<PAGE>
File No. 2-56805
811-2650
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 30 [X]
--
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 22 [X]
--
- --------------------------------------------------------------------------------
SELIGMAN CASH MANAGEMENT FUND, INC.
(Exact name of registrant as specified in charter)
- --------------------------------------------------------------------------------
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
- --------------------------------------------------------------------------------
THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
<TABLE>
<CAPTION>
<S> <C>
[X] immediately upon filing pursuant [ ] on (date) pursuant to paragraph
to paragraph (b) (a)(1)
[ ] on (date) pursuant to [ ] 75 days after filing pursuant to
paragraph (b) paragraph (a)(2)
[ ] 60 days after filing pursuant to [ ] on (date) pursuant to paragraph
paragraph (a)(1) (a)(2) of rule 485.
</TABLE>
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on December
20, 1996.
<PAGE>
File No. 2-56805
811-2650
SELIGMAN CASH MANAGEMENT FUND INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 30
Pursuant to Rule 481(a)
-----------------------
<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
- --------------------------- ----------------------
<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Organization and Capitalization
5. Management of the Fund Management Services
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
<CAPTION>
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- -----------------------------------------------
<S> <C>
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 Fund Shares;
of Securities Being Offered 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 Asset Value Per Share
of Money Market Funds
23. Financial Statements Financial Statements
</TABLE>
<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
May 1, 1997
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 assur-
ance 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 Pol-
icies." 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,
1998. Class B shares and Class D shares 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,
or, through securities dealers or other financial intermediaries, to facili-
tate periodic investments in Class B shares or Class D shares, respectively,
of other Seligman Mutual Funds. Class B shares are sold without an initial
sales load but are subject to a contingent deferred sales load ("CDSL") 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 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 Dis-
tribution 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 Addi-
tional 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.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Fund Expenses.................................................. 2
Financial Highlights...................................................... 3
Alternative Distribution System........................................... 5
Investment Objectives and Policies........................................ 6
Management Services....................................................... 8
Net Asset Value Per Share................................................. 9
Purchase of Shares........................................................ 9
Right of Accumulation in Purchases of
Shares of the other Seligman Mutual
Funds.................................................................... 13
Telephone Transactions.................................................... 13
Redemption of Shares...................................................... 15
Administration, Shareholder Services
and Distribution Plan.................................................... 17
Exchange Privilege........................................................ 18
Dividends................................................................. 20
Federal Income Taxes...................................................... 21
Shareholder Information................................................... 21
Yield..................................................................... 23
Organization and Capitalization........................................... 23
</TABLE>
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
----------------- ----------------- -----------------
SHAREHOLDER TRANSACTION (INITIAL SALES (DEFERRED SALES (DEFERRED SALES
EXPENSES LOAD ALTERNATIVE) LOAD ALTERNATIVE) LOAD ALTERNATIVE)
<S> <C> <C> <C>
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 None 5% in 1st year 1% in 1st year
original purchase price 4% in 2nd year None thereafter
or redemption proceeds, 3% in 3rd and
whichever is lower).... 4th years
2% in 5th year
1% in 6th year
None thereafter
Redemption Fees......... None None None
Exchange Fees........... None None None
<CAPTION>
CLASS A CLASS B CLASS D
----------------- ----------------- -----------------
<S> <C> <C> <C>
ANNUAL FUND OPERATING
EXPENSES FOR 1996
(as a percentage of
average net assets)
Management Fees......... .41% .41% .41%
12b-1 Fees.............. --+ 1.00%* 1.00%
Other Expenses.......... .38% .38% .38%
--- ---- ----
Total Fund Operating
Expenses............... .79% 1.79% 1.79%
=== ==== ====
</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 CDSLs on Class B and Class D shares are one-time charges paid
only if shares are redeemed within six years or one year of purchase,
respectively (or, in the case of shares acquired upon exchange, the purchase
of the Original Class B Shares or Original Class D Shares). "Other Expenses"
for Class B shares are estimated based on expense incurred during 1996. For
more information concerning 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.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) a 5% annual return Class A $ 8 $25 $ 44 $ 98
and (2) redemption at the end of Class B++ $68 $86 $117 $184
each time period.................. Class D $28+++ $56 $ 97 $211
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5%
ANNUAL RETURN USED IN THIS EXAMPLE IS A HYPOTHETICAL RATE.
* Includes an annual distribution fee of .75% and an annual service fee of
.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, 1998.
++ Assuming (1) a 5% annual return and (2) no redemption at the end of the
period, the expenses on a $1,000 investment would be $18 for 1 year, $56
for 3 years and $97 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) a 5% annual return and (2) no redemption at the end of one
year, the expenses on a $1,000 investment would be $18.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights for the Fund's Class A, Class B and Class D shares
for the periods presented have been audited by Deloitte & Touche LLP,
independent auditors. This information, which is derived from the financial
and accounting records of the Fund, should be read in conjunction with the
financial statements and notes contained in the Fund's 1996 Annual Report,
which is incorporated by reference in the Fund's Statement of Additional
Information, copies of which may be obtained by calling or writing the Fund at
the telephone numbers or address provided on the cover page of this
Prospectus.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from each Class's be-
ginning net asset value to its ending net asset value so that they may under-
stand 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 each Class's perfor-
mance 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 pe-
riod. Total returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of year.................... $ 1,000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income....... .046 .051 .034 .024 .030 .053 .074 .084 .066 .059
Dividends paid or declared.. (.046) (.051) (.034) (.024) (.030) (.053) (.074) (.084) (.066) (.059)
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Net asset value, end of
year....................... $ 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: 4.71% 5.18% 3.46% 2.40% 3.10% 5.53% 7.53% 8.76% 6.88% 6.13%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets..................... .79% .86% .82% .77% .76% .79% .80% .80% .93% .83%
Net investment income to
average net assets......... 4.61% 5.06% 3.41% 2.37% 3.04% 5.34% 7.40% 8.46% 6.63% 5.96%
Net assets, end of year
(000s omitted)............. $208,950 $177,395 $194,406 $173,902 $193,158 $260,297 $287,518 $321,481 $344,664 $354,588
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>
- -------
* For the years ended December 31, 1991 to 1993, the Manager, at its discre-
tion, waived a portion of its management fees for Class A shares.
The data provided above reflects historical information and therefore has
not been adjusted to reflect the effect of the increased management fee ap-
proved by shareholders on April 10, 1991 or the Administration, Shareholder
Services and Distribution Plan which was approved by shareholders in respect
of Class A shares on November 23, 1992, under which payment may commence after
April 30, 1998.
3
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS D
-------- ----------------------------------
YEAR ENDED
4/22/96* DECEMBER 31, 5/3/93*
TO ------------------------ TO
12/31/96 1996 1995 1994 12/31/93
-------- ------- ------- ------ --------
<S> <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
Net investment income........... .025 .036 .040 .024 .003
Dividends paid or declared...... (.025) (.036) (.040) (.024) (.003)
------ ------- ------- ------ ------
Net asset value, end of period.. $1.000 $ 1.000 $ 1.000 $1.000 $1.000
====== ======= ======= ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: 2.44% 3.67% 4.08% 2.35% .30%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.. 1.78%+ 1.79% 1.90% 1.90% 1.74%+
Net investment income to average
net assets..................... 3.58%+ 3.61% 4.02% 2.32% 1.39%+
Net assets, end of period (000s
omitted)....................... $2,493 $22,309 $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%+
</TABLE>
- -------
* Commencement of offering of shares.
** For the year/period ended December 31, 1993 to 1994, the Manager, at its
discretion, waived a portion of its management fees and/or reimbursed cer-
tain expenses for Class D Shares.
+ Annualized.
4
<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 ex-
change their Class B or Class D shares of another Seligman Mutual Fund ("Orig-
inal 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 choos-
ing 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 ac-
quired 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 re-
spect 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 in-
vestments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and, potentially, cer-
tain 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 in-
come 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 approxi-
mately 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 ex-
change privileges.
The Directors of the Fund believe that no conflict of interest currently ex-
ists 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 pur-
pose, the Directors will monitor the Fund for the existence of any material
conflict among the classes and will take such action as is reasonably neces-
sary 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 pri-
mary 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 advan-
tage 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 ini-
tially 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
5
<PAGE>
Class B automatic conversion feature, making their investment subject to
higher distribution fees for an in-definite period of time. Each class has ad-
vantages and disadvantages for different investors, and investors should
choose the class that best suits their circumstances and their objectives.
<TABLE>
<CAPTION>
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE
SALES LOAD DAILY NET ASSETS) OTHER INFORMATION
---------- ------------------ -----------------
<S> <C> <C> <C>
CLASS A None Service fee of --
.25%. (This
fee will not
be assessed
through April
30, 1998.
Payments may
commence after
that date.)
CLASS B None Service fee of CDSL of:
.25%; 5% in 1st year
Distribution 4% in 2nd year
fee of .75% 3% in 3rd and
until 4th years
conversion 2% in 5th year
1% in 6th year
0% after 6th
year.
CLASS D None Service fee of CDSL of 1% on
.25%; redemption
Distribution within one year
fee of up to of purchase of
.75%. the Original
Class D Shares.
</TABLE>
- -------
* Conversion occurs at the end of the month which precedes the 8th anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class
B shares of another Seligman Mutual Fund, the conversion period applicable
to the Class B shares acquired in the exchange will apply, and the holding
period of the shares exchanged will be tacked onto the holding period of the
shares acquired.
Investors who intend to purchase shares of the Fund primarily as a vehicle
for exchanges into Class B or Class D shares of other Seligman Mutual Funds
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 Mu-
tual 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, respec-
tively, 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 de-
fined 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 institu-
tions 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 denomi-
nations 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, evaluat-
ing 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
6
<PAGE>
that the Fund will be able to do so. In an effort to maintain a stable net as-
set 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 re-
maining maturity of 13 months (397 days) or less and will maintain a 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 securi-
ty) unless (i) it is rated in one of the two highest rating categories as-
signed to short-term debt securities by at least two nationally recognized
statistical rating organizations ("NRSRO's") such as Moody's Investors Serv-
ice, Inc. ("Moody's") and Standard & Poor's Rating Service ("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 con-
tinue 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 se-
curities 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 Ad-
ministration, 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 Trea-
sury, such as securities of Federal Home Loan Banks, while certain other secu-
rities are supported only by the credit of the agency or instrumentality it-
self, such as securities issued by the Federal National Mortgage Administra-
tion.
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 reg-
ulatory supervision by the U.S. Government or state governments and the obli-
gations of the 100 largest foreign banks in terms of assets with branches or
agencies in the United States. Fixed time deposits, unlike negotiable certifi-
cates of deposit, generally do not have a market and may be subject to penal-
ties for early withdrawal of funds.
Investments in foreign banks and foreign branches of United States banks in-
volve 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-
7
<PAGE>
term unsecured promissory notes with maturities not exceeding nine months is-
sued in bearer form by bank holding companies, corporations and finance compa-
nies. 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 compa-
nies in terms of assets.
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 in-
strument is held by the Fund and is unrelated to the interest rate on the in-
strument. 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 commer-
cial banks. Repurchase agreements could involve certain risks in the event of
bankruptcy or other default by the seller, including possible delays and ex-
penses 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 agree-
ments 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 secu-
rities 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 col-
lateral. The Fund will not lend more than 25% of the value of its total as-
sets, 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 ex-
penses since portfolio transactions ordinarily will be made directly with the
issuer, money market dealer, or other financial institution on a net price ba-
sis.
The foregoing investment policies are not fundamental and the Board of Di-
rectors 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 de-
scription of the Fund's investment policies, including a list of those re-
strictions 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 out-
standing shares of the Fund or (2) 67% or more of the shares of the Fund pres-
ent 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 of Directors
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.
8
<PAGE>
The Manager also serves as manager of seventeen 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., Se-
ligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc., Selig-
man High Income Fund Series, Seligman Income Fund, Inc., Seligman Municipal
Fund Series, Inc., Seligman Municipal Series Trust, Seligman New Jersey Munic-
ipal Fund, Inc., Seligman Pennsylvania Municipal Fund Series, Seligman Portfo-
lios, Inc., Seligman Quality Municipal Fund, Inc., Seligman Select Municipal
Fund, Inc., Seligman Value Fund Series, Inc. and Tri-Continental Corporation.
At March 31, 1997, the aggregate assets of the Seligman Group were approxi-
mately $14.2 billion. The Manager also provides investment management or ad-
vice to institutional accounts having an aggregate value of approximately $4.2
billion at March 31, 1997.
Mr. William C. Morris is Chairman of the Manager and Chairman of the Board
and Chief Executive Officer of the Fund. Mr. Morris owns a majority of the
outstanding voting securities of the Manager.
The Manager also provides senior management for Seligman Data Corp., a whol-
ly-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, calcu-
lated daily and payable monthly, equal to a per annum percentage of the Fund's
daily net assets. For the year ended December 31, 1996, the management fee
paid by the Fund was equal to .41% 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.
Total expenses of the Fund's Class A and Class D shares for the year ended De-
cember 31, 1996 amounted to .79% and 1.79%, respectively, of the average daily
net assets of such class. The annualized total expenses for Class B shares for
the period ended December 31, 1996 amounted to 1.78% of the average daily net
assets of such class.
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 ("NYSE") (normally, 4:00 p.m. Eastern
time) on days on which the NYSE is open for business. Net asset value is cal-
culated 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 ma-
turity 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 Ave-
nue, 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
9
<PAGE>
WITH THE INVEST-A-CHECK(R) SERVICE. THE MINIMUM AMOUNT FOR INITIAL INVESTMENT
IN THE SELIGMAN TIME HORIZON MATRIX SM ASSET ALLOCATION PROGRAM IS $10,000.
FOR INFORMATION ABOUT THIS PROGRAM, CONTACT YOUR FINANCIAL ADVISOR.
No purchase order may be placed for Class B shares for an amount of $250,000
or more.
Each class of shares are continuously offered for sale at their net asset
value next determined after a purchase order is received and becomes effec-
tive. 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 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 busi-
ness on the day an order becomes effective are entitled to receive income div-
idends 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, 1998. 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 in our postage-paid return envelope or directly to
P.O. BOX 3947, NEW YORK, NY 10008-3947. Credit card convenience checks and
third party checks (i.e., checks made payable to someone other than the "Se-
ligman Group of Funds") may not be used to open a new fund account or purchase
additional shares of the Fund. Class B and Class D shares are sold only
through securities dealers and other financial intermediaries. A check re-
ceived 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. Eastern time 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 Fed-
eral Reserve System may take longer to be converted.
Seligman Data Corp. may charge a $10.00 service fee for checks returned to
it as uncollectable. This charge will be deducted from the shareholder's ac-
count. Payment of redemption proceeds will be delayed on redemptions of shares
purchased by check (unless certified) until Seligman Data Corp. receives no-
tice 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 Sys-
tem. 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 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 Se-
ligman 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.
10
<PAGE>
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 the Seligman Mutual Fund, 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
Seligman Mutual Funds by exchanging Class B or Class D shares of the Fund for
Class B or Class D shares of such other funds through the Automatic Dollar-
Cost-Averaging Service (see "Shareholder Information" below) or any periodic
investment or market-timing service offered by a Service Organization. For ad-
ministrative 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 Seligman Mutual Funds pursuant to the Seligman
Time Horizon Matrix, SM 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.
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSL
- -------------------- ----
<S> <C>
less than 1 year........................................................... 5%
1 year or more but less than 2 years....................................... 4%
2 years or more but less than 3 years...................................... 3%
3 years or more but less than 4 years...................................... 3%
4 years or more but less than 5 years...................................... 2%
5 years or more but less than 6 years...................................... 1%
6 years or more............................................................ 0%
</TABLE>
Class B shares are also subject to an annual distribution fee of .75% and an
annual 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 pur-
chases 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 pur-
chased through the reinvestment of dividends on Class B shares also will con-
vert automatically to Class A shares together with the underlying shares on
which they were earned. Conversion occurs at the end of the month which pre-
cedes 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 con-
tinue 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 cer-
tain 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 au-
tomatically convert to Class A shares.
11
<PAGE>
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 ex-
change 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 invest-
ment 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 ex-
change of such shares. The amount of any CDSL will 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 in-
vestment 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
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 re-
spect 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 ap-
plicable CDSL period will then be redeemed.
For example, assume an investor exchanged $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 divi-
dends. 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 to-
tal value of $155 ($1.00 per share). The CDSL for this transaction would be
calculated as follows:
<TABLE>
<S> <C>
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
=======
</TABLE>
For federal income tax purposes, the amount of the CDSL will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the re-
demption 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) dis-
tributions from a custodial account under Code section 403(b)(7) or an indi-
vidual retirement account (an "IRA") due to death, disability, or attainment
of age 59 1/2, and (iii) a tax-free return of an excess contribution to an
IRA; (c) in whole or in part, in connection with shares sold to current and
retired Directors of the Fund; (d) in whole or in part, in connection with
shares sold to any state,
12
<PAGE>
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 Seligman Mutual Fund, or an-
other 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.
For the period from the date Seligman Global Horizon Funds (the "Offshore
Fund") commences offering its shares, until May 31, 1997, SFSI will reimburse
any CDSL charged upon the redemption of Class B or Class D shares of any Se-
ligman Mutual Fund by a non-U.S. resident alien investor who uses the redemp-
tion proceeds to purchase Class B or Class A shares, respectively, of the Off-
shore Fund through Merrill Lynch, Pierce, Fenner & Smith Incorporated, or any
of its affiliates (collectively, "Merrill Lynch"). Merrill Lynch will, in
turn, reimburse SFSI for the amount of CDSL so reimbursed by it over a period
of four years.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the mutual funds in the Selig-
man 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 representa-
tives 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 mu-
tual fund in the Seligman Group on which a sales load was paid will be in-
cluded 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 an initial sales load, as described in each fund's prospectus.
To receive the reduced initial 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 initial 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
13
<PAGE>
address. These services are separate from the Fund's existing Expedited Re-
demption 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 share-
holder'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 ex-
changes or address changes.
For accounts registered as trusts (unless the trustee and sole beneficiary
are the same person), corporations or group retirement plans: Telephone re-
demptions are not permitted. Group retirement plans that may allow partici-
pants to place telephone exchanges directly with the Fund must first provide a
letter of authorization signed by the plan custodian or trustee, and provide a
telephone services election form signed by each plan participant. Addition-
ally, 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 ex-
actly 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 telephone services
election form.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone services, authorizes each of the other owners to effect telephone
transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares via telephone.
In these circumstances, the shareholder or the shareholder's representative
should consider using other redemption or exchange procedures. (See "Redemp-
tion of Shares" below.) Use of these other redemption or exchange procedures
may result in the request being processed at a later time than if a telephone
transaction had been used, and the Fund's net asset value may fluctuate during
such periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine. These will in-
clude: 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 in-
structions 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
14
<PAGE>
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. Tele-
phone transactions must be effected through a representative of Seligman Data
Corp., i.e., requests may not be communicated via Seligman Data Corp.'s auto-
mated telephone answering system. Shareholders, of course, may refuse or can-
cel telephone services. Telephone services may be terminated by a shareholder
at any time by sending a written request to Seligman Data Corp. TELEPHONE SER-
VICES MAY NOT BE ESTABLISHED BY A SHAREHOLDER'S BROKER/DEALER WITHOUT THE
WRITTEN AUTHORIZATION OF THE SHAREHOLDER. Written acknowledgment of the addi-
tion of telephone services to an existing account or termination of telephone
services will be sent to the shareholder at the address of record.
REDEMPTION OF SHARES
Upon receipt by Seligman Data Corp. of a proper request, the Fund will re-
deem shares at their net asset value next determined less any applicable CDSL.
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
("uncertificated") form without charge, except a CDSL, if applicable, at any
time BY SENDING A WRITTEN REQUEST TO Seligman Data Corp. at P.O. Box 3947, New
York, NY 10008-3947 or if the request is to be sent by overnight delivery
service to 100 Park Avenue, New York, NY 10017. The redemption request must be
signed by all persons in whose name the shares are registered. A shareholder
may redeem shares that are not in book credit form without charge, except a
CDSL, if applicable, by surrendering certificates in proper form to the same
address. Certificates should be sent by registered mail. Share certificates
must be endorsed for transfer or accompanied by an endorsed stock power as-
signed by all share owners exactly as their name(s) appear(s) on the account
registration. The shareholder's letter of instruction or endorsed stock power
should specify the Fund name, account number, class of shares (A, B or D) and
the number of shares or dollar amount to be redeemed. The Fund cannot accept
conditional redemption requests (i.e., requests to sell shares on a future
date). If the redemption proceeds are (i) $50,000 or more, (ii) to be paid to
someone other than the shareholder of record (regardless of the amount) or
(iii) to be mailed to other than the address of record (regardless of the
amount), the signature(s) of the shareholder(s) must be guaranteed by an eli-
gible 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 DOCUMENTA-
TION MAY ALSO BE REQUIRED BY SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION
BY A CORPORATION, EXECUTOR, ADMINISTRATOR, TRUSTEE, CUSTODIAN OR RETIREMENT
PLAN. FOR FURTHER INFORMATION WITH RESPECT TO REDEMPTION REQUIREMENTS, PLEASE
CONTACT THE SHAREHOLDER SERVICES DEPARTMENT OF SELIGMAN DATA CORP. FOR ASSIS-
TANCE.
