Class A shares. Such service
fee will not be charged until after April 30, 1997. Class B shares and Class D
shares are available only through an exchange of shares of another mutual fund
in the Seligman Group offering Class B shares ("Original Class B shares") or
Class D shares ("Original Class D shares"), respectively, or through securities
dealers or other financial intermediaries, to facilitate periodic investments in
Class B shares or Class D shares, respectively, of other mutual funds in
Seligman Group. Class B shares are sold without an initial sales load but are
subject to a contingent deferred sales load ("CDSL"), if applicable, of 5% on
redemptions in the first year after issuance of such shares (or, in the case of
Class B shares acquired upon exchange, the issuance of the Original Class B
Shares), declining to 1% in the sixth year and 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 issue. Class D shares are sold
without an initial sales load but are subject to a CDSL of 1% imposed on certain
redemptions within one year of purchase (or, in the case of Class D shares
acquired upon exchange, the purchase of the Original Class D Shares). In
addition, Class B shares and Class D shares are each subject to an annual
distribution fee of up to .75% and an annual service fee of up to .25% of the
average daily net asset value of their respective class.
Each Class A, Class B and Class D share represents an identical legal
interest in the investment portfolio of the Fund and has the same rights except
for certain class expenses and except that Class B shares and Class D shares
bear a higher distribution fee that generally will cause the Class B shares and
Class D shares to have a higher expense ratio and pay lower dividends that Class
A shares. Each Class has exclusive voting rights with respect to its
distribution plan. Although holders of Class A, Class B and Class D shares have
identical legal rights, the different expenses borne by each Class will result
in different net asset values and dividends. The three classes also have
different exchange privileges.
TABLE OF CONTENTS
Page
----
Investment Objectives And Policies ................ 2
Calculation Of Yield .............................. 2
Investment Limitations ............................ 3
Directors and Officers ............................ 4
Management And Expenses ........................... 7
Administration, Shareholder Services and
Distribution Plan .............................. 9
Purchase and Redemption of Fund Shares ............ 9
Net Asset Value Per Share..10
General Information ............................... 10
Financial Statements .............................. 11
Appendix A ........................................ 11
Appendix B ........................................ 12
-1-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
As stated in the Prospectus, the Fund's objectives are to preserve capital
and to maximize liquidity and current income. Investments in the Fund are
neither insured nor guaranteed by the U.S. Government and there is no assurance
that the Fund will be able to maintain a stable net asset value of $1.00 per
share.
The Fund invests in high-quality money market instruments, including
securities issued or guaranteed by the U.S. Government or its agencies and
instrumentalities, obligations of domestic and foreign commercial banks,
commercial paper and high-grade short-term debt securities (such as bonds and
notes). The Fund may enter into repurchase agreements with respect to these
securities. A more complete description of the investments and ratings of
investments the Fund may make is contained in Appendix A.
LENDING OF PORTFOLIO SECURITIES
As stated in the Prospectus, 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
has not loaned any portfolio securities to date.
CALCULATION OF YIELD
The current and effective yields of the Class A, Class B and Class D shares
of the Fund may be quoted in reports, sales literature, and advertisements
published by the Fund. The current yield of Class A shares is computed by
determining the net change exclusive of capital changes in the value of a
hypothetical pre-existing account having a balance of 1 share at the beginning
of a seven-day calendar period, dividing the net change in account value by the
value of the account at the beginning of the period, and multiplying the return
over the seven-day period by 365/7. For purposes of the calculation, net change
in account value reflects the value of additional shares purchased with
dividends from the original share and dividends declared on both the original
share and any such additional shares, but does not reflect realized gains or
losses or unrealized appreciation or depreciation. Effective yield is computed
by annualizing the seven-day return with all dividends reinvested in additional
Fund shares. The current and effective yields of the Fund's Class B shares and
Class D shares are computed in the same manner, except that the yield on Class B
shares and Class D shares may include a CDSL if shares are held for less than
six years (for Class B shares) or less than one year (for Class D shares).
Because Class B shares and Class D shares bear a higher distribution fee than
the Class A shares, the yield of Class B shares and Class D shares will be lower
than the yield of Class A shares.
The following are examples of the yield calculations for Class A and Class
D shares for the seven-day period ended December 31, 1995. No Class B shares
were outstanding during this period.
Class A shares Class D shares
-------------- --------------
Total dividends per share from net investment $.000929 $.000728
income (seven days ended December 31, 1995)
Annualized (365 day basis). .04844 .037960
Average net asset value per share 1.000 1.000
Annualized historical net yield per
share for seven 4.84%* 3.80%*
calendar days ended December 31, 1995
Effective yield (seven days ended
December 31, 1995) 4.96%** 3.87%**
Weighted average life to maturity of investments was 36 days at December 31,
1995.
* This represents the annualized average net investment income per share for the
seven days ended December 31, 1995.
**Annualized average of net investment income for the same period with dividends
reinvested.
-2-
<PAGE>
INVESTMENT LIMITATIONS
Under the Fund's fundamental policies, which cannot be changed except by a
vote of a majority of its outstanding voting securities, the Fund may not:
- - Issue senior securities or borrow money, except from banks for temporary
purposes in an amount not to exceed 5% of the value of the total assets of the
Fund;
- - Make loans, except loans of portfolio securities and except to the extent that
the purchase of notes, bonds or other evidences of indebtedness, the entry
into repurchase agreements or deposits with banks, may be considered loans;
- - Mortgage or pledge any of its assets, except to the extent, up to a maximum
of 5% of its total assets, necessary to secure borrowings permitted by
paragraph 1;
- - Underwrite the securities of other issuers; make "short" sales of securities,
or purchase securities on "margin"; write or purchase put or call options;
- - Invest more than 25% of the market value of its total assets in securities of
issuers in any one industry, provided that the Fund reserves the right to
concentrate investments in money market instruments issued by the U.S.
Government or its agencies or instrumentalities or banks or bank holding
companies;
- - Invest more than 5% of its gross assets (taken at market) in the securities of
any one issuer, other than the U.S. Government, its agencies or
instrumentalities, or buy more than 10% of the voting securities of any one
issuer, other than U.S. Government agencies or instrumentalities;
- - Buy or hold any real estate or securities of corporations or trusts whose
principal business is investing in interests in real estate, or buy or hold
oil or gas interests, or buy or hold any commodity or commodity contracts;
- - Buy 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;
- - Invest in securities with contractual or other restrictions on resale, except
in connection with repurchase agreements;
- - Deal with its directors and officers, or firms they are associated with, in
the purchase or sale of securities except as broker, or purchase or hold the
securities of any issuer, if to its knowledge, directors or officers of the
Fund or of the Manager individually owning beneficially more than 0.5% of the
securities of that other company own in the aggregate more than 5% of such
securities; or
- - Invest in the securities of companies for purposes of exercising control or
management of such companies or in securities issued by other investment
companies, except in connection with a merger, consolidation, acquisition or
reorganization.
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 (1) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares of the Fund present at a shareholders' meeting if
more than 50% of the outstanding shares of the Fund are represented at the
meeting in person or by proxy.
-3-
<PAGE>
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 Officer
(57) and Chairman of the Executive Committee
Managing Director, Chairman and President, J. & W.
Seligman & Co. Incorporated, investment managers and
advisors; and Seligman Advisors, Inc., advisors; Chairman
and Chief Executive Officer, the Seligman Group of
Investment Companies; Chairman, Seligman Financial
Services, Inc., broker/dealer; Seligman Holdings, Inc.,
holding company; Seligman Services, Inc., broker/dealer;
and Carbo Ceramics Inc., ceramic proppants for oil and gas
industry; Director or Trustee, Seligman Data Corp.,
shareholder service agent; Kerr-McGee Corporation,
diversified energy company; and Sarah Lawrence College;
and a Member of the Board of Governors of the Investment
Company Institute; formerly, Chairman, Seligman
Securities, Inc., broker/dealer; and J. & W. Seligman
Trust Company, trust company.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(43)
Director and Managing Director (formerly, Chief
Administrative and Financial Officer), J. & W. Seligman &
Co. Incorporated, investment managers and advisors; and
Seligman Advisors, Inc., advisors; Director or Trustee,
the Seligman Group of Investment Companies; President, the
Seligman Group of Investment Companies, except Seligman
Quality Municipal Fund, Inc. and Seligman Select Municipal
Fund, Inc.; Chairman, Seligman Data Corp., shareholder
service agent; Director, Seligman Financial Services,
Inc., broker/dealer; Seligman Services, Inc.,
broker/dealer; Senior Vice President, Seligman Henderson
Co., advisors; formerly, Director and Secretary, Chuo
Trust - JWS Advisors, Inc., advisors; and Director,
Seligman Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and advisors; and
Seligman Advisors, Inc., advisors; Director or Trustee,
the Seligman Group of Investment Companies; Seligman
Financial Services, Inc., broker/dealer; Seligman Services
Inc., broker/dealer; Trudeau Institute, nonprofit
biomedical research organization; Lake Placid Center for
the Arts, cultural organization; and Lake Placid Education
Foundation, education foundation; formerly, Director, J. &
W. Seligman Trust Company; and Seligman Securities, Inc.,
broker/dealer.
JOHN R. GALVIN* Director
(66)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman of the American Council on
Germany; a Governor of the Center for Creative Leadership;
Director of USLIFE, insurance; National Committee on
U.S.-China Relations, National Defense University and the
Institute for Defense Analysis; Raytheon Co., electronics;
Formerly, Ambassador, U.S. State Department; Distinguished
Policy Analyst at Ohio State University and Olin
Distinguished Professor of National Security Studies at
the United States Military Academy. From June, 1987 to
June, 1992, he was the Supreme Allied Commander, Europe
and the Commander-in-Chief, United States European
Command.
Tufts University, Packard Avenue, Medford, MA 02155
-4-
<PAGE>
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or Trustee,
the Seligman Group of Investment Companies; Chairman, The
Rockefeller Foundation, charitable foundation; and
Director, NYNEX, telephone company; and the Committee for
Economic Development; formerly, Trustee, The Markle
Foundation, philanthropic organization; and Director,
International Research and Exchange Board, intellectual
exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive Officer,
Kerr-McGee Corporation, energy and chemicals; Director or
Trustee, the Seligman Group of Investment Companies;
Director of Kimberly-Clark Corporation, consumer products,
Bank of Oklahoma Holding Company, American Petroleum
Institute, Oklahoma City Chamber of Commerce, Baptist
Medical Center, Oklahoma Chapter of the Nature
Conservancy, Oklahoma Medical Research Foundation and
United Way Advisory Board; Chairman of Oklahoma City
Public Schools Foundation; and Member of the Business
Roundtable and National Petroleum Council.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan & Cromwell, law
firm; Director or Trustee, the Seligman Group of
Investment Companies; The Municipal Art Society of New
York; Commonwealth Aluminum Corporation; the U. S. Council
for International Business; and the U. S.-New Zealand
Council; Chairman, American Australian Association; Member
of the American Law Institute and Council on Foreign
Relations; and Member of the Board of Governors of the
Foreign Policy Association and New York Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(53)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; and Chairman of the Board of
Trustees of St. George's School (Newport, RI).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law firm; Director
or Trustee, the Seligman Group of Investment Companies;
Public Service Enterprise Group, public utility.
