<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. 31 [X]
--
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 23 [X]
--
- --------------------------------------------------------------------------------
SELIGMAN CASH MANAGEMENT FUND, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
- --------------------------------------------------------------------------------
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):
[X] immediately upon filing pursuant to [ ] on (date) pursuant to paragraph
paragraph (b) (a)(1)
[ ] on (date) pursuant to paragraph (b) [ ] 75 days after filing pursuant to
------ paragraph (a)(2)
[ ] 60 days after filing pursuant to [ ] on (date) pursuant to paragraph
paragraph (a)(1) (a)(2) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on March 27,
1998.
<PAGE>
SELIGMAN CASH MANAGEMENT FUND INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 31
Pursuant to Rule 481(a)
-----------------------
Item in Part A of Form N-1A Location in Prospectus
- --------------------------- ----------------------
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 Alternative Distribution System;
Offered 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
<TABLE>
<CAPTION>
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- ---------------------------------------------------------
<S> <C> <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 Investment Objective And Policies;
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 Management and Expenses
Services
17. Brokerage Allocation Not Applicable
18. Capital Stock and Other General Information
Securities
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
of Money Market Funds Per Share
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
SELIGMAN
- ----------
CASH
MANAGEMENT
FUND, INC.
ART
PROSPECTUS
MAY 1, 1998
----
A
MONEY MARKET
FUND IN ITS
23RD YEAR
LOGO
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
Table of Contents
Summary of Fund Expenses 2
Financial Highlights 3
Alternative Distribution System 5
Investment Objectives and Policies 6
Management Services 9
Net Asset Value Per Share 9
Purchase of Shares 10
Right of Accumulation in Purchases
of Shares of the other Seligman
Mutual Funds 14
Telephone Transactions 15
Redemption of Shares 16
Administration, Shareholder Services
and Distribution Plan 18
Exchange Privilege 19
Dividends 21
Federal Income Taxes 22
Shareholder Information 23
Yield 25
Organization and Capitalization 25
ART IN THE BACKGROUND
TIMES CHANGE ... VALUES ENDURE
<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
For Retirement Plan Information--Toll-Free Telephone: (800) 445-1777
May 1, 1998
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,
1999. 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.
---------------
<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..... None* 5% in 1st year 1% in 1st year
4% in 2nd year None thereafter
3% in 3rd and
4th years
2% in 5th year
1% in 6th year
None thereafter
Redemption Fees......... None None None
Exchange Fees........... None None None
<CAPTION>
CLASS A CLASS B CLASS D
----------------- ----------------- -----------------
<S> <C> <C> <C>
ANNUAL FUND OPERATING
EXPENSES FOR 1997
(as a percentage of
average net assets)
Management Fees......... .40% .40% .40%
12b-1 Fees.............. --+ 1.00%** 1.00%**
Other Expenses.......... .38% .38% .38%
--- ---- ----
Total Fund Operating
Expenses............... .78% 1.78% 1.78%
=== ==== ====
</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). 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) 5% annual return and Class A $ 8 $25 $ 43 $ 97
(2) redemption at the end of each Class B++ 68 86 116 183
time period........................ Class D 28 56 96 209
An investor would pay the following
expenses on the same Class A $ 8 $25 $43 $ 97
investment, assuming no redemption. Class B++ 18 56 96 183
Class D 18 56 96 209
</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.
- -------
* A CDSL of 1% will be charged on redemptions of Class A shares acquired by
exchange which were originally purchased at net asset value due to the size
of the purchase, if such shares are redeemed within eighteen months of the
original purchase.
** 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 Fund Expenses since those fees will not
be charged until after April 30, 1999.
++ The expenses shown for the ten-year period reflect the conversion of Class
B shares to Class A shares after 8 years.
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 1997 Annual Report,
which is incorporated by reference in the Fund's Statement of Additional
Information, copies of which may be obtained by calling or writing the Fund at
the telephone numbers or address provided on the cover page of this
Prospectus.
"Per share operating performance" data is designed to allow investors to
trace the operating performance, on a per share basis, from the beginning net
asset value to the ending net asset value so that they can understand what ef-
fect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by con-
verting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amount.
"Total return based on net asset value" measures each Class's performance
assuming investors purchased Fund shares at net asset value as of the begin-
ning of the period, invested dividends paid at net asset value, and then sold
their shares at the net asset value per share on the last day of the period.
Total returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <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
Net investment income....... .047 .046 .051 .034 .024 .030 .053 .074 .084
Dividends paid or declared.. (.047) (.046) (.051) (.034) (.024) (.030) (.053) (.074) (.084)
======== ======== ======== ======== ======== ======== ======== ======== ========
Net asset value, end of
year....................... $ 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: 4.80% 4.71% 5.18% 3.46% 2.40% 3.10% 5.53% 7.53% 8.76%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets..................... .78% .79% .86% .82% .77% .76% .79% .80% .80%
Net investment income to
average net assets......... 4.70% 4.61% 5.06% 3.41% 2.37% 3.04% 5.34% 7.40% 8.46%
Net assets, end of year
(000s omitted)............. $206,604 $208,950 $177,395 $194,406 $173,902 $193,158 $260,297 $287,518 $321,481
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%
<CAPTION>
1988
---------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of year.................... $ 1.000
Net investment income....... .066
Dividends paid or declared.. (.066)
=========
Net asset value, end of
year....................... $ 1.000
=========
TOTAL RETURN BASED ON NET
ASSET VALUE: 6.88%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets..................... .93%
Net investment income to
average net assets......... 6.63%
Net assets, end of year
(000s omitted)............. $344,664
Without management fee
waiver or expense
reimbursement:*
Net investment income per
share......................
Ratios:
Expenses to average net
assets.....................
Net investment income to
average net assets.........
</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, 1999.
3
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS D
------------------ --------------------------------------------
YEAR 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ---------------------------------- TO
12/31/97 12/31/96 1997 1996 1995 1994 12/31/93
-------- -------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income... .037 .025 .037 .036 .040 .024 .003
Dividends paid or
declared............... (.037) (.025) (.037) (.036) (.040) (.024) (.003)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN BASED ON
NET ASSET VALUE: 3.77% 2.44% 3.77% 3.67% 4.08% 2.35% .30%
Ratios/Supplemental
Data:
Expenses to average net
assets................. 1.78% 1.78%+ 1.78% 1.79% 1.90% 1.90% 1.74%+
Net investment income to
average net assets..... 3.70% 3.58%+ 3.70% 3.61% 4.02% 2.32% 1.39%+
Net assets, end of
period (000s omitted).. $10,858 $ 2,493 $24,110 $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 Seligman Mutual Funds by exchanging their Class B or Class D
shares of the Fund. Class B or Class D shares of another Seligman Mutual Fund
may only be exchanged for Class B or Class D shares, respectively, of the
Fund. Class B shares are sold to investors choosing to pay no initial sales
load, a higher distribution fee and, with respect to redemptions within six
years of purchase (or, in the case of shares acquired through an exchange, of
the purchase of the Original Shares), a CDSL, and who desire shares to convert
automatically to Class A shares after eight years. Class D shares are subject
to a higher distribution fee and, with respect to redemptions of shares within
one year of purchase (or, in the case of shares acquired through an exchange,
of the purchase of the Original Shares), a CDSL.
The three classes of shares represent interests in the same portfolio of 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 Seligman Mutual Fund for which the ex-
change privilege is available. Although Class D shareholders are subject to a
shorter CDSL period at a lower rate, they forgo the Class B automatic conver-
sion feature, making their investment subject to higher
5
<PAGE>
distribution fees for an in-definite period of time. Each class has advantages
and disadvantages for different investors, and investors should choose the
class that best suits their circumstances and their objectives.
<TABLE>
<CAPTION>
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE
SALES LOAD DAILY NET ASSETS) OTHER INFORMATION
---------- ------------------ -----------------
<S> <C> <C> <C>
CLASS A None Service fee of CDSL of 1% on
.25%. (This redemptions of
fee will not Class A shares
be assessed acquired by
through April exchange which
30, 1999. were originally
Payments may purchased at net
commence after asset value due
that date.) to the size of
purchase, if
such shares are
redeemed within
18 months of
original
purchase.
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%; redemptions
Distribution within one year
fee of up to of purchase.
.75%.
</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.) More over, 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 Association.
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.