EXPEDITED REDEMPTION SERVICE. The Expedited Redemption Service allows a
shareholder
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<PAGE>
whose shares are uncertificated to request redemptions by telephone or by let-
ter to Seligman Data Corp. without a signature guarantee. If a shareholder in-
tends to use this Service, it should be elected on the initial Account Appli-
cation. If a shareholder wishes to add this service subsequent to the estab-
lishment 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 reason-
able 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 do-
mestic 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. Accord-
ingly, 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 Identifi-
cation 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, reg-
ular telephone redemptions of uncertificated shares may be made once per day,
in an amount up to $50,000 per fund 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. Re-
demption requests to be payable by check will not be accepted within 30 days
following an address change. Qualified Plans, IRAs or other retirement plans
are not eligible for telephone redemptions.The Fund reserves the right to sus-
pend or terminate its telephone redemption services at any time without no-
tice.
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 trans-ferred 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 Se-
ligman 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 re-
demption. 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 proc-
essed 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
16
<PAGE>
shares are owned jointly, redemption checks will need to be signed by all per-
sons unless otherwise elected on the Account Application, in which case a sin-
gle 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 ac-
count, the check will be returned marked "insufficient funds." Seligman Data
Corp. will charge a $10.00 processing fee for any check redemption draft re-
turned as uncollectable. This charge may be deducted from the account against
which the check was drawn.
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 Re-
demption Service may be terminated at any time by the Fund or Boston Safe De-
posit and Trust Co. See "Terms and Conditions" on page 25.
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 speci-
fied 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, ac-
counting 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 dis-
tribution of such promotional materials and prospectuses to prospective in-
vestors and defraying SFSI's costs incurred in connection with its marketing
efforts with respect to shares of the Fund. The Manager, in its sole discre-
tion, 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 com-
mence after April 30, 1998. It is expected that the proceeds from the distri-
bution fee in respect of Class A shares will be used primarily to compensate
Service Organizations which enter into agreements with SFSI. Such Service Or-
ganizations 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 av-
erage daily net asset value of the Class B and Class D
17
<PAGE>
shares. Proceeds from the Class B distribution fees are used to pay Service
Organizations a continuing fee of up to .25% on an annual basis of the average
net asset value of Class B shares attributable to particular Service Organiza-
tions for providing personal service and/or the maintenance of shareholder ac-
counts and will also be used by SFSI to defray the expense of 4% made by it to
Service Organizations at the time of the sale of Class B shares. Proceeds from
Class D distribution fees are used primarily to compensate Service Organiza-
tions for administration, shareholder services and distribution assistance
(including a continuing fee of up to .25% on an annual basis of the average
daily net asset value of Class D shares attributable to particular Service Or-
ganizations for providing personal service and/or the maintenance of share-
holder accounts) and will initially be used by SFSI to defray certain expenses
of the payment of 1% made by it to Service Organizations at the time of the
sale of Class D shares (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
year ended December 31, 1996 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
total amount paid for the period ended December 31, 1996 by the Class B shares
pursuant to the Plan was 1% per annum of the average daily net assets of Class
B shares. The Plan is reviewed by the Directors annually.
Seligman Services, Inc. ("SSI"), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts as broker/dealer of record for most share-
holder accounts that do not have a designated broker/dealer of record includ-
ing 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 an initial 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 in-
vested dividends on such shares) and all cash dividends declared for the month
to the date of the exchange, must be exchanged at the applicable public offer-
ing price, which includes an initial sales load.
Class B shares may be exchanged for Class B shares of any other Seligman Mu-
tual Fund and Class D shares may be exchanged for Class D shares of any other
Seligman Mutual Fund, in each case at net asset value. If shares that are sub-
ject to a CDSL are exchanged for shares of another fund, for purposes of as-
sessing 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 con-
tinue 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
18
<PAGE>
Fund's CDSL schedule if such schedule is higher or longer than the CDSL sched-
ule 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 tele-
phone services.
The Seligman Mutual Funds available under the Exchange Privilege are:
. SELIGMAN CAPITAL FUND, INC. seeks aggressive capital appreciation. Current
income is not an objective.
. SELIGMAN COMMON STOCK FUND, INC. seeks favorable current income and long-
term growth of both income and capital value without exposing capital to undue
risk.
. SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC. invests in shares of com-
panies in the communications, information and related industries to produce
capital gain. Income is not an objective.
. SELIGMAN FRONTIER FUND, INC. seeks to produce growth in capital value; in-
come may be considered but will only be incidental to the Fund's investment
objective.
. SELIGMAN GROWTH FUND, INC. seeks longer-term growth in capital value and an
increase in future income.
. SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. consists of the Seligman Hender-
son International Fund, the Seligman Henderson Emerging Markets Growth Fund,
the Seligman Henderson Global Growth Opportunities Fund, the Seligman Hender-
son Global Smaller Companies Fund and the Seligman Henderson Global Technology
Fund, of which seek long-term capital appreciation primarily by investing in
companies either globally or internationally.
. SELIGMAN HIGH INCOME FUND SERIES consists of the Seligman U.S. Government
Securities Series and the Seligman High-Yield Bond Series which seek high cur-
rent income by investing in debt securities.
. SELIGMAN INCOME FUND, INC. seeks high current income and the possibility of
improvement of future income and capital value.
. SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and a
National Series. The National Municipal Series seeks to provide maximum income
exempt from regular federal income taxes; individual state series, each seek-
ing to maximize income exempt from regular federal income taxes and from per-
sonal income taxes in designated states, are available for Colorado, Georgia,
Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York,
Ohio, Oregon and South Carolina. (Does not currently offer Class B shares.)
. SELIGMAN MUNICIPAL SERIES TRUST includes the Seligman California Municipal
Quality Series, the Seligman California Municipal High-Yield Series, the Se-
ligman Florida Municipal Series and the Seligman North Carolina Municipal Se-
ries, each of which invests in municipal securities of its designated state.
(Does not currently offer Class B shares.)
. SELIGMAN NEW JERSEY MUNICIPAL FUND, INC. invests in investment grade New
Jersey municipal securities. (Does not currently offer Class B shares.)
. SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES invests in investment grade
Pennsylvania municipal securities. (Does not currently offer Class B shares.)
. SELIGMAN VALUE FUND SERIES, INC. consists of the Seligman Large-Cap Value
Fund and the Seligman Small-Cap Value Fund each of which seeks capital appre-
ciation by investing in equity securities of value companies.
All permitted exchanges will be based on the net asset values of the respec-
tive funds determined at the close of the NYSE on that day. Telephone requests
for exchanges received between 8:30 a.m. and 4:00 p.m. Eastern time on any
business day by Seligman Data Corp. at (800) 221-2450, will be processed as of
the close of business on that day. The registration of an
19
<PAGE>
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 ac-
count 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, un-
less 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 Privi-
lege will not be carried over to the new fund account unless specifically re-
quested 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 cer-
tificates 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 or-
der may be processed by mail. For more information about telephone exchange
privileges, which, unless objected to, are assigned to most shareholders auto-
matically 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 in-
come 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 pre-
ceding 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 div-
idend and credited to a share-holder's account are not subject to a CDSL. In
the case of prototype retirement plans, dividends are automatically reinvested
in additional shares. Shareholders may elect to change their dividend option
by writ-
20
<PAGE>
ing Seligman Data Corp. at the address listed below. If the shareholder has
telephone services, changes may also be telephoned to Seligman Data Corp. be-
tween 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 mu-
tual 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, transfers or exchanges all shares in the share-
holder'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 or-
dinary income rates to the shareholders, whether received in cash or rein-
vested 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 share-
holders 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 CERTI-
FIES 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 INTER-
NAL 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 UN-
DISTRIBUTED 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 Corpo-
rate Communications/Investor Relations Department, J. & W. Seligman & Co. In-
corporated, 100 Park Avenue, New York, NY 10017 or by telephoning the Corpo-
rate 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 re-
quested by writing Shareholder Services, Seligman Data Corp, at the same ad-
dress or by toll-free telephone (800) 221-2450 from all continental United
States, or (212) 682-7600 outside the continental United States. Seligman Data
Corp. may be telephoned Monday through Friday (except holidays), between the
hours
21
<PAGE>
of 8:30 a.m. and 6:00 p.m. Eastern time and calls will be answered by a serv-
ice representative.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BAL-
ANCE, MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT
STATEMENTS, FORM 1099-DIV AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DE-
LIVERY 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 transac-
tions in their account. Other investor services are available. These include:
. INVEST-A-CHECK(R) SERVICE enables a shareholder to authorize additional pur-
chases 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 estab-
lished 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. For invest-
ments in the Seligman Time Horizon MatrixSM Asset Allocation Program, the min-
imum amount is 1,000 quarterly or $500 monthly. (See "Terms and Conditions" on
page 25.)
. 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. For exchanges into the
Seligman Time Horizon MatrixSM Asset Allocation Program, the minimum amount is
$500 at regular monthly intervals or $1,000 at regular quarterly intervals.
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 ma-
turity. Accordingly, it will not normally be advisable to liquidate a CD be-
fore 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. 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 25.)
. 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.
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<PAGE>
. OVERNIGHT DELIVERY to service shareholder requests is available for a $15.00
fee which will be deducted from a shareholder's account, if requested.
. COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of charge
for the current year and most recent prior year. Copies of year-end statements
for prior years back to 1977 are available for a fee of $10.00 per year, per
account, with a maximum charge of $150 per account. Statement requests should
be forwarded, along with a check, to Seligman Data Corp.
TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for:
--Individual Retirement Accounts (IRAs);
--Savings Incentive Match Plans for Employees (SIMPLE IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and certain
non-profit organizations who wish to make deferred compensation arrangements;
and
--Money Purchase Pension and Profit Sharing Plans for sole proprietorships,
individuals, corporations and partnerships.
These types of plans may be established only upon receipt of a written ap-
plication 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 au-
thorized 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 gen-
erated 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 as-
sumed to be generated each week over a 52-week period and is shown as a per-
centage 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, incorpo-
rated 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.
23
<PAGE>
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 manager or adviser (including the Fund).
24
<PAGE>
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 divi-
dends 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 certifi-
cates will be subject to a surety fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The applica-
tion 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 share-
holder'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 In-
vest-A-Check(R) Service may be suspended. In the event that a check is re-
turned 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) Serv-
ice 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 share-
holder 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 In-
vest-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 contin-
ued, 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
and any applicable CDSL. Redemptions will be made at the asset value at the
close of business on the specific day designated by the shareholder of each
month (or on the prior business day if the day specified falls on a weekend or
holiday), less, in the case of Class B shares, any applicable CDSL. Under this
Service, a Class B shareholder who requests both dividends and distributions
in additional shares may withdraw up to 12% of the value of the shareholder's
fund account (at the time of election) per annum, without the imposition of a
CDSL. A shareholder may change the amount of scheduled payments or may suspend
payments by written notice to Seligman Data Corp. at least ten days prior to
the effective date of such a change or suspension. The Service may be termi-
nated by the shareholder at any time by writing to Seligman Data Corp. Selig-
man 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 ex-
cess 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 Re-
demption section of the Account Application. All checks will require all sig-
natures 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 signa-
ture(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 sharehold-
er'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 negli-
gence. 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 sharehold-
er(s).
Seligman Data Corp. will charge a $10.00 service fee for any check redemp-
tion draft returned marked "unpaid". This fee will be deducted from the ac-
count against which the check was drawn. NO REDEMPTION PROCEEDS WILL BE REMIT-
TED TO SHAREHOLDERS WITH RESPECT TO SHARES PURCHASED BY CHECK (UNLESS CERTI-
FIED) 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.
5/97
25
<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
=====================================================
PROSPECTUS
Seligman
Cash
Management
Fund, Inc.
May 1, 1997
[Logo Appears Here]
=====================================================
A Money Market Fund
In Its 22nd Year
TXCM1 5/97
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1997
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 May 1, 1997. It should be read in conjunction
with the Prospectus, which may be obtained by writing or calling the Fund at the
above address or telephone numbers. This Statement of Additional Information,
although not in itself a Prospectus, is incorporated by reference into the
Prospectus in its entirety.
The Fund offers three classes of shares. Class A shares may be
purchased at net asset value. 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, 1998. 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
Seligman Mutual Funds. 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 higher ongoing fees that generally will cause the Class B shares and Class
D shares to have higher expense ratios 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
<TABLE>
<CAPTION>
Page
<S> <C>
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......................................10
Net Asset Value Per Share...................................................10
General Information.........................................................11
Financial Statements........................................................11
Appendix A..................................................................12
Appendix B..................................................................14
TXCM1A
</TABLE>
-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. Class B shares and Class D
shares are subject to 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, Class B and
Class D shares for the seven-day period ended December 31, 1996.
<TABLE>
<CAPTION>
Class A shares Class B shares Class D shares
-------------- -------------- --------------
<S> <C> <C> <C>
Total dividends per share from $0.000872 $0.000692 $0.000686
net investment income (seven
days ended December 31, 1996)
Annualized (365 day basis) 0.045469 0.036083 0.035770
Average net asset value per share 1.000 1.000 1.000
Annualized historical net yield 4.54%* 3.60%* 3.58%*
per share for seven calendar days
ended December 31, 1996
Effective yield (seven days 4.65%** 3.67%** 3.64%**
ended December 31, 1996)
</TABLE>
Weighted average life to maturity of investments was 32 days at December 31,
1996.
* This represents the annualized average net investment income per share for
the seven days ended December 31, 1996.
** 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.
- ------------------------
/*/ The Fund has applied for, and expects to receive, an exemptive order from
the Securities and Exchange Commission that would permit it to purchase shares
of other investment companies advised by the Manager for the limited purpose of
hedging its obligations in connection with the deferred fee arrangement for
outside directors referred to under "Directors and Officers" below.
-3-
<PAGE>
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years, are shown below.
Each Director who is an "interested person" of the Fund, as defined in the 1940
Act, is indicated by an asterisk. Unless otherwise indicated, their addresses
are 100 Park Avenue, New York, NY 10017.
<TABLE>
<S> <C>
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer and
(59) Chairman of the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors, Inc.,
advisers; Chairman and Chief Executive Officer, the Seligman
Group of Investment Companies; Chairman, Seligman Financial
Services, Inc., broker/dealer; Seligman Holdings, Inc.,
holding company; Seligman Services, Inc., broker/dealer; and
Carbo Ceramics Inc., ceramic proppants for oil and gas
industry; Director or Trustee, Seligman Data Corp.,
shareholder service agent; Kerr-McGee Corporation,
diversified energy company; and Sarah Lawrence College; and
a Member of the Board of Governors of the Investment Company
Institute; formerly, President, J. & W. Seligman & Co.
Incorporated; Chairman, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust Company, trust
company; and Director, Daniel Industries Inc., manufacturer
of oil and gas metering equipment.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(44)
Director and President, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; President (with the
exception of Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.) and Director or
Trustee, the Seligman Group of Investment Companies; and
Seligman Advisors, Inc., advisers; Chairman and President,
Seligman Data Corp., shareholder service agent; and
Director, Seligman Financial Services, Inc., broker/dealer;
Seligman Services, Inc., broker/dealer; and Seligman
Henderson Co., advisers; formerly, Director, Seligman
Securities, Inc., broker/dealer; and J. & W. Seligman Trust
Company, trust company.
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman, American Council on Germany;
a Governor of the Center for Creative Leadership; Director,
USLIFE Corporation, life insurance; National Committee on
U.S.-China Relations, National Defense University; the
Institute for Defense Analysis; and Raytheon Co.,
electronics; and Consultant, Thomson CSF, electronics;
formerly, Ambassador, U.S. State Department; Distinguished
Policy Analyst at Ohio State University and Olin
Distinguished Professor of National Security Studies at the
United States Military Academy. From June, 1987 to June,
1992, he was the Supreme Allied Commander, Europe and the
Commander-in-Chief, United States European Command.
Tufts University, Packard Avenue, Medford, MA 02155
ALICE S. ILCHMAN Director
(62)
President, Sarah Lawrence College; Director or Trustee, the
Seligman Group of Investment Companies; Chairman, The
Rockefeller Foundation, charitable foundation; and Director,
NYNEX, telephone company; and the Committee for Economic
Development; formerly, Trustee, The Markle Foundation,
philanthropic organization; and Director, International
Research and Exchange Board, intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
FRANK A. McPHERSON Director
(64)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; Kimberly-Clark
Corporation, consumer products, Bank of Oklahoma Holding
Company, American Petroleum Institute, Oklahoma City
Chamber of Commerce, Baptist Medical Center, Oklahoma
Chapter of the Nature Conservancy, Oklahoma Medical
Research Foundation and United Way Advisory Board;
Chairman, Oklahoma City Public Schools Foundation; and
Member of the Business Roundtable and National Petroleum
Council; formerly, Chairman of the Board and Chief
Executive Officer, Kerr-McGee Corporation, energy and
chemicals.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW* Director
(67)
Retired Chairman and Senior Partner, Sullivan & Cromwell,
law firm; Director or Trustee, the Seligman Group of
Investment Companies; Municipal Art Society of New York;
Commonwealth Aluminum Corporation; the U. S. Council for
International Business; and the U. S.-New Zealand
Council; Chairman, American Australian Association;
Member of the American Law Institute and Council on
Foreign Relations; and Member of the Board of Governors
of the Foreign Policy Association and The New York
Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(54)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; Trustee, Geraldine R. Dodge
Foundation, charitable foundation; and Chairman of the
Board of Trustees of St. George's School (Newport, RI);
formerly, Director, the National Association of
Independent Schools (Washington, DC).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(70)
Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of Investment
Companies; and Public Service Enterprise Group, public
utility. Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(69)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; The Houston
Exploration Company; The Brooklyn Museum; The Brooklyn
Union Gas Company; The Committee for Economic
Development; Dow Jones & Co., Inc.; and Public
Broadcasting Service; formerly, Co-Chairman of the Policy
Council of the Tax Foundation; Director and Vice
Chairman, Mobil Corporation; Director, Tesoro Petroleum
Companies, Inc.; and Director and President, Bekaert
Corporation. 675 Third Avenue, Suite 3004, New York, NY
10017
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(49)
Director, Managing Director and Chief Investment Officer,
Institutional, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and Seligman Advisors,
Inc., advisers; Director or Trustee, the Seligman Group
of Investment Companies; Director, Seligman Holdings,
Inc., holding company; Seligman Financial Services, Inc.,
broker/dealer; and Seligman Services, Inc.,
broker/dealer; formerly, President, the Seligman Group of
Investment Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund, Inc.; and
Director, Seligman Data Corp., shareholder service agent;
Seligman Henderson Co., advisers; J. & W. Seligman Trust
Company, trust company; and Seligman Securities, Inc.,
broker/dealer.
</TABLE>
-5-
<PAGE>
<TABLE>
<S> <C>
ROBERT L. SHAFER Director
(64)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; and USLIFE
Corporation, life insurance; formerly, Vice President,
Pfizer Inc., pharmaceuticals.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(62)
Executive Vice President, Chief Operating Officer and
Director, Sammons Enterprises, Inc.; Director or Trustee,
the Seligman Group of Investment Companies; Red Man Pipe
and Supply Company, piping and other materials; and C-
SPAN.
300 Crescent Court, Suite 700, Dallas, TX 75201
LEONARD J. LOVITO Vice President and Portfolio Manager
(37)
Vice President, Investment Officer, J. & W. Seligman &
Co. Incorporated, investment managers and advisers; Vice
President and Portfolio Manager, two other open-end
investment companies in the Seligman Group of Investment
Companies.
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Seligman
Financial Services, Inc., broker/dealer; Seligman
Advisors, Inc., advisers; and Seligman Data Corp.,
shareholder service agent; Vice President, the Seligman
Group of Investment Companies; and Seligman Services,
Inc. broker/dealer; and Treasurer, Seligman Holdings,
Inc., holding company; and Seligman Henderson Co.,
advisors; formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Senior Vice
President, J. & W. Seligman Trust Company, trust company.