Park Avenue at Morris County, P.O. Box 1945, Morristown,
NJ 07962-1945
JAMES Q. RIORDAN Director
(68)
Director, Various Corporations; Director or Trustee, the
Seligman Group of Investment Companies; The Brooklyn
Museum; The Brooklyn Union Gas Company; The Committee for
Economic Development; Dow Jones & Co., Inc.; and Public
Broadcasting Service; formerly, Co-Chairman of the Policy
Council of the Tax Foundation; Director and Vice Chairman,
Mobil Corporation; Director, Tesoro Petroleum Companies,
Inc.; and Director and President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
-5-
<PAGE>
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief Investment Officer,
Institutional, J. & W. Seligman & Co. Incorporated,
investment managers and advisors; and Seligman Advisors,
Inc., advisors; Director or Trustee, the Seligman Group of
Investment Companies; Director, Seligman Holdings, Inc.,
holding company; Seligman Financial Services, Inc.,
distributor; Seligman Henderson Co., advisors; and
Seligman Services, Inc., broker/dealer; formerly,
President, the Seligman Group of Investment Companies,
except Seligman Quality Municipal Fund, Inc. and Seligman
Select Municipal Fund, Inc.; and Director, J. & W.
Seligman Trust Company; Seligman Data Corp., shareholder
service agent; and Seligman Securities, Inc.,
broker/dealer.
ROBERT L. SHAFER Director
(63)
Vice President, Pfizer Inc., pharmaceuticals; Director or
Trustee, the Seligman Group of Investment Companies; and
USLIFE Corporation, life insurance.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(61)
Executive Vice President, Chief Operating Officer and
Director, Sammons Enterprises, Inc.; Director or Trustee,
the Seligman Group of Investment Companies; Red Man Pipe
and Supply Company, piping and other materials; and
C-SPAN.
300 Crescent Court, Suite 700, Dallas, TX 75201
LEONARD J. LOVITO Vice President and Portfolio Manager
(35)
Vice President, Investment Officer, J. & W. Seligman & Co.
Incorporated, investment managers and advisors; Vice
President and Portfolio Manager, two other open-end
investment companies in the Seligman Group of Investment
Companies.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisors; Seligman
Financial Services, Inc., broker/dealer; and Seligman
Advisors, Inc., advisors; Vice President, the Seligman
Group of Investment Companies; Senior Vice President,
Finance (formerly, Treasurer), Seligman Data Corp.,
shareholder service agent; Treasurer, Seligman Holdings,
Inc., holding company; and Seligman Henderson Co.,
advisors; formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Vice President,
Finance J & W Seligman Trust Company.
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation, and Corporate
Secretary, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors, Inc.,
advisors; Corporate Secretary, the Seligman Group of
Investment Companies; Seligman Financial Services, Inc.,
broker/dealer Seligman Henderson Co., advisers; Seligman
Services, Inc., broker/dealers; and Seligman Data Corp.;
formerly, Secretary, J. & W. Seligman Trust Company; and
attorney, Seward and Kissel.
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment Companies; and
Seligman Data Corp., shareholder service agent; formerly,
Treasurer, American Investors Advisors, Inc. and the
American Investors Family of Funds.
-6-
<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.
<TABLE>
<CAPTION>
Compensation Table
Pension or Total Compensation
Aggregate Retirement Benefits from Registrant and
Name and Compensation Accrued as part of Fund Complex Paid
Position with Registrant from Registrant (1) Fund Expenses to Directors (2)
------------------------ ------------------- ------------- ----------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President .. N/A N/A N/A
Fred E. Brown, Director ................ N/A N/A N/A
John R. Galvin, Director ............... $1,730.54 N/A $41,252.75
Alice S. Ilchman, Director ............. 2,842.88 N/A 68,000.00
Frank A. McPherson, Director ........... 1,730.54 N/A 41,252.75
John E. Merow, Director ................ 2,771.44 N/A 66,000.00(d)
Betsy S. Michel, Director 2,735.72 N/A 67,000.00
Douglas R. Nichols, Jr., Director (3) .. 1,040.90 N/A 24,747.75
James C. Pitney, Director .............. 2,842.88 N/A 68,000.00
James Q. Riordan, Director ............. 2,842.88 N/A 70,000.00
Herman J. Schmidt, Director (3) ........ 1,040.90 N/A 24,747.75
Ronald T. Schroeder, Director .......... N/A N/A N/A
Robert L. Shafer, Director ............. 2,842.88 N/A 70,000.00
James N. Whitson, Director ............. 2,771.44 N/A 68,000.00(d)
</TABLE>
- ----------------------
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
(3) Retired May 18, 1995.
(d) Deferred. The total amounts of deferred compensation (including interest)
payable to Messrs. Merow, Pitney and Whitson as of December 31, 1995 were
$61,903, $59,807 and $8,200, respectively. Mr. Pitney no longer defers current
compensation.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is accrued
on the deferred balances. The annual cost of such interest is included in the
directors' fees and expenses, and the accumulated balance thereof is included in
"Liabilities" in the Fund's financial statements.
Directors and officers of the Fund are also directors or trustees and
officers of some or all of the other investment companies in the Seligman Group.
Directors and officers of the Fund as a group owned directly or indirectly
7,077,762 shares or 3.7% of the Fund's Class A Capital Stock at March 29, 1996.
As of that date, no Directors or officers owned shares of the Fund's Class D
Capital Stock.
MANAGEMENT AND EXPENSES
Under the Management Agreement, dated December 29, 1988, as amended May 15,
1991, subject to the control of the Board of Directors, the Manager manages the
investment of the assets of the Fund, including making purchases and sales of
portfolio securities consistent with the Fund's investment objectives and
policies, and administers its business and other affairs. The Manager provides
the Fund with such office space, administrative and other services and executive
-7-
<PAGE>
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of directors of the Fund who are employees or consultants of
the Manager and 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 of
the Prospectus. The management fee amounted to $818,740 in 1995, $779,345 in
1994 and $628,981 in 1993, equivalent to .43% of the average daily net assets of
the Fund in 1995, .44% in 1994 and .35% in 1993. During the year ended December
31, 1994, the Manager reimbursed expenses of Class D shares equal to $16,822.
During the year ended December 31, 1993, the Manager at its discretion waived a
portion of its fee for the Fund.
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 existing
shareholders, expenses of printing and filing reports and other documents filed
with governmental agencies, expenses of shareholders' meetings, expenses of
corporate data processing and related services, shareholder record keeping and
shareholder account services, fees and disbursements of transfer agents and
custodians, expenses of disbursing dividends and distributions, fees and
expenses of directors of the Fund not employed by (or serving as a Director of)
the Manager or its affiliates, insurance premiums and extraordinary expenses
such as litigation expenses. The Fund's expenses are allocated in a manner
determined by the Board of Directors to be fair and equitable.
The Manager has undertaken to one state securities administrators, so long
as required, to reimburse the Fund for each year in the amount by which total
expenses, including the management fee, but excluding interest, taxes, brokerage
commissions, distribution fees and extraordinary expenses, exceed 2 1/2% of the
first $30,000,000 of average net assets, 2% of the next $70,000,000 of average
net assets, and 1 1/2% thereafter. Such reimbursement, if any, will be made
monthly.
The Management Agreement was initially approved by the Board of Directors
on September 30, 1988 and by the shareholders at a special meeting held on
December 16, 1988. The amendments to the Management Agreement, to increase the
fee rate payable to the Manager by the Fund, were approved by the Board of
Directors on January 17, 1991, and by the shareholders at a special meeting 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 Appendix
B 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
"Code"). The Code proscribes certain practices with regard to personal
securities transactions and personal dealings, provides a framework for the
reporting and monitoring of personal securities transactions by the Manager's
Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Code. The Code prohibits
each of the officers, directors and employees (including all portfolio managers)
of the Manager from purchasing or selling any security that the officer,
director or employee knows or believes (i) was recommended by the Manager for
purchase or sale by any client, including the Fund, within the preceding two
weeks, (ii) has been reviewed by the Manager for possible purchase or sale
within the preceding two weeks, (iii) is being purchased or sold by any client,
(iv) is being considered by a research analyst, (v) is being acquired in a
private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Code also imposes a strict standard of confidentiality and
requires portfolio managers to disclose any interest they may have in the
securities or issuers that they recommend for purchase by any client.
-8-
<PAGE>
The Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may not
be purchased due to a possible conflict with clients. All officers, directors
and employees are also required to disclose all securities beneficially owned by
them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
The Fund has adopted an Administration, Shareholder Services and
Distribution Plan for each Class (the "Plan") in accordance with Section 12(b)
of the Act and Rule 12b-1 thereunder.
The Plan was approved on July 16, 1992 by the Board of Directors of the
Fund, including a majority of the Directors who are not "interested persons" (as
defined in the Act) and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (the "Qualified
Directors") and was approved by shareholders of the Fund at a Special Meeting of
Shareholders held on November 23, 1992. Although the Plan became effective in
respect of the Class A shares on January 1, 1993, the Manager has elected to
currently waive the fee. Payments may not commence until after April 30, 1997.
The Plan as it relates to Class B shares was approved by the Directors on March
21, 1996 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 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
of shares without the approval of a majority of the outstanding voting
securities of such class. If the amount payable with respect to Class A shares
under the Plan is proposed to be increased materially, the Fund will either (i)
permit holders of Class B shares to vote as a separate class on the proposed
increase or (ii) establish a new class of shares subject to the same payment
under the Plan as existing Class A shares, in which case the Class B shares will
thereafter convert into the new class instead of into Class A shares. No
material amendment to the Plan may be made except by a majority of both the
Directors and Qualified Directors.
The Plan requires that the Treasurer of the Fund shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
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. Class B shares
and Class D shares, which are available only through an exchange of shares of
another Seligman Mutual Fund offering Class B shares ("Original Class B Shares")
or Class D shares ("Original Class D shares"), respectively, at net asset value,
or through securities dealers or other financial intermediaries, to facilitate
periodic investments in Class B shares or Class D shares, respectively, of other
mutual funds in the Seligman Group. 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 issuance of such shares (or, in the case of Class B shares
acquired upon exchange, the issuance of the Original Class B Shares), declining
to 1.00% in the sixth year and 0.00% 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 issue. Class D shares are sold
without an initial sales load but are subject to a CDSL of 1% imposed on certain
redemptions without one year of purchase (or, in the case of Class D shares
acquired upon exchange, the purchase of the Original Class D Shares). See
"Alternative Distribution System," "Purchase Of Shares," and "Redemption Of
Shares" in the Prospectus.