YEAR 2000 RISKS. The Fund is dependent upon service providers and their com-
puter systems for its day-to-day operations, and many of the Fund's service
providers in turn depend upon computer systems of other persons. Many computer
systems currently cannot properly recognize or process date sensitive informa-
tion relating to the year 2000 and beyond. The Manager, Seligman Financial
Services, Inc., and the
8
<PAGE>
Fund's custodian have been evaluating the impact the year 2000 issue may have
on their computer systems. They expect that any modifications to their com-
puter systems necessary to address the year 2000 issue will be made and tested
in a timely manner. They are also working with vendors and other persons whose
systems are linked to theirs to obtain satisfactory assurances regarding the
year 2000 issue. Seligman Data Corp., which provides certain corporate and
shareholder account services to the Fund at cost, has informed the Fund that
it does not expect that the cost to the Fund of its services will increase ma-
terially as a result of the modifications to its computer systems necessary to
prepare for the year 2000. The costs of systems remediation by persons other
than Seligman Data Corp. will not be borne directly by the Fund. There can be
no assurance that the remedial actions taken by the Fund's service providers
will be sufficient or timely. Inadequate remediation could have an adverse ef-
fect on the Fund's operations, including pricing and securities trading and
settlement, and the provision of shareholder services.
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.
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, 1998, the aggregate assets of the Seligman Group were approxi-
mately $20.2 billion. The Manager also provides investment management or ad-
vice to institutional and other accounts having an aggregate value of approxi-
mately $7.4 billion at March 31, 1998.
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, 1997, the management fee
paid by the Fund was equal to .40% 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, Class B and Class D shares for the year
ended December 31, 1997 amounted to .78%, 1.78% and 1.78%, respectively, 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
regular trading on the New
9
<PAGE>
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 calculated separately
for each class. The Fund's assets are valued on the basis of amortized cost,
which involves valuing a portfolio instrument at its cost initially and there-
after assuming a constant amortization to maturity of any discount or premium
regardless of the impact of fluctuating interest rates on the market value of
the instrument. Under present policies, the Fund invests only in securities
which have a maturity of 13 months (397 days) or less at the date of purchase.
The Fund also maintains a weighted average portfolio maturity of 90 days or
less. These policies are followed in order for the Fund to maintain a constant
net asset value of $1.00 per share although there is no assurance that it will
be able to do so on a continuous basis.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager,
acts as general distributor of the Fund's shares. Its address is 100 Park 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 WITH THE INVEST-A-CHECK(R) SERV-
ICE. THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE SELIGMAN TIME HORIZON
MATRIX SM ASSET ALLOCATION PROGRAM IS $10,000. FOR INFORMATION ABOUT THIS PRO-
GRAM, CONTACT YOUR FINANCIAL ADVISOR.
The minimum amount for initial investment in the Fund is $500 for investors
who purchase shares of the Fund through Merrill Lynch's MFA or MFA Select Pro-
grams. There is no minimum investment required for investors who purchase
shares of the Fund through wrap fee Programs.
Purchase orders placed for Class B shares must be for an amount LESS THAN
$250,000.
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 and when Mellon Bank, N.A. receives, or converts the purchase
amount into federal funds, i.e., monies of member banks within the Federal Re-
serve System held at a Federal Reserve Bank. Shares purchased at the close of
business on the day an order becomes effective are entitled to receive income
dividends that day. SFSI reserves the right to refuse any purchase order.
Class A shares are subject to an annual service fee of up to .25% of the aver-
age daily net asset value of the Class A shares. Such fee may not be charged
until after April 30, 1999. 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.
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 a postage-paid return envelope or directly to P.O. BOX 9766, PROVI-
DENCE, RI 02940-9766. Credit card convenience checks and third party checks
(i.e., checks made pay able to someone other than the "Seligman Group of
Funds") may not be used to open a new fund account or purchase additional
shares of the Fund. Class B and Class D shares are sold only through securi-
ties dealers and other financial intermediaries. A check received from an in-
vestor 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
10
<PAGE>
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.
An investor's bank may be able to transmit federal funds to Mellon Bank,
N.A. via the Federal Reserve Wire System. If funds are transmitted in this way
and received by Mellon Bank, N.A. prior to 1:30 p.m. Eastern time, on days
which the 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.
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.
Current shareholders may purchase additional shares by having funds elec-
tronically transferred directly from an employer, the Internal Revenue Service
or other government agency, or any institution capable of transmitting pay-
ments through the Automated Clearing House ("ACH") network. Purchases may be
one-time transactions, or, for those institutions that offer direct deposit
programs, may be made on a systematic basis. To utilize this service, the fol-
lowing bank information must be provided to the paying institution:
Mellon Bank, N.A.
ABA #043000261
A/C No. 600FFFNNNNNNNNNN
"600" IDENTIFIES THE SELIGMAN GROUP OF FUNDS, "FFF" IS THE FUND CODE REPRE-
SENTING THE FUND AND CLASS OF SHARES IN WHICH THE PURCHASE SHOULD BE MADE
(this code is available on the back of all shareholder account statements),
AND "NNNNNNNNNN" INDICATES THE SHAREHOLDER'S TEN-DIGIT ACCOUNT NUMBER. In ad-
dition, the shareholder must indicate that this is a checking account at
Mellon Bank. For IRA and group retirement accounts, all electronic purchases
will be designated as current year contributions. For more information about
this service, please contact Seligman Data Corp. Purchases of Class B and
Class D shares are subject to certain limitations, as discussed below.
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, respectively, of another Seligman Mutual Fund ("Original Class B
Shares" and "Original Class D Shares" and, collectively,
11
<PAGE>
"Original Shares"), or through Service Organizations (as defined under "Admin-
istration, Shareholder Services and Distribution Plan"), to facilitate peri-
odic investments in other Seligman Mutual Funds by exchanging Class B or Class
D shares of the Fund for Class B or Class D shares, respectively, of such
other funds through the Automatic Dollar-Cost-Averaging Service (see "Share-
holder Information" below) or any periodic investment or market-timing service
offered by a Service Organization. For administrative reasons, Service Organi-
zations may also purchase Class B or Class D shares in connection with an in-
vestment to be allocated among Class B or Class D shares of several other Se-
ligman Mutual Funds pursuant to the Seligman Time Horizon MatrixSM, an asset
allocation program.
CLASS B SHARES. Class B shares are sold without an initial sales load but
are subject to a CDSL if the shares are redeemed within six years of purchase
(or, in the case of Class B shares acquired upon exchange, within six years of
the purchase of the Original Class B Shares) at rates set forth in the table
below, charged as a percentage of the current net asset value or the original
purchase price, whichever is less.
<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.
CONTINGENT DEFERRED SALES LOAD. A CDSL will be imposed on redemptions 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). The amount
of any CDSL will be used by
12
<PAGE>
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 Organiza-
tions (as defined under "Administration, Shareholder Services and Distribution
Plan") at the time of sale (or at the time of sale of the Original Shares).
A CDSL of 1% will also be imposed on the redemption of Class A shares ac-
quired by exchange which were originally purchased at net asset value due to
the size of the purchase, if such Class A shares are redeemed within eighteen
months of the original purchase date.
Class A shares acquired by exchange which were originally purchased by an
"eligible employee benefit plan" may be subject to a CDSL of 1% for termina-
tions at the plan level only, on redemptions of shares originally purchased
within eighteen months prior to plan termination. "Eligible employee benefit
plan" means any plan or arrangement, whether or not tax qualified, which pro-
vides for the purchase of Fund shares and has at least (i) $500,000 invested
in the Seligman Mutual Funds or (ii) 50 eligible employees to whom such plan
is made available.
The 1% CDSL normally imposed on redemptions of certain Class A shares (i.e.
those acquired by exchange which were originally purchased during the preced-
ing eighteen months at net asset value due to the size of the purchase) will
be waived on shares that were purchased through Morgan Stanley Dean Witter &
Co. ("Morgan Stanley") by certain Chilean investors (i.e. pension plans, in-
surance companies and mutual funds). Upon redemption of such shares within an
eighteen month period, Morgan Stanley will reimburse SFSI a pro rata portion
of the fee it received from SFSI at the time of sale of such shares.
To minimize the application of a CDSL to a redemption, shares received
through an exchange which were originally acquired through the investment of
dividends and distributions, and shares acquired through the investment of
dividends on Class A, Class B or Class D shares of the Fund (all of which are
not subject to a CDSL) will be redeemed first; followed by shares purchased,
or received through an exchange, which have been held for a period of time
longer than the applicable CDSL period. Shares purchased, or received through
an exchange, which were held for the longest period of time within the appli-
cable CDSL period will then be redeemed. No CDSL will be imposed on the re-
demption of shares acquired through the investment of dividends from any Class
A, Class B or Class D shares within the Seligman Group of Mutual Funds or on
any shares received through an exchange of such shares.