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation and Corporate
Secretary, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Corporate Secretary,
the Seligman Group of Investment Companies; Seligman
Advisors, Inc., advisers; Seligman Financial Services,
Inc., broker/dealer; Seligman Henderson Co., advisers;
Seligman Services, Inc., broker/dealer; and Seligman Data
Corp. shareholder service agent; formerly, Secretary, J.
& W. Seligman Trust Company, trust company; and attorney,
Seward and Kissel, law firm.
THOMAS G. ROSE Treasurer
(39)
Treasurer, the Seligman Group of Investment Companies;
and Seligman Data Corp., shareholder service agent;
formerly, Treasurer, American Investors Advisors, Inc.
and the American Investors Family of Funds.
</TABLE>
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.
-6-
<PAGE>
Compensation Table
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits from Fund and
Name and Compensation Accrued as part of Fund Complex Paid
Position with Fund from Fund(1) Fund Expenses to Directors (1)(2)
------------------ ------------ ------------- -------------------
<S> <C> <C> <C>
William C. Morris,
Director and Chairman N/A N/A N/A
Brian T. Zino
Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director** N/A N/A N/A
John R. Galvin, Director $2,459.28 N/A $65,000.00
Alice S. Ilchman, Director 2,495.00 N/A 66,000.00
Frank A. McPherson, Director 2,459.28 N/A 65,000.00
John E. Merow, Director 2,495.00(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,495.00 N/A 66,000.00
James C. Pitney, Director 2,459.28 N/A 65,000.00
James Q. Riordan, Director 2,495.00 N/A 66,000.00
Robert L. Shafer, Director 2,495.00 N/A 66,000.00
James N. Whitson, Director 2,495.00(d) N/A 66,000.00(d)
- ----------------------
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1996.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired March 20, 1997.
(d) Deferred.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is
accrued on the deferred balances. The annual cost of such interest is included
in the directors' fees and expenses, and the accumulated balance thereof is
included in "Liabilities" in the Fund's financial statements. The total amounts
of deferred compensation (including interest) payable in respect of the Fund to
Messrs. Merow and Whitson as of December 31, 1996 were $67,637 and $11,167,
respectively. After January 1, 1997, Mr. Merow no longer defers current
compensation. Mr. Pitney no longer defers current compensation; however, he has
accrued deferred compensation in the amount of $62,888 as of December 31, 1996.
The Fund has applied for, and expects to receive, exemptive relief that would
permit a director who has elected deferral of his or her fees to choose a rate
of return equal to either (i) the interest rate on short-term Treasury bills, or
(ii) the rate of return on the shares of any of the investment companies advised
by the Manager, as designated by the director. The Fund may, but is not
obligated to, purchase shares of such investment companies to hedge its
obligations in connection with this deferral arrangement.
Directors and officers of the Fund are also directors or trustees and officers
of some or all of the other investment companies in the Seligman Group.
Directors and officers of the Fund as a group owned directly or indirectly
7,357,955 shares or 3.2% of the Fund's Class A Capital Stock at March 31, 1997.
As of that date, no Directors or officers owned shares of the Fund's Class B or
Class D Capital Stock.
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
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of directors of the Fund who are
-7-
<PAGE>
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 $846,790 in 1996, $818,740 in 1995
and $779,345 in 1994 , which was equivalent to annual rates of .41%, .43% and
.44%, respectively, of the average daily net assets of the Fund in 1996, 1995,
and 1994. During the year ended December 31, 1994, the Manager reimbursed
expenses of Class D shares equal to $16,822.
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 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
"Ethics Code"). The Ethics Code proscribes certain practices with regard to
personal securities transactions and personal dealings, provides a framework for
the reporting and monitoring of personal securities transactions by the
Manager's Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The Ethics
Code prohibits each of the officers, directors and employees (including all
portfolio managers) of the Manager from purchasing or selling any security that
the officer, director or employee knows or believes (i) was recommended by the
Manager for purchase or sale by any client, including the Fund, within the
preceding two weeks, (ii) has been reviewed by the Manager for possible purchase
or sale within the preceding two weeks, (iii) is being purchased or sold by any
client, (iv) is being considered by a research analyst, (v) is being acquired in
a private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest they
may have in the securities or issuers that they recommend for purchase by any
client.
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
-8-
<PAGE>
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may
not be purchased due to a possible conflict with clients. All officers,
directors and employees are also required to disclose all securities
beneficially owned by them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
The Fund has adopted an Administration, Shareholder Services and Distribution
Plan for each Class (the "Plan") in accordance with Section 12(b) of the 1940
Act and Rule 12b-1 thereunder.
The Plan was approved on July 16, 1992 by the Board of Directors of the Fund,
including a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) 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, 1998. 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.
Under the Plan, with respect to Class A shares, service organizations can
enter into agreements with Seligman Financial Services, Inc. ("SFSI") and
receive a continuing fee of up to 0.25% on an annual basis of the average daily
net assets of Class A shares, attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Fund did not make payments under the Plan with
respect to Class A shares during the year ended December 31, 1996. For the
period ended December 31, 1996, fees incurred by the Fund in respect of Class B
shares amounted to $8,128, or 1.00% per annum of the average daily net assets of
Class B shares. Of this amount, 0.725% per annum was paid directly to FEP
Capital, L.P. ("FEP") to compensate it for having funded, at the time of sale
(i) the 4% commission paid to selling brokers and (ii) a payment of 0.25% of
sales to SFSI; 0.025% per annum was paid to SFSI; and the remaining 0.25% per
annum was paid to SFSI which, in turn, made an equal payment to Service
Organizations for providing personal services and/or maintenance of shareholder
accounts. For the year ended December 31, 1996, fees incurred in respect of
Class D shares amounted to $142,672, or 1.00% per annum of the average daily net
assets of Class D shares. This amount was paid to SFSI and, in the first twelve
months after a sale, reimbursed it primarily for the 1% payment made to dealers
at the time of sale and for certain other direct distribution costs. After the
first twelve months, fees paid to SFSI are used to pay a continuing fee to
Service Organizations.
The Plan requires that the Treasurer of the Fund shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
Effective April 1, 1995, Seligman Services, Inc. ("SSI"), an affiliate of the
Manager, became eligible to receive distribution and service fees pursuant to
the Plan. For the year ended December 31, 1996 and for the period ended
December 31, 1995, SSI received distribution and service fees of $10,159 and
$335, respectively, pursuant to the Plan.
-9-
<PAGE>
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund issues three classes of shares: Class A shares may be purchased at a
price equal to the next determined net asset value per share. 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.
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.
-10-
<PAGE>
GENERAL INFORMATION
It is the intention of the Fund not to hold Annual Meetings of Shareholders.
The Directors may call Special Meetings of Shareholders for action by
shareholder vote as may be required by the 1940 Act or the Fund's Articles of
Incorporation.
Capital Stock. The Board of Directors is authorized to classify or reclassify
and issue any unissued Capital Stock of the Fund into any number of other
classes without further action by shareholders. The 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.
Custodian. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, Missouri 64105 serves as custodian of the Fund. It also maintains, under
the general supervision of the Manager, the accounting records and determines
the net asset value for the Fund.
Auditors. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York,
New York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 1996 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1996, as
well as certain other financial information as of that date. The Annual Report
will be furnished, without charge, to investors who request copies of the Fund's
Statement of Additional Information.
-11-
<PAGE>
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
Standard & Poor's Rating Service. 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.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. ("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
-12-
<PAGE>
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.
-13-
<PAGE>
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
. Helps finance America's fledgling railroads through underwriting.
. Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
. Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
. Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
. Is appointed U.S. Navy fiscal agent by President Grant.
. Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
. Helps Congress finance the building of the Panama Canal.
..1910s
. Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
. Participates in hundreds of underwritings including those for some of the
country's largest companies: Briggs Manufacturing, Dodge Brothers, General
Motors, Minneapolis-Honeywell Regulatory Company, Maytag Company, United
Artists Theater Circuit and Victor Talking Machine Company.
. Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion in
assets, and one of its oldest.
...1930s
. Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
. Establishes Investment Advisory Service.
...1940s
. Helps shape the Investment Company Act of 1940.
. Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
. Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
. Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
-14-
<PAGE>
...1950-1989
. Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
. Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
. Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
. Introduces Seligman Select Municipal Fund and Seligman Quality Municipal
Fund, two closed-end funds that invest in high-quality municipal bonds.
. In 1991 establishes a joint venture with Henderson plc, of London, known as
Seligman Henderson Co., to offer global investment products.
. Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
. Launches Seligman Henderson Global Fund Series, Inc., which today offers
five separate series: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund, Seligman Henderson Global Growth Opportunities Fund and
Seligman Henderson Emerging Markets Growth Fund.
. Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
-15-
<PAGE>
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[LOGO OF SELIGMAN APPEARS HERE]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Cash Management Fund, Inc., which contains information about the sales
charges, management fee, and other costs. Please read the prospectus carefully
before investing or sending money.
- --------------------------------------------------------------------------------
21ST ANNUAL REPORT
- --------------------------------------------------------------------------------
SELIGMAN
CASH
MANAGEMENT
FUND, INC.
- --------------------------------------------------------------------------------
December 31, 1996
[LOGO OF SELIGAN APPEARS HERE]
- --------------------------------------------------------------------------------
A Money Market Fund
Established in 1977
<PAGE>
================================================================================
SELIGMAN CASH MANAGEMENT FUND, INC.
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
HIGHLIGHTS OF 1996
- -------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS D
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets........................................... $208,949,614 $2,493,437 $22,309,114
- -------------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $1.00 $1.00 $1.00
Number of Shareholders............................... 11,432 156 1,234
- -------------------------------------------------------------------------------------------------------------------------
Dividends............................................ $.046 $.025* $.036
- -------------------------------------------------------------------------------------------------------------------------
Annualized Net Yield per Share....................... 4.61% 3.58%* 3.61%
Annualized Effective Yield per Share with
Dividends Invested Monthly....................... 4.71% 3.64%* 3.67%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Investments in the Fund are neither insured nor guaranteed by the US Government
and there is no assurance that the Fund will be able to maintain a stable net
asset value of $1.00 per share.
*From April 22, 1996 (commencement of operations).
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Overall, Seligman Cash Management Fund provided a solid yield in 1996 while
it continued to invest in only the highest quality money market instruments. The
Fund's yield at year-end 1996 was slightly lower than at year-end 1995, as the
Federal Reserve Board did not increase the fed funds rate after an initial
lowering in February 1996.
Nineteen ninety-six was a challenging year for the fixed-income markets. In
the short-term securities market, yields improved gradually, recovering from the
lows reached after the February reduction in the fed funds rate -- the interest
rate charged for interbank loans. The increase in the rate of economic growth in
the second quarter supported the assumption that the Fed would increase
short-term interest rates for a time, and yields on money market securities
improved. However, the lack of any noticeable increases in inflationary
indicators provided the support necessary to maintain the fed funds rate at
5.25% through December 1996, down from the 5.50% rate at the end of December
1995. Further, the yield on the benchmark three-month Treasury bill, which moves
rapidly in response to changes in the economic environment, ended the year at
5.17%, modestly higher than the 5.05% yield at year-end 1995.
Currently, there are no clear indications that there will be either runaway
economic expansion or recession in 1997. Looking ahead, the environment for the
fixed-income markets and investors remains generally positive, given continued
modest economic growth, low inflation, and bipartisan efforts to balance the
federal budget without raising taxes. While we always recognize that there could
be further short-term volatility, we remain positive about the long-term outlook
for the fixed-income markets and your Fund.
A discussion with your Portfolio Manager and the Fund's portfolio of
investments follow this letter.
We thank you for your interest in Seligman Cash Management Fund, and look
forward to serving your investment needs in the many years to come.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
January 31, 1997
2
<PAGE>
================================================================================
INTERVIEW WITH YOUR PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
[PICTURE APPEARS HERE]
Seligman Taxable Fixed Income Team: (from left) Nicholas Walsh, James
Auchterlonie, (seated) Leonard J. Lovito (Portfolio Manager), Susan Egan
LEONARD J. LOVITO is a Vice President of J. & W. Seligman & Co. Incorporated and
Vice President and Portfolio Manager of Seligman Cash Management Fund. He also
serves as Vice President of Seligman High Income Fund Series and Portfolio
Manager of its Seligman U.S. Government Securities Series, and Vice President of
Seligman Portfolios, Inc. and Portfolio Manager of its Seligman Bond and
Seligman Cash Management Portfolios. Mr. Lovito joined Seligman in 1984 as a
fixed-income analyst and has more than 13 years of fixed-income trading and
portfolio management experience. Mr. Lovito is supported by a team of seasoned
research professionals who assist him in selecting investments in accordance
with your Fund's objective.
WHICH ECONOMIC FACTORS AFFECTED SELIGMAN CASH MANAGEMENT FUND IN THE LAST 12
MONTHS?
"In February 1996, the Federal Reserve Board made its only adjustment to
short-term interest rates in the year, lowering the fed funds rate by 0.25%. The
adjustment was in response to the slowdown in economic growth that began during
1995. This slower growth trend was expected to continue throughout 1996, as were
further cuts in interest rates. However, the rate of economic growth began to
pick up in the second quarter of 1996, and remained stable throughout the rest
of the year. Consequently, the fed funds rate remained unchanged.
"Any adjustment to short-term interest rates has an immediate impact on
money market rates, and the February reduction was no exception. Therefore, the
rates on the types of money market instruments your Fund invests in declined in
the first half of 1996. However, the economic picture improved and fears of
inflationary pressure emerged, increasing the possibility that interest rates
would be raised. In this environment, money market rates reversed their course
and recovered some of the ground lost earlier in the year. The ultimate effect
of the movements in money market rates was a slight decline in Seligman Cash
Management's yield which, based on the net asset value of Class A shares, ended
the year at 4.61%, down from 5.06% at year-end 1995."
WHAT WAS YOUR INVESTMENT STRATEGY?
"After the Fed lowered short-term rates in February, the average maturity of the
Fund was extended to lock in longer-term rates. As the economic and interest
rate outlook improved, the Fund's average maturity was shortened in the second
quarter to 35-40 days, and maintained at approximately 35 days throughout the
second half of 1996, down from 45 days in the first quarter of 1996."
WHAT IS THE OUTLOOK?
"Since moderate economic growth and relatively low levels of inflation are
expected in 1997, the Fed is likely to keep short-term interest rates unchanged
in the near term. If this proves to be the case, we will continue to maintain a
30- to 40-day average maturity for the portfolio. However, if economic
fundamentals change, we are prepared to lengthen or shorten the Fund's average
maturity as appropriate. We will continue to invest in the highest quality money
market instruments, as we expand the list of investments, adding diversity to
the Fund's investment portfolio."
3
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------- ------ -----
<S> <C> <C> <C>
COMMERCIAL PAPER 64.1%
AUTOMOTIVE 5.1%
Ford Motor Credit Corp., 3/21/97 ......................... 5.38% $12,000,000 $ 11,860,170
------------
BANKING 9.3%
CoreStates Financial Corp., 1/28/97 ...................... 5.34 11,600,000 11,554,151
Norwest Financial Corp., 3/7/97 .......................... 5.37 10,200,000 10,102,392
------------
21,656,543
------------
CAPITAL EQUIPMENT 9.6%
General Electric Capital Corp., 1/14/97 .................. 5.39 11,200,000 11,178,484
John Deere Capital Corp., 2/7/97 ......................... 5.36 11,300,000 11,238,563
------------
22,417,047
------------
CONSUMER PRODUCTS 4.2%
Clorox Company, 3/6/97 ................................... 5.35 10,000,000 9,906,133
------------
DEFENSE 4.3%
Raytheon Corp., 1/10/97 .................................. 5.36 10,000,000 9,986,775
------------
FINANCE 18.7%
American Express Credit Corp., 2/18/97 ................... 5.35 11,100,000 11,021,856
American General Finance Corp., 1/17/97 .................. 5.37 10,900,000 10,874,324
Associates Corp. of North America, 2/19/97 ............... 5.36 11,000,000 10,920,797
Associates Corp. of North America, 3/3/97 ................ 5.37 11,100,000 11,000,316
------------
43,817,293
------------
OFFICE PRODUCTS 4.2%
Pitney Bowes Credit Corp., 3/10/97 ....................... 5.34 10,000,000 9,900,455
------------
TELECOMMUNICATIONS 8.7%
Ameritech Corp., 3/4/97 .................................. 5.34 10,000,000 9,909,239
BellSouth Telecommunications, 2/5/97 ..................... 5.34 10,500,000 10,446,202
------------
20,355,441
------------
TOTAL COMMERCIAL PAPER (Cost $149,899,857) ............... 149,899,857
------------
FIXED TIME DEPOSITS 22.1%
ABN-AMRO Bank, Grand Cayman, 1/2/97 ...................... 5.51 10,900,000 10,900,000
Canadian Imperial Bank of Commerce, Grand Cayman, 1/2/97 6.59 10,900,000 10,900,000
First National Bank of Chicago, Grand Cayman, 1/2/97 ..... 6.34 10,900,000 10,900,000
National Westminster Bank, Nassau, 1/2/97 ................ 6.59 3,800,000 3,800,000
Republic National Bank of New York, 1/2/97 ............... 6.84 10,900,000 10,900,000
Swiss Bank, Grand Cayman, 1/2/97 ......................... 6.59 4,200,000 4,200,000
------------
TOTAL FIXED TIME DEPOSITS (Cost $51,600,000) ............. 51,600,000
------------
BANK NOTES 9.1%
Huntington National Bank, Ohio, 1/10/97 .................. 5.49 10,300,000 10,300,000
First Chicago NBD Bancorp, Detroit, 1/6/97 ............... 5.45 10,900,000 10,900,030
------------
TOTAL BANK NOTES (Cost $21,200,030) ...................... 21,200,030
------------
TOTAL INVESTMENTS 95.3% (Cost $222,699,887) ............. 222,699,887
OTHER ASSETS LESS LIABILITIES 4.7% ...................... 11,052,278
------------
NET ASSETS 100.0% ....................................... $233,752,165
============
</TABLE>
- ----------
See Notes to Financial Statements.
4
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
Commercial paper (cost $149,899,857)............................................. $149,899,857
Fixed time deposits (cost $51,600,000)........................................... 51,600,000
Bank notes (cost $21,200,030).................................................... 21,200,030 $ 222,699,887
----------
Cash........................................................................................... 241,935
Receivable for Capital Stock sold.............................................................. 14,529,654
Interest receivable............................................................................ 294,988
Investment in, and expenses prepaid to, shareholder service agent.............................. 57,557
Other.......................................................................................... 48,410
-------------
Total Assets ................................................................................. 237,872,431
-------------
LIABILITIES:
Payable for Capital Stock redeemed............................................................. 3,673,744
Accrued expenses, taxes, and other............................................................. 446,522
-------------
Total Liabilities ............................................................................. 4,120,266
-------------
Net Assets .................................................................................... $ 233,752,165
=============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.01 par value; 1,400,000,000 shares authorized;
233,756,792 shares outstanding):
Class A..................................................................................... $ 2,089,542
Class B..................................................................................... 24,934
Class D..................................................................................... 223,091
Additional paid-in capital..................................................................... 231,419,225
Accumulated net realized loss.................................................................. (4,627)
------------
NET ASSETS:
Applicable to 208,954,241 Class A shares, 2,493,437 Class B shares,
and 22,309,114 Class D shares, equivalent to $1.00 per share.............................. $ 233,752,165
=============
</TABLE>
- ----------
See Notes to Financial Statements.
5
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest .......................................................... $11,169,716
-----------
EXPENSES:
Management fee .................................................... 846,790
Shareholder account services ...................................... 490,381
Distribution and service fees ..................................... 150,800
Registration ...................................................... 93,182
Shareholder reports and communications ............................ 55,194
Custodian services ................................................ 53,000
Auditing and legal fees ........................................... 52,158
Directors' fees and expenses ...................................... 30,188
Miscellaneous ..................................................... 16,005
-----------
Total Expenses .................................................... 1,787,698
-----------
Net Investment Income and Increase in Net Assets from Operations .. $ 9,382,018
===========
</TABLE>
- ----------
See Notes to Financial Statements.