-9-
<PAGE>
Regardless of the method of redemption, a check for the proceeds ordinarily
will be sent within seven calendar days following redemption. Payment may be
made in securities, subject to the review of some state securities commissions,
or postponed, if the orderly liquidation of portfolio securities is prevented by
the closing of, or restricted trading on, the New York Stock Exchange during
periods of emergency, or during such other periods as ordered by the Securities
and Exchange Commission. If payment were to be made in securities, shareholders
receiving securities could incur certain transaction costs.
The Fund will not accept orders from securities dealers for the repurchase
of shares. Shares transferred to dealers will be subject to the redemption
requirements of the Fund and Seligman Data Corp.
NET ASSET VALUE PER SHARE
The net asset value per share is determined as of the close of trading on
the New York Stock Exchange ("NYSE"), (normally 4:00 p.m., Eastern time), on
days on which the Fund is open for business. The Fund's office is currently
closed on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Net asset value
per share is computed by dividing the value of the net assets (i.e., the value
of its assets less liabilities) by the total number of outstanding shares of
such Portfolio. All expenses, including the Manager's fee, are accrued daily and
taken into account for the purpose of determining its net asset value.
Pursuant to Rule 2a-7 under the 1940 Act, the Fund's portfolio securities
are valued by the amortized cost method. This method of valuation involves
valuing a security at its cost at the time of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the security. While
this method provides certainty in valuation, it may result in periods during
which value, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the security. During periods of declining
interest rates, the quoted yield on shares of the Fund may tend to be higher
than that of a fund with identical investments which uses a method of valuation
based on market prices and estimates of market prices for all its portfolio
securities. Thus, if the use of amortized cost resulted in lower aggregate
portfolio value on a particular day, a prospective investor would be able to
obtain a somewhat higher yield if he purchased shares on that day than he would
be able to receive from a fund using solely market values and existing investors
would receive less investment income. The converse is true in a period of rising
interest rates.
The order permitting the Fund to use the amortized cost method of valuation
requires that, under the direction of the Board of Directors, certain procedures
be adopted to monitor and stabilize the price per share. Calculations are made
to compare the value of its investments valued at amortized cost with market
values. Market valuations are obtained by using actual quotations provided by
market markers, values obtained from yield data relating to classes of money
market instruments or U.S. Government securities published by reputable sources
at the mean between the bid and asked prices for the instruments. The Fund will
not maintain a dollar-weighted average portfolio maturity in excess of 90 days.
In the event that a deviation of 1/2 of 1% or more exists between the $1.00 per
share net asset value and the net asset value calculated by reference to market
quotations, or if there is any other deviation which the Board of Directors
believes would result in a material dilution to shareholders or purchasers, the
Board of Directors will promptly consider what action, if any, should be
initiated.
GENERAL INFORMATION
CAPITAL STOCK. The Board of Directors is authorized to classify or
reclassify and issue any unissued Capital Stock of the Fund into any number of
other classes without further action by shareholders. The Investment Company Act
of 1940 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.
Rule 18f-2 under the Act provides that any matter required to be submitted
by the provisions of the Act or applicable state law, or otherwise, to the
holders of the outstanding voting securities of an investment company such as
the Fund shall not be deemed to have been effectively acted upon unless approved
by the holders of a majority of the outstanding shares of each class affected by
such matter. Rule 18f-2 further provides that a class shall be deemed to be
affected by a matter unless it is clear that the interests of each class in the
matter are substantially identical or that the matter does not significantly
affect any interest of such class. However, the Rule exempts the selection of
independent auditors, the approval of principal distributing contracts and the
election of directors from the separate voting requirements of the Rule.
-10-
<PAGE>
CUSTODIAN. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, Missouri 64105 serves as custodian of the Fund. It also maintains, under
the general supervision of the Manager, the accounting records and determines
the net asset value for the Fund.
AUDITORS. Deloitte & Touche LLP. independent auditors, have been selected
as auditors of the Fund. Their address is Two World Financial Center, New York,
New York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 1995 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1995, as
well as certain other financial information as of that date. The Annual Report
will be furnished, without charge, to investors who request copies of the Fund's
Statement of Additional Information.
APPENDIX A
DESCRIPTION OF PERMISSIBLE INVESTMENTS:
U.S. GOVERNMENT, AGENCY AND INSTRUMENTALITY OBLIGATIONS - are securities
issued or guaranteed as to principal and interest by the United States
government or by agencies or instrumentalities thereof and include a variety of
obligations, which differ in their interest rates, maturities, and dates of
issue. Some of these obligations are issued directly by the United States
Treasury such as U.S. Treasury bills, notes, and bonds; others are guaranteed by
the U.S. Treasury, such as securities issued by the Small Business
Administration, the General Services Administration, and Farmers Home
Administration; others are supported by the right of the issuer to borrow from
the Treasury, such as securities issued by Federal Home Loan Banks; while others
are supported only by the credit of the agency or instrumentality and not by the
Treasury, such as securities issued by the Federal National Mortgage
Administration. There can be no assurance that the U.S. Government will provide
financial support to such an agency or instrumentality if it is not obligated to
do so by law.
REPURCHASE AGREEMENTS - involve the purchase of obligations and the
simultaneous agreement to resell the same obligations on demand or at a future
specified date and at an agreed upon price. Such transactions afford an
opportunity to earn a return which is only temporarily available.
NEGOTIABLE CERTIFICATES OF DEPOSIT - are certificates issued against funds
deposited in a bank. They are for a definite period of time, earn a specified
rate of return, and are negotiable.
BANKERS' ACCEPTANCES - are short-term credit instruments primarily used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.
FIXED TIME DEPOSITS - represent funds deposited in a bank. They are for a
definite period of time and earn a specified rate of return. Unlike negotiable
certificates of deposit, they do not have a market, and they may be subject to
penalties for early withdrawal of funds. Fixed time deposits are made in foreign
branches of domestic banks and in foreign banks.
COMMERCIAL PAPER - refers to promissory notes issued by corporations to
finance short-term credit needs.
CORPORATE DEBT SECURITIES - include bonds and notes issued by corporations
to finance longer-term credit needs.
DESCRIPTION OF A-1 AND P-1 COMMERCIAL PAPER RATINGS:
The ratings A-1+ and A-1 are the highest commercial paper ratings assigned
by S & P. Paper rated A-1+ has the highest rating and is regarded as having the
greatest capacity for timely payment. Paper rated A-1 indicates that the degree
of safety regarding timely payment is very strong. Long-term senior debt is
rated A or better. The issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances. Typically, the issuer's industry is well established
and the issuer has a strong position within the industry. The reliability and
quality of management are unquestioned.
-11-
<PAGE>
The rating P-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of parent company and the relationships which exist with the
issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
DESCRIPTION OF BOND RATINGS:
Bonds rated AAA have the highest rating S&P assigns to a debt obligation.
Such a rating indicates an extremely strong capacity to pay principal and
interest. Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in a small degree. Bonds rated in the Aa group
(Aa1, Aa2, Aa3) by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater amplitude, or there may be other elements present which make the
long-term risks appear somewhat larger.
APPENDIX B
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest
of eight brothers, arrived in the United States from Germany. He earned his
living as a pack peddler in Pennsylvania, and began sending for his brothers.
The Seligmans became successful merchants, establishing businesses in the South
and East.
Backed by nearly thirty years of business success - culminating in the sale
of government securities to help finance the Civil War - Joseph Seligman, with
his brothers, established the international banking and investment firm of J. &
W. Seligman & Co. In the years that followed, the Seligman Complex played a
major role in the geographical expansion and industrial development of the
United States.
THE SELIGMAN COMPLEX:
.... Prior to 1900
o Helps finance America's fledgling railroads through underwriting. o Is
admitted to the New York Stock Exchange in 1869. Seligman remained a member
of the NYSE until 1993, when the evolution of its business made it
unnecessary.
o Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy, helping
to finance World War I.
-12-
<PAGE>
...1920s
o Participates in hundreds of underwritings including those for some of the
country's largest companies: Briggs Manufacturing, Dodge Brothers, General
Motors, Minneapolis-Honeywell Regulatory Company, Maytag
Company, United Artists Theater Circuit and Victor Talking Machine Company.
SYMBOL 183 \f "Symbol"....Forms Tri-Continental Corporation in 1929, today the
nation's largest, diversified closed-end equity investment company, with over $2
billion in assets, and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual fund,
today known as Seligman Common Stock Fund, Inc.
0 Establishes Investment Advisory Service.
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the investment
banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today managing
a national and 18 state-specific tax-exempt funds.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered through
variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund and Seligman Quality Municipal
Fund, two closed-end funds that invest in high-quality municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration Group plc,
of London, known as Seligman Henderson Co., to offer global investment
products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today offers four
separate series: Seligman Henderson International Fund, Seligman Henderson
Global Smaller Companies Fund, Seligman Henderson Global Technology Fund and
Seligman Henderson Global Growth Opportunities Fund.
-13-
<PAGE>
------------------
20th ANNUAL REPORT
------------------
SELIGMAN
CASH
MANAGEMENT
FUND, INC.
------------------
December 31, 1995
Seligman Financial Services, Inc.
an affiliate of
[logo]
J. & W. Seligman & Co.
incorporated
established 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the [logo]
information of shareholders or those who
who have received the offering ------------------------
prospectus covering shares of Capital A Money Market Fund
Stock of Seligman Cash Management Fund, Established in 1976
Inc., which contains information about
the sales charge, management fee, and
other costs. Please read the prospectus
carefully before investing or sending
money.
TXCM2 12/95
<PAGE>
================================================================================
SELIGMAN CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
A money market mutual fund that seeks to
preserve capital and to maximize
liquidity and current income by
investing in high-quality money market
instruments.
HIGHLIGHTS OF 1995
- --------------------------------------------------------------------------------
CLASS A CLASS D
- --------------------------------------------------------------------------------
Net Assets .............................. $177,394,650 $14,554,637
- --------------------------------------------------------------------------------
Net Asset Value per Share ............... $ 1.00 $ 1.00
Number of Shareholders .................. 11,535 1,002
- --------------------------------------------------------------------------------
Dividends ............................... $ .051 $ .040
- --------------------------------------------------------------------------------
Net Yield per Share ..................... 5.06% 4.02%
Effective Yield per Share with Dividends
Invested Monthly ..................... 5.18% 4.08%
- --------------------------------------------------------------------------------
1
<PAGE>
================================================================================
To the Shareholders
- --------------------------------------------------------------------------------
In general, your Fund performed favorably during 1995. Longer-term performance
results and an interview with your Portfolio Manager begin on page 3.