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>
13
<PAGE>
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 (as defined in section
72(m)(7) of the Internal Revenue Code of 1986, as amended (the "Code")) of a
shareholder or beneficial owner; (b) in connection with (i) distributions from
retirement plans qualified under section 401(a) of the Code when such redemp-
tions are necessary to make distributions to plan participants (such payments
include, but are not limited to death, disability, retirement, or separation
of service), (ii) distributions from a custodial account under Code section
403(b)(7) or an individual retirement account (an "IRA") due to death, dis-
ability, minimum distribution requirements after attainment of age 70 1/2, or,
for accounts established prior to January 1, 1998, attainment of age 59 1/2,
and (iii) a tax-free return of an excess contribution to an IRA; (c) in whole
or in part, in connection with shares sold to current and retired Directors of
the Fund; (d) in whole or in part, in connection with shares sold to any
state, county, or city or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable investment laws from paying
a sales load or commission in connection with the purchase of shares of any
registered investment management company; (e) in whole or in part, in connec-
tion with systematic withdrawals; (f) in connection with participation in the
Merrill Lynch Small Market 401(k) Program; and (g) in connection with the re-
demption of shares of the Fund if the Fund is combined with another Seligman
Mutual Fund, or another similar reorganization transaction.
If, with respect to a redemption of any shares which where were sold by a
dealer (or which were acquired through an exchange of Original Shares sold by
a dealer), the CDSL is waived because the redemption qualifies for a waiver as
set forth above, the dealer shall remit to SFSI promptly upon notice an amount
equal to the payment or a portion thereof paid by SFSI at the time of sale of
such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the Seligman Mutual Funds. In
some instances, these bonuses or incentives may be offered only to certain
dealers which employ registered representatives who have sold or may sell a
significant amount of shares of the Fund and/or certain other funds managed by
the Manager during a specified period of time. Such bonus or other incentive
may take the form of payment for travel expenses, including lodging, incurred
in connection with trips taken by qualifying registered representatives and
members of their families to places within or outside the United States. The
cost to SFSI of such promotional activities and payments shall be consistent
with the Rules of the National Association of Securities Dealers, Inc., as
then in effect.
RIGHT OF ACCUMULATION IN PURCHASES OF SHARES OF THE OTHER SELIGMAN MUTUAL
FUNDS
Since Class A shares of the Fund are offered to investors at net asset val-
ue, only those shares of the Fund owned as a result of an exchange of shares
from another Seligman Mutual Fund on which an initial sales load was paid will
be included for purposes of determining a shareholder's eligibility for a re-
duced 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 pro-
spectus. To receive the reduced initial sales load on such
14
<PAGE>
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 initial sales load.
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER/DEALER REPRESENTATIVE, has the ability to effect the following transac-
tions via telephone: (i) redemption of Fund shares with proceeds payable to
the address of record (up to $50,000 per day per fund account), (ii) exchange
of Fund shares for shares of the same class of another Seligman Mutual Fund,
(iii) change of a dividend option, and (iv) change of address. In addition, a
shareholder who has current bank information on file with Seligman Data Corp.
may redeem shares via telephone and have the proceeds transferred electroni-
cally from the shareholder's fund account to the shareholder's predesignated
bank account. See "Redemption of Shares." These services are separate from the
Fund's existing Expedited Redemption Service, which is primarily to wire a
transfer or redemption proceeds to a shareholder's bank account. All telephone
transactions are effected through Seligman Data Corp. at (800) 221-2450.
For investors who purchase shares by completing and submitting an Account
Application: 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. A shareholder must provide bank information on the Account Applica-
tion or a supplemental election form in order to have redemptions sent to the
shareholder's bank account.
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
form available from the broker/dealer of record.
For accounts registered as IRAs: Telephone services will include only ex-
changes or address changes.
For corporations or group retirement plans: Telephone redemptions are not
permitted. Additionally, group retirement plans are not permitted to change a
dividend or distribution option. Group retirement plans that may allow partic-
ipants to place telephone exchanges directly with the Fund must first provide
a letter of authorization signed by the plan's custodian or trustee, and pro-
vide a telephone services election form signed by each plan participant.
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 proce-
15
<PAGE>
dures may result in the request being processed at a later time than if a tel-
ephone 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 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 un-
authorized or fraudulent instructions. Telephone transactions must be effected
through a representative of Seligman Data Corp., i.e., requests may not be
communicated via Seligman Data Corp.'s automated telephone answering system.
Shareholders, of course, may refuse or cancel telephone services. Telephone
services may be terminated by a shareholder at any time by sending a written
request to Seligman Data Corp. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A
SHAREHOLDER'S BROKER/DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHARE-
HOLDER. Written acknowledgment of the addition of telephone services to an ex-
isting account or termination of telephone services will be sent to the share-
holder 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 9759,
Providence, RI 02940-9759 or if the request is to be sent by overnight deliv-
ery service to 100 Park Avenue, New York, NY 10017. The redemption request
must be signed by all persons in whose name the shares are registered. A
shareholder may redeem shares that are not in book credit form without charge,
except a CDSL, if applicable, by surrendering certificates in proper form to
the same address. Certificates should be sent certified or registered mail.
Return receipt is advisable; however, this may increase mailing time. Share
certificates must be endorsed for transfer or accompanied by an endorsed stock
power assigned 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
16
<PAGE>
of the amount) or (iii) to be mailed to other than the address of record (re-
gardless of the amount), the signature(s) of the shareholder(s) must be guar-
anteed by an eligible financial institution including, but not limited to, the
following: banks, trust companies, credit unions, securities brokers and deal-
ers, 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. Nota-
rization by a notary public is not an acceptable signature guarantee. A signa-
ture guarantee is not required if redemption proceeds are transferred elec-
tronically to the shareholder's predesignated bank account.
ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED BY SELIGMAN DATA CORP. IN THE
EVENT OF A REDEMPTION BY A CORPORATION, EXECUTOR, ADMINISTRATOR, TRUSTEE, CUS-
TODIAN OR RETIREMENT PLAN. FOR FURTHER INFORMATION WITH RESPECT TO REDEMPTION
REQUIREMENTS, PLEASE CONTACT THE SHAREHOLDER SERVICES DEPARTMENT OF SELIGMAN
DATA CORP. FOR ASSISTANCE.
EXPEDITED REDEMPTION SERVICE. The Expedited Redemption Service allows a
shareholder whose shares are uncertificated to request redemptions by tele-
phone or by letter to Seligman Data Corp. without a signature guarantee. If a
shareholder intends to use this Service, it should be elected on the initial
Account Application. If a shareholder wishes to add this service subsequent to
the establishment of an account, the shareholder must provide a signature
guaranteed letter of instruction that includes bank account information.
Under the Expedited Redemption Service, Seligman Data Corp. will use 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. Proceeds will be sent to the ad-
dress of record. A shareholder whose bank is a member of the ACH network and
who has current bank information on file with Seligman Data Corp. may have re-
demption proceeds transferred electronically to the shareholder's
predesignated bank account. Telephone redemption requests, including Expedited
Redemptions, received by Seligman Data Corp. at (800) 221-2450 by the close of
regular trading on the NYSE (normally, 4:00 p.m. Eastern time), will be proc-
essed as of the close of business on that day. Redemption requests to be pay-
able by check will not be accepted within 30 days following an address change.
IRAs, group retirement plans, corporations and trusts for which the name
of the current trustee does not appear in the account registration are not el-
igible for telephone redemptions. The Fund reserves the right to suspend or
terminate its telephone redemption services at any time without notice.
17
<PAGE>
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 shares are owned jointly, redemption checks will need
to be signed by all persons unless otherwise elected on the Account Applica-
tion, in which case a single signature will be acceptable.
The shareholder should be certain there are adequate shares in the account
to cover the amount of checks written. If insufficient shares are in the 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 ordered in conjunction with the establishment of a
new Seligman Cash Management Fund account are held for at least seven calendar
days to ensure the original purchase check has cleared. 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.")
GENERAL. With respect to shares redeemed, a check for the proceeds, less any
applicable CDSL, will be sent to the address of record within seven calendar
days after acceptance of the redemption order and will be made payable to all
of the registered owners on the account. Redemptions via telephone to the
shareholder's bank account will be transferred electronically within five
business days. Payment of redemption proceeds will be delayed on redemptions
of shares purchased by check (unless certified) until Seligman Data Corp. re-
ceives notice that the check has cleared, which may be up to 15 days from the
credit of the shares to the shareholder's account. No interest is earned on
the redemption proceeds during this period.
The Fund reserves the right to redeem shares owned by a shareholder whose
investment in the Fund has a value of less than a minimum amount specified by
the Fund's Board of Directors, which is presently $500. Shareholders would be
sent a notice before the redemption is processed stating that the value of
their investment in the Fund is less than the specified minimum and that they
have sixty days to make an additional investment.