6
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1996 1995
-------------- ---------------
<S> <C> <C>
OPERATIONS:
Increase in net assets from operations -- net investment income ........................... $ 9,382,018 $ 9,637,468
--------------- ---------------
Decrease in net assets from distributions -- net investment income paid to
shareholders as dividends:
Class A .............................................................................. (8,838,245) (9,215,896)
Class B .............................................................................. (29,542) --
Class D .............................................................................. (514,231) (421,572)
--------------- ---------------
Total .................................................................................... (9,382,018) (9,637,468)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:*
Proceeds from sale of shares:
Class A .............................................................................. 302,318,619 303,480,822
Class B .............................................................................. 2,516,484 --
Class D .............................................................................. 8,286,958 --
Net proceeds from transfer of Government Portfolio -- Class A ........................... -- 21,971,609
Net asset value of shares issued in payment of dividends:
Class A .............................................................................. 7,769,306 8,011,199
Class B .............................................................................. 23,729 --
Class D .............................................................................. 395,206 328,806
Exchanged from associated Funds:
Class A .............................................................................. 1,123,234,216 361,106,751
Class B .............................................................................. 5,538,322 --
Class D .............................................................................. 144,499,447 80,746,637
--------------- ---------------
Total .................................................................................... 1,594,582,287 775,645,824
--------------- ---------------
Cost of shares redeemed:
Class A .............................................................................. (315,244,457) (360,478,471)
Class B .............................................................................. (57,036) --
Class D .............................................................................. (16,603,403) (9,346,161)
Exchanged into associated Funds:
Class A .............................................................................. (1,086,522,720) (351,102,803)
Class B .............................................................................. (5,528,062) --
Class D .............................................................................. (128,823,731) (60,632,635)
--------------- ---------------
Total .................................................................................... (1,552,779,409) (781,560,070)
--------------- ---------------
Increase (decrease) in net assets from capital share transactions ........................ 41,802,878 (5,914,246)
--------------- ---------------
Increase (decrease) in net assets ........................................................ 41,802,878 (5,914,246)
NET ASSETS:
Beginning of year ........................................................................ 191,949,287 197,863,533
--------------- ---------------
End of year .............................................................................. $ 233,752,165 $ 191,949,287
=============== ===============
</TABLE>
- ----------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
7
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Cash Management Fund, Inc. (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. All shares existing prior to May 3,
1993, were classified as Class A shares. The Fund began offering Class B shares
on April 22, 1996. Class B 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"), if applicable, of 5% on redemptions in the first
year after purchase, declining to 1% in the sixth year and 0% thereafter. Class
B shares will automatically convert to Class A shares on the last day of the
month that precedes the eighth anniversary of their date of purchase. Class D
shares are subject to a distribution fee of up to 0.75% and a service fee of up
to 0.25% on an annual basis, and a CDSL of 1% imposed on certain redemptions
made within one year of purchase. The three classes of shares represent
interests in the same portfolio of investments, have the same rights, and are
generally identical in all respects except that each class bears its separate
distribution and certain other class expenses, and has exclusive voting rights
with respect to any matter on which a separate vote of any class is required.
2. Significant accounting policies 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. For the year ended December 31, 1996,
distribution and service fees were the only class-specific expenses.
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.
8
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
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, 1996,
was equivalent to an annual rate of 0.41% of the average daily net assets of the
Fund.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan"). Under the Plan, with respect to Class A shares, 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 average daily net assets of Class A shares, 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, 1996.
Under the Plan, with respect to Class B and Class D shares, service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class B and Class D shares for which the organizations are
responsible; and, for Class D shares only, fees for providing other distribution
assistance of up to 0.75% on an annual basis of such average daily net assets.
Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
of this fee to a third party (the "Purchaser") which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the year ended December 31, 1996, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $8,128 and $142,672, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares. For the year ended December 31, 1996, such
charges amounted to $66,631.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amount of such payments
and the Class B shares distribution fees retained by the Distributor for the
period ended December 31, 1996, was $4,806.
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive distribution and service fees pursuant to the Plan. For the year ended
December 31, 1996, Seligman Services, Inc. received distribution and service
fees of $10,159, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $490,381 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 $16,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and
9
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
interest is included in directors' fees and expenses, and the accumulated
balance thereof at December 31, 1996, of $141,692, 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. At December 31, 1996, the Fund had a net loss carryforward of $4,627, which
is available for offset against future taxable net gains, expiring in 1999.
5. 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
<TABLE>
<S> <C>
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
============
</TABLE>
10
<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 each Class's beginning net asset value
to the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures each Class's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends 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 B
---------------------------------------------------------- --------
YEAR ENDED DECEMBER 31, 4/22/96*
---------------------------------------------------------- TO
1996 1995 1994 1993 1992 12/31/96
----- ----- ----- ----- ----- --------
<S> <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
Net investment income ............ .046 .051 .034 .024 .030 .025
Dividends paid or declared ....... (.046) (.051) (.034) (.024) (.030) (.025)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED
ON NET ASSET VALUE: ........... 4.71% 5.18% 3.46% 2.40% 3.10% 2.44%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average net assets ... .79% .86% .82% .77% .76% 1.78%+
Net investment income to
average net assets ............ 4.61% 5.06% 3.41% 2.37% 3.04% 3.58%+
Net assets, end of period
(000s omitted) ................ $208,950 $177,395 $194,406 $173,902 $193,158 $ 2,493
Without management fee waiver
or reimbursement of expenses:**
Net investment income per share .. $ .023 $ .029
Ratios:
Expenses to average net assets . .86% .85%
Net investment income to
average net assets .......... 2.28% 2.95%
<CAPTION>
CLASS D
------------------------------------------
YEAR ENDED DECEMBER 31, 5/3/93*
------------------------------- TO
1996 1995 1994 12/31/93
-------- ------ ------ --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period ........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income ............ .036 .040 .024 .003
Dividends paid or declared ....... (.036) (.040) (.024) (.003)
-------- -------- -------- --------
Net asset value, end of period ... $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ========
TOTAL RETURN BASED
ON NET ASSET VALUE: ........... 3.67% 4.08% 2.35% .30%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average net assets ... 1.79% 1.90% 1.90% 1.74%+
Net investment income to
average net assets ............ 3.61% 4.02% 2.32% 1.39%+
Net assets, end of period
(000s omitted) ................ $ 22,309 $ 14,554 $ 3,458 $ 26
Without management fee waiver
or reimbursement of expenses:**
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%+
</TABLE>
- ----------
* Commencement of offering of shares.
** For the years 1992 and 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.
11
<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, 1996, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the Fund's custodian. 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, 1996, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
January 31, 1997
12
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3, 4
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
SENIOR PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2, 4
DIRECTOR OR TRUSTEE,
Various Organizations
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
JAMES Q. RIORDAN 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
Ronald T. Schroeder 1
MANAGING DIRECTOR, J. & W. Seligman & Co.
Incorporated
ROBERT L. SHAFER 3, 4
DIRECTOR OR TRUSTEE,
Various Organizations
JAMES N. WHITSON 2, 4
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT AND MANAGING DIRECTOR,
J. & W. Seligman & Co. Incorporated
CHAIRMAN AND PRESIDENT, Seligman Data Corp.
- ----------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
13
<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
14
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
- -------------------------------------------
<TABLE>
<S> <C> <C>
(a) Financial Statements and Schedules:
Part A Financial Highlights for Class A shares for the ten years
ended December 31, 1996; Financial Highlights for Class B
shares for the period from April 22, 1996 (commencement of
offering) to December 31, 1996; Financial Highlights for Class
D shares for the period from May 3, 1993 (commencement of
offering) to December 31, 1996.
Part B Required Financial Statements are included in the Fund's
Annual Report to Shareholders, dated December 31, 1996, which
are incorporated by reference in the Fund's Statement of
Additional Information. These include: Portfolio of
Investments as of December 31, 1996; Statement of Assets and
Liabilities as of December 31, 1996; Statement of Operations
for the year ended December 31, 1996; Statements of Changes in
Net Assets for the years ended December 31, 1996 and 1995;
Notes to Financial Statements; Financial Highlights for the
five years ended December 31, 1996 for the Fund's Class A
shares; for the period April 22, 1996 (commencement of
offering) through December 31, 1996 for the Fund's Class B
shares; and for the period May 3, 1993 (commencement of
offering) through December 31, 1996 for the Fund's Class D
shares; Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except
Exhibits marked with an asterisk (*) which are incorporated
herein.
(1) Form of Amendment and Restatement of Articles of Incorporation of
Registrant.*
(2) Amended and Restated By-laws of the Registrant.*
(3) Not applicable.
(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.*
(7) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to Exhibit 7 of Registration Statement
No. 2-92487, Post-Effective Amendment No. 21, filed on January 29,
1997.)
(7a) Deferred Compensation Plan for Directors of Seligman Group of Funds.
(Incorporated by Reference to Exhibit 7a of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29,
1997.)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company.*
(9) Not applicable.
(10) Opinion and Consent of Counsel.*
(11) Report and Consent of Independent Auditors.*
(12) Not applicable.
</TABLE>
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
-----------------
Item 24. FINANCIAL STATEMENTS AND EXHIBITS (continued)
- ------- ---------------------------------
<TABLE>
<S> <C>
(13) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated. (Incorporated by
Reference to Post-Effective Amendment No. 29 filed April 19, 1996.)
(13a) Purchase Agreement for Initial Capital between Registrant's Class D
shares and J. & W. Seligman & Co. Incorporated.*
(14) The Seligman IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 16, 1997.)
(14a) The Seligman Simple IRA Plan Set-Up Kit.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 16, 1997.)
(14b) The Seligman Simple IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 16, 1997.)
(15) Form of Administration, Shareholder Services and Distribution Plan of
Registrant.
(Incorporate by Reference to Post-Effective Amendment No. 29 filed on
April 19, 1996.)
(15a) Form of Administration, Shareholder Services and Distribution Agreement
between Seligman Financial Services, Inc. and Dealers.
(Incorporate by Reference to Post-Effective Amendment No. 29 filed on
April 19, 1996.)
(16) Schedule for Computation of each Performance Quotation provided in
Registration Statement to Item 22.*
(17) Financial Data Schedules meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940. (Incorporated by
Reference to Post-Effective Amendment No. 27 filed on February 16,
1996.)
</TABLE>
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
- ------- -------------------------------
<TABLE>
<CAPTION>
(1) (2)
Numbers of Record
Title of Class Holders as of March 31, 1997
-------------- ----------------------------
<S> <C>
Class A Common Stock 11,463
Class B Common Stock 424
Class D Common Stock 1,519
</TABLE>
Item 27. Indemnification
- ------- ---------------
Reference is made to the provisions of Articles Twelfth and
Thirteenth of Registrant's Amended and Restated Articles of
Incorporation filed as Exhibit 24(b)(1) and Article IV of
Registrant's Amended and Restated By-laws filed as Exhibit 24(b)(2)
to this Post-Effective Amendment No. 30 to the Registration
Statement.
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
-----------------
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised by the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser - J. & W.
- -------- ----------------------------------------------------
Seligman & Co. Incorporated, a Delaware corporation ("Manager"), is
the Registrant's investment manager. The Manager also serves as
investment manager to seventeen 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 Municipal Fund Series, Inc., Seligman Municipal
Series Trust, Seligman New Jersey Municipal Fund, Inc. Seligman
Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc.,
Seligman Quality Municipal Fund, Inc., Seligman Select Municipal
Fund, Inc., Seligman Value Fund Series, Inc. and Tri-Continental
Corporation.
The Manager has an investment advisory service division which
provides investment management or advice to private clients. The list
required by this Item 28 of officers and directors of the Manager 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. 801-15798 which was filed on filed on August 7,
1996).
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 Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.
Seligman Value Fund Series, Inc.
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
-----------------
(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 31, 1997
--------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ---------------- ---------------- ---------------
<S> <C> <C>
William C. Morris* Director Chairman of the
Board and Chief
Executive Officer
Brian T. Zino* Director Director and President
Ronald T. Schroeder* Director Director
Fred E. Brown* Director None
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
Stephen J. Hodgdon* President None
Lawrence P. Vogel* Senior Vice President, Vice President
Finance
Ed Lynch* Senior Vice President, None
Director of Marketing
Mark R. Gordon* Senior Vice President, None
National Sales Manager
Gerald I. Cetrulo, III Senior Vice President None
140 West Parkway of Sales, Regional Sales
Pompton Plains, NJ 07444 Manager
Bradley F. Hanson Senior Vice President None
9707 Xylon Court of Sales, Regional Sales
Bloomington, MN 55438 Manager
Bradley W. Larson Senior Vice President None
367 Bryan Drive of Sales, Regional Sales
Danville, CA 94526 Manager
D. Ian Valentine Senior Vice President None
307 Braehead Drive of Sales, Regional Sales
Fredericksburg, VA 22401 Manager
Helen Simon* Vice President, Sales None
Administration Manager
Karen J. Bullot* Vice President, None
Retirement Plans
John Carl* Vice President, None
Marketing
Marsha E. Jacoby* Vice President, None
National Accounts
Manager
William W. Johnson* Vice President, Order None
Desk
James R. Besher Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Bradford C. Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Christopher J. Derry Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
</TABLE>
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
-----------------
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1997
--------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Andrew Draluck Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
Jonathan G. Evans Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
Michael C. Forgea Regional Vice President None
32 W. Anapamu Street #186
Santa Barbara, CA 93101
David Gardner Regional Vice President None
2504 Clublake Trail
McKinney, TX 75070
Carla A. Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Mark Lien Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
Judith L. Lyon Regional Vice President None
163 Haynes Bridge Road,
Ste 205
Alpharetta, CA 30201
David Meyncke Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
Tim O'Connell Regional Vice President None
14872 Summerbreeze Way
San Diego, CA 92128
Juliana Perkins Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
Dave Petzke Regional Vice President None
1673 Montelena Court
Carson City, NV 89703
Robert H. Ruhm Regional Vice President None
167 Derby Street
Melrose, MA 02176
Diane H. Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
Bruce Tuckey Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
Andrew Veasey Regional Vice President None
14 Woodside
Rumson, NJ 07760
Kelli A. Wirth-Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
</TABLE>
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
-----------------
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1997
--------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Jeffrey S. Dean* Assistant Vice President, None
Annuity Product Manager
Sandra Floris* Assistant Vice None
President, Order Desk
Keith Landry* Assistant Vice None
President, Order Desk
Gail S. Cushing* Assistant Vice President, None
National Accounts Manager
Frank P. Marino* Assistant Vice President, None
Mutual Fund Product
Manager
Joseph M. McGill* Assistant Vice President None
and Compliance Officer
Jack Talvy* Assistant Vice President, None
Internal Marketing
Services Manager
Joyce Peress* Assistant Secretary None
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, NY, NY 10017.
(c) Not applicable.
<TABLE>
<CAPTION>
Item 30. Location of Accounts and Records
- -------- --------------------------------
<S> <C>
(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
</TABLE>
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 years ended December 31, 1996, 1995 and 1994, the
approximate cost of these services were:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Class A shares $72,000 $59,600 $49,565
Class B shares 400 -- --
Class D shares 10,600 -- 711
</TABLE>
Item 32. Undertakings - The Registrant undertakes, (1) to furnish a copy of
- -------- ------------
the Registrant's latest annual report, upon request and without
charge, to every person to whom a prospectus is delivered and (2) if
requested to do so by the holders of at least ten percent of its
outstanding shares, to call a meeting of shareholders for the
purpose of voting upon the removal of a director or directors and to
assist in communications with other shareholders as required by
Section 16(c) of the Investment Company Act of 1940.
<PAGE>
File No. 2-56805
811-2650
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. 30 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on the 28th day of April, 1997.
SELIGMAN 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. 30 has been
signed below by the following persons in the capacities indicated on April, 28
1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/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
</TABLE>
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
James C. Pitney, Director ) -----------------------------------
James Q. Riordan, Director ) * Brian T. Zino, Attorney-in-fact
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
File No. 2-56805
811-2650
SELIGMAN CASH MANAGEMENT FUND, INC.
Post-Effective Amendment No. 30 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
<TABLE>
<CAPTION>
Form N-1A Item No. Description
- ----------------- -----------
<S> <C>
24(b)(1) Amended and Restated Articles of Incorporation
24(b)(2) Amended and Restated By-laws
24(b)(6) Form of Distributing Agreement
24(b)(8) Copy of Custody Agreement
24(b)(10) Opinion and Consent of Counsel
24(b)(11) Consent of Independent Auditors
24(b)(13)(a) Purchase Agreement for Fund's Class D Shares
24(b)(16) Performance Data Schedules
24(b)(17) Financial Data Schedules
Other exhibits Power of Attorney
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> SELIGMAN CASH MANAGEMENT FUND CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 222,700
<INVESTMENTS-AT-VALUE> 222,700
<RECEIVABLES> 14,878
<ASSETS-OTHER> 294
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 237,872
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,120
<TOTAL-LIABILITIES> 4,120
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233,757
<SHARES-COMMON-STOCK> 208,954<F1>
<SHARES-COMMON-PRIOR> 177,400<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 208,950<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10,356<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (1,518)<F1>
<NET-INVESTMENT-INCOME> 8,838<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8,838<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8,838)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,425,552<F1>
<NUMBER-OF-SHARES-REDEEMED> (1,401,767)<F1>
<SHARES-REINVESTED> 7,769<F1>
<NET-CHANGE-IN-ASSETS> 31,555<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> 785<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 1,518<F1>
<AVERAGE-NET-ASSETS> 191,623<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .046<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.046)<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .79<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>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> SELIGMAN CASH MANAGEMENT FUND CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-22-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 222,700
<INVESTMENTS-AT-VALUE> 222,700
<RECEIVABLES> 14,878
<ASSETS-OTHER> 294
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 237,872
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,120
<TOTAL-LIABILITIES> 4,120
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233,757
<SHARES-COMMON-STOCK> 2,493<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,493<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 44<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (14)<F1>
<NET-INVESTMENT-INCOME> 30<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 30<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (30)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,055<F1>
<NUMBER-OF-SHARES-REDEEMED> (5,585)<F1>
<SHARES-REINVESTED> 23<F1>
<NET-CHANGE-IN-ASSETS> 2,494<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> 4<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 14<F1>
<AVERAGE-NET-ASSETS> 1,192<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .025<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.025)<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> 1.78<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS B ONLY. ALL OTHER DATA ARE FUND LEVEL.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 014
<NAME> SELIGMAN CASH MANAGEMENT FUND CLASS D
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 222,700
<INVESTMENTS-AT-VALUE> 222,700
<RECEIVABLES> 14,878
<ASSETS-OTHER> 294
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 237,872
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,120
<TOTAL-LIABILITIES> 4,120
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233,757
<SHARES-COMMON-STOCK> 22,309<F1>
<SHARES-COMMON-PRIOR> 14,554<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 22,309<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 770<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (256)<F1>
<NET-INVESTMENT-INCOME> 514<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 514<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (514)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 152,787<F1>
<NUMBER-OF-SHARES-REDEEMED> (145,427)<F1>
<SHARES-REINVESTED> 395<F1>
<NET-CHANGE-IN-ASSETS> 7,754<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> 58<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 256<F1>
<AVERAGE-NET-ASSETS> 14,261<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .036<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.036)<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> 1.79<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS D ONLY. ALL OTHER DATA ARE FUND LEVEL.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99.B1
ARTICLES OF AMENDEMENT AND RESTATEMENT
of
ARTICLES OF INCORPORATION
of
UNION CASH MANAGEMENT FUND, INC.
THIS IS TO CERTIFY that UNION CASH MANAGEMENT FUND, INC., a corporation
organized and existing under and by virtue of the laws of the State of Maryland,
amends and restates its charter to read in is entirety as follows:
FIRST: I, the subscriber, Charles F. Rechlin, whose post office address is
48 Wall Street, New York, N. Y. 10005, being more than 18 years of age, do,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, form a corporation.
SECOND: NAME. The name of the corporation (which is hereinafter called
----
the "Corporation") is
SELIGMAN CASH MANAGEMENT FUND, INC.
THIRD: PURPOSES AND POWERS. The purpose for which the Corporation is
-------------------
formed and the business or objects to be carried on or promoted by it are to
engage in the business of an investment company, in connection therewith, to
hold part or all of its funds in cash, to acquire by purchase, subscription,
contract, exchange or otherwise, and to own, hold for investment, resale or
otherwise, sell, assign, negotiate, exchange, transfer or otherwise, dispose of,
or turn to account or realize upon, and generally to deal in and with, all forms
of stocks, bonds, debentures, notes, evidences of interest, evidences of
indebtedness, warrants, certificates of deposit, bankers' acceptances,
repurchase agreements and other securities, irrespective of their form, the name
by which they may be described, or the character or form of the entities by
which they are issued or created (hereinafter sometimes called "Securities");
and to make payment therefor by any lawful means; to exercise any and all
rights, powers and privileges of individual ownership or interest in respect of
any and all such Securities, including the right to vote thereon and to consent
and otherwise act with respect thereto; to do any and all acts and things for
the preservation, protection, improvement and enhancement in value of any and
all such Securities; to acquire or become interested in any such Securities as
aforesaid, irrespective of whether or not such Securities be fully paid or
subject to further payments, and to make payments thereon as called for or in
advance of calls or otherwise;
<PAGE>
And, in general, to do any or all such other things in connection with the
objects and purposes of the Corporation hereinbefore set forth, as are, in the
opinion of the Board of Directors of the Corporation, necessary, incidental,
relative or conducive to the attainment of such objects and purposes; and to do
such acts and things, and to exercise any and all such powers to the same extent
authorized or permitted to a corporation under any laws that may be now or
hereafter applicable or available to the Corporation.