For the year, Class A shares of the Fund provided a net annualized yield of
4.84%, and an effective or compounded yield of 4.96% for the seven days ended
December 31 for shareholders who invested dividends in additional shares. The
Class D shares provided a net annualized yield of 3.80%, and an effective or
compounded yield of 3.87% for the seven days ended December 31 for shareholders
who invested dividends in additional shares.
For both Class A and D shares, the total investments at year end of $192.6
million were diversified among 21 issuers, with 55.9% invested in commercial
paper, 24.5% invested in fixed time deposits, 9.7% invested in certificates of
deposit, 5.2% held in bank notes, and the remaining 4.7% in bankers'
acceptances. At December 31, 1995, the average weighted maturity of the Fund was
36 days.
Turning towards the US financial markets, many factors including low
inflation, falling interest rates, and strong corporate earnings paved the way
for a memorable year. In general, the equity and bond markets had banner years,
with many broad-based indices posting notable highs. However, in the short-term
securities market, yields gradually declined from mid-summer on due to the
Federal Reserve Board's (FRB) easing of monetary policy.
The FRB lowered the federal funds rate--the interest rate charged for
interbank loans--to 5.75% on July 6 and 5.50% on December 19. In response, the
yield on the benchmark three-month Treasury bill, which began the year at 5.65%,
declined to 5.05% by year end.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. However, we remain optimistic about Seligman
Cash Management Fund's performance.
We thank you for your continued investment in Seligman Cash Management
Fund, and look forward to serving your investment needs in 1996 and the years
ahead.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
2
<PAGE>
================================================================================
ANNUAL PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
- ------------------------- YOUR PORTFOLIO MANAGER
Leonard J. Lovito is a Vice President of J. & W.
Seligman & Co. Incorporated and Vice President and
Portfolio Manager of Seligman Cash Management Fund.
Mr. Lovito, who joined Seligman in 1984 as a
fixed-income trader and who has more than 12 years
PHOTO of fixed-income trading and portfolio management
experience, also serves as Vice President of
Seligman High Income Fund Series and Portfolio
Manager of Seligman U.S. Government Securities
Series and Vice President of Seligman Portfolios,
Inc., and Portfolio Manager of its Cash Management
and Fixed Income Securities portfolios. Mr. Lovito
is supported by a team of seasoned research
professionals who assist him in selecting securities
- ------------------------- in accordance with your Fund's objective.
ECONOMIC FACTORS AFFECTING SELIGMAN CASH MANAGEMENT FUND
"MODERATING ECONOMIC GROWTH, SUBDUED INFLATION, AND THE POTENTIAL FOR A CREDIBLE
DEFICIT REDUCTION ACCORD PROMPTED THE FEDERAL RESERVE BOARD TO LOWER THE FEDERAL
FUNDS RATE TWICE IN 1995. THESE REDUCTIONS IN SHORT-TERM INTEREST RATES LED TO
LOWER MONEY MARKET RATES, RESULTING IN A DECLINE IN YOUR FUND'S YIELD."
YOUR MANAGER'S INVESTMENT STRATEGY
"WE CONTINUED TO INVEST IN THE HIGHEST QUALITY MONEY MARKET INSTRUMENTS WITHIN A
DIVERSE GROUP OF INDUSTRIES. ALTHOUGH WE MAINTAINED A SHORTER AVERAGE MATURITY
THAN OUR PEERS IN ORDER TO PROVIDE GREATER LIQUIDITY, YOUR FUND EXTENDED
MATURITIES SLIGHTLY TO LOCK IN RATES AS THE FEDERAL RESERVE BOARD EASED MONETARY
POLICY."
OUR OUTLOOK FOR THE YEAR AHEAD
"SLUGGISH INCOME GROWTH AND HIGH CONSUMER DEBT WILL MORE THAN LIKELY SLOW
ECONOMIC GROWTH IN THE FIRST HALF OF 1996. THIS MODERATING GROWTH TREND, COUPLED
WITH A POTENTIAL BALANCED-BUDGET ACCORD, COULD PROMPT THE FEDERAL RESERVE BOARD
TO EASE MONETARY POLICY FURTHER AND LEAD TO CONTINUED INTEREST RATE DECLINES. IF
THIS SCENARIO COMES TO FRUITION, WE ANTICIPATE THAT WE WILL EXTEND THE
MATURITIES OF THE POSITIONS IN YOUR PORTFOLIO IN ORDER TO LOCK IN HIGHER
YIELDS."
3
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------- --------- -----
COMMERCIAL PAPER 56.0%
AUTOMOTIVE 5.0%
<S> <C> <C> <C>
Ford Motor Credit Corp., 3/25/96 ............................ 5.53% $ 9,800,000 $ 9,675,377
BANKING 10.1%
CoreStates Financial Corp., 3/27/96.......................... 5.60 10,000,000 9,868,133
Republic National Bank of New York, 1/25/96.................. 5.75 9,500,000 9,464,090
19,332,223
CAPITAL EQUIPMENT 10.1%
General Electric Capital Corp., 1/3/96....................... 5.46 9,500,000 9,497,034
John Deere Capital Corp., 1/12/96............................ 5.72 9,900,000 9,882,939
19,379,973
FINANCE 20.7%
American Express Credit Corp., 1/17/96....................... 5.74 10,500,000 10,473,587
Associates Corp. of North America, 1/31/96................... 5.73 9,900,000 9,853,388
Beneficial Corp., 2/21/96 ................................... 5.70 10,000,000 9,920,383
Norwest Financial Corp., 2/16/96 ............................ 5.70 9,500,000 9,431,779
39,679,137
OFFICE PRODUCTS 5.0%
Pitney Bowes Credit Corp., 2/2/96............................ 5.73 9,700,000 9,651,284
TELECOMMUNICATIONS 5.1%
AT&T Capital Corp., 3/15/96.................................. 5.54 10,000,000 9,886,533
TOTAL COMMERCIAL PAPER (Cost $107,604,527) .................. 107,604,527
FIXED TIME DEPOSITS 24.6%
ABN-AMRO Bank, Grand Cayman, 1/2/96.......................... 5.77 9,000,000 9,000,000
Bank of Montreal, Toronto, 1/2/96............................ 5.83 9,000,000 9,000,000
Canadian Imperial Bank of Commerce, Grand Cayman, 1/2/96..... 5.89 9,000,000 9,000,000
First National Bank of Chicago, Grand Cayman, 1/2/96......... 6.02 9,000,000 9,000,000
National Westminster Bank, Nassau, 1/2/96.................... 5.83 2,200,000 2,200,000
State Street Bank & Trust, Grand Cayman, 1/2/96.............. 5.58 9,000,000 9,000,000
TOTAL FIXED TIME DEPOSITS (Cost $47,200,000) ................ 47,200,000
CERTIFICATES OF DEPOSIT 9.8%
Harris Trust & Savings, Chicago, 3/1/96...................... 5.78 9,400,000 9,400,309
Wachovia Bank of Georgia, 1/25/96............................ 5.89 9,400,000 9,400,118
TOTAL CERTIFICATES OF DEPOSIT
(Cost $18,800,427) ........................................ 18,800,427
BANK NOTES 5.2% (Cost $10,000,000)
Huntington National Bank, Ohio, 2/15/96...................... 5.76 10,000,000 10,000,000
BANKERS' ACCEPTANCES 4.7% (Cost $9,011,139)
Chase Manhattan Bank, New York, 3/4/96....................... 5.66 9,100,000 9,011,139
TOTAL INVESTMENTS 100.3% (Cost $192,616,093) .............. 192,616,093
OTHER ASSETS LESS LIABILITIES (0.3)% ..................... (666,806)
------------
NET ASSETS 100.0% ........................................ $191,949,287
============
</TABLE>
- ----------
See notes to financial statements.
4
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Commercial paper (cost $107,604,527)................................... $107,604,527
Fixed time deposits (cost $47,200,000)................................. 47,200,000
Certificates of deposit (cost $18,800,427)............................. 18,800,427
Bank notes (cost $10,000,000).......................................... 10,000,000
Bankers' acceptances (cost $9,011,139)................................. 9,011,139 $ 192,616,093
------------
Cash................................................................................... 287,950
Receivable for Capital Stock sold...................................................... 2,252,639
Interest receivable.................................................................... 192,808
Investment in, and expenses prepaid to, shareholder service agent...................... 24,126
Other.................................................................................. 41,173
-------------
Total Assets ......................................................................... 195,414,789
-------------
LIABILITIES:
Payable for Capital Stock redeemed..................................................... 3,035,002
Accrued expenses, taxes, and other..................................................... 430,500
-------------
Total Liabilities ..................................................................... 3,465,502
-------------
Net Assets ............................................................................ $191,949,287
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.01 par value; 2,000,000,000 shares authorized;
191,953,914 shares outstanding):
Class A........................................................................... $ 1,773,993
Class D............................................................................ 145,546
Additional paid-in capital............................................................. 190,034,375
Accumulated net realized loss.......................................................... (4,627)
-------------
NET ASSETS:
Applicable to 177,399,277 Class A shares
and 14,554,637 Class D shares, equivalent to $1.00 per share....................... $191,949,287
============
</TABLE>
- ----------
See notes to financial statements.
5
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest............................................................ $11,395,465
-----------
EXPENSES:
Management fee...................................................... 818,740
Shareholder account services........................................ 480,945
Registration........................................................ 106,372
Distribution and service fees....................................... 105,659
Custodian services.................................................. 85,203
Auditing and legal fees............................................. 67,514
Shareholder reports and communications.............................. 39,723
Directors' fees and expenses........................................ 32,695
Miscellaneous....................................................... 21,146
-----------
Total expenses...................................................... 1,757,997
-----------
Net investment income and increase in net assets from operations ... $ 9,637,468
===========
- ----------
See notes to financial statements.
6
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Increase in net assets from operations -- net investment income ........ $ 9,637,468 $ 6,149,511
------------ ------------
Decrease in net assets from distributions -- net investment
income - paid to shareholders as dividends:
Class A ............................................................ (9,215,896) (6,112,909)
Class D ............................................................ (421,572) (36,602)
------------ ------------
Total ................................................................. (9,637,468) (6,149,511)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares--Class A ................................. 303,480,822 326,737,207
Net proceeds from transfer of Government Portfolio-- Class A .......... 21,971,609 --
Net asset value of shares issued in payment of dividends:
Class A ............................................................ 8,011,199 5,283,819
Class D ............................................................ 328,806 28,078
Exchanged from associated Funds:
Class A ............................................................ 361,106,751 61,223,552
Class D ............................................................ 80,746,637 7,748,357
------------ ------------
Total ................................................................. 775,645,824 401,021,013
------------ ------------
Cost of shares redeemed:
Class A ............................................................ (360,478,471) (322,927,467)
Class D ............................................................ (9,346,161) (874,978)
Exchanged into associated Funds:
Class A ............................................................ (351,102,803) (49,813,081)
Class D ............................................................ (60,632,635) (3,469,582)
------------ ------------
Total ................................................................. (781,560,070) (377,085,108)
------------ ------------
Increase (decrease) in net assets from capital share transactions ..... (5,914,246) 23,935,905
------------ ------------
Increase (decrease) in net assets ..................................... (5,914,246) 23,935,905
NET ASSETS:
Beginning of year ..................................................... 197,863,533 173,927,628
------------ ------------
End of year ........................................................... $191,949,287 $197,863,533
============ ============
</TABLE>
- ----------
See notes to financial statements.