18
<PAGE>
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, 1999. 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 shares. Proceeds from
the Class B distribution fees are used to pay Service Organizations a continu-
ing fee of up to .25% on an annual basis of the average net asset value of
Class B shares attributable to particular Service Organizations for providing
personal service and/or the maintenance of shareholder accounts and will also
be used by SFSI to defray the expense of 4% made by it to Service Organiza-
tions at the time of the sale of Class B shares. Proceeds from Class D distri-
bution fees are used primarily to compensate Service Organizations for admin-
istration, shareholder services and distribution assistance (including a con-
tinuing fee of up to .25% on an annual basis of the average daily net asset
value of Class D shares attributable to particular Service Organizations for
providing personal service and/or the maintenance of shareholder accounts) and
will initially be used by SFSI to defray 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 administra-
tion, 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, 1997 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 and
became effective on
19
<PAGE>
April 22, 1996. The total amount paid for the period ended December 31, 1997
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 an-
nually.
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 Seligman Mutual Fund which is sold with an initial sales load plus any
additional shares acquired through invested dividends or distributions on such
shares, and all cash dividends declared for the month to the date of the ex-
change, may be reexchanged at net asset value for Class A shares of another
Seligman Mutual Fund.
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 and Class D shares may be exchanged for Class B and Class D shares,
respectively, of another Seligman Mutual Fund, on the basis of relative net
asset value.
If shares that are subject to a CDSL are exchanged for shares of another Se-
ligman Mutual Fund, for purposes of assessing the CDSL payable upon the dispo-
sition of the acquired shares, the calculation of the applicable holding pe-
riod 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 Fund's
CDSL schedule if such schedule is higher or longer than the CDSL schedule re-
lating 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 terms of the exchange offer described herein may be modi-
fied 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 con-
tact an authorized investment dealer or Seligman Data Corp. to obtain prospec-
tuses of any of the Seligman Mutual Funds.
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.
20
<PAGE>
. 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 each of which seeks
a high current income by investing in debt securities.
. SELIGMAN INCOME FUND, INC. seeks high current income and the possibility of
improvement of future income and capital value.
. SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and a
National Series. The National Municipal Series seeks to provide maximum income
exempt from regular federal income taxes; individual state series, each 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 long-term capi-
tal appreciation by investing in equity securities of value companies primar-
ily located in the U.S.
All permitted exchanges will be based on the net asset values of the respec-
tive funds determined at the close of regular trading on 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. Requests received
after the close of regular trading on the NYSE will be processed at the net
asset values per share calculated the following business day. The registration
of an account into which an exchange is made must be identical to the regis-
tration of the account from which shares are exchanged. When establishing a
new account by an exchange of shares, the shares being exchanged must have a
value of at least the minimum initial investment required by the mutual fund
into which the exchange is being made. THE METHOD OF RECEIVING DISTRIBUTIONS,
UNLESS OTHERWISE INDICATED, WILL BE CARRIED OVER TO THE NEW FUND ACCOUNT, AS
WILL TELEPHONE SERVICES. ACCOUNT SERVICES, SUCH AS INVEST-A-CHECK(R) SERVICE,
DIRECTED DIVIDENDS, SYSTEMATIC WITHDRAWAL PLAN AND CHECK WRITING PRIVILEGE
WILL NOT BE CARRIED OVER TO THE NEW FUND ACCOUNT UNLESS SPECIFICALLY REQUESTED
AND PERMITTED BY THE NEW FUND. Exchange orders may be placed to effect an ex-
change of a specific number of shares, an exchange of shares equal to a spe-
cific dollar amount or an exchange of all shares held. Shares for which cer-
tificates have been issued may not be exchanged via telephone and may be ex-
changed only upon receipt of a written exchange request together with certifi-
cates representing shares to be exchanged in proper form. The exchange privi-
lege via mail is generally applicable to group retirement plans, although some
restrictions may apply.
21
<PAGE>
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 broker/dealer of record listed on the account. SFSI reserves
the right to reject any telephone exchange request. Any rejected telephone ex-
change order may be processed by mail. For more information about telephone
exchange privileges, which, unless objected to, are assigned to most share-
holders automatically and the circumstances under which a shareholder may bear
the risk of loss for a fraudulent transaction, see "Telephone Transactions"
above.
Exchanges of shares are sales and may result in a gain or loss for federal
income tax purposes.
DIVIDENDS
The Fund declares as a dividend substantially all of its net investment 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 and sent to the share-
holder's address of record, or, if elected by a shareholder who has current
bank information on file with Seligman Data Corp., electronically deposited
into the shareholder's predesignated bank account. Such deposits will normally
reach the shareholder's bank account in 3 to 4 business days after the payable
date of the dividend.
In the case of prototype retirement plans, dividends are automatically rein-
vested in additional shares. Shareholders may elect to change their dividend
option by writing Seligman Data Corp. at the address listed below. If the
shareholder has telephone services, changes may also be telephoned to Seligman
Data Corp. between 8:30 a.m. and 6:00 p.m. Eastern time by either the share-
holder 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. For information on how to have
dividends electronically deposited into a shareholder's bank account, contact
Seligman Data Corp.
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 Se-
ligman Mutual Fund will continue to receive dividends and gains as elected
prior to such exchange unless otherwise specified. In the event that a share-
holder redeems all shares in the shareholder's Fund account, the shareholder
will receive on the redemption payment date the amount of all dividends de-
clared for the period up to and including the date of redemption of the
shares. A transfer or exchange of all shares (closing an account), between the
record date and payable date, will result in the value of dividends being paid
to the new fund account in accordance with the option on the closed account,
unless Seligman Data Corp. is instructed otherwise.
22
<PAGE>
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 the New York City ar-
ea. Information about shareholder accounts may be requested by writing Share-
holder Services, Seligman Data Corp, at the same address or by calling toll-
free (800) 221-2450 from all continental United States, or (212) 682-7600 out-
side the continental United States. Seligman Data Corp. may be telephoned Mon-
day through Friday (except holidays), between the hours of 8:30 a.m. and 6:00
p.m. Eastern time and calls will be answered by a service representative.
24-HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BAL-
ANCE, MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT
STATEMENTS AND FORM 1099-DIV CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF DIV-
IDEND 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 TELE-
PHONE 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 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
23
<PAGE>
in fixed amounts of $250 or more per fund, to purchase shares. Accounts may be
established concurrently with the Invest-A-Check(R) Service only if accompa-
nied with a check for at least $100 in conjunction with the monthly investment
option, or a check for at least $250 in conjunction with the quarterly invest-
ment option. For investments in the Seligman Time Horizon MatrixSM Asset Allo-
cation Program, the minimum amount is 1,000 quarterly or $500 monthly. By
utilizing the Invest-A-Check(R) Service to establish an account, you are
agreeing to continue the service until the Fund's minimum investment amount is
met. If you elect to cancel the service prior to meeting the minimum, your ac-
count may be subject to closure. (See "Terms and Conditions.")
. 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 or another Seligman Mutual Fund. (Dividend checks must in-
clude the shareholder's name, account number, the name of the Fund and the
class of shares in which the investment is to be made.) If the dividends are
to be invested in a new fund account, the first investment must meet the re-
quired minimum purchase amount for such fund.
A shareholder may also direct that dividends payable on shares of other com-
panies be transferred electronically to purchase shares of any Seligman Mutual
Fund, if the other company provides this service. See "Purchase of Shares" for
more information or contact Seligman Data Corp.
. 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.
. SYSTEMATIC WITHDRAWAL PLAN permits payments in fixed amounts of $50 or more
at regular intervals to be made to a shareholder who owns or purchases shares
worth $5,000 or more held as book credits. Payments will be sent by check to
the shareholder's address of record or, if elected by a shareholder who has
current bank information on file with Seligman Data Corp. electronically de-
posited into the shareholder's predesignated bank account. Such deposits will
normally reach the shareholder's bank account in 2 to 3 business days after
the shares are redeemed from the shareholder's fund account. Holders of Class
B and Class D shares may elect to use this plan immediately, although certain
withdrawals may be subject to a CDSL. (See "Terms and Conditions.")
. DIRECTED DIVIDENDS allows a shareholder to pay dividends to another person
or to direct the payment of such dividends to another Seligman Mutual Fund for
purchase at net asset value. Dividends on Class A, Class B and Class D shares
may only be directed to shares of the same class of another Seligman Mutual
Fund.
. OVERNIGHT DELIVERY to service shareholder requests is available for a $15.00
fee which will be deducted from a shareholder's account, if requested.
. COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of charge
for the current year
24
<PAGE>
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 maxi-
mum charge of $150 per account. Statement requests should be forwarded, along
with a check, to Seligman Data Corp.