In addition, the Corporation may issue, sell, acquire through purchase,
exchange, or otherwise, hold, dispose of, resell, transfer, reissue or cancel
shares of its capital stock in any manner and to the extent now or hereafter
permitted by the laws of Maryland and by these Articles of Incorporation.
The foregoing matters shall each be construed as purposes, objects and
powers, and none of such matters shall be in any way limited by reference to, or
inference from, any other of such matters or any other Article of these Articles
of Incorporation, but shall be regarded as independent purposes, objects and
powers and the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms or the
general powers of the Corporation now or hereafter conferred by the laws of the
State of Maryland, nor shall the expression of one thing be deemed to exclude
another, although it be of like nature, not expressed.
Nothing herein contained shall be construed as giving the Corporation any
rights, powers or privileges not permitted to it by law.
FOURTH: PRINCIPAL OFFICE. The post office address of the principal office
----------------
of the Corporation in this State is c/o The Corporation Trust Incorporated,
First Maryland Building, 25 South Charles Street, Baltimore, Maryland 21201.
The resident agent of the Corporation is The Corporation Trust Incorporated, the
post office address of which is First Maryland Building, 25 South Charles
Street, Baltimore, Maryland 21201. Said resident agent is a corporation of the
State of Maryland.
FIFTH: CAPITAL STOCK. The total number of shares of capital stock which
-------------
the Corporation has authority to issue is 1,400,000,000 shares of the par value
of $.01 each and having an aggregate par value of $14,000,000. Notwithstanding
any other provision od these Articles of Incorporation, the Board of Directors
of the Corporation is authorized to classify or reclassify any unissued capital
stock from time to time by setting or changing the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of such capital stock.
No holder of shares of the capital stock of the Corporation shall be
entitled as such, as a matter of right, to purchase or subscribe for any part of
any new or additional issue of stock or securities of the Corporation..
All shares of the capital stock of the Corporation now or hereafter
authorized shall be "subject to redemption" and "redeemable", in the sense used
in the General Laws of the State of
2
<PAGE>
Maryland authorizing the formation of corporations. In the absence of any
contrary specification as to the purpose for which shares of the capital stock
of the Corporation are repurchased by it, all shares so repurchased shall be
deemed to be "aquired for retirementr" in the sense contemplated by the laws of
the State of Maryland. Shares retired by repurchase or retired by redemption
shall thereafter have the status of authorized but unissued ca[ital stock of the
Corporation.
All person who sall aquire stock in the Corporation shall acquire the same
subject to the provisions of these Articels of Incorporation.
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 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 (e) below, each Class B
share shall convert automatically into Class A shares on the last
business day of the month that precedes the eighth anniversary of the
date of issuance of such Class B share; such conversion shall be effected
on the basis of the relative net asset values of Class B and Class A
shares as determined by the Corporation on the date of conversion.
3
<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 provision of
any exemptive order applicable to the Corporation, and as may be
determined by the Board of Directors and disclosed in the then current
prospectus of the Corporation, shares of a particular Class may be
automatically converted into shares of another Class; provided, however,
that such conversion shall be subject to the continuing availability of
an opinion of counsel to the effect that such conversion does not
constitute a taxable event under Federal income tax law. The Board of
Directors, in its sole discretion, may suspend any conversion rights if
such opinion is no longer available.
(6) As to any matter with respect to which a separate vote of any
Class is required by the Investment Company Act or by the Maryland
General Corporation Law (including, without limitation, approval of any
plan, agreement or other arrangement referred to in subsection (4)
above), such requirement as to a separate vote by the Class shall apply
in lieu of single Class voting, and, if permitted by the Investment
Company Act or any rules, regulations or orders thereunder and the
Maryland General Corporation Law, the Classes shall vote together as a
single Class on any such manner that shall have the same effect on each
such Class. As to any matter that does not affect the interest of a
particular Class, only the holders of shares of the affected Class shall
be entitled to vote.
SIXTH: DIRECTORS. The Corporation has ten directors in office, and the
---------
names of the directors in office are as follows:
Lane W. Adams Douglas R. Nichols, Jr.
Fred E. Brown Robert G. Olmsted
4
<PAGE>
Stanley R. Currie James C. Pitney
William McBride Love B. W. Robertson
John E. Merow Robert L. Shafer
The number of directors in office may be changed from time to time in such
lawful manner as the By-Laws of the Corporation shall provide.
SEVENTH: PROVISIONS FOR DEFINING, LIMITING AND REGULATING THE POWERS OF
--------------------------------------------------------------
THE CORPORATION, DIRECTORS AND SHAREHOLDERS.
-------------------------------------------
A. BOARD OF DIRECTORS. The Board of Directors shall have the general
------------------
management and control of the business and property of the Corporation, and may
exercise all the powers of the Corporation, except such as are by statute or by
these Articles of Incorporation or by the By-Laws conferred upon or reserved to
the shareholders. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is hereby empowered:
1. To authorize the issuance and sale, from time to time, of shares
of capital stock of the Corporation, whether for cash at not less than
the par value thereof or for such other consideration as the Board of
Directors may deem advisable, in the manner and to the extent now or
hereafter permitted by the laws of Maryland; provided, however, that the
consideration (or the value thereof as determined by the Board of
Directors) per share to be received by the Corporation upon the sale of
shares of its capital stock (including treasury shares) shall not be less
than the net asset value (determined as provided in Article NINTH hereof)
per share of such capital stock outstanding at the time (determined by
the Board of Directors) as of which the computation of such net asset
value shall be made.
2. To authorize the execution and performance by the Corporation of
an agreement or agreements, which may be exclusive contracts, with man
Distributor, Inc., a Delaware corporation, or any other person, as
distributor, providing for the distribution of shares of the capital
stock of the Corporation, without charge by the Corporation of a premium
over the net asset (determined as provided in Article NINTH hereof) of
such shares
3. To specify, in instances in which it may be desirable, that
shares of the capital stock of the Corporation repurchased by it are not
acquired for retirement and to specify the purposes for which such shares
are repurchased.
4. To authorize the execution and performance by the Corporation of
an agreement or agreements with Seligman or any other person whereby,
subject to the control of the Board of Directors, the investment
5
<PAGE>
and other operations of the Corporation shall be managed by Seligman or
such other person.
The Corporation may in its By-Laws confer powers on the Board of
Directors in addition to the foregoing and in addition to the powers expressly
conferred by statute.
B. VOTING POWERS. The presence in person or by proxy of the holders of
-------------
one-third of the shares of the capital stock of the Corporation outstanding and
entitled to vote thereat shall constitute a quorum at any meetings of the
shareholders, except as otherwise provided be law. If at any meeting of the
shareholders there be less than a quorum present, the shareholders present at
such meeting may, without further notice, adjourn the same from time to time
until a quorum shall attend, but no business shall be transacted at any such
adjourned meeting, except such as might have been lawfully transacted had the
meeting not been adjourned. Notwithstanding any provision of law requiring any
action to be taken or authorized by the holders of a greater proportion than a
majority of the shares of capital stock of the Corporation entitled to vote
thereon, such action shall be valid and effective if taken or authorized by the
affirmation vote of the holders of a majority of the shares of the capital stock
of the Corporation outstanding and entitled to vote thereon.
C. DIVIDENDS. The Corporation shall distribute to its shareholders in
---------
the form of dividends, at such times and in such manner as the Board of
Directors shall determine, in cash or in shares of capital stock or rights to
subscribe to shares of capital stock of the Corporation, or in property or
otherwise, amounts substantially equal to the net income of the Corporation
after deduction of operating expenses, taxes applicable to such income, and any
reserves set aside out of such income.
In addition, the Board of Directors is empowered to distibute, from time
to time, in such form as the Board of Directors may determine, additional
dividends from any assets of the Corporation legally available for the payment
thereof (excluding unrealized appreciation of the Corporation's assets),
provided that each shareholder shall be notified at the time of payment of each
such dividend of the account or accounts from which it was paid.
EIGHTH: REDEMPTIONS AND REPURCHASES.
---------------------------
A. The Corporation shall under some circumstances redeem, and may under
other circumstances repurchase or redeem, shares of its capital stock as
follows:
1. OBLIGATION OF THE CORPORATION TO REDEEM SHARES. Each holder of shares
----------------------------------------------
of any class shall be entitled at his option to require the Corporation
to redeem all or any part of the shares of capital stock of that class
owned by such holder, upon written or telegraphic request to the
Corporation or its designated agent, accompanied by surrender of the
certificate or certificates for such shares, or such other evidence of
ownership as shall be specified by the Board of Directors, for the
6
<PAGE>
proportionate interest per share in the assets of the Corporation
belonging to that class, or the cash equivalent thereof (being the net
asset value of such shares determined as provided in Article NINTH
hereof), subject to and in accordance with the provisions of paragraph B
of this Article.
2. RIGHT OF THE CORPORATION TO REDEEM SHARES. In addition the Board
-----------------------------------------
of Directors may, from time to time in its discretion, authorize the
Corporation to require the redemption of all or any part of the
outstanding shares of its capital stock, for the proportionate interest
in the assets of the Corporation represented by such shares, or the cash
equivalent thereof (being the net asset value per Share of that Class
determined as provided in Article NINTH hereof), subject to and in
accordance with the provisions of paragraph B of this Article, upon the
sending of written notice thereof to each shareholder any of whose shares
are so redeemed and on such terms and conditions as the Board of
Directors shall deem advisable.
3. RIGHT OF THE CORPORATION TO REPURCHASE SHARES. In addition the
---------------------------------------------
Board of Directors may, from time to time in its discretion, authorize
the Corporation to repurchase shares of its capital stock, either
directly or through an agent, subject to and in accordance with the
provisions of paragraph B of this Article. The price to be paid by the
Corporation upon any such repurchase shall be determined, in the
discretion of the Board of Directors, in accordance with any provision of
the Investment Company Act of 1940 or any rule or regulation thereunder,
including any rule or regulation made or adopted pursuant to Section 22
of the Investment Company act of 1940 by the Securities and Exchange
Commission or any securities association registered under the Securities
Exchange Act of 1934.
B. The following provisions shall be applicable with respect to
redemptions and repurchases of shares of the capital stock of the Corporation
pursuant to paragraph A hereof:
1. The time as of which the net asset value applicable to any
redemption pursuant to subparagraph A(1) or A(2) of this Article shall be
computed shall be such time as may be determined by or pursuant to the
direction of the Board of Directors.
2 Certificates for shares of capital stock to be redeemed or
repurchased shall be surrendered in proper form for transfer, together
with such proof of the authenticity of signatures as may be required by
resolution of the Board of Directors.
3. Payment of the redemption or repurchase price by the Corporation or
its designated agent shall be made in cash within seven
7
<PAGE>
days after the time used for determination of the redemption or
repurchase price, but in no event prior to delivery to the Corporation or
its designated agent of the certificate or certificates for the shares of
capital stock so redeemed or repurchased, or of such other evidence of
ownership as shall be specified by the Board of Directors; except that
any payment may be made in whole or in part in securities or other assets
of the Corporation if, in the event of the closing of the New York Stock
Exchange or the happening of any event at any time prior to actual
payment which makes the liquidation of Securities in orderly fashion
impractical or impossible, the Board of Directors shall determine that
payment in cash would be prejudicial to the best interests of the
remaining shareholders of the Corporation. In making any such payment in
whole or in part in Securities or other assets of the Corporation, the
Corporation shall, as nearly as may be practicable, deliver Securities or
other assets of a gross value (determined in the manner provided in
Article NINTH hereof) representing the same proportionate interest in the
Securities and other assets of the Corporation as is represented by the
shares so to be paid for. Delivery of the Securities included in any such
payment shall be made as promptly as any necessary transfers on the books
of the several corporations whose Securities are to be delivered may be
made.
4. The right of the holder of shares of capital stock redeemed or
repurchased by the Corporation as provided in this Article to receive
dividends thereon and all other rights of such holder with respect to
such shares shall forthwith cease and terminate from and after the time
as of which the redemption or repurchase price of such shares has been
determined (except the right of such holder to receive (a) the redemption
or repurchase price of such shares from the Corporation or its designated
agent, in cash and/or in Securities or other assets of the Corporation,
and (b) any dividend to which such holder had previously become entitled
as the record holder of such shares on the record date for such
dividend).
NINTH: DETERMINATION OF NET ASSET VALUE. For the purposes referred to in
--------------------------------
Articles SEVENTH and EIGHTH hereof, the net asset value of shares of the capital
stock of the Corporation shall be determined by or pursuant to the direction of
the Board of Directors in accordance with the following provisions:
A. Such net asset value on any day shall be computed as follows:
The net asset value of each share of such stock shall be the quotient
obtained by dividing the "net value of the assets" of the Corporation by
the total number of shares at the time deemed to be outstanding
(including shares sold whether paid for and issued or not, and excluding
shares redeemed or repurchased on the basis of previously determined
values, whether paid for, received and held in treasury, or not).
8
<PAGE>
The "net value of the assets" shall be the "gross value" after
deducting the amount of all expenses incurred and accrued and unpaid,
such reserves as may be set up to cover taxes and any other liabilities,
and such other deductions as in the opinion of the officers of the
Corporation are in accordance with accepted accounting practice.
The "gross value" of the assets shall be the amount of all cash and
receivables and the market value of all Securities and other assets held
by the Corporation at the time as of which the determination is made.
Securities held shall be valued at market value or, in the absence of
readily available market quotations, at fair value, both as determined
pursuant to methods approved by the Board of Directors and in accordance
with applicable statutes and regulations.
B. The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are deemed by it to be necessary or desirable and are consistent with
the provisions of the Investment Company Act of 1940 and the rules and
regulations thereunder.
TENTH: DETERMINATION BINDING. Any determination made by or pursuant to
---------------------
the direction of the Board of Directors in good faith, and so far as accounting
matters are involved in accordance with accepted accounting practice, as to the
amount of the assets, obligations or liabilities of the Corporation, as to the
amount of the net income of the Corporation for any period or amounts at any
time legally available for the payment of dividends, as to the amount of any
reserves or charges, as to the use, alteration or cancellation of any reserves
or charges (whether or not any obligation or liability for which such reserves
or charges shall have been created shall have been paid or discharged or shall
be then or thereafter required to be paid or discharged), as to the price or
closing bid or asked price of any Security owned or held by the Corporation, as
to the market value of any Security or fair value of any other asset owned by
the Corporation, as to the number of shares of the Corporation outstadning or
deemed to be outstanding, as to the impracticability or impossibility of
liquidating Securities in orderly fashion, as to the extent to which it is
practicable to deliver the proportionate interest in the Securities and other
assets of the Corporation represented by any shares redeemed or repurchased in
payment for any such shares, as to the method of payment for any such shares,
redeemed or repurchased, or as to any other matters relating to the issue, sale,
redemption, repurchase, and/or other acquisition or disposition of Securities or
shares of capital stock of the Corporation shall be final and conclusive and
shall be binding upon the Corporation and all holders of shares of its capital
stock, past, present and future, and shares of the capital stock of the
Corporation are issued and sold on the condition and understanding that any and
all such determinations shall be binding as aforesaid. No provision of these
Articles of Incorporation shall be effective to (a) bind any person to waive
compliance with any provision of the Securities Act of 1933 or the Investment
Company Act of 1940 or of any valid rule, regulation or order of the Securities
and Exchange Commission thereunder, or (b) protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would
9
<PAGE>
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
ELEVENTH: AMENDMENTS. The Corporation reserves the right to take any
----------
lawful action and to make any amendment of these Articles of Incorporation,
including the right to make any amendment which changes the terms of any shares
of the capital stock of the Corporation of any class now or hereafter authorized
by classification, reclassification, or otherwise, and to make any amendment
authorizing any sale, lease, exchange or transfer of the property and assets of
the Corporation as an entirety, or substantially as an entirety, with or without
its good will and franchise, if a majority of all the shares of capital stock of
the Corporation at the time issued and outstanding and entitled to vote, vote in
favor of any such action or amendment, or consent thereto in writing, and
reserves the right to make any amendment of these Articles of Incorporation in
any form, manner or substance now or hereafter authorized or permitted by law.
TWELFTH: LIMITATION OF CERTAIN LIABILITIES OF DIRECTORS AND OFFICER. A
-----------------------------------------------------------
Director or Officer of the Corporation shall not be liable to the Corporation or
its shareholders for monetary damages for breach of fiduciary duty as a Director
or Officer, except to the extent such exemption from liability or limitation
thereof is not permitted by law (including the Investment Company Act of 1940 as
currently in effect or as the same may hereafter be amended).
No amendment, modification or repeal of this Article Twelfth shall
adversely affect any right or protection of a Director or Officer that exists at
the time of such amendment, modification or repeal.
THIRTEENTH: INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The
----------------------------------------------------
Corporation shall indemnify to the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended) any person made or threatened to be made a party to any
action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a Director, Officer or employee of the Corporation or
serves or served at the request of the Corporation any other enterprise as a
Director, Officer or employee. To the fullest extent permitted by law
(including the Investment Company Act of 1940 as currently in effect or as the
same may hereafter be amended), expenses incurred by any such person in
defending any such action, suit or proceeding shall be paid or reimbursed by the
Corporation promptly upon receipt by it of an undertaking of such person to
repay such expenses if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation. The rights provided to any
person by this Article shall be enforceable against the Corporation by such
person who shall be presumed to have relied upon it in serving or continuing to
serve as a Director, Officer or employee as provided above. No amendment of
this Article Thirteenth shall impair the rights of any person arising at any
time with respect to events occurring prior to such amendment. For purposes of
this Article Thirteenth, the term "Corporation" shall include any predecessor of
the Corporation and any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger; the term
"other enterprise" shall include any corporation, partnership, joint venture,
trust
10
<PAGE>
or employee benefit plan; service "at the request of the Corporation" shall
include service as a Director, Officer or employee of the Corporation which
imposes duties on, or involves services by, such Director, Officer or employee
with respect to an employee benefit plan, its participants or beneficiaries; any
excise taxes assessed on a person with respect to an employee benefit plan shall
be deemed to be indemnifiable expenses; and action by a person with respect to
any employee benefit plan which such person reasonably believes to be in the
interest of the participants and beneficiaries of such plan shall be deemed to
be action not opposed to the best interests of the Corporation.
* * * *
The foregoing amendment and restatement of the Articles of Incorporation of
the Corporation has been duly advised by the Board of Directors and approved by
the stockholders of the Corporation.
IN WITNESS WHEREOF, UNION CASH MANAGEMENT FUND, INC. has caused these
Articles of Amendment and Restatement to be signed in its name and on its behalf
by its President, witnessed by its Secretary, and the said officers of the
Corporation further also acknowledged said instrument to be the corporate act of
the Corporation and stated under the penalties of perjury that to the best of
their knowledge, information and belief the matters and facts therein set forth
with respect to approval are true in all material respects, all on April 22,
1982.
UNION CASH MANAGEMENT FUND, INC.
By /s/ Ronald T. Schroeder
------------------------------
Ronald T. Schroeder,
President
Witness:
/s/ Carl J. White
- --------------------------------
Carl J. White, Secretary
11
<PAGE>
RESTATEMENT
of the
BY-LAWS
of
SELIGMAN CASH MANAGEMENT FUND, INC.
<PAGE>
SELIGMAN CASH MANAGEMENT FUND, INC.
BY-LAWS
ARTICLE I.
Shareholders' Meetings.
SECTION 1. Place of Holding Meetings. Each meeting of shareholders shall
-------------------------
be held at the office of the Corporation in the City of Baltimore, Maryland, or
at such other place within the United States as may be fixed by the Board of
Directors.
SECTION 2. Annual Meetings. The annual meeting of the shareholders of the
---------------
Corporation shall be held during the 31-day period commencing April 15 of each
year on such day and at such hour as may from time to time be designated by the
Board of Directors and stated in the notice of such meeting, for the transaction
of such business as may properly be brought before the meeting; provided,
--------
however, that an annual meeting of shareholders shall not be required to be held
- -------
in any year in which none of the following is required to be acted on by
shareholders pursuant to the Investment Company Act of 1940: election of
directors; approval of the investment advisory agreement; ratification of the
selection of independent public accountants and approval of a distribution
agreement.