7
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Cash Management Fund, Inc. (the "Fund") offers two classes of
shares: Class A shares and Class D shares, each of which may be acquired by
investors at net asset value. All shares existing prior to May 3, 1993, were
classified as Class A shares. Class D shares are offered only to investors who
wish to exchange their Class D shares of other associated funds. Class D shares
are subject to a distribution fee of up to 0.75% and a service fee of up to
0.25% on an annual basis, and a contingent deferred sales load (CDSL) of 1%
imposed on certain redemptions made within one year of purchase. The two classes
of shares represent interests in the same portfolio of investments, have the
same rights and are generally identical in all respects except that each class
bears its separate distribution and certain class expenses and has exclusive
voting rights with respect to any matter to which a separate vote of any class
is required.
2. Significant accounting policies followed, all in conformity with
generally accepted accounting principles, are given below:
a. The Fund uses the amortized cost method for valuing portfolio securities.
Under this method all investments purchased at a discount or premium are
valued by amortizing the difference between the original purchase price and
the maturity value of the issue over the period to maturity.
b. There is no provision for federal income or excise tax. The Fund has elected
to be taxed as a regulated investment company and intends to distribute
substantially all taxable net income and net gain realized. Dividends are
declared daily and paid monthly.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. The cost of investments for federal income tax purposes is
substantially the same as the cost for financial reporting purposes.
Interest income, including the amortization of discount or premium, is
recorded as earned.
d. The Fund may enter into repurchase agreements with commercial banks and with
broker/dealers deemed to be creditworthy by J. & W. Seligman & Co.
Incorporated (the "Manager"). Securities received as collateral subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market
value greater than or equal to the repurchase price plus accrued interest,
at all times. Procedures have been established to monitor, on a daily basis,
the market value of repurchase agreements' underlying securities to ensure
the existence of the proper level of collateral.
e. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses, if any, are allocated daily to each class of
shares based upon the relative value of shares of each class. Class-specific
expenses, which include distribution and service fees and any other items
that are specifically attributed to a particular class, are charged directly
to such class.
3. 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 paid monthly, equal to a per annum
percentage of the Fund's average daily net assets.
The management fee rate is calculated on a sliding scale of 0.45% to 0.375%,
based on average daily net assets of all the investment companies managed by the
Manager. The management fee for the year ended December 31, 1995, was equivalent
to an annual rate of 0.43% of the average daily net assets of the Fund.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") under which service organizations can enter into agreements with
Seligman Financial Services, Inc. (the "Distributor") and receive a continuing
fee of up to 0.25% on an annual basis of the Fund's average daily net assets,
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor, and
likewise the Fund, did not make payments under the Plan with respect to Class A
shares during the year ended December 31, 1995.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
8
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
to the Distributor pursuant to the Plan. For the year ended December 31, 1995,
fees paid amounted to $105,659, or 1% per annum of the average daily net assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year from purchase of
original shares which were exchanged into the Fund. For the year ended December
31, 1995, such charges amounted to $53,796.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became eligible to receive distribution and service fees pursuant to
the Plan. For the period ended December 31, 1995, Seligman Services, Inc.
received distribution and service fees of $335, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $454,481 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $3,719.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
Fees of $25,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1995 of
$129,910 is included in other liabilities. Deferred fees and related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
4. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1995, which are included in the corresponding captions of the
Statement of Operations, were as follows:
CLASS A CLASS D
------- --------
Distribution and service fees..... $ -- $105,659
Registration...................... 21,017 3,667
Shareholder reports and
communications................. 4,097 152
5. At December 31, 1995, the Fund had a net loss carryforward of $4,627, which
is available for offset against future taxable net gains, expiring in 1999.
6. On January 17, 1995, shareholders of the Fund's Government Portfolio approved
a transfer of its net assets to the Fund's Prime Portfolio Class A in a tax-free
exchange. As a result, on January 26, 1995, 21,971,609 shares of the Prime
Portfolio Class A valued at $21,971,609 were exchanged for the net assets of the
Government Portfolio. For each share of Capital Stock owned, shareholders of the
Government Portfolio received one share of Capital Stock of the Prime Portfolio
Class A. In addition, since it is the only remaining portfolio of the Fund,
Prime Portfolio is no longer designated as such.
Immediately before the transfer of net assets, the Condensed Financial
Statements of the Government Portfolio were as follows:
Condensed Statement of Net Assets
January 26, 1995
Total assets ................................ $22,005,452
Total liabilities ........................... 33,843
-----------
Net assets .................................. $21,971,609
===========
Shares of Capital Stock outstanding ......... 21,971,609
Net asset value per share ................... $ 1.000
Condensed Statement of Operations --
January 1, 1995 to
January 26, 1995
Net investment income and increase
in net assets from operations ............ $ 71,496
===========
Condensed Statement of Changes
in Net Assets -- January 1, 1995
to January 26, 1995
Net investment income and increase
in net assets from operations ............ $ 71,496
Decrease in net assets from
distributions ............................ (71,496)
Decrease in net assets from capital
share transactions ....................... (64,014)
-----------
Net decrease in net assets .................. (64,014)
Net Assets:
Beginning of period ....................... 22,035,623
-----------
End of period ............................. $21,971,609
===========
Condensed Financial Highlights --
January 1, 1995 to
January 26, 1995
Net asset value, beginning of period ........ $ 1.000
Net investment income ....................... 0.003
Dividends paid .............................. (0.003)
-----------
Net asset value, end of period .............. $ 1.000
===========
9
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends 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
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
----------------------------------------------- ---------------------------
YEAR ENDED
YEAR ENDED DECEMBER 31 DECEMBER 31 5/3/93*
----------------------------------------------- ---------------- TO
1995 1994 1993 1992 1991 1995 1994 12/31/93
------- ------- ------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period............................. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income................. .051 .034 .024 .030 .053 .040 .024 .003
Dividends paid or declared............ (.051) (.034) (.024) (.030) (.053) (.040) (.024) (.003)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period........ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE ................ 5.18% 3.46% 2.40% 3.10% 5.53% 4.08% 2.35% .30%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average net assets........ .86% .82% .77% .76% .79% 1.90% 1.90% 1.74%+
Net investment income to
average net assets................. 5.06% 3.41% 2.37% 3.04% 5.34% 4.02% 2.32% 1.39%+
Net assets, end of period
(000's omitted).................... $177,395 $194,406 $173,902 $193,158 $260,297 $14,554 $3,458 $26
Without management fee waiver
or reimbursement of expenses:**
Net investment income per share....... $.023 $.029 $.052 $.013 $.002
Ratios:
Expenses to average net assets...... .86% .85% .86% 3.23% 1.83%+
Net investment income to
average net assets............... 2.28% 2.95% 5.28% .99% 1.30%+
</TABLE>
- ----------
* Commencement of offering of Class D shares.
** For the years 1991 to 1993, the Manager, at its discretion, waived a portion
of its management fees for the Fund, and reimbursed certain expenses for
Class D shares in 1994.
+ Annualized.
See notes to financial statements.
10
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN CASH MANAGEMENT FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Cash Management Fund, Inc. as of
December 31, 1995, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the Fund's custodian. 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 Cash
Management Fund, Inc. as of December 31, 1995, the results of its operations,
the changes in its net assets and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
February 2, 1996
11
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
Fred E. Brown
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
John R. Galvin 2, 4
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
Alice S. Ilchman 3, 4
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
Frank A. McPherson 2, 4
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
John E. Merow
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
Betsy S. Michel 2, 4
DIRECTOR OR TRUSTEE,
Various Organizations
William C. Morris 1
CHAIRMAN
CHAIRMAN OF THE BOARD AND PRESIDENT,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
James C. Pitney 3, 4
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
James Q. Riordan 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
Ronald T. Schroeder 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3, 4
VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFE Corporation
James N. Whitson 2, 4
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
Brian T. Zino 1
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
- ----------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
12
<PAGE>
================================================================================
EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
William C. Morris
CHAIRMAN
Brian T. Zino
PRESIDENT
Leonard J. Lovito
VICE PRESIDENT
Lawrence P. Vogel
VICE PRESIDENT
Thomas G. Rose
TREASURER
Frank J. Nasta
SECRETARY
- --------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access Service
13
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
(a) Financial Statements and Schedules:
Part A Financial Highlights for Class A shares for the ten years
ended December 31, 1995; Financial Highlights for Class D
shares for the period from May 3, 1993 (commencement of
offering) to December 31, 1995.
Part B Required Financial Statements are included in the Fund's
Annual Report to Shareholders, dated December 31, 1995,
which are incorporated by reference in the Fund's Statement
of Additional Information. These include: Portfolio of
Investments as of December 31, 1995; Statement of Assets
and Liabilities as of December 31, 1995; Statement of
Operations for the year ended December 31, 1995; Statements
of Changes in Net Assets for the years ended December 31,
1995 and 1994; Notes to Financial Statements; Financial
Highlights for the five years ended December 31, 1995 for
the Fund's Class A shares and for the period May 3, 1993
(commencement of offering) through December 31, 1995 for
the Fund's Class D shares; Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except
Exhibits marked with an asterisk (*) which are incorporated
herein.
(1a) Form of Amendment and Restatement of Articles of Incorporation of
Registrant. (Incorporated by reference to Post-Effective Amendment No.
24 filed on April 23, 1993.)
(1b) Articles Supplementary to Articles of Incorporation of Registrant,
dated April 10, 1996.*
(2) Amended and Restated By-laws of the Registrant. (Incorporated by
reference to Post-Effective Amendment No. 10 filed on July 14, 1982.)
(4) Specimen certificate of Class D Capital Stock. (Incorporated by
reference to Post-Effective Amendment No. 24 filed on April 23, 1993.)
(4a) Specimen certificate of Class B Capital Stock. (Incorporated by
reference to Form SE filed on April 16, 1996.)
(5) Amended Management Agreement between Registrant and J. & W. Seligman &
Co. Incorporated. (Incorporated by reference to Post-Effective
Amendment No. 26 filed on May 1, 1995.)
(6) Copy of the Amended Distributing Agreement between Registrant and
Seligman Financial Services, Inc. (Incorporated by Reference to
Post-Effective Amendment No. 24 filed on April 23, 1993.)
(7) Amendments to Amended Retirement Income Plan of J. & W. Seligman & Co.
Incorporated and Trust. (Incorporated by Reference to Post-Effective
Amendment No. 25 filed on April 29, 1994.)