TAX-DEFERRED PLANS. Shares of the Fund may be purchased for:
--Individual Retirement Accounts (IRAs), including Traditional IRAs, Roth
IRAs and Education IRAs;
--Savings Incentive Match Plans for Employees (SIMPLE IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and certain
non-profit organizations who wish to make deferred compensation arrangements;
and
--Money Purchase Pension and Profit Sharing Plans for sole proprietorships,
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.
25
<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).
26
<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
dividends from investment income in shares or in cash according to the option
elected. Dividend options may be changed by notifying Seligman Data Corp.
These option changes must be received by Seligman Data Corp. on or before the
record date for the dividend in order to be effective for that dividend. Stock
certificates will not be issued, unless requested. Replacement stock
certificates and certain waiver of probate procedures will be subject to a
surety fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The 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. By utilizing the Invest-A-Check(R) Service to establish an account,
you are agreeing to continue the service until the Fund's minimum investment
amount is met. If you elect to cancel the service prior to meeting the mini-
mum, your account may be subject to closure. If an ACH debit or preauthorized
check is not honored by the shareholder's bank, or if the value of shares held
falls below the required minimum, the Invest-A-Check(R) Service may be sus-
pended. In the event that a check is returned uncollectable, Seligman Data
Corp. will cancel the purchase, redeem shares held in the shareholder's ac-
count for an amount sufficient to reimburse the Fund for any loss it may have
incurred as a result, and charge a $10.00 return check fee. This fee may be
deducted from the shareholder's account. The Invest-A-Check(R) Service may be
reinstated upon written request indicating that the cause of interruption has
been corrected. The Invest-A-Check(R) Service may be terminated by the share-
holder 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 re-
sult from acts done in good faith and pursuant to these terms. Instructions
for establishing Invest-A-Check(R) Service are given on the Account Applica-
tion. In the event a shareholder exchanges all of the shares from one Seligman
Mutual Fund to another, the shareholder must re-apply for the Invest-A-
Check(R) Service in the Seligman Mutual Fund into which the exchange was made.
Accounts established in conjunction with the Invest-A-Check(R) Service must be
accompanied by a check for at least $100 in connection with the monthly in-
vestment option or a check for at least $250 in connection with the quarterly
investment option. If a shareholder uses the Invest-A-Check(R) Service to make
an IRA or group retirement plan investment, the purchase will be credited as a
current year contribution. In the event of a partial exchange, Invest-A-
Check(R) Service will be continued, subject to the above conditions, in the
Seligman Mutual Fund from which the exchange was made.
SYSTEMATIC WITHDRAWAL PLAN
A sufficient number of full and fractional shares will be redeemed to pro-
vide the amount required for a scheduled payment and any applicable CDSL. Re-
demptions will be made at the asset value at the close of business on the spe-
cific day of each month designated by the shareholder (or on the prior busi-
ness day if the day specified falls on a weekend or holiday), less, in the
case of Class B and Class D shares, any applicable CDSL. Under this Plan, a
Class B or Class D shareholder's who requests both dividends and capital gain
distributions in additional shares may withdraw up to 12% or 10%, respective-
ly, of the value of the shareholder's fund account (at the time of election)
per annum, without the imposition of a CDSL. A minimum payment amount of $50
per cycle is needed to establish this Plan. A shareholder may change the
amount of scheduled payments or may suspend payments by written notice to Se-
ligman Data Corp. at least ten days prior to the effective date of such a
change or suspension. The Plan may be terminated by the shareholder at any
time by writing to Seligman Data Corp. Seligman Data Corp. also reserves the
right to terminate the Plan. It will be terminated upon proper notification of
the death or legal incapacity of the shareholder. This Plan is considered ter-
minated in the event a withdrawal of shares, other than to make scheduled
withdrawal payments, reduces the value of shares remaining on deposit to less
than $5,000. Continued payment in excess of dividend income invested will re-
duce and ultimately exhaust capital.
CHECK REDEMPTION SERVICE
The Check Redemption Service is available to all Class A shareholders, to
all Class B shareholders and to Class D shareholders with respect to Class D
shares held for one year or more. If shares are held in joint names, all
shareholders must sign the Check Redemption section of the Account Applica-
tion. All checks will require all signatures unless a lesser number is indi-
cated in the Check Redemption section. Accounts in the names of corporations,
trusts, partnerships, etc. must list all authorized signatories. In all cases,
each signator guarantees the genuineness of the other signature(s). Checks may
not be drawn for less than $500.
The shareholder authorizes Boston Safe Deposit and Trust Co. to honor the
checks drawn by the shareholder on the account of Seligman Cash Management
Fund, Inc. and to effect a redemption of sufficient shares in the sharehold-
er's account to cover payment of the check, and 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.
5/98
27
<PAGE>
SELIGMAN
CASH MANAGEMENT FUND, INC.
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
LOGO
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
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
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, 1998. It should be read in conjunction
with the Prospectus, which may be obtained by writing or calling the Fund at the
above address or telephone numbers. This Statement of Additional Information,
although not in itself a Prospectus, is incorporated by reference into the
Prospectus in its entirety.
The Fund offers three classes of shares. Class A shares may be purchased at
net asset value. 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, 1999. 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 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 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 issue. 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.
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 Page
<S> <C>
Investment Objectives and Policies 2 Purchase and Redemption of Fund Shares 10
Calculation of Yield 2 Net Asset Value Per Share 10
Investment Limitations 3 General Information 11
Directors and Officers 4 Financial Statements 11
Management and Expenses 7 Appendix A 12
Administration, Shareholder Services Appendix B 14
and Distribution Plan 8
</TABLE>
TXCM1A
-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, 1997.
<TABLE>
<CAPTION>
Class A shares Class B shares Class D shares
-------------- -------------- --------------
<S> <C> <C> <C>
Total dividends per share from net investment income $.000876 $.000686 $.000685
(seven days ended December 31, 1997)
Annualized (365 day basis) .045677 .035770 .035718
Average net asset value per share 1.000 1.000 1.000
Annualized historical net yield per share for seven 4.57%* 3.58%* 3.57%*
calendar days ended December 31, 1997
Effective yield (seven days ended December 31, 1997) 4.67%** 3.64%** 3.63%**
</TABLE>
Weighted average life to maturity of investments was 86 days at December 31,
1997.
* This represents the annualized average net investment income per share for
the seven days ended December 31, 1997.
** 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 received an exemptive order from the Securities
and Exchange Commission that would permit it to purchase shares of other
investment companies advised by the Manager for the limited purpose of hedging
its obligations in connection with the deferred fee arrangement for outside
directors referred to under "Directors and Officers" below.
-3-
<PAGE>
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years, are shown below.
Each Director who is an "interested person" of the Fund, as defined in the 1940
Act, is indicated by an asterisk. Unless otherwise indicated, their addresses
are 100 Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer and
(60) Chairman of the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; Chairman and Chief Executive Officer,
the Seligman Group of Investment Companies; Chairman,
Seligman Financial Services, Inc., broker/dealer; Seligman
Services, Inc., broker/dealer; and Carbo Ceramics Inc.,
ceramic proppants for oil and gas industry; Director,
Seligman Data Corp., shareholder service agent; Kerr-McGee
Corporation, diversified energy company; and Sarah Lawrence
College; and a Member of the Board of Governors of the
Investment Company Institute; formerly, President, J. & W.
Seligman & Co. Incorporated; Chairman, Seligman Advisors,
Inc., advisers; Seligman Holdings, Inc., holding company;
Seligman Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company; and Director, Daniel
Industries Inc., manufacturer of oil and gas metering
equipment.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(45)
Director and President, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; President (with the
exception of Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.) and Director or
Trustee, the Seligman Group of Investment Companies;
Chairman, Seligman Data Corp., shareholder service agent; and
Director, Seligman Financial Services, Inc., broker/dealer;
Seligman Services, Inc., broker/dealer; and Seligman
Henderson Co., advisers; formerly, Director, Seligman
Advisors, Inc., advisers; Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust Company, trust
company.
JOHN R. GALVIN Director
(68)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman, American Council on Germany;
a Governor of the Center for Creative Leadership; National
Committee on U.S.-China Relations, National Defense
University; the Institute for Defense Analysis; and Raytheon
Co., electronics; formerly, Director, USLIFE Corporation,
life insurance; Ambassador, U.S. State Department for
negotiations in Bosnia; Distinguished Policy Analyst at Ohio
State University and Olin Distinguished Professor of National
Security Studies at the United States Military Academy. From
June, 1987 to June, 1992, he was the Supreme Allied
Commander, Europe and the Commander-in-Chief, United States
European Command.