SECTION 3. Special Meetings. Special meetings of the shareholders for any
----------------
purpose or purposes may be called by the Chairman of the Board, the President, a
majority of the Board of Directors or a majority of the Executive Committee and
shall be called by the Secretary upon the written request of the holders of
shares entitled to not less than twenty-five percent of all the votes entitled
to be cast at such meeting. Such request shall state the purpose or purposes of
such meeting and the matters proposed to be acted on thereat. The Secretary
shall inform such shareholders of the reasonably estimated cost of preparing and
mailing such notice of meeting, and upon payment to the Corporation of such
costs the Secretary shall give notice stating the purpose or purposes of the
meeting, as required in this Article and by law, to all shareholders entitled to
notice of such meeting. No special meeting need be called upon the request of
the holders of shares entitled to cast less than a majority of all votes
entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any special meeting of
shareholders held during the preceding twelve months.
SECTION 4. Notice of Shareholders' Meetings. Not less than ten days nor
--------------------------------
more than ninety days before the date of every shareholders' meeting, the
Secretary shall give to each shareholder entitled to vote at or to notice of
such meeting, written or printed notice stating the time and place of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, either by mail or presenting it to him personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the shareholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
SECTION 5. Quorum. At any meeting of shareholders, the presence in person
------
or by proxy of such shareholders entitled to cast one-third of the votes thereat
shall constitute a quorum. If at any meeting of shareholders there shall be
less than a quorum present, the holders of a majority of the shares present at
such meeting may, without further notice, adjourn the same from time to time
until a quorum shall attend, but no business shall be transacted at any such
adjourned meeting, except as might have been lawfully transacted had the meeting
not been adjourned.
<PAGE>
SECTION 6. Voting. A majority of the votes of a class of shares entitled
------
to vote as a separate class (a "Separate Class") or of any classes of shares
required to vote s a single class (a "Single Combined Class"), as the case may
be, cast at a meeting of shareholders, at which a quorum is present, shall be
sufficient to take or authorize action upon any matter affecting such Separate
or Single Combined Class which may properly come before the meeting unless more
than a majority of the votes cast of such Separate or Singled Combined Class is
required by law or by the Articles of Incorporation.
With respect to all shares having voting rights (a) a shareholder may vote
the shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, provided
that no proxy shall be valid after eleven months from its date unless otherwise
provided in the proxy and (b) in all elections for directors every shareholder
shall have the right to vote, in person or by proxy, the shares owned of record
by him, for as many persons as there are directors to be elected and for whose
election he has a right to vote.
SECTION 7. Conduct of Shareholders' Meetings. Each meeting of
---------------------------------
shareholders shall be presided over by the Chairman of the Board, or if he is
not present, by the President or a Vice-President of the Corporation designated
by the Chairman of the Board to act as Chairman of the meeting, or if none of
the foregoing is present, by a Chairman to be elected at the meeting. The
Secretary of the Corporation, or if he is not present, an Assistant Secretary,
or if neither is present, a secretary to be named at the meeting, shall act as
secretary of the meeting.
ARTICLE II.
Board of Directors.
SECTION 1. Number; Term. The business and affairs of the Corporation
------------
shall be managed under the direction of a Board of ten members, but from time to
time such number may be increased to not more than twenty or decreased to not
less than three, by vote of a majority of the entire Board of Directors,
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors so made by the Board.
At each annual meeting of shareholders the shareholders shall elect
directors to hold office until the next annual meeting or until their successors
are elected and qualify, subject to the right of removal granted by law.
Directors need not be shareholders.
SECTION 2. Vacancies. Any vacancy occurring in the Board of Directors for
---------
any cause other than by reason of an increase in the number of directors may be
filled by the vote of a majority of the remaining directors, although such
majority is less than a quorum. Any vacancy occurring by reason of an increase
in the number of directors may be filled by action of a majority of the entire
board of Directors. A director elected by the Board of Directors to fill a
vacancy shall be elected to hold office until the next annual meeting of
shareholders or until his successor is elected and qualifies.
SECTION 3. Meetings. Meetings of the Board of Directors, regular or
--------
special, may be held at any place in or out of the State of Maryland as the
Board may from time to time determine or as shall be specified or filed in the
respective notices or waivers of notice thereof.
Regular meetings of the Board shall be held at such time as the Board may
from time to time determine. No notice need be given of regular meetings of the
Board.
2
<PAGE>
Special meetings of the Board may be held at any time upon call of the
Chairman of the Board, at the request of the Executive Committee or of a
majority of the directors, by the Secretary, by oral, telegraphic or written
notice duly served on or sent or mailed to each director not less than two days
before such meeting. Such notice need not include a statement of the business
to be transacted at, or the purpose of, such special meeting. A written waiver
of notice, signed by the director entitled to such notice and filed with the
records of the meeting, whether before or after the holding thereof, or actual
attendance at the meeting, shall be deemed equivalent to the giving of notice to
such director.
At all meetings of the Board, a majority of the entire Board, but not less
than two directors, shall constitute a quorum for the transaction of business.
If there be less than a quorum present at any meeting of the Board, a majority
of those present may adjourn the meeting from time to time.
The action of a majority of the directors present at a meeting at which a
quorum is present shall be the action of the Board unless the concurrence of a
greater proportion is required for such action by statute, the Articles of
Incorporation or these By-Laws.
SECTION 4. Board Operations Committee. The Board of Directors may appoint
--------------------------
those of its members who are not interested persons (as defined in the
Investment Company Act of 1940) of the Corporation as a Board Operations
Committee, which committee shall have the authority generally to direct the
operations of the Board of Directors including (a) the nomination for
appointment by the Board from among the members of the Board Operations
Committee of the members of the Audit Committee and the Director Nominating
Committee, (b) the nomination for appointment by the Board of such other
committees, if any, as the Board Operations Committee shall determine, (c) the
power of the Board to select legal counsel for the Corporation, (d) the
recommendation to the Board of (i) matters to be submitted to the shareholders
of the Corporation for consideration and (ii) the recommendations to be made to
the shareholders with respect thereto, and (e) control of the agenda for
meetings or other action of the Board.
SECTION 5. Audit Committee. The Board of Directors may appoint those of
---------------
its members nominated by the Board Operations Committee for that purpose as an
Audit Committee, such committee to be composed of two or more directors. The
Audit Committee shall (a) recommend independent public accountants for selection
by the Board, (b) review the scope of audit, accounting and financial internal
controls and the quality and adequacy of the Corporation accounting staff with
the independent public accountants and such other persons as may be deemed
appropriate, (c) review reports of the independent public accountants and
comment to the Board when warranted, (d) report to the Board at least once each
year and at such other times as the committee deems desirable, and (e) be
directly available at all times to the independent public accountants and
responsible officers of the Corporation for consultation on audit, accounting
and related financial matters.
SECTION 6. Director Nominating Committee. The Board of Directors may
-----------------------------
appoint those of its members nominated by the Board Operations Committee for
that purpose as a Director Nominating Committee, such committee to be composed
of two or more directors. The Director Nominating Committee shall recommend to
the Board a slate of persons to be nominated for election as directors by the
shareholders at each annual meeting of shareholders and a person to be elected
to fill any vacancy occurring for any reason in the Board.
SECTION 7. Executive Committee. The Board of Directors may appoint those
-------------------
of its members nominated by the Board Operations Committee for that purpose as
an Executive Committee, such committee to be composed of two or more directors.
In the intervals between meetings of the Board, the
3
<PAGE>
Executive Committee shall have the power of the Board to (a) determine the value
of securities and assets owned by the Corporation, (b) elect or appoint officers
of the Corporation to serve until the next meeting of the Board and (c) take
such action as may be necessary to manage the portfolio security loan business
of the Corporation.
All action by the Executive Committee shall be recorded and reported to the
Board at its meeting next succeeding such action.
SECTION 8. Other Committees. The Board of Directors may appoint from
----------------
among its members other committees composed of two or more directors which shall
have such powers as may be delegated or authorized by the resolution appointing
them.
SECTION 9. Committee Procedures. The Board of Directors may at any time,
--------------------
in conformity with the recommendations of the Board Operations Committee, change
the members of any committee, fill vacancies or discharge any committee.
In the absence of any member of any committee, the member or members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an interested person (as
defined in the Investment Company Act of 1940) of the Corporation.
Each committee may fix its own rules of procedure and may meet as and when
provided by those rules.
A majority of the members of the Board Operations Committee, and two or
more members of any other committee, shall constitute a quorum unless the Board
shall otherwise provide.
Copies of the minutes of all meetings of committees other than the
Nominating Committee and the Executive Committee shall be distributed to the
Board unless the Board shall otherwise provide.
SECTION 10. Telephone Meetings. Members of the Board of Directors or a
------------------
committee of the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time.
Participation in a meeting by these means constitutes presence in person at the
meeting.
SECTION 11. Action Without a Meeting. Any action required or permitted to
------------------------
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent to such action is signed by
all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
SECTION 12. Compensation of Directors. The Board of Directors shall have
-------------------------
the authority to fix the compensation of the directors for services in any
capacity.
ARTICLE III.
Officers.
SECTION 1. Officers. The executive officers of the Corporation shall be
--------
elected by the Board of Directors and shall be a Chairman of the Board, who
shall be the chief executive officer of the
4
<PAGE>
Corporation, a President, one or more Vice Precedents, a Secretary and a
Treasurer. The Chairman of the Board shall be selected from among the directors.
The Board may also appoint such other officers, employees and agents as it may
deem appropriate. Any two or more offices, except those of President and Vice
President, may be held by the same person but no person shall execute,
acknowledge or verify any instrument in more than one capacity, if such
instrument is required by law, the Articles of Incorporation or these By-Laws to
be executed, acknowledged or verified by two or more officers.
SECTION 2. Term. Officers shall serve for one year and until their
----
successors are elected and shall qualify, but any officer may be removed (except
as a director) by action of a majority of the entire Board of Directors
whenever, in the judgment of the Board, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
SECTION 3. Authority and Duties. All officers and agents of the
--------------------
Corporation shall have such authority and perform such duties in the management
of the property and affairs of the Corporation as generally pertain to their
respective offices, as well as such authority and duties as may be determined by
resolution of the Board of Directors.
Without limiting the generality of the foregoing and subject to the
provisions of the Articles of Incorporation of the Corporation and to the order
of the Board of Directors, the Treasurer shall be the chief financial and
accounting officer of the Corporation and as such shall receive, or cause to be
received, and give, or cause to be given, receipts for all funds and securities
paid or delivered to, or for the account of the Corporation; shall cause such
funds and securities to be deposited for the account of the Corporation with
such custodians as may be designated by the Board of Directors; shall pay or
cause to be paid out of the funds of the Corporation all just debts of the
Corporation upon their maturity; shall maintain, or cause to be maintained,
accurate records of all receipts, disbursements, assets, liabilities and
transactions of the Corporation; shall see that adequate audits thereof are
regularly made; and shall, when required by the Board of Directors, render
accurate statements of the condition of the Corporation.
SECTION 4. Compensation of Officers. The Board of Directors may determine
------------------------
what, if any, compensation shall be paid to officers of the Corporation.
ARTICLE IV.
INDEMNIFICATION.
The Corporation may indemnify any person, made a party to any action by or
in the right of the Corporation to procure a judgment in its favor, by reason of
the fact that he, his testator or intestate, is or was a director or officer of
the Corporation, against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with the defense of such
action, or in connection with an appeal therein, except in relation to matters
as to which such director or officer is adjudged to have breached his duty to
the Corporation as such director or officer. Such indemnification shall in no
case include amounts paid in settling or otherwise disposing of a threatened
action, or a pending action with or without court approval, or expenses incurred
in defending a threatened action, or a pending action which is settled or
otherwise disposed of without court approval.
5
<PAGE>
The Corporation may indemnify any person made, or threatened to be made, a
party to an action or proceeding other than one by or in the right of the
Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, which any director or officer of the Corporation
served in any capacity at the request of the Corporation, by reason of the fact
that he, his testator or intestate, was a director or officer of the
Corporation, or served such other corporation in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in the best interests of
the Corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any such civil or criminal action or proceeding by judgment, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not in
itself create a presumption that any such director or officer did not act, in
good faith, for a purpose which he reasonably believed to be in the best
interests of the Corporation or that he had reasonable cause to believe that his
conduct was unlawful.
A person who has been wholly successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in the first two paragraphs of this Article shall be entitled to indemnification
as authorized in such paragraphs. Except as provided in the preceding
sentence, any indemnification under such paragraphs, unless ordered by a court,
shall be made by the Corporation, only if authorized in the specific case:
(a) By the Board of Directors acting by a quorum consisting of
directors who are not parties to such action or proceeding upon a
finding that the director of officer has met the standard of conduct
set forth in the first or second paragraph of this Article, as the
case may be, or,
(b) If such a quorum is not obtainable with due diligence:
(1) By the Board of Directors upon the opinion in writing
of independent legal counsel that indemnification is proper in
the circumstances because the applicable standards of conduct set
forth in such paragraphs has been met by such director or
officer, or
(2) By the shareholders upon a finding that the director or
officer has met the applicable standard of conduct set forth in
such paragraphs.
Expenses, including attorneys' fees, incurred in defending a civil or
criminal action or proceeding may be paid by the Corporation in advance of the
final disposition of such action or proceeding if authorized under the preceding
sentence, subject to repayment to the Corporation by the person receiving such
advancement in case he is ultimately found not to be entitled to indemnification
or, where indemnification is granted, to the extent the expenses so advanced by
the Corporation exceed the indemnification to which he is entitled.
Nothing herein shall affect the right of any person to be awarded
indemnification, including attorneys' fees, by a court in accordance with law.
6
<PAGE>
If any expenses or other amounts are paid by way of indemnification,
otherwise than by court order or action by the shareholders, the Corporation
shall, not later than the next annual meeting of shareholders unless such
meeting is held within three months from the date of such payment, and, in any
event, within fifteen months from the date of such payment, mail to its
shareholders of record at the time entitled to vote for the election of
directors a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
To the extent permitted by law, the provisions of this Article shall apply
to all alleged or actual causes of action, whenever heretofore or hereafter
accrued, asserted against any person designated in the first two paragraphs
hereof.
Indemnification provided for in this Article shall not be deemed exclusive
of any other rights to which any person may lawfully be entitled under any By-
Law, agreement, vote of shareholders, or otherwise.
No provision of this Article shall protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
ARTICLE V.
Capital Stock.
SECTION 1. Certificates of Stock. Each shareholder shall be entitled to a
---------------------
certificate or certificates which shall represent and certify the class and the
number of whole shares of stock owned by him in the Corporation. Each
certificate shall be signed by the Chairman of the Board, President or a Vice
President and countersigned by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer and shall be sealed with the corporate seal.
The signatures may be either manual or facsimile signatures and the seal may be
either facsimile or any other form of seal. In case any officer who has signed
any certificate ceases to be an officer of the Corporation before the
certificate is issued, the certificate may nevertheless be issued by the
Corporation with the same effect as if the officer had not ceased to be such
officer as of the date of its issue.
SECTION 2. Lost Certificates. The Board of Directors may determine the
-----------------
conditions upon which a new certificate of stock may be issued in place of a
certificate which is alleged to have been lost, destroyed or stolen. It may, in
its discretion, require the owner of such certificate to give bond, with
sufficient surety, to the Corporation to indemnify it against any loss or claim
which may arise by reason of the issuance of a new certificate.
SECTION 3. Record Dates; Closing of Transfer Books. The Board of
---------------------------------------
Directors may fix, in advance, a date as the record date for the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders, or shareholders entitled to receive payment of any dividend or the
allotment of any rights, or in order to make a determination of shareholders for
any other proper purpose. Such date in any case shall be not more than ninety
days, and in the case of a meeting of shareholders, not less than ten days,
prior to the date of the action that requires such determination.
7
<PAGE>
SECTION 4. Stock Ledger. An original or duplicate stock ledger containing
------------
the names and addresses of all shareholders and the number of shares of each
class held by each shareholder, shall be kept by the Secretary at the office of
the Corporation in the City of New York, or in Jersey City, New Jersey, or at
such other office or agency of the Corporation in the City of New York and
Jersey City, as the Board of Directors may from time to time by resolution
determine.
ARTICLE VI.
Checks, Notes, Etc.
All checks and drafts on the Corporation's bank accounts and all bills of
exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers, or agent or agents, as shall be thereunto authorized from time to time
by the Board of Directors.
ARTICLE VII.
Books and Records.
The books of the Corporation other than the original or duplicate stock
ledger may be kept at such place or places in or out of the State of Maryland as
the Board of Directors may from time to time determine.
ARTICLE VIII.
Seal.
The Board of Directors shall provide a suitable corporate seal, in such
form and bearing such inscriptions as they may determine.
ARTICLE IX.
Fiscal Year.
The fiscal year of the Corporation shall be the calendar year, subject,
however, to change from time to time by the Board of Directors.
ARTICLE X.
Custodian.
All securities and funds of the Corporation shall be held by one or more
custodians each of which shall be a bank or trust company having not less than
$2,500,000 aggregate capital, surplus and undivided profits, as shown by its
last published report, provided any such custodian can be found ready and
willing to act.
The terms of custody of such securities and funds shall include provisions
to the effect that the custodian shall deliver securities owned by the
Corporation only (a) upon sales of such securities for the account of the
Corporation and receipt by the custodian of payment therefor, (b) when such
securities are
8
<PAGE>
called, redeemed or retired or otherwise become payable, (c) in exchange for or
upon conversion into other securities alone or other securities and cash,
whether pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (d) upon conversion of such
securities pursuant to their terms into other securities, (e) upon exercise of
subscription, purchase or other similar rights represented by such securities,
(f) for the purpose of exchanging interim receipt or temporary securities for
definitive securities, (g) for the purpose of redeeming in kind shares of the
capital stock of the Corporation, (h) for loans of securities by the
Corporation, or (i) for other proper corporate purposes.
Such terms of custody shall also include provisions to the effect that the
custodian shall deliver funds of the Corporation only (a) upon the purchase of
securities for the portfolio of the Corporation and the delivery of such
securities to the custodian, (b) for the repurchase or redemption of shares of
the capital stock of the Corporation, (c) for the payment of dividends, taxes,
management or supervisory fees or operating expenses, (d) for payments in
connection with the conversion, exchange or surrender of securities owned by the
Corporation, (e) for payments in connection with the return of securities loaned
by the Corporation or the reduction of cash collateral, or (f) for other proper
corporate purposes.
Upon the resignation or inability of any such custodian to serve, the
Corporation shall (a) use its best efforts to obtain a successor custodian, (b)
require the funds and securities of the Corporation held by the custodian to be
delivered to the successor custodian, and (c) in the event that no successor
custodian can be found, submit to the shareholders of the Corporation, before
permitting delivery of such funds and securities to anyone other than a
successor custodian, the question whether the Corporation shall be dissolved or
shall function without a custodian; provided, however, that nothing herein
contained shall prevent the termination of any agreement between the Corporation
and any such custodian with respect to any class of the Corporation's shares of
capital stock (and with respect to the assets and liabilities belonging to such
class) by the affirmative vote of the holders of a majority of the outstanding
shares of such class or classes (voting as a single class) entitled to vote.
Such terms of custody shall further provide that, pending appointment of a
successor custodian or a vote of the shareholders of the affected class or
classes to function without a custodian, a custodian shall not deliver funds and
other property of the Corporation to the Corporation, but may deliver them to a
bank or trust company of its own selection having not less than $2,500,000
aggregate capital, surplus, and undivided profits, as shown by its last
published report, as custodian for the Corporation to be held under terms
similar to those under which they were held by the retiring custodian.
Subject to such rules, regulations and orders as the Securities and
Exchange Commission may adopt, the Corporation may authorize or direct a
custodian to deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
custodian.
The Corporation may also have such transfer agents and registrars of the
shares of its capital stock as the Board of Directors shall from time to time
determine. The Board of Directors may employ and fix the powers, rights,
duties, responsibilities, privileges, immunities, and compensation of any such
custodian, transfer agent, or registrar, subject however, in the case of any
such custodian, to the foregoing provision of this paragraph.
9
<PAGE>
As used herein, the term "receipt by the custodian of payment" shall
include the receipt of (a) a certified or official bank check, (b) an advice
that funds have been or will be credited to the account of the custodian at a
clearing agency registered under the Securities Exchange Act of 1934, or (c) a
bank wire from a correspondent bank of the custodian. As used herein, the term
"delivery of such securities to the custodian" shall include the receipt of (a)
securities in bearer form or in proper form for transfer, or (b) an advice that
securities have been credited to the account of the custodian at a clearing
agency registered under the Securities Exchange Act of 1934, or at the Federal
Reserve Bank of New York.