(7a) Amendments to Amended Employees' Thrift Plan of Union Data Service
Center, Inc. and Trust. (Incorporated by Reference to Post-Effective
Amendment No. 25 filed on April 29, 1994.)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by Reference to Post-Effective Amendment
No. 22 filed on April 30, 1991.)
(10) Opinion and Consent of Counsel. (Incorporated by Reference to
Post-Effective Amendment No.1 to the Registration Statement on Form
N-14 filed filed on November 18, 1994.)
(11) Report and Consent of Independent Auditors.*
<PAGE>
PART C. OTHER INFORMATION (continued)
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (continued)
(13a) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated.*
(13b) Purchase Agreement for Initial Capital between Registrant's Class D
shares and J. & W. Seligman & Co. Incorporated. (Incorporated by
Reference to Post-Effective Amendment No. 24 filed on April 23, 1993.)
(14) Copy of Amended Individual Retirement Account Trust and Related
Documents. (Incorporated by Reference to Post-Effective Amendment No.
23 filed on April 30, 1992.)
(14a) Copy of Amended Comprehensive Retirement Plans for Money Purchase
and/or Prototype Profit Sharing Plan. (Incorporated by Reference to
Seligman Tax-Exempt Fund Series, Inc., File No. 2-86008, Post-Effective
Amendment No. 24 filed on November 30, 1992.)
(14b) Copy of Amended Basic Business Retirement Plans for Money Purchase
and/or Profit Sharing Plans. (Incorporated by Reference to Seligman
Tax-Exempt Fund Series, Inc. File No. 2-86008, Post-Effective Amendment
No. 24 filed on November 30, 1992.)
(14c) Copy of Amended 403(b)(7) Custodial Account Plan. (Incorporated by
Reference to Seligman New Jersey Tax-Exempt Fund, Inc., File No.
33-13401, Pre-Effective Amendment No. 1 filed on January 11, 1988)
(14d) Copy of Amended Simplified Employee Pension Plan (SEP). (Incorporated
by Reference to Post-Effective Amendment No. 23 filed on April 30,
1992.)
(14e) Copy of the amended J. & W. Seligman & Co. Incorporated (SARSEP) Salary
Reduction and Other Elective Simplified Employee Pension-Individual
Retirement Accounts Contribution Agreement (Under Section 408(k) of the
Internal Revenue Code). (Incorporated by Reference to Post-Effective
Amendment No. 23 filed on April 30, 1992.)
(15) Copy of amended Administration, Shareholder Services and Distribution
Plan and form of Agreement of Registrant.*
(16) Schedule for Computation of each Performance Quotation provided in
Registration Statement to Item 22. (Incorporated by Reference to
Post-Effective Amendment No. 10 filed on July 14, 1982.)
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940. (Incorporated by
Reference to Post-Effective Amendment No. 27 filed on February 16,
1996.)
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT -
Seligman Data Corp. ("SDC"), a New York corporation, is owned by the
Registrant and certain associated investment companies. The
Registrant's investment in SDC is recorded at a cost of $3,719.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Numbers of Record
TITLE OF CLASS HOLDERS AS OF MARCH 29, 1996
-------------- ----------------------------
Class A Common Stock 11,052
Class B Common Stock 0
Class D Common Stock 832
<PAGE>
PART C. OTHER INFORMATION (continued)
ITEM 27. INDEMNIFICATION - Incorporated by reference to Registrants
Post-Effective Amendment #22 (File No. 2-56805) as filed with the
Commission on 5/1/91.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER - J. & W. Seligman
& Co. Incorporated, a Delaware corporation ("Manager"), is the
Registrant's investment manager. The Manager also serves as investment
manager to sixteen associated investment companies. They are Seligman
Capital Fund, Inc., Seligman Common Stock Fund, Inc., Seligman
Communications and Information Fund, Inc., Seligman Frontier Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund
Series, Inc., Seligman High Income Fund Series, Seligman Income Fund,
Inc., Seligman New Jersey Tax-Exempt Fund, Inc. Seligman Pennsylvania
Tax-Exempt Fund Series, Seligman Portfolios, Inc., Seligman Quality
Municipal Fund, Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman
Tax-Exempt Series Trust, Seligman Tax-Exempt Series Trust, Seligman
Select Municipal Fund, 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 and the
Subadviser, respectively, together with information as to any other
business, profession, vocation or employment of a substantial nature
engaged in by such officers and directors during the past two years, is
incorporated by reference to Schedules A and D of Form ADV, filed by
the Manager pursuant to the Investment Advisers Act of 1940 (SEC File
No. 801-5798 which was filed on December 5, 1995).
ITEM 29. PRINCIPAL UNDERWRITERS
(a) The names of each investment company (other than the
Registrant) for which each principal underwriter currently
distributing securities of the Registrant also acts as a
principal underwriter, depositor or investment adviser follow:
Item 29.
Seligman Capital Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman New Jersey Tax-Exempt Fund, Inc.
Seligman Pennsylvania Tax-Exempt Fund Series
Seligman Portfolios, Inc.
Seligman Tax-Exempt Fund Series, Inc.
Seligman Tax-Exempt Series Trust
(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 21:
<TABLE>
<CAPTION>
SELIGMAN FINANCIAL SERVICES, INC.
AS OF MARCH 29, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<C> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board
and Chief Executive
Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director Director
FRED E. BROWN* Director Director
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
DAVID F. STEIN* Director None
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
SELIGMAN FINANCIAL SERVICES, INC.
AS OF MARCH 29, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<C> <C> <C>
STEPHEN J. HODGDON* President None
LAWRENCE P. VOGEL* Senior Vice President, Finance Vice President
MARK R. GORDON* Senior Vice President, Director None
of Marketing
GERALD I. CETRULO, III Senior Vice President of Sales, None
140 West Parkway Regional Sales Manager
Pompton Plains, NJ 07444
BRADLEY F. HANSON Senior Vice President of Sales, None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
BRADLEY W. LARSON Senior Vice President of Sales, None
367 Bryan Drive Regional Sales Manager
Danville, CA 94526
D. IAN VALENTINE Senior Vice President of Sales, None
307 Braehead Drive Regional Sales Manager
Fredericksburg, VA 22401
HELEN SIMON* Vice President, Sales None
Administration Manager
MARSHA E. JACOBY* Vice President, National Accounts None
Manager
WILLIAM W. JOHNSON* Vice President, Order Desk None
JAMES R. BESHER Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
BRAD DAVIS Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
ANDREW DRALUCK Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
JONATHAN EVANS Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
CARLA GOEHRING Regional Vice President None
11426 Long Pine
Houston, TX 77077
SUSAN GUTTERUD Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
MARK LIEN Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
RANDY D. LIERMAN Regional Vice President None
2627 R.D. Mize Road
Independence, MO 64057
JUDITH L. LYON Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
SELIGMAN FINANCIAL SERVICES, INC.
AS OF MARCH 29, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<C> <C> <C>
DAVID MEYNCKE Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
HERB W. MORGAN Regional Vice President None
11308 Monticook Court
San Diego, CA 92127
MELINDA NAWN Regional Vice President None
5850 Squire Hill Court
Cincinnati, OH 45241
ROBERT H. RUHM Regional Vice President None
167 Derby Street
Melrose, MA 02176
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
BRUCE TUCKEY Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
ANDREW VEASEY Regional Vice President None
14 Woodside
Rumson, NJ 07760
TODD VOLKMAN Regional Vice President None
4650 Cole Avenue, #216
Dallas, TX 75205
KELLI A. WIRTH-DUMSER Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
FRANK P. MARINO* Assistant Vice President, Mutual
Fund Product Manager None
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, NY, NY 10017.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
- -------- --------------------------------
(1) Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105 AND
(2) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
<PAGE>
PART C. OTHER INFORMATION (continued)
ITEM 31. MANAGEMENT SERVICES -Seligman Data Corp. ("SDC") the Registrant's
shareholder service agent, has an agreement with First Data Investors
Services Group ("FDISG") pursuant to which FDISG provides a data
processing system for certain shareholder accounting and recordkeeping
functions performed by SDC, which commenced in July 1990. For the
fiscal years ended December 31, 1995, 1994 and 1993, the approximate
cost of these services were:
1995 1994 1993
---- ---- ----
Class A shares $ 59,600 $49,565 $ 77,300
Class D shares -- $ 711 N/A
ITEM 32. UNDERTAKINGS - The Registrant undertakes, (1) to furnish a copy of the
Registrant's latest annual report, upon request and without charge, to
every person to whom a prospectus is delivered and (2) if requested to
do so by the holders of at least ten percent of its outstanding shares,
to call a meeting of shareholders for the purpose of voting upon the
removal of a director or directors and to assist in communications with
other shareholders as required by Section 16(c) of the Investment
Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of the Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 29 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 19th day of April, 1996.
SELIGMAN CASH MANAGEMENT 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. 29 has been
signed below by the following persons in the capacities indicated on
April 19, 1996.
SIGNATURE TITLE
--------- -----
/S/ WILLIAM C. MORRIS Chairman of the Board (Principal executive
- ------------------------ officer) and Director
William C. Morris*
/S/ BRIAN T. ZINO Director and President
- ------------------------
Brian T. Zino
/S/ THOMAS G. ROSE Treasurer
- ------------------------
Thomas G. Rose
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /S/ BRIAN T. ZINO
-----------------
James C. Pitney, Director ) * Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
EXHIBIT 1B
SELIGMAN CASH MANAGEMENT FUND, INC.
-----------------------------------
ARTICLES SUPPLEMENTARY
Seligman Cash Management Fund, Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation") and registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: The total number of shares of capital stock of all classes which the
Corporation has authority to issue is 1,400,000,000 shares, which were
previously classified by the Board of Directors of the Corporation into two
classes designated as Class A Common Stock and Class D Common Stock. The number
of authorized shares of Class A Common Stock and of Class D Common Stock each
consisted of the sum of x and y, where x equalled the issued and outstanding
shares of such class and y equalled one-half of the authorized but unissued
shares of Common Stock of all classes; provided that at all times the aggregate
authorized, issued and outstanding shares of Class A and Class D Common Stock
shall not exceed the authorized number of shares of Common Stock; and, in the
event application of the formula above would have resulted, at any time, in
fractional shares, the applicable number of authorized shares of each class was
to have been rounded down to the nearest whole number of shares of such class.