Tufts University, Packard Avenue, Medford, MA 02155
ALICE S. ILCHMAN Director
(63)
President, Sarah Lawrence College; Director or Trustee, the
Seligman Group of Investment Companies; and the Committee for
Economic Development; Chairman, The Rockefeller Foundation,
charitable foundation; formerly, Trustee, The Markle
Foundation, philanthropic organization; and Director, NYNEX,
telephone company; and International Research and Exchange
Board, intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
-4-
<PAGE>
FRANK A. McPHERSON Director
(65)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; Kimberly-Clark
Corporation, consumer products; Bank of Oklahoma Holding
Company; Baptist Medical Center; Oklahoma Chapter of the
Nature Conservancy; Oklahoma Medical Research Foundation; and
National Boys and Girls Clubs of America; and Member of the
Business Roundtable and National Petroleum Council; formerly,
Chairman of the Board and Chief Executive Officer, Kerr-McGee
Corporation, diversified energy company; Chairman, Oklahoma
City Public Schools Foundation; and Director, Federal Reserve
System's Kansas City Reserve Bank; and the Oklahoma City
Chamber of Commerce.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW Director
(68)
Retired Chairman and Senior Partner, Sullivan & Cromwell, law
firm; Director or Trustee, the Seligman Group of Investment
Companies; Commonwealth Industries, Inc., manufacturer of
aluminum sheet products; the Foreign Policy Association;
Municipal Art Society of New York; the U. S. Council for
International Business; and The New York and Presbyterian
Hospital; Chairman, American Australian Association; and The
New York and Presbyterian Hospital Care Network, Inc.; Vice-
Chairman, the U. S.-New Zealand Council; Member of the
American Law Institute and Council on Foreign Relations.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(55)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; Trustee, The Geraldine R. Dodge
Foundation, charitable foundation; and Chairman of the Board
of Trustees of St. George's School (Newport, RI); formerly,
Director, the National Association of Independent Schools
(Washington, DC).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(71)
Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of Investment
Companies; and Director, Public Broadcasting Service (PBS);
formerly, Director, Public Service Enterprise Group, public
utility.
Park Avenue at Morris County, P.O. Box 1945, Morristown, NJ
07962-1945
JAMES Q. RIORDAN Director
(70)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; The Houston
Exploration Company; The Brooklyn Museum; The Brooklyn Union
Gas Company; The Committee for Economic Development; and
Public Broadcasting Service (PBS); formerly, Co-Chairman of
the Policy Council of the Tax Foundation; Director and Vice
Chairman, Mobil Corporation; Director, Tesoro Petroleum
Companies, Inc.; Dow Jones & Co., Inc.; and Director and
President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
ROBERT L. SHAFER Director
(65)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; formerly, Vice
President, Pfizer Inc., pharmaceuticals; and Director, USLIFE
Corporation, life insurance.
235 East 42nd Street, New York, NY 10017
-5-
<PAGE>
JAMES N. WHITSON Director
(63)
Director, Sammons Enterprises, Inc.; Director or Trustee, the
Seligman Group of Investment Companies; C-SPAN; and
CommScope, Inc., manufacturer of coaxial cables; formerly,
Executive Vice President and Chief Operating Officer, Sammons
Enterprises, Inc.; and Director, Red Man Pipe and Supply
Company, piping and other materials.
5949 Sherry Lane, Suite 1900, Dallas, TX 75225
LEONARD J. LOVITO Vice President and Portfolio Manager
(38)
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
(41)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Seligman
Financial Services, Inc., broker/dealer; and Seligman Data
Corp., shareholder service agent; Vice President, the
Seligman Group of Investment Companies; and Seligman
Services, Inc. broker/dealer; and Treasurer, Seligman
Henderson Co., advisors; formerly, Senior Vice President,
Seligman Advisors, Inc., advisers; and Treasurer, Seligman
Holdings, Inc., holding company.
FRANK J. NASTA Secretary
(33)
Senior Vice President, Law and Regulation and Corporate
Secretary, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; Secretary, the Seligman Group of
Investment Companies; Seligman Financial Services, Inc.,
broker/dealer; Seligman Henderson Co., advisers; Seligman
Services, Inc., broker/dealer; and Seligman Data Corp.
shareholder service agent; formerly, Senior Vice President,
Law and Regulation and Corporate Secretary, Seligman
Advisors, Inc., advisers; and an attorney at Seward and
Kissel, law firm.
THOMAS G. ROSE Treasurer
(40)
Treasurer, the Seligman Group of Investment Companies; and
Seligman Data Corp., shareholder service agent.
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund for
which no market valuation is available and to elect or appoint officers of the
Fund to serve until the next meeting of the Board.
Compensation Table
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits from Fund and
Name and Compensation Accrued as part of Fund Complex 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
Fred E. Brown, Director Emeritus** N/A N/A N/A
John R. Galvin, Director $1,399.36 N/A $69,000.00
Alice S. Ilchman, Director 1,331.72 N/A 65,000.00
Frank A. McPherson, Director 1,367.44 N/A 66,000.00
John E. Merow, Director 1,331.72 N/A 65,000.00
Betsy S. Michel, Director 1,399.36 N/A 69,000.00
</TABLE>
-6-
<PAGE>
<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>
James C. Pitney, Director 1,321.08 N/A 64,000.00
James Q. Riordan, Director 1,378.08 N/A 67,000.00
Robert L. Shafer, Director 1,378.08 N/A 67,000.00
James N. Whitson, Director 1,388.72(d) N/A 68,000.00(d)
- ----------------------
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1997. Effective January 16, 1998, the per meeting fee for
Directors was increased by $1,000, which is allocated among all Funds in the
Fund Complex.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired as Director and designated Director Emeritus March 20, 1997.
(d) Deferred.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is
accrued on the deferred balances. The annual cost of such interest is included
in the directors' fees and expenses, and the accumulated balance thereof is
included in "Liabilities" in the Fund's financial statements. The total amount
of deferred compensation (including interest) payable in respect of the Fund to
Mr. Whitson as of December 31, 1997 was $13,176. Messrs. Merow and Pitney no
longer defer current compensation; however, they have accrued deferred
compensation in the amounts of $71,167 and $66,171, respectively, as of December
31, 1997. The Fund has applied for and received exemptive relief that would
permit a director who has elected deferral of his or her fees to choose a rate
of return equal to either (i) the interest rate on short-term Treasury bills, or
(ii) the rate of return on the shares of any of the investment companies advised
by the Manager, as designated by the director. The Fund may, but is not
obligated to, purchase shares of such investment companies to hedge its
obligations in connection with this deferral arrangement.
Directors and officers of the Fund are also directors or trustees and officers
of some or all of the other investment companies in the Seligman Group.
Directors and officers of the Fund as a group owned directly or indirectly
8,700,881 shares or 4.47% of the Fund's Class A Capital Stock at March 31, 1998.
As of that date, no Directors or officers owned shares of the Fund's Class B or
Class D Capital Stock.
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 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 $945,343 in 1997, $846,790 in 1996
and $818,740 in 1995, which was equivalent to annual rates of .40%, .41% and
.43%, respectively, of the average daily net assets of the Fund in 1997, 1996
and 1995.
-7-
<PAGE>
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 Compliance Officer, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The Ethics
Code prohibits each of the officers, directors and employees (including all
portfolio managers) of the Manager from purchasing or selling any security that
the officer, director or employee knows or believes (i) was recommended by the
Manager for purchase or sale by any client, including the Fund, within the
preceding two weeks, (ii) has been reviewed by the Manager for possible purchase
or sale within the preceding two weeks, (iii) is being purchased or sold by any
client, (iv) is being considered by a research analyst, (v) is being acquired in
a private placement, unless prior approval has been obtained from the Manager's
Compliance Officer, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest they
may have in the securities or issuers that they recommend for purchase by any
client.
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may
not be purchased due to a possible conflict with clients. All officers,
directors and employees are also required to disclose all securities
beneficially owned by them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
The Fund has adopted an Administration, Shareholder Services and Distribution
Plan for each Class (the "Plan") in accordance with Section 12(b) of the 1940
Act and Rule 12b-1 thereunder.
-8-
<PAGE>
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"), an
affiliate of the Manager, 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, 1997.
For the year ended December 31, 1997, fees incurred by the Fund in respect of
Class B shares amounted to $77,586, or 1.00% per annum of the average daily net
assets of Class B shares. Of this amount, 0.725% per annum was paid directly to
FEP Capital, L.P. ("FEP") to compensate it for having funded, at the time of
sale (i) the 4% commission paid to selling brokers and (ii) a payment of 0.25%
of sales to SFSI; 0.025% per annum was paid to SFSI; and the remaining 0.25% per
annum was paid to SFSI which, in turn, made an equal payment to Service
Organizations for providing personal services and/or maintenance of shareholder
accounts. For the year ended December 31, 1997, fees incurred in respect of
Class D shares amounted to $254,038, 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.