The Corporation may make such other arrangements for the custody of its
assets (including deposit arrangements) as may be required by any applicable
law, rule or regulation.
ARTICLE XI.
Amendments.
The Board of Directors is authorized and empowered to make, alter or repeal
the By-Laws of the Corporation, in any manner not inconsistent with the laws of
the State of Maryland or the Articles of Incorporation of the Corporation.
10
<PAGE>
Exhibit 99_B6
DISTRIBUTING AGREEMENT
----------------------
DISTRIBUTING AGREEMENT, dated as of January 1, 1993, between SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation (the "Fund"), and SELIGMAN
FINANCIAL SERVICES, INC., a Delaware corporation ("Seligman Financial
Services").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Exclusive Distributor. The Fund hereby agrees that Seligman Financial
---------------------
Services shall be for the period of this Agreement exclusive agent for
distribution within the United States and its territories, and Seligman
Financial Services agrees to use its best efforts during such period to
effect such distribution of shares of Capital Stock ("Shares") of the Fund;
provided, however, that nothing herein shall prevent the Fund, if it so
-------- -------
elects, from selling or otherwise distributing its Shares directly to any
persons other than dealers. The Fund understands that Seligman Financial
Services also acts as agent for distribution of the shares of capital stock
or beneficial interest of other open-end investment companies which have
entered into management agreements with J. & W. Seligman & Co. Incorporated
(the "Manager").
2. Sales of Shares. Seligman Financial Services is authorized, as agent for
---------------
the Fund and not as principal, (a) to sell Shares of the Fund to such
dealers as Seligman Financial Services may select pursuant to the terms of
written sales agreements (which may also relate to sales of shares of
capital stock or shares of beneficial interest of other open-end investment
companies which have entered into management agreements with the Manager),
in form or forms approved by the Fund, and (b) to sell Shares of the Fund
to other purchasers on such terms as may be provided in the then current
prospectus of the Fund relating to such Shares; provided, however, that no
-------- -------
sales of Shares shall be confirmed by Seligman Financial Services at any
time when, according to advice received by Seligman Financial Services from
the Fund, the officers of the Fund have for any reason sufficient to them
temporarily or permanently suspended or discontinued the sale and issuance
of the Shares. Each sale of Shares shall be effected by Seligman Financial
Services only at the applicable price determined by the Fund in the manner
prescribed in its then current prospectus relating to such Shares.
Seligman Financial Services shall comply with all applicable laws, rules
and regulations including, without limiting the generality of the
foregoing, all rules or regulations made or adopted pursuant to Section 22
of the Investment Company Act of 1940 (the "1940 Act") by the Securities
and Exchange Commission or any securities association registered under the
Securities Exchange Act of 1934.
1
<PAGE>
The Fund agrees, as long as its Shares may legally be issued, to fill all
orders confirmed by Seligman Financial Services in accordance with the
provisions of this Agreement.
3. Repurchase Agent. Seligman Financial Services is authorized, as agent for
----------------
the Fund and not as principal, to accept offers for resale to the Fund and
to repurchase on behalf of the Fund Shares of each series of the Fund at
net asset values determined by the Fund in conformity with its then current
prospectus relating to such Shares.
4. Compensation. As compensation for the services of Seligman Financial
------------
Services under this Agreement, Seligman Financial Services shall be
entitled to receive the sales charge, determined in conformity with the
Fund's then current prospectus relating to such Shares, on all sales of
Shares of the Fund confirmed by Seligman Financial Services hereunder and
for which payment has been received, less the dealers' concession allowed
in respect of such sales. In addition, in accordance with the terms of the
Fund's Administration, Shareholder Services and Distribution Plans (the
"Plans"), each of the series of the Fund may make payments from time to
time to Seligman Financial Services in accordance with the terms and
limitations of, and for the purposes set forth in the Plans.
5. Expenses. Seligman Financial Services agrees promptly to pay or reimburse
--------
the Fund for all expenses (except expenses incurred by the Fund in
connection with the preparation, printing and distribution of any
prospectus or report or other communication to shareholders, to the extent
that such expenses are incurred to effect compliance with any Federal or
State law or to enable such distribution to shareholder(s) (a) of printing
and distributing copies of any prospectus and of preparing, printing and
distributing any other material used by Seligman Financial Services in
connection with offering Shares of the Fund for sale, and (b) of
advertising in connection with such offering. The Fund agrees to pay all
expenses in connection with the registration of Shares of the Fund under
the Securities Act of 1933 (the "Act"), all fees and related expenses which
may be incurred in connection with the qualification of Shares of the Fund
for sale in such States (as well as the District of Columbia, Puerto Rico
and other territories) as Seligman Financial Services may designate, and
all expenses in connection with maintaining facilities for the issue and
transfer of its Shares, of supplying information, prices and other data to
be furnished by it hereunder, and through Union Data Service Center, Inc.,
of all data processing and related services related to the share
distribution activity contemplated hereby.
The Fund agrees to execute such documents and to furnish such information
as may be reasonably necessary, in the discretion of the Directors of the
Fund, in
2
<PAGE>
connection with the qualification of Shares of the Fund for sale in such
States (as well as the District of Columbia, Puerto Rico and other
territories) as Seligman Financial Services may designate. Seligman
Financial Services also agrees to pay all fees and related expenses
connected with its own qualification as a broker or dealer under Federal or
State laws and, except as otherwise specifically provided in this Agreement
or agreed to by the Fund, all other expenses incurred by Seligman Financial
Services in connection with the sale of Shares of the Fund as contemplated
in this Agreement (including the expenses of qualifying the Fund as a
dealer or broker under the laws of such States as may be designated by
Seligman Financial Services, if deemed necessary or advisable by the Fund).
It is understood and agreed that any payments made to Seligman Financial
Services pursuant to the Plans may be used to defray some or all of the
expenses incurred by Seligman Financial Services pursuant to this
Agreement.
6. Prospectus and Other Information. The Fund represents and warrants to and
--------------------------------
agrees with Seligman Financial Services that:
(a) A registration statement, including one or more prospectuses relating
to the Shares, has been filed by the Fund under the Act and has become
effective. Such registration statement, as now in effect and as from
time to time hereafter amended, and also any other registration
statement relating to the Shares which may be filed by the Fund under
the Act which shall become effective, is herein referred to as the
"Registration Statement", and any prospectus or prospectuses filed by
the Fund as a part of the Registration Statement, as the "Prospectus".
(b) At all times during the term of this Agreement, except when the
officers of the Fund have suspended or discontinued the sale and
issuance of Shares of the Fund as contemplated by Section 2 hereof,
the Registration Statement and Prospectus will conform in all respects
to the requirements of the Act and the rules and regulations of the
Securities and Exchange Commission, and neither of such documents will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statement therein not misleading, except that the foregoing does not
apply to any statements or omissions in either of such documents based
upon written information furnished to the Fund by Seligman Financial
Services specifically for use therein.
3
<PAGE>
The Fund agrees to prepare and furnish to Seligman Financial Services from
time to time a copy of its Prospectus, and authorizes Seligman Financial
Services to use such Prospectus, in the form furnished to Seligman
Financial Services from time to time, in connection with the sale of the
Fund's Shares. The Fund also agrees to furnish Seligman Financial Services
from time to time, for use in connection with the sale of such Shares, such
information with respect to the Fund and its Shares as Seligman Financial
Services may reasonably request.
7. Reports. Seligman Financial Services will prepare and furnish to the
-------
Directors of the Fund at least quarterly a written report complying with
the requirements of Rule 12b-1 under the 1940 Act setting forth all amounts
expended under the Plans and the purposes for which such expenditures were
made.
8. Indemnification. (a) The Fund will indemnify and hold harmless Seligman
---------------
Financial Services and each person, if any, who controls Seligman Financial
Services within the meaning of the Act against any losses, claims, damages
or liabilities to which Seligman Financial Services or such controlling
person may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's Registration Statement
or Prospectus or any other written sales material prepared by the Fund
which is utilized by Seligman Financial Services in connection with the
sale of Shares or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
(in the case of the Registration Statement and Prospectus) necessary to
make the statements therein not misleading or (in the case of such other
sales material) necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; and will
reimburse Seligman Financial Services and each such controlling person for
any legal or other expenses reasonably incurred by Seligman Financial
Services or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
--------
however, that the Fund will not be liable in any such case to the extent
-------
that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus in
conformity with written information furnished to the Fund by Seligman
Financial Services specifically for use therein; and provided, further,
that nothing herein shall be so construed as to protect Seligman Financial
Services against any liability to the Fund or its security holders to which
Seligman Financial Services would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence, in the performance of its
duties, or by reason of the reckless disregard by Seligman Financial
Services of its obligations and duties under this Agreement.
4
<PAGE>
This indemnity agreement will be in addition to any liability which the
Fund may otherwise have.
(b) Seligman Financial Services will indemnify and hold harmless the Fund,
each of its Directors and officers and each person, if any, who
controls the Fund within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Fund or any such Director,
officer or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or Prospectus or any sales material not
prepared by the Fund which is utilized in connection with the sale of
Shares or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or (in the case of the Registration Statement and Prospectus)
necessary to make the statements therein not misleading or (in the
case of such other sales material) necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, in the case of the Registration Statement and
Prospectus to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in conformity with written information furnished to the Fund
by Seligman Financial Services specifically for use therein; and
Seligman Financial Services will reimburse any legal or other expenses
reasonably incurred by the Fund or any such Director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Seligman
Financial Services may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be
5
<PAGE>
liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
9. Effective Date. This Agreement shall become effective upon its execution
--------------
by an authorized officer of the respective parties to this Agreement, but
in no event prior to shareholder approval of the Plans.
10. Term of Agreement. This Agreement shall continue in effect until December
-----------------
31 of the year in which it is first effective and through December 31 of
each year thereafter if such continuance is approved in the manner required
by the 1940 Act and the rules thereunder and Seligman Financial Services
shall not have notified the Fund in writing at least 60 days prior to the
anniversary date of the previous continuance that it does not desire such
continuance. This Agreement may be terminated at any time, without payment
of penalty on 60 days' written notice to the other party by vote of a
majority of the Directors of the Fund who are not interested persons (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Plans or any agreement related
thereto, or by vote of a majority of the outstanding voting securities of
the Fund (as defined in the 1940 Act). This Agreement shall automatically
terminate in the event of its assignment (as defined in the 1940 Act).
11. Miscellaneous. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require,
or to impose any duty upon, either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and Seligman Financial Services have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.
SELIGMAN CASH MANAGEMENT FUND, INC.
By_____________________________________
Ronald T. Schroeder, President
SELIGMAN FINANCIAL SERVICES, INC.
6
<PAGE>
By_____________________________________
Donald R. Pitti, President
7
<PAGE>
Exhibit 99.B8
CUSTODY AGREEMENT
-----------------
THIS AGREEMENT made the ______ day of ____________, 19__, by and between
INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of
the state of Missouri, having its trust office located at 127 West 10th Street,
Kansas City, Missouri 64105 ("Custodian"), and SELIGMAN CASH MANAGEMENT FUND,
INC., a Maryland corporation, having its principal office and place of business
at One Bankers Trust Plaza, New York, New York 10006 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian and Recordkeeper of the securities and monies of Fund and its now
existing and future established portfolios (individually referred to herein as
Portfolio); and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian
-------------------------
as custodian of the Fund which is to include:
A. Appointment as custodian of the securities and monies at any time
owned by each Portfolio of the Fund; and
B. Appointment as agent to perform certain accounting and recordkeeping
functions required of a duly registered investment company in
compliance with applicable provisions of federal, state, and local
laws, rules and regulations including, as may be required:
1
<PAGE>
1. Providing information necessary for Fund and each Portfolio to
file required financial reports; maintaining and preserving
required books, accounts and records as the basis for such
reports; and performing
2
<PAGE>
certain daily functions in connection with such accounts and
records, and
2. Calculating daily net asset value of each Portfolio of the Fund,
and
3. Acting as liaison with independent auditors.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
--------------------------------
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Board of Directors of Fund appointing Custodian as
custodian hereunder and approving the form of this Agreement; and
B. Resolutions of the Board of Directors of Fund designating certain
persons to give instructions on behalf of Fund to Custodian and
authorizing Custodian to rely upon such instructions.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
-----------------------------------------
A. Delivery of Assets
------------------
Fund will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as
practicable, and from time to time thereafter, all portfolio
securities acquired by it and monies then owned by it (except as
permitted by the Investment Company Act of 1940) or from time to time
coming into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies not so
delivered. All securities so delivered to Custodian (other than
bearer securities) shall be registered in the name of Fund or its
nominee, or of a nominee of Custodian, or shall be properly endorsed
and in form for transfer satisfactory to Custodian.
B. Delivery of Accounts and Records
--------------------------------
Fund shall turn over to Custodian all of the Fund's relevant accounts
and records previously maintained by it. Custodian shall be entitled
to rely conclusively on
3
<PAGE>
the completeness and correctness of the accounts and records turned
over to it by Fund, and Fund shall indemnify and hold Custodian
harmless of and from any and all expenses, damages and losses
whatsoever arising out of or in connection with any error, omission,
inaccuracy or other deficiency of such accounts and records or in the
failure of Fund to provide any portion of such or to provide any
information needed by the Custodian knowledgeably to perform its
function hereunder.
C. Delivery of Assets to Third Parties
-----------------------------------
Custodian will receive delivery of and keep safely the assets of Fund
delivered to it from time to time and the assets of each Portfolio
segregated in a separate account. Custodian will not deliver, assign,
pledge or hypothecate any such assets to any person except as
permitted by the provisions of this Agreement or any agreement
executed by it according to the terms of section 3.S. of this
Agreement. Upon delivery of any such assets to a subcustodian
pursuant to Section 3.S. of this agreement, Custodian will create and
maintain records identifying those assets which have been delivered to
the subcustodian as belonging to the applicable Portfolio of the Fund.
The Custodian is responsible for the safekeeping of the securities and
monies of Fund only until they have been transmitted to and received
by other persons as permitted under the terms of this Agreement,
except for securities and monies transmitted to United Missouri Bank
of Kansas City, N.A. (UMBKC), United Missouri Trust Company of New
York (UMBTC), First National Bank of Chicago (FNBC) for which
Custodian remains responsible. Custodian shall also be responsible
for the monies and securities of Fund(s) held by eligible foreign
subcustodians to the extent the domestic custodian with which the
Custodian contracts is responsible to Custodian. Custodian may
participate directly or indirectly through a subcustodian in the
Depository Trust Company, Treasury/Federal Reserve Book Entry System,
Participant Trust
4
<PAGE>
Company or other depository approved by the Fund (as such entities are
defined at 17 CFR Section 270.17f-4(b)).
5
<PAGE>
D. Registration of Securities
--------------------------
Custodian will hold stocks and other registerable portfolio securities
of Fund registered in the name of Fund or its nominee or in the name
of any nominee of Custodian for whose fidelity and liability Custodian
will be fully responsible, or in street certificate form, so-called,
with or without any indication of fiduciary capacity. Unless otherwise
instructed, Custodian will register all such portfolio securities in
the name of its authorized nominee, as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder
or in any provision of any subsequent Federal tax law exempting such
transaction from liability for stock transfer taxes. All securities,
and the ownership thereof by a Portfolio of the Fund, which are held
by Custodian hereunder, however, shall at all times be identifiable on
the records of the Custodian. The Fund agrees to hold Custodian and
its nominee harmless for any liability as a record holder of
securities held in custody.
E. Exchange of Securities
----------------------
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of the applicable Portfolio of
the Fund for other securities or cash issued or paid in connection
with any reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or otherwise, and
will deposit any such securities in accordance with the terms of any
reorganization or protective plan. Without instructions, Custodian is
authorized to exchange securities held by it in temporary form for
securities in definitive form, to effect an exchange of shares when
the par value of the stock is changed, and, upon receiving payment
therefor, to surrender bonds or other securities held by it at
maturity or when advised of an earlier mandatory call for redemption,
except that Custodian shall receive instructions prior to surrendering
any convertible security.
6
<PAGE>
Pursuant to this paragraph, the Custodian will inform the Fund of such
corporate actions and capital changes when it is informed of them
through the publications it subscribes to.
F. Purchases of Investments of the Fund
------------------------------------
Fund will, on each business day on which a purchase of securities
shall be made by it, deliver to Custodian instructions which shall
specify with respect to each such purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer through
whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of such named Portfolio, but only insofar
as monies are available therein for such purpose, and receive the
portfolio securities so purchased by such named Portfolio, except that
Custodian may in its sole discretion advance funds to the Fund which
may result in an overdraft because the monies held by the Custodian on
behalf of the Fund are insufficient to pay the total amount payable
upon such purchase. Such payment will be made only upon receipt by
Custodian of the securities so purchased in form for transfer
satisfactory to Custodian.
7
<PAGE>
Custodian agrees to promptly inform Fund of any failures by sellers to
make proper deliveries of securities purchased by the Fund.
G. Sales and Deliveries of Investments of the Fund - Other than Options
--------------------------------------------------------------------
and Futures
-----------
Fund will, on each business day on which a sale of investment
securities of Fund has been made, deliver to Custodian instructions
specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of such Portfolio to the broker or other person specified in the
instructions relating to such sale, such delivery to be made only upon
receipt of payment therefor in such form as is satisfactory to
Custodian, with the understanding that Custodian may deliver or cause
to be delivered securities for payment in accordance with the customs
prevailing among dealers in securities. Custodian agrees to promptly
inform
8
<PAGE>
Fund of any failures of purchasers to make proper payment for
securities sold by Fund.
H. Purchases or Sales of Security Options, Options on Indices and
--------------------------------------------------------------
Security Index Futures Contracts
--------------------------------
Fund will, on each business day on which a purchase or sale of the
following options and/or futures shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
9
<PAGE>
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
10
<PAGE>
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
----------------------------
If specifically allowed for in the prospectus of the applicable
Portfolio of the Fund:
1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in such instructions by way of pledge or hypothecation to secure
any loan incurred by a Portfolio of the Fund; provided, however,
that the securities shall be released only upon payment to
Custodian of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already
made, further securities may be released or caused to be released
for that purpose upon receipt of instructions. Upon receipt of
instructions, Custodian will pay, but only from funds available
for such purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release securities
held in custody to the borrower designated in such instructions;
provided, however, that the securities will be released only upon
deposit with Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned securities.
Upon receipt of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
11
<PAGE>
J. Routine Matters
---------------
Custodian will, in general, attend to all routine and mechanical
matters in connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with securities or other property of Fund
except as may be otherwise provided in this Agreement or directed from
time to time by the Board of Directors of Fund.
K. Deposit Account
---------------
Custodian will open and maintain a special purpose deposit account(s)
in the name of Custodian on behalf of each Portfolio (Accounts),
subject only to draft or order by Custodian upon receipt of
instructions. All monies received by Custodian from or for the
account of a Portfolio shall be deposited in said Accounts. Barring
events not in the control of the Custodian such as strikes, lockouts
or labor disputes, riots, war or equipment or transmission failure or
damage, fire, flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond its control,
at 9:00 a.m., Kansas City time, on the second business day after
deposit of any check into Fund's Account, Custodian agrees to make Fed
Funds available to the appropriate Portfolio of the Fund in the amount
of the check. Deposits made by Federal Reserve wire will be available
to the Fund immediately and ACH wires will be available to the Fund on
the next business day. Income earned on the portfolio securities will
be credited to the applicable Portfolio of the Fund based on the
schedule attached as Exhibit A, except that income earned on portfolio
securities held by domestic subcustodians other than UMBKC, UMBTC,
Bank of New York (previously Irving Trust Company and hereinafter
referred to as BONY) and Morgan Guaranty and Trust Company (MGT) will
be credited when received. The Custodian will be entitled to reverse
any credited amounts where credits have been made and monies are not
finally collected. If monies are collected after such
12
<PAGE>
reversal, the Custodian will credit the applicable Portfolio in that
amount. Custodian may open and maintain an Account in such other banks
or trust companies as may be designated by it and by properly
authorized resolution of the Board of Directors of Fund, such Account,
however, to be in the name of Custodian on behalf of the applicable
portfolio of the Fund and subject only to its draft or order.
L. Income and other Payments to Fund
---------------------------------
Custodian will:
1. Collect, claim and receive and deposit for the Account of each
Portfolio of the Fund all income and other payments which become
due and payable on or after the effective date of this Agreement
with respect to the securities deposited under this Agreement,
and credit the account of the applicable Portfolio of the Fund in
accordance with the schedule attached hereto as Exhibit A, except
that income earned on portfolio securities held by domestic
subcustodians other than UMBKC, UMBTC, BONY, and MGT will be
credited when received. Income from foreign securities and
assets held by eligible foreign subcustodians shall be credited
by Custodian upon receipt of income from the domestic
subcustodian contracting with the foreign eligible subcustodians.