SECOND: Pursuant to the authority of the Board of Directors to classify and
reclassify unissued shares of capital stock, the Board of Directors has
reclassified the unissued shares of Class A Common Stock and Class D Common
Stock into the following classes and has provided for the issuance of shares of
such classes. The terms of the Common Stock as set by the Board of Directors are
as follows:
(a) The Common Stock of the Corporation shall have three classes of
shares, which shall be designated Class A Common Stock, Class B Common
Stock and Class D Common Stock. The number of authorized shares of Class A
Common Stock, of Class B Common Stock and of Class D Common Stock shall
each consist of the sum of x and y, where x equals the issued and
outstanding shares of such class and y equals one-third of the authorized
but unissued shares of Common Stock of all classes; provided that at all
times the aggregate authorized, issued and outstanding shares of Class A,
Class B and Class D Common Stock shall not exceed the authorized number of
shares of Common Stock (i.e., 1,400,000,000 shares of Common Stock until
changed by further action of the Board of Directors in accordance with
Section 2-208.1 of the Maryland General Corporation Law, or any successor
provision); and, in the event application of the formula above would
result, at any time, in fractional shares, the applicable number of
authorized shares of each class shall be rounded down to the nearest whole
number of shares of such class. Any class of Common Stock shall be referred
to herein individually as a "Class" and collectively, together with any
further class or classes from time to time established, as the "Classes".
(b) All Classes shall represent the same interest in the Corporation
and have identical voting, dividend, liquidation, and other rights;
provided, however, that notwithstanding anything in the charter of the
Corporation to the contrary:
(1) Class A shares may be subject to such front-end sales loads
as may be established by the Board of Directors from time to time in
accordance with the Investment Company Act and applicable rules and
regulations of the National Association of Securities Dealers, Inc.
(the "NASD").
(2) Class B shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD. Subject to subsection (5) below,
each Class B share shall convert automatically into Class A shares on
the last business day of the month that precedes the eighth
anniversary of the date of issuance of such Class B share; such
conversion shall be effected on the basis of the relative net asset
values of Class B shares and Class A shares as determined by the
Corporation on the date of conversion.
-1-
<PAGE>
3) Class D shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD.
(4) Expenses related solely to a particular Class (including,
without limitation, distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement,
plan or other arrangement, however designated, which may differ
between the Classes) shall be borne by that Class and shall be
appropriately reflected (in the manner determined by the Board of
Directors) in the net asset value, dividends, distribution and
liquidation rights of the shares of that Class.
(5) At such time as shall be permitted under the Investment
Company Act, any applicable rules and regulations thereunder and the
provisions of any exemptive order applicable to the Corporation, and
as may be determined by the Board of Directors and disclosed in the
then current prospectus of the Corporation, shares of a particular
Class may be automatically converted into shares of another Class;
provided, however, that such conversion shall be subject to the
continuing availability of an opinion of counsel to the effect that
such conversion does not constitute a taxable event under Federal
income tax law. The Board of Directors, in its sole discretion, may
suspend any conversion rights if such opinion is no longer available.
(6) As to any matter with respect to which a separate vote of any
Class is required by the Investment Company Act or by the Maryland
General Corporation Law (including, without limitation, approval of
any plan, agreement or other arrangement referred to in subsection (4)
above), such requirement as to a separate vote by the Class shall
apply in lieu of single Class voting, and, if permitted by the
Investment Company Act or any rules, regulations or orders thereunder
and the Maryland General Corporation Law, the Classes shall vote
together as a single Class on any such matter that shall have the same
effect on each such Class. As to any matter that does not affect the
interest of a particular Class, only the holders of shares of the
affected Class shall be entitled to vote.
THIRD: These Articles Supplementary do not change the total number of
authorized shares of the Corporation.
IN WITNESS WHEREOF, SELIGMAN CASH MANAGEMENT FUND, INC. has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Secretary, and each of said officers of the
Corporation has also acknowledged these Articles Supplementary to be the
corporate act of the Corporation and has stated under penalties of perjury that
to the best of his knowledge, information and belief that the matters and facts
set forth with respect to approval are true in all material respects, all on
April 10, 1996.
SELIGMAN CASH MANAGEMENT FUND, INC.
By: /s/ Brian T. Zino
-------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- ------------------
Frank J. Nasta
Secretary
-2-
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
Seligman Cash Management Fund, Inc.:
We consent to the incorporation by reference in the Statement of Additional
Information in this Post-Effective Amendment No. 29 to Registration Statement
No. 2-56805 of our report dated February 2, 1996, appearing in the Annual Report
to shareholders for the year ended December 31, 1995, and to the reference to us
under the caption "Financial Highlights" in the Prospectus, which is a part of
such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 17, 1996
EXHIBIT 13A
INVESTMENT LETTER
SELIGMAN CASH MANAGEMENT FUND, INC.
Seligman Cash Management Fund, Inc. (the "Fund"), an open-end diversified
management investment company, and the undersigned ("Purchaser"), intending to
be legally bound, hereby agree as follows:
1. The Fund hereby sells to Purchaser and Purchaser purchases 1 Class B share
(the "Share") of Capital Stock (par value $.01) of the Prime Portfolio of
the Fund at a price of $1.00. The Fund hereby acknowledges receipt from
Purchaser of funds in such amount in full payment for the Share.
2. Purchaser represents and warrants to the Fund that the Shares are being
acquired for investment and not with a view to distribution thereof, and
that Purchaser has no present intention to redeem or dispose of the Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the 17th day
of April, 1996 ("Purchase Plan").
SELIGMAN CASH MANAGEMENT FUND, INC.
By: /s/ Lawrence P. Vogel
-----------------------------
Name: Lawrence P. Vogel
Title: Vice President
J. & W. SELIGMAN & CO. INCORPORATED
By: /s/ Lawrence P. Vogel
-----------------------------
Name: Lawrence P. Vogel
Title: Senior Vice President
EXHIBIT 15
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
SECTION 1. Seligman Cash Management Fund, Inc. (the "Fund") will pay fees
to Seligman Financial Services, Inc., the principal underwriter of its shares
(the "Distributor"), for administration, shareholder services and distribution
assistance for the Class A, Class B and Class D shares of the Fund. As a result,
the Fund is adopting this Administration, Shareholder Services and Distribution
Plan (the "Plan") pursuant to Section 12(b) of the Investment Company Act of
1940, as amended (the "Act") and Rule 12b-1 thereunder.
SECTION 2. Pursuant to this Plan, the Fund may pay to the Distributor a
shareholder servicing fee of up to .25% on an annual basis of the average daily
net assets of the Fund (payable quarterly with respect to Class A and monthly
with respect to Class B and Class D) and a distribution fee of .75% on an annual
basis, payable monthly, of the average daily net assets of the Fund attributable
to the Class B Shares and a distribution fee of up to .75% on an annual basis,
payable monthly, of the average daily net assets of the Fund attributable to
Class D shares. Such fees will be used in their entirety by the Distributor to
make payments for administration, shareholder services and distribution
assistance, including, but not limited to (i) compensation to securities dealers
and other organizations (each, a "Service Organization" and collectively, the
"Service Organizations"), for providing distribution assistance with respect to
assets invested in the Fund, (ii) compensation to Service Organizations for
providing administration, accounting and other shareholder services with respect
to Fund shareholders, and (iii) otherwise promoting the sale of shares of the
Fund, including paying for the preparation of advertising and sales literature
and the printing and distribution of such promotional materials and prospectuses
to prospective investors and defraying the Distributor's costs incurred in
connection with its marketing efforts with respect to shares of the Fund. To the
extent a Service Organization provides administration, accounting and other
shareholder services, payment for which is not required to be made pursuant to a
plan meeting the requirements of Rule 12b-1, a portion of the fee paid by the
Fund shall be deemed to include compensation for such services. The fees
received from the Fund hereunder in respect of the Class A shares may not be
used to pay any interest expense, carrying charges or other financing costs, and
fees received hereunder may not be used to pay any allocation of overhead of the
Distributor. The fees of any particular class of the Fund may not be used to
subsidize the sale of shares of any other class. The fees payable to Service
Organizations from time to time shall, within such limits, be determined by the
Directors of the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's investment
manager (the "Manager"), in its sole discretion, may make payments to the
Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Fund.
SECTION 4. This Plan shall continue in effect through December 31 of each
year so long as such continuance is specifically approved at least annually by
vote of a majority of both (a) the Directors of the Fund and (b) the Qualified
Directors, cast in person at a meeting called for the purpose of voting on such
approval.
SECTION 5. The Distributor shall provide to the Fund's Directors, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
<PAGE>
SECTION 6. This Plan may be terminated by the Fund with respect to any
class at any time by vote of a majority of the Qualified Directors, or by vote
of a majority of the outstanding voting securities of such class. If this Plan
is terminated in respect of a class, no amounts (other than amounts accrued but
not yet paid) would be owed by the Fund to the Distributor with respect to such
class.
SECTION 7. All agreements related to this Plan shall be in writing, and
shall be approved by vote of a majority of both (a) the Directors of the Fund
and (b) the Qualified Directors, cast in person at a meeting called for the
purpose of voting on such approval, provided, however, that the identity of a
particular Service Organization executing any such agreement may be ratified by
such a vote within 90 days of such execution. Any agreement related to this Plan
shall provide:
A. That such agreement may be terminated in respect of any class of the
Fund at any time, without payment of any penalty, by vote of a
majority of the Qualified Directors or by vote of a majority of the
outstanding voting securities of the class, on not more than 60 days'
written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event of its
assignment.
SECTION 8. This Plan may not be amended to increase materially the amount
of fees permitted pursuant to Section 2 hereof without the approval of a
majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Fund is not obligated to pay any administration, shareholder
services or distribution expense in excess of the fee described in Section 2
hereof, and, in the case of Class A shares, any expenses of administration,
shareholder services and distribution of Class A shares of the Fund accrued in
one fiscal year of the Fund may not be paid from administration, shareholder
services and distribution fees received from the Fund in respect of Class A
shares in any other fiscal year.
2
<PAGE>
SECTION 10. As used in this Plan, (a) the terms "assignment", "interested
person" and "vote of a majority of the outstanding voting securities" shall have
the respective meanings specified in the Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission and (b) the term "Qualified Directors" shall mean the
Directors of the Fund who are not "interested persons" of the Fund and have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to this Plan.
3
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION AGREEMENT, dated as
of , 19 between Seligman Financial Services, Inc. ("Seligman
Financial Services") and (the "Service Organization").
The Parties hereto enter into a Administration, Shareholder Services
and Distribution Agreement ("Service Agreement") with respect to the shares of
Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information Fund, Inc.,
Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman Henderson
Global Fund Series, Inc., Seligman High Income Fund Series, Seligman Income
Fund, Inc., Seligman New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania
Tax-Exempt Fund Series, Seligman Tax-Exempt Fund Series, Inc., Seligman
Tax-Exempt Series Trust (the "Funds"), and any other future mutual funds that
may become members of the Seligman Group of Investment Companies which adopt an
Administration, Shareholder Services and Distribution Plan, pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "Act"), and in
consideration of the mutual agreements herein made, agree as follows:
The Service Organization shall make such use of or provide such
information and services as may be necessary or appropriate (i) to provide
shareholder services to shareholders of the Funds and (ii) to assist Seligman
Financial Services in any distribution of shares of the Funds, including,
without limitation, making use of the Service Organization's name, client lists,
and publications, for the solicitation of sales of shares of the Funds to
Service Organization clients, and such other assistance as Seligman Financial
Services reasonably requests, to the extent permitted by applicable statute,
rule or regulation.