SFSI is entitled to retain any CDSL imposed on redemptions of Class D shares
occurring within one year after purchase. For the years ended December 31,
1997, 1996 and 1995 such charges amounted to $37,556, $66,631 and $53,796,
respectively.
SFSI has assigned its rights to collect any CDSL imposed on
redemptions of Class B shares to FEP Capital, L.P. ("FEP"). SFSI has also
assigned its rights to substantially all of the distribution fees in respect of
Class B shares received by it pursuant to the Plan (other than the portion of
such fees used to make ongoing shareholder servicing payments to Service
Organizations as described in the Prospectus) to FEP, which provides funding to
SFSI to enable it to pay commissions to dealers at the time of the sale of the
related Class B shares. In connection with the assignment of its rights to
collect any CDSL and the distribution fees with respect to Class B shares, SFSI
receives payments from FEP based on the value of Class B shares sold. The
aggregate amount of such payments from FEP and the Class B distribution fees
retained by SFSI for the year ended December 31, 1997 and the period ended
December 31, 1996, were $18,765 and $4,806, respectively.
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 years ended December 31, 1997 and 1996 and for the period
ended December 31, 1995, SSI received distribution and service fees of $22,937,
$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 regular 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, Martin Luther King, Jr. 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, 801 Pennsylvania, Kansas City,
Missouri 64105 serves as custodian of the Fund. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for the Fund.
AUDITORS. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York,
New York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 1997
contains a schedule of the investments as of December 31, 1997, as well as
certain other financial information as of that date. The financial statements
and notes included in the Annual Report, and the Independent Auditor's Report
thereon, are incorporated herein by reference. The Annual Report will be
furnished without charge to investors who request copies of this Statement of
Additional Information.
-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
Association. 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.
-12-
<PAGE>
Description of Bond Ratings:
Bonds rated AAA have the highest rating S&P assigns to a debt obligation.
Such a rating indicates an extremely strong capacity to pay principal and
interest. Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in a small degree. Bonds rated in
the Aa group (Aa1, Aa2, Aa3) by Moody's are judged by Moody's to be of high
quality by all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than Aaa bonds
because margins of protection may not be as large or fluctuations of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risks appear somewhat larger.
-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 $3 billion in
assets, and one of its oldest.
...1930s
. Assumes management of Broad Street Investing Co. Inc., its first mutual fund,
today known as Seligman Common Stock Fund, Inc.
. Establishes Investment Advisory Service.
...1940s
. Helps shape the Investment Company Act of 1940.
. Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the investment
banking industry.
. Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
. Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
-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>
Portfolio of Investments
December 31, 1997
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------------ ----------- ---------
<S> <C> <C> <C>
US GOVERNMENT SECURITIES 72.4%
US Treasury Notes:
5 5/8%, due 1/31/1998 ................................... 5.55% $25,000,000 $25,001,317
5 1/8%, due 2/28/1998 ................................... 5.56 30,000,000 29,979,646
5 1/8%, due 3/31/1998 ................................... 5.39-5.42 30,000,000 29,980,457
5 1/8%, due 4/30/1998 ................................... 5.44-5.45 30,000,000 29,967,813
5 3/8%, due 5/31/1998 ................................... 5.56 30,000,000 29,977,033
5 1/8%, due 6/30/1998 ................................... 5.47 30,000,000 29,949,375
------------
TOTAL US GOVERNMENT SECURITIES
(Cost $174,855,641) ....................................... 174,855,641
------------
FIXED TIME DEPOSITS 18.4%
Bank of Montreal, Grand Cayman, 1/2/1998..................... 6.46 10,800,000 10,800,000
Bank of Nova Scotia, Grand Cayman, 1/2/1998.................. 6.08 9,000,000 9,000,000
Canadian Imperial Bank of Commerce,
Grand Cayman, 1/2/1998 .................................... 3.55 3,000,000 3,000,000
First National Bank of Chicago,
Grand Cayman, 1/2/1998 .................................... 6.72 10,800,000 10,800,000
Republic National Bank of New York,
Grand Cayman, 1/2/1998 .................................... 6.34 10,800,000 10,800,000
------------
TOTAL FIXED TIME DEPOSITS (Cost $44,400,000)................. 44,400,000
------------
TOTAL INVESTMENTS 90.8% (Cost $219,255,641)............................................................ 219,255,641
OTHER ASSETS LESS LIABILITIES 9.2%..................................................................... 22,316,508
------------
NET ASSETS 100.0% ..................................................................................... $241,572,149
============
</TABLE>
- -----------------------
See Notes to Financial Statements.
4
<PAGE>
Statement of Assets and Liabilities
December 31, 1997
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
US Government securities (cost $174,855,641) ......................... $174,855,641
Fixed time deposits (cost $44,400,000)................................ 44,400,000 $219,255,641
------------
Cash ................................................................................. 330,595
Receivable for Capital Stock sold .................................................... 22,239,773
Interest receivable .................................................................. 1,920,619
Investment in, and expenses prepaid to, shareholder service agent .................... 52,459
Other ................................................................................ 103,684
------------
Total Assets ......................................................................... 243,902,771
------------
LIABILITIES:
Payable for Capital Stock redeemed ................................................... 1,823,925
Accrued expenses, taxes, and other ................................................... 506,697
------------
Total Liabilities .................................................................... 2,330,622
------------
Net Assets ........................................................................... $241,572,149
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.01 par value; 1,400,000,000 shares authorized;
241,576,776 shares outstanding):
Class A ............................................................................ $ 2,066,086
Class B ............................................................................ 108,584
Class D ............................................................................ 241,098
Additional paid-in capital ........................................................... 239,161,008
Accumulated net realized loss ........................................................ (4,627)
-----------
NET ASSETS:
Applicable to 206,608,635 Class A shares, 10,858,376 Class B shares, and 24,109,765
Class D shares, equivalent to $1.00 per share ........................................ $241,572,149
============
</TABLE>
- ----------------------
See Notes to Financial Statements.
5
<PAGE>
Statement of Operations
For the Year Ended December 31, 1997
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ........................................................ $12,896,897
EXPENSES:
Management fee ........................ $945,343
Shareholder account services .......... 511,760
Distribution and service fees ......... 331,624
Registration .......................... 164,237
Shareholder reports and communications. 68,060
Custody and related services .......... 64,200
Auditing and legal fees ............... 45,339
Directors' fees and expenses .......... 21,428
Miscellaneous ......................... 13,426
--------
Total Expenses ................................... 2,165,417
-----------
Increase in Net Assets from Operations-- Net Investment Income... $10,731,480
===========
</TABLE>
- ------------------
See Notes to Financial Statements.
6
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1997 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Increase in Net Assets from Operations -- Net Investment Income ... $ 10,731,480 $ 9,382,018
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ........................................................ (9,504,798) (8,838,245)
Class B ........................................................ (287,754) (29,542)
Class D ........................................................ (938,928) (514,231)
------------- -------------
Decrease in Net Assets from Distributions ......................... (10,731,480) (9,382,018)
------------- -------------
CAPITAL SHARE TRANSACTIONS:*
Proceeds from sale of shares:
Class A ........................................................ 369,012,050 302,318,619
Class B ........................................................ 6,725,313 2,516,484
Class D ........................................................ 26,841,455 8,286,958
Investment of dividends:
Class A ........................................................ 8,286,168 7,769,306
Class B ........................................................ 234,246 23,729
Class D ........................................................ 641,267 395,206
Exchanged from associated Funds:
Class A ........................................................ 1,337,682,789 1,123,234,216
Class B ........................................................ 49,941,825 5,538,322
Class D ........................................................ 533,443,570 144,499,447
------------- -------------
Total ............................................................. 2,332,808,683 1,594,582,287
------------- -------------
Cost of shares redeemed:
Class A ........................................................ (390,596,218) (315,244,457)
Class B ........................................................ (2,106,850) (57,036)
Class D ........................................................ (18,366,686) (16,603,403)
Exchanged into associated Funds:
Class A ........................................................ (1,326,730,395) (1,086,522,720)
Class B ........................................................ (46,429,595) (5,528,062)
Class D ........................................................ (540,758,955) (128,823,731)
-------------- --------------
Total.............................................................. (2,324,988,699) (1,552,779,409)
-------------- --------------
Increase in Net Assets from
Capital Share Transactions ........................................ 7,819,984 41,802,878
-------------- --------------
Increase in Net Assets ............................................ 7,819,984 41,802,878
NET ASSETS:
Beginning of year ................................................. 233,752,165 191,949,287
-------------- --------------
End of Year ....................................................... $ 241,572,149 $233,752,165
============== ==============
</TABLE>
- -----------------------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
7
<PAGE>
Notes to Financial Statements
*
1. Multiple Classes of Shares --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, the commencement of Class D shares, 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 0.75%, 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 of purchase,
declining to 1% in the sixth year and 0% thereafter. Class B shares will auto-
matically 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, if applicable, of 1% imposed on redemptions made within one
year of purchase. The three classes of shares represent interests in the same
portfolio of investments, have the same rights, and are generally identical in
all respects except that each class bears its separate distribution and certain
other class expenses, and has exclusive voting rights with respect to any matter
on which a separate vote of any class is required.