If, for any reason, the Fund is credited with income that is not
subsequently collected, Custodian may reverse that credited
amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
13
<PAGE>
a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
notice of which is contained in publications of the
type to which a custodian for investment companies
normally subscribes for such purpose; and
b. the endorsement for collection, in the name of the
applicable Portfolio of the Fund, of all checks, drafts or
other negotiable instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to instructions.
Unless prior instructions have been received to the contrary,
Custodian will, without further instructions, sell any rights held for
the account of Fund on the last trade date prior to the date of
expiration of such rights.
M. Payment of Dividends and other Distributions
--------------------------------------------
On the declaration of any dividend or other distribution on the shares
of Capital Stock of any Portfolio ("Portfolio Shares") by the Board of
Directors of Fund, Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of said Board of
Directors certified by the Secretary or an
14
<PAGE>
Assistant Secretary of Fund wherein there shall be set forth the
record date as of which shareholders entitled to receive such dividend
or other distribution shall be determined, the date of payment of such
dividend or distribution, and the amount payable per share on such
dividend or distribution. Except if the ex-dividend date and the
reinvestment date of any dividend are the same, in which case funds
shall remain in the Custody Account, on the date specified in such
Resolution for the payment of such dividend or other distribution,
Custodian will pay out of the monies held for the account of the
applicable Portfolio of the Fund, insofar as the same shall be
available for such purposes, and wire to the account of the Dividend
Disbursing Agent for Fund, such amount as may be necessary to pay the
amount per share payable in cash on Portfolio Shares issued and
outstanding on the record date established by such Resolution.
N. Shares of Fund Purchased by Fund
--------------------------------
Whenever any Portfolio Shares are repurchased or redeemed by Fund,
Fund or its agent shall advise Custodian of the aggregate dollar
amount to be paid for such shares and shall confirm such advice in
writing. Upon receipt of such advice, Custodian shall charge such
aggregate dollar amount to the Account of Portfolio and either deposit
the same in the account maintained for the purpose of paying for the
repurchase or redemption of Portfolio Shares or deliver the same in
accordance with such advice.
Custodian shall not have any duty or responsibility to determine that
Fund Shares have been removed from the proper shareholder account or
accounts or that the proper number of such shares have been canceled
and removed from the shareholder records.
O. Shares of Fund Purchased from Fund
----------------------------------
Whenever Portfolio Shares are purchased from Fund, Fund will deposit
or cause to be deposited with Custodian the amount received for such
shares. Custodian
15
<PAGE>
shall not have any duty or responsibility to determine that Portfolio
Shares purchased from Fund have been added to the proper shareholder
account or accounts or that the proper number of such shares have been
added to the shareholder records.
P. Proxies and Notices
-------------------
Custodian will promptly deliver or mail or have delivered or mailed
to Fund all proxies properly signed, all notices of meetings, all
proxy statements and other notices, requests or announcements
affecting or relating to securities held by Custodian for Fund and
will, upon receipt of instructions, execute and deliver or cause its
nominee to execute and deliver or mail or have delivered or mailed
such proxies or other authorizations as may be required. Except as
provided by this Agreement or pursuant to instructions hereafter
received by Custodian, neither it nor its nominee will exercise any
power inherent in any such securities, including any power to vote the
same, or execute any proxy, power of attorney, or other similar
instrument voting any of such securities, or give any consent,
approval or waiver with respect thereto, or take any other similar
action.
Q. Disbursements
-------------
Custodian will pay or cause to be paid insofar as funds are available
for the purpose, bills, statements and other obligations of Fund
(including but not limited to obligations in connection with the
conversion, exchange or surrender of securities owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
R. Daily Statement of Accounts
---------------------------
16
<PAGE>
Custodian will, within a reasonable time, render to Fund as of the
close of business on each day, a detailed statement of the amounts
received or paid and of securities received or delivered for the
account of Fund during said day. Custodian will, from time to time,
upon request by Fund, render a detailed statement of the securities
and monies held for Fund under this Agreement, and Custodian will
maintain such books and records as are necessary to enable it to do so
and will permit such persons as are authorized by Fund including
Fund's independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded, will
permit federal and state regulatory agencies to examine the
securities, books and records. Upon the written instructions of Fund
or as demanded by federal or state regulatory agencies, Custodian will
instruct any subcustodian to give such persons as are authorized by
Fund including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, to permit federal and state regulatory agencies to examine
the books, records and securities held by subcustodian which relate to
Fund. Fund will be entitled to receive reports produced by the
Custodian's portfolio accounting system, including without limitation,
those listed on Exhibit C hereof.
S. Appointment of Subcustodians
----------------------------
1. Notwithstanding any other provisions of this Agreement, all of or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by Custodian and approved by
the Fund's Board of Directors. Any such subcustodian must have
the qualifications required for custodian under the Investment
Company Act of 1940, as amended. The subcustodian may
participate directly or indirectly in the Depository Trust
Company, Treasury/Federal Reserve Book Entry System, Participant
Trust Company
17
<PAGE>
or other depository approved by the Fund (as such entities are
defined at 17 CFR Sec. 270.17f-4(b)). The appointment of UMBKC or
any other subcustodian, depository or clearing agency used by the
Custodian and approved by the Fund will not relieve Custodian of
any of its obligations hereunder except as provided in Section
3.C hereof. The Custodian will comply with Section 17f-4 of the
Investment Company Act of 1940, as amended, as to depositories
and clearing agencies used by Custodian and approved the Fund.
The Custodian will not be entitled to reimbursement by Fund for
any fees or expenses of any subcustodian, depository or clearing
agency.
2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts reasonably necessary to effect Fund's
foreign securities transactions, may be held in the custody of
one or more banks or trust companies acting as subcustodians,
according to Section 3.S.1; and thereafter, pursuant to a written
contract or contracts as approved by Fund's Board of Directors,
may be transferred to an account maintained by such subcustodian
with an eligible foreign custodian, as defined in Rule 17f-
5(c)(2), provided that any such arrangement involving a foreign
custodian shall be in accordance with the provisions of Rule 17f-
5 under the Investment Company Act of 1940 as that Rule may be
amended from time to time.
T. Accounts and Records
--------------------
Custodian, with the direction and as interpreted by the Fund, Fund's
accountants and/or other tax advisors, will prepare and maintain as
complete, accurate and current all accounts and records required to be
maintained by Fund under the Internal Revenue Code of 1986 ("Code") as
amended and under the general Rules
18
<PAGE>
and Regulations under the Investment Company Act of 1940 ("Rules") as
amended, and as agreed upon between the parties and will preserve said
records in the manner and for the periods prescribed in said Code and
Rules, or for such longer period as is agreed upon by the parties.
Custodian relies upon Fund to furnish, in writing, accurate and timely
information to complete Fund's records and perform daily calculation
of the Fund's net asset value, as provided in Section 3.W. below.
Custodian shall incur no liability and Fund shall indemnify and hold
harmless Custodian from and against any liability arising from any
failure of Fund to furnish such information in a timely and accurate
manner, even if Fund subsequently provides accurate but untimely
information. It shall be the responsibility of Fund to furnish
Custodian with the declaration, record and payment dates and amounts
of any dividends or income and any other special actions required
concerning each of its securities when such information is not readily
available from generally accepted securities industry services or
publications.
U. Accounts and Records Property of Fund
-------------------------------------
Custodian acknowledges that all of the accounts and records maintained
by Custodian pursuant to this Agreement are the property of Fund, and
will be made available to Fund for inspection or reproduction within a
reasonable period of time, upon demand. Custodian will assist Fund's
independent auditors, or upon approval of Fund, or upon demand, any
regulatory body having jurisdiction over the Fund or Custodian, in any
requested review of Fund's accounts and records but shall be
reimbursed for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews. Upon receipt
from Fund of the necessary information, Custodian will supply
necessary data for Fund's completion of any necessary tax returns,
questionnaires, periodic reports to
19
<PAGE>
Shareholders and such other reports and information requests as Fund
and Custodian shall agree upon from time to time.
V. Adoption of Procedures
----------------------
Custodian and Fund may from time to time adopt procedures as they
agree upon, and Custodian may conclusively assume that no procedure
approved by Fund, or directed by Fund, conflicts with or violates any
requirements of its prospectus, "Articles of Incorporation", Bylaws,
or any rule or regulation of any regulatory body or governmental
agency. Fund will be responsible to notify Custodian of any changes
in statutes, regulations, rules or policies which might necessitate
changes in Custodian's responsibilities or procedures.
W. Calculation of Net Asset Value
------------------------------
Custodian will calculate Fund's net asset value, in accordance with
Fund's prospectus, once daily. Custodian will prepare and maintain a
daily evaluation of securities for which market quotations are
available by the use of outside services normally used and contracted
for this purpose; all other securities will be evaluated in accordance
with Fund's instructions. Custodian will have no responsibility for
the accuracy of the prices quoted by these outside services or for the
information supplied by Fund or upon instructions.
X. Overdrafts
----------
If Custodian shall in its sole discretion advance funds to the account
of the Fund which results in an overdraft because the monies held by
Custodian on behalf of the Fund are insufficient to pay the total
amount payable upon a purchase of securities as specified in Fund's
instructions or for some other reason, the amount of the overdraft
shall be payable by the Fund to Custodian upon demand and shall bear
an interest rate determined by Custodian from the date advanced until
the date of payment. Custodian shall have a lien on the assets of the
Fund in the amount of any outstanding overdraft.
20
<PAGE>
4. INSTRUCTIONS.
-------------
A. The term "instructions", as used herein, means written or facsimile
instructions or advice to Custodian from two designated
representatives of Fund. Certified copies of resolutions of the Board
of Directors of Fund naming two or more designated representatives to
give instructions in the name and on behalf of Fund, may be received
and accepted from time to time by Custodian as conclusive evidence of
the authority of any two designated representatives to act for Fund
and may be considered to be in full force and effect (and Custodian
will be fully protected in acting in reliance thereon) until receipt
by Custodian of notice to the contrary. Unless the resolution
delegating authority to any person to give instructions specifically
requires that the approval of anyone else will first have been
obtained, Custodian will be under no obligation to inquire into the
right of the person giving such instructions to do so.
Notwithstanding any of the foregoing provisions of this Section 4. no
authorizations or instructions received by Custodian from Fund, will
be deemed to authorize or permit any director, trustee, officer,
employee, or agent of Fund to withdraw any of the securities or
similar investments of Fund upon the mere receipt of such
authorization or instructions from such director, trustee, officer,
employee or agent.
Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgement if required at the discretion of
Custodian) of the instructions of any two designated representatives
of Fund, will undertake to deliver for Fund's account monies,
(provided such monies are on hand or available) in connection with
Fund's transactions and to wire transfer such monies to such broker,
dealer, subcustodian, bank or other agent specified in such
instructions.
B. If oral instructions are permitted pursuant to Section 4.A. hereunder,
no later than the next business day immediately following such oral
instruction the Fund will
21
<PAGE>
send Custodian written confirmation of such oral instruction. At
Custodian's sole discretion, Custodian may record on tape, or
otherwise, any oral instruction whether given in person or via
telephone, each such recording identifying the parties, the date and
the time of the beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
-------------------------------------
A. Custodian shall hold harmless and indemnify Fund from and against any
loss or liability arising out of Custodian's failure to comply with
the terms of this Agreement or arising out of Custodian's negligence
or bad faith. Custodian may request and obtain the advice and opinion
of counsel for Fund, or of its own counsel with respect to questions
or matters of law, and it shall be without liability to Fund for any
action taken or omitted by it in good faith, in conformity with such
advice or opinion. If Custodian reasonably believes that it could not
prudently act according to the instructions of the Fund or the Fund's
counsel, it may in its discretion, with notice to the Fund, not act
according to such instructions.
B. Custodian may rely upon the advice of Fund and upon statements of
Fund's public accountants and other persons believed by it in good
faith, to be expert in matters upon which they are consulted, and
Custodian shall not be liable for any actions taken, in good faith,
upon such statements.
C. If Fund requires Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable
for payment of monies or in any other way, Custodian, upon notice to
Fund given prior to such actions, shall be and be kept indemnified by
Fund in an amount and form satisfactory to Custodian against any
liability on account of such action.
D. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or
22
<PAGE>
paper reasonably appearing to it to be genuine and to have been
properly executed and shall, unless otherwise specifically provided
herein, be entitled to receive as conclusive proof of any fact or
matter required to be ascertained from Fund hereunder, a certificate
signed by the Fund's President, or other officer specifically
authorized for such purpose.
E. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The validity of the issue of any securities purchased by or for
Fund, the legality of the purchase thereof or evidence of
ownership required by Fund to be received by Custodian, or the
propriety of the decision to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the Capital
Stock of Fund, or the sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any stock
dividend.
F. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
received by it on behalf of Fund, until Custodian actually receives
such money, provided only that it shall advise Fund promptly if it
fails to receive any such money in the ordinary course of business,
and use its best efforts and cooperate with Fund toward the end that
such money shall be received.
23
<PAGE>
G. Custodian shall not be responsible for loss occasioned by the acts,
neglects, defaults or insolvency of any broker, bank, trust company,
or any other person with whom Custodian may deal in the absence of
negligence, or bad faith on the part of Custodian, except as provided
in Section 3.S.1 hereof.
H. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section
3.S.2. must, provide Fund for its approval, agreements with banks or
trust companies which will act as subcustodians for Fund pursuant to
Section 3.S of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
------------
the Fee Schedule attached hereto as Exhibit B which may be changed from
time to time as agreed to in writing by Custodian and Fund. Custodian may
charge such compensation against monies held by it for the account of Fund.
Custodian will also be entitled, notwithstanding the provisions of Sections
5.C. or 5.D. hereof, to charge against any monies held by it for the
account of Fund the amount of any loss, damage, liability, advance, or
expense for which it shall be entitled to reimbursement under the
provisions of this Agreement including fees or expenses due to Custodian
for other services provided to the Fund by the Custodian. Custodian will
not be entitled to reimbursement by Fund for any loss or expenses of any
subcustodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
-----------
notice in writing, delivered or mailed, postage prepaid, to the other party
hereto and received not less than ninety (90) days prior to the date upon
which such termination will take effect. If the Custodian terminates this
Agreement, the Fund may extend the effective date of the termination ninety
(90) days by written request to the Custodian thirty (30) days prior to the
end of the initial ninety (90) days notice period unless the Custodian in
good faith could not perform the duties hereunder. Upon termination of
this Agreement, Fund will pay to Custodian such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to such
date and Fund will use its best efforts to obtain a
24
<PAGE>
successor custodian. Unless the holders of a majority of the outstanding
shares of "Capital Stock" of Fund vote to have the securities, funds and
other properties held under this Agreement delivered and paid over to some
other person, firm or corporation specified in the vote, having not less
the Two Million Dollars ($2,000,000) aggregate capital, surplus and
undivided profits, as shown by its last published report, and meeting such
other qualifications for custodian as set forth in the Bylaws of Fund, the
Board of Directors of Fund will, forthwith upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian a bank or
trust company having such qualifications. Custodian will, upon termination
of this Agreement, deliver to the successor custodian so specified or
appointed, at Custodian's office, all securities then held by Custodian
hereunder, duly endorsed and in form for transfer, all funds and other
properties of Fund deposited with or held by Custodian hereunder, or will
co-operate in effecting changes in book-entries at the Depository Trust
Company or in the Treasury/Federal Reserve Book-Entry System pursuant to 31
CFR Sec. 306.118. In the event no such vote has been adopted by the
stockholders of Fund and no written order designating a successor custodian
has been delivered to Custodian on or before the date when such termination
becomes effective, then Custodian will deliver the securities, funds and
properties of Fund to a bank or trust company at the selection of Custodian
and meeting the qualifications for custodian, if any, set forth in the
Bylaws of Fund and having not less that Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report. Upon either such delivery to a successor custodian,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such bank or trust company will be the successor
custodian under this Agreement and will be entitled to reasonable
compensation for its services. In the event that no such successor
custodian can be found, Fund will submit to its shareholders, before
permitting delivery of the cash and securities owned by Fund to anyone
other than a successor custodian, the question of whether Fund will be
liquidated
25
<PAGE>
or function without a custodian. Notwithstanding the foregoing requirement
as to delivery upon termination of this Agreement, Custodian may make any
other delivery of the securities, funds and property of Fund which is
permitted by the Investment Company Act of 1940, Fund's Certificate of
Incorporation and Bylaws then in effect or apply to a court of competent
jurisdiction for the appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings received by
-------
Fund at One Bankers Trust Plaza, New York, New York 10006 such other
address as Fund may have designated to Custodian in writing, will be deemed
to have been properly given to Fund hereunder; and notices, requests,
instructions and other writings received by Custodian at its offices at 127
West 10th Street, Kansas City, Missouri 64105, or to such other address as
it may have designated to Fund in writing, will be deemed to have been
properly given to Custodian hereunder.
9. MISCELLANEOUS.
-------------
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement shall become effective at the close of business on
the _____________________ day of ______, 19__.
26
<PAGE>
F. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
H. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between
such issuer and Fund unless the Fund directs the Custodian otherwise.
I. This Agreement may not be assigned by either party without prior
written consent of the other party.
J. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder, such statutes, rules and regulations shall be
deemed to control and supersede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.
27
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:_______________________________
Gerard P. Dipoto, Jr.
Senior Vice President
ATTEST:
- ------------------------
Cheryl J. Naegler
Assistant Secretary
SELIGMAN CASH MANAGEMENT FUND, INC.
By:________________________
Title:_____________________
ATTEST:
- ------------------------
Secretary
28
<PAGE>
SULLIVAN & CROMWELL
48 Wall Street
New York, New York 10005
December 31, 1976
Union Cash Management Fund, Inc.
One Banker Trust Plaza
New York, New York 10006
Dear Sirs:
You have requested our opinion in connection with your Registration
Statement on Form S-5 (File No 2-56805) which you have filed under the
Securities Act of 1933 with respect to 25,000,000 shares of your capital stock,
$.01 par value.
As your counsel, we are familiar with your organization and corporate
status and the legality of your capital stock. We are also familiar with the
Distributing Agreement between you and Union Service Distributor, Inc.
We advise you that, in our opinion:
(a) Union Cash Management Fund, Inc. is a corporation duly organized
and validly existing under the laws of the State of Maryland, with an
authorized capital stock consisting of 500,000,000 shares, all of the same
class and of the par value of $.01 each.
(b) Shares of the capital stock of Union Cash Management Fund, Inc.,
when issued for at least the par value thereof in accordance with the
above-mentioned Distributing Agreement, or as otherwise authorized by the
Board of Directors, will be legally and validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement referred to above.
In giving such consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations of said Commission
thereunder.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 99.B11
CONSENT OF INDEPENDENT AUDITORS
Seligman Cash Management Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 30 to Registration
Statement No. 2-56805 of our report dated January 31, 1997, appearing in the
Annual Report to Shareholders for the year ended December 31, 1996, incorporated
by reference in the Statement of Additional Information, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is also
part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 25, 1997
<PAGE>
Exhibit 99.13a
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 D 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 Share is being
acquired for investment and not with a view to distribution thereof, and
that Purchaser has no present intention to redeem or dispose of the Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the day of
, 1993 ("Purchase Date").
SELIGMAN CASH MANAGEMENT FUND, INC.
By:____________________________________
Name:
Title:
J. & W. SELIGMAN & CO. INCORPORATED
By:____________________________________
Name:
Title:
<PAGE>
Exhibit 99.B16
Perf Quot
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ John R. Galvin (L.S.)
----------------------------
John R. Galvin
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
her attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in her name and stead, in her capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Alice S. Ilchman (L.S.)
-------------------------------
Alice S. Ilchman
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Frank A. McPherson (L.S.)
-----------------------------
Frank A. McPherson
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ John E. Merow (L.S.)
---------------------------
John E. Merow
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
her attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in her name and stead, in her capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Betsy S. Michel (L.S.)
-----------------------------
Betsy S. Michel
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ William C. Morris (L.S.)
------------------------------
William C. Morris
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ James C. Pitney (L.S.)
-------------------------------
James C. Pitney
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ James Q. Riordan (L.S.)
-----------------------------
James Q. Riordan
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ Ronald T. Schroeder (L.S.)
--------------------------------
Ronald T. Schroeder
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Robert L. Shafer (L.S.)
-------------------------------
Robert L. Shafer
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ James N. Whitson (L.S.)
-----------------------------
James N. Whitson
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN CASH
MANAGEMENT FUND, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ Brian T. Zino (L.S.)
------------------------------
Brian T. Zino