1. Except with respect to the Class D shares of a Fund for the first year
following the sale thereof, Seligman Financial Services shall pay to
the Service Organization a service fee (as defined in the National
Association of Securities Dealers, Inc. Rules of Fair Practice) not to
exceed .25 of 1% per annum of the average daily net assets of each
class of shares of each Fund attributable to the clients of the Service
Organization.
2. With respect to the first year following the sale of Class D shares of
a Fund, Seligman Financial Services shall pay to the Service
Organization at or promptly after the time of sale a service fee (as
defined in the National Association of Securities Dealers, Inc. Rules
of Fair Practice) not to exceed .25 of 1% of the net asset value of the
Class D shares sold by the Service Organization. Such service fee shall
be paid to the Service Organization solely for personal services and/or
the maintenance of shareholder accounts to be provided by the Service
Organization to the purchaser of such Class D Shares over the course of
the first year following the sale.
3. Any service fee paid hereunder shall be paid solely for personal
services and/or the maintenance of shareholder accounts. For greater
certainty, no part of a service fee shall be paid for subtransfer
agency services, subaccounting services, or administrative services.
<PAGE>
4. In addition to payment of the service fee, from time to time Seligman
Financial Services may make payments to the Service Organization in
addition to those contemplated above for providing distribution
assistance with respect to assets invested in each Fund by its clients.
5. Neither the Service Organization nor any of its employees or agents are
authorized to make any representation concerning the Funds or the
Funds' shares except those contained in the then current Prospectus,
copies of which will be supplied by Seligman Financial Services. The
Service Organization shall have no authority to act as agent for
Seligman Financial Services or the Funds.
6. In consideration of the services provided pursuant to paragraphs 1, 2
and/or 4 above, the Service Organization shall be entitled to receive
fees as are set forth in Exhibit A hereto as may be amended from time
to time by Seligman Financial Services. Seligman Financial Services has
no obligation to make any such payments and the Service Organization
agrees to waive payment of its fee until Seligman Financial Services is
in receipt of the fee from the Fund(s). The payment of fees has been
authorized pursuant to an Administration, Shareholder Services and
Distribution Plans (the "Plans") approved by the Directors/Trustees and
the shareholders of the Funds pursuant to the requirements of the Act
and such authorizations may be withdrawn at any time.
7. It is understood that the Funds reserve the right, at their discretion
and without notice, to suspend or withdraw the sale of shares of the
Funds. This Agreement shall not be construed to authorize the Service
Organization to perform any act that Seligman Financial Services would
not be permitted to perform under the respective Distributing
Agreements between each of the Funds and Seligman Financial Services.
8. Subject to the proviso in Section 6 of the Plans, this Agreement shall
continue until December 31 of the year in which any Plan has first been
approved by shareholders and through December 31 of each year
thereafter provided such continuance is specifically approved at least
annually by a vote of a majority of (i) the Fund's Directors/Trustees
and (ii) the Qualified Directors/Trustees cast in person at a meeting
called for the purpose of voting on such approval and provided further
that the Service Organization shall not have notified Seligman
Financial Services in writing at least 60 days prior to the anniversary
date of the previous continuance that it does not desire such
continuance. This Agreement may be terminated at any time without
payment of any penalty with respect to any of the Funds by vote of a
majority of the Qualified Directors/Trustees, or by vote of a majority
of the outstanding voting securities of the particular Fund or class or
series of a Fund, on 60 days' written notice to the Service
Organization and Seligman Financial Services. Notwithstanding anything
contained herein, in the event that any of the Plans shall be
terminated or any of the Plans or any part thereof shall be found
invalid or ordered terminated by any regulatory or judicial authority,
or the Service Organization shall fail to perform the services
contemplated by this Agreement, such determination to be made in good
faith by Seligman Financial Services, this Agreement may be terminated
with respect to such Plan effective upon receipt of written notice
thereof by the Service Organization. This Agreement will also terminate
automatically in the event of its assignment.
<PAGE>
9. All communications to Seligman Financial Services shall be sent to it
at its offices, 100 Park Avenue, New York, New York 10017.
Any notice to the Service Organization shall be duly given if
mailed or telegraphed to it at the address shown below.
10. As used in this Agreement, the terms "assignment", "interested person"
and "vote of a majority of the outstanding voting securities" shall
have the respective meanings specified in the Act and in the rules and
regulations thereunder and the term "Qualified Directors/Trustees"
shall mean the Directors/Trustees of a Fund who are not interested
persons of the Fund and have no direct or indirect financial interest
in its Plan or in any agreements related to the Plan.
11. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon, any of the parties to do anything in violation
of any applicable laws or regulations.
IN WITNESS WHEREOF, Seligman Financial Services and the Service Organization
have caused this Agreement to be executed by their duly authorized offices as of
the date first above written.
SELIGMAN FINANCIAL SERVICES, INC.
By _________________________________
Stephen J. Hodgdon, President
SERVICE ORGANIZATION
By _________________________________
Address ____________________________
____________________________________
1/95
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION AGREEMENT
EXHIBIT A
The payment schedule for Service Organizations is set forth immediately
below:
<TABLE>
<CAPTION>
FEES AS A PERCENTAGE
OF EACH FUND'S/SERIES'
AVERAGE DAILY NET ASSETS ATTRIBUTABLE
NET ASSETS TO SERVICE ORGANIZATIONS*
ATTRIBUTABLE TO -----------------------------------
SERVICE ORGANIZATIONS CLASS A SHARES/ CLASS D
FUND NAME CLASS A SHARES CLASS B SHARES+ SHARES**
- --------- -------------- --------------- --------
<S> <C> <C> <C>
Seligman Capital Fund, Inc. $100,000 or more .25% 1.00%
Seligman Cash Management Fund, Inc: $100,000 or more -0-/.25% 1.00%
Seligman Common Stock Fund, Inc. $100,000 or more .25% 1.00%
Seligman Communications and Information Fund, Inc. $100,000 or more .25% 1.00%
Seligman Frontier Fund, Inc. $100,000 or more .25% 1.00%
Seligman Growth Fund, Inc. $100,000 or more .25% 1.00%
Seligman Henderson Global Fund Series, Inc:
Seligman Henderson Emerging Markets Growth Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Smaller Companies Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Growth Opportunities Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Technology Fund $100,000 or more .25% 1.00%
Seligman Henderson International Fund $100,000 or more .25% 1.00%
Seligman High Income Fund Series:
U.S. Government Securities Portfolio $100,000 or more .25% 1.00%
High-Yield Bond Portfolio $100,000 or more .25% 1.00%
Seligman Income Fund, Inc. $100,000 or more .25% 1.00%
Seligman New Jersey Tax-Exempt Fund, Inc. $100,000 or more .25% 1.00%
Seligman Pennsylvania Tax-Exempt Fund Series $100,000 or more .25% 1.00%
Seligman Tax-Exempt Fund Series, Inc:
National Series $100,000 or more .10% 1.00%
Colorado Series $100,000 or more .10% 1.00%
Georgia Series $100,000 or more .10% 1.00%
Louisiana Series $100,000 or more .10% 1.00%
Maryland Series $100,000 or more .10% 1.00%
Massachusetts Series $100,000 or more .10% 1.00%
Michigan Series $100,000 or more .10% 1.00%
Minnesota Series $100,000 or more .10% 1.00%
Missouri Series $100,000 or more .10% 1.00%
New York Series $100,000 or more .10% 1.00%
Ohio Series $100,000 or more .10% 1.00%
Oregon Series $100,000 or more .10% 1.00%
South Carolina Series $100,000 or more .10% 1.00%
Seligman Tax-Exempt Series Trust:
California Tax-Exempt Quality Series $100,000 or more .10% 1.00%
California Tax-Exempt High-Yield Series $100,000 or more .10% 1.00%
Florida Tax-Exempt Series $100,000 or more .25% 1.00%
North Carolina Tax-Exempt Series $100,000 or more .25% 1.00%
</TABLE>
March 21, 1996
* Included in each of the percentages above is the service fee (as defined in
the National Association of Securities Dealers, Inc. Rules of Fair Practice)
with respect to each class of shares referred to in paragraph 1 of this
Agreement. Except as provided in Footnote ** below, Seligman Financial
Services shall pay the fees provided for above to the Service Organization
quarterly.
** At or promptly after the time of sale of any Class D Shares, a Service
Organization shall be paid 1.00% of the net asset value of the Class D Shares
sold by it. The difference between .75% and the amount paid is comprised of
the service fee referred to in paragraph 1 of this Agreement for services to
be provided to Class D shareholders over the course of the one year period
immediately following the sale.
+ Class B Shares are not available for the U.S. Government Securities Portfolio
of Seligman High Income Fund Series, Selligman New Jersey Tax-Exempt Fund,
Inc., Seligman Pennsylvania Tax-Exempt Fund Series or any Series of Seligman
Tax-Exempt Fund Series, Inc. or Seligman Tax-Exempt Series Trust.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> SELIGMAN CASH MANAGEMENT FUND - CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 192616
<INVESTMENTS-AT-VALUE> 192616
<RECEIVABLES> 2470
<ASSETS-OTHER> 329
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 195415
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3466
<TOTAL-LIABILITIES> 3466
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191954
<SHARES-COMMON-STOCK> 177400<F1>
<SHARES-COMMON-PRIOR> 194410<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 177395<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10774<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (1558)<F1>
<NET-INVESTMENT-INCOME> 9216<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9216<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9216)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 686560<F1>
<NUMBER-OF-SHARES-REDEEMED> (711581)<F1>
<SHARES-REINVESTED> 8011<F1>
<NET-CHANGE-IN-ASSETS> (17010)<F1>
<ACCUMULATED-NII-PRIOR> 0<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 774<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 1558<F1>
<AVERAGE-NET-ASSETS> 181991<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .051<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.051)<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .86<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A only. All other data are fund level.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 014
<NAME> SELIGMAN CASH MANAGEMENT FUND - CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 192616
<INVESTMENTS-AT-VALUE> 192616
<RECEIVABLES> 2470
<ASSETS-OTHER> 329
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 195415
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3466
<TOTAL-LIABILITIES> 3466
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191954
<SHARES-COMMON-STOCK> 14554<F1>
<SHARES-COMMON-PRIOR> 3458<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 14554<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 621<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (200)<F1>
<NET-INVESTMENT-INCOME> 421<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 421<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (421)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 80746<F1>
<NUMBER-OF-SHARES-REDEEMED> (69979)<F1>
<SHARES-REINVESTED> 329<F1>
<NET-CHANGE-IN-ASSETS> 11096<F1>
<ACCUMULATED-NII-PRIOR> 0<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 45<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 200<F1>
<AVERAGE-NET-ASSETS> 10545<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .04<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.04)<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> 1.90<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
</TABLE>