2. Significant Accounting Policies -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. Security Valuation -- 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. Federal Taxes -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. Security Transactions and Related Investment Income -- Investment
transactions are recorded on trade dates. Identified cost of investments
sold is used for both financial statement and federal income tax purposes.
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.
Dividends are declared daily and paid monthly.
d. Repurchase Agreements -- 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. Multiple Class Allocations -- 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
attributable to a particular class, are charged directly to such class. For
the year ended December 31, 1997, distribution and service fees were the
only class-specific expenses.
3. Management Fee, Administrative Services, and Other Transactions-- The Manager
manages the affairs of the Fund and provides the necessary personnel and
facilities. Compensation of all officers of the Fund, all
8
<PAGE>
Notes to Financial Statements
directors of the Fund who are employees or consultants of the Manager, and all
personnel of the Fund and the Manager is paid by the Manager. The Manager
receives a fee, calculated daily and paid monthly, equal to a per annum
percentage of the Fund's average daily net assets.
The management fee rate is calculated on a sliding scale of 0.45% to 0.375%
based on average daily net assets of all the investment companies managed by the
Manager. The management fee for the year ended December 31, 1997, was equivalent
to an annual rate of 0.40% of the Fund's average daily net assets.
The Fund has an Administration, Shareholder Services and Distribution
Plan (the "Plan") with respect to distribution of its shares. Under the Plan,
with respect to Class A shares, service organizations can enter into agreements
with 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, at tributable 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, 1997.
Under the Plan, with respect to Class B and Class D shares, service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class B and Class D shares for which the organizations are
responsible; and, for Class D shares only, fees for providing other distribution
assistance of up to 0.75% on an annual basis of such average daily net assets.
Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of 0.75% on an annual
basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially
all of this fee to a third party (the "Purchaser"), which provides
funding to the Distributor to enable it to pay commissions to dealers at the
time of the sale of the related Class B shares.
For the year ended December 31, 1997, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $77,586 and $254,038, respectively.
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase. For the year ended
December 31, 1997, such charges amounted to $37,556.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amount of such payments
and the Class B shares distribution fees retained by the Distributor, for the
year ended December 31, 1997, amounted to $18,765.
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, 1997, Seligman Services, Inc. received distribution and service fees of
$22,937, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $511,760 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.
9
<PAGE>
Notes to Financial Statements
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses and the accumulated balance thereof at December 31, 1997,
of $150,514 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. Loss Carryforward -- At December 31, 1997, the Fund had a net loss
carryforward for federal income tax purposes of $4,627, which is available for
offset against future taxable net gains, expiring in 1999.
10
<PAGE>
Financial Highlights
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial
statements, to their equivalent per share amounts.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value on the last day of the
period. The total return computations do not reflect any sales charges investors
may incur in purchasing or selling shares of the Fund. Total returns for periods
of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
-------- --------- -------- -------- --------
<S> <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
-------- --------- -------- -------- --------
Net investment income .............................. .047 .046 .051 .034 .024
Dividends paid or declared ......................... (.047) (.046) (.051) (.034) (.024)
-------- --------- -------- -------- --------
Net Asset Value, End of Year ....................... $1.000 $1.000 $1.000 $1.000 $1.000
======== ========= ======== ======== ========
TOTAL RETURN BASED ON NET
ASSET VALUE: 4.80% 4.71% 5.18% 3.46% 2.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ..................... .78% .79% .86% .82% .77%
Net investment income to average net assets ........ 4.70% 4.61% 5.06% 3.41% 2.37%
Net Assets, End of Year (000s omitted) ............ $206,604 $208,950 $177,395 $194,406 $173,902
Without management fee waiver or
reimbursement of expenses:**
Net investment income per share .................. $.023
Ratios:
Expenses to average net assets ................... .86%
Net investment income to average
net assets ....................................... 2.28%
</TABLE>
- ------------------
See footnotes on page 12.
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
CLASS B CLASS D
-------------------- ---------------------------------------------
YEAR 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO -------------------------------- TO
12/31/97 12/31/96 1997 1996 1995 1994 12/31/93
------- -------- ------- ---- ---- ---- --------
<S> <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
------ ------ ------ ------ ------ ------ ------
Net investment income ........................... .037 .025 .037 .036 .040 .024 .003
Dividends paid or declared ...................... (.037) (.025) (.037) (.036) (.040) (.024) (.003)
------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Year .................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET
ASSET VALUE: 3.77% 2.44% 3.77% 3.67% 4.08% 2.35% .30%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .................. 1.78% 1.78%+ 1.78% 1.79% 1.90% 1.90% 1.74%+
Net investment income to average net assets ..... 3.70% 3.58%+ 3.70% 3.61% 4.02% 2.32% 1.39%+
Net Assets, End of Year (000s omitted) .......... $10,858 $2,493 $24,110 $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.
** The Manager, at its discretion, waived a portion of its management fees for
the Fund for the year 1993, and reimbursed certain expenses for Class D
shares in 1994.
+ Annualized.
See Notes to Financial Statements.
12
<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, 1997, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the Fund's custodian. 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, 1997, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
January 30, 1998
13
<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
- ------- ---------------------------------
(a) Financial Statements and Schedules:
Part A Financial Highlights for Class A shares for the ten years ended
December 31, 1997; Financial Highlights for Class B shares for the
period from April 22, 1996 (commencement of offering) to December
31, 1997; Financial Highlights for Class D shares for the period
from May 3, 1993 (commencement of offering) to December 31, 1997.
Part B Required Financial Statements, which are included in the Fund's
Annual Report to Shareholders dated December 31, 1997, are
incorporated by reference in the Fund's Statement of Additional
Information. These include: Portfolio of Investments as of
December 31, 1997; Statement of Assets and Liabilities as of
December 31, 1997; Statement of Operations for the year ended
December 31, 1997; Statements of Changes in Net Assets for the years
ended December 31, 1997 and 1996; Notes to Financial Statements;
Financial Highlights for the five years ended December 31, 1997 for
the Fund's Class A shares; for the period April 22, 1996
(commencement of offering) through December 31, 1997 for the Fund's
Class B shares; and for the period May 3, 1993 (commencement of
offering) through December 31, 1997 for the Fund's Class D shares;
Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except Exhibits
marked with an asterisk (*) which are incorporated herein.
(1) Form of Amendment and Restatement of Articles of Incorporation of
Registrant. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 30, filed April 29, 1997.)
(2) Amended and Restated By-laws of the Registrant. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 30, filed April 29,
1997.)
(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. (Incorporated by reference to Registrant's Post-
Effective Amendment No. 30, filed April 29, 1997.)
(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 Cash Management Fund.*
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 30, filed April 29, 1997.)
(9) Not applicable.
(10) Opinion and Consent of Counsel. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 30, filed April 29, 1997.)
(11) Report and Consent of Independent Auditors.*
C-1
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
Item 24. FINANCIAL STATEMENTS AND EXHIBITS (continued)
- ------- ---------------------------------
(12) Not applicable.
(13) Purchase Agreement for Initial Capital between Registrant's Class B shares
and J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to 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. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 30, filed April 29,
1997.)
(14) The Seligman Roth/Traditional IRA Information Kit. (Incorporated by
reference to Exhibit q(1) of Registration Statement No. 333-50295, Form
N-2, filed on April 16, 1998.)
(14a) The Seligman Simple IRA Plan Set-Up Kit. (Incorporated by reference to
Exhibit 14 of Registration Statement No. 333-20621, Pre-Effective
Amendment No. 2, filed on April 17, 1997.)
(14b) The Seligman Simple IRA Plan Agreement. (Incorporated by reference to
Exhibit 14 of Registration Statement No. 333-20621, Pre-Effective
Amendment No. 2, filed on April 17, 1997.)
(14c) Qualified Plan and Trust Basic Plan Document. (Incorporated by
reference to Exhibit q(4) to Registration No. 333-50295, Form N-2, filed
on April 16, 1998.)
(14d) Flexible Standardized 401(k) Profit Sharing Plan Adoption Agreement.
(Incorporated by reference to Exhibit q(4) to Registration No. 333-50295,
Form N-2, filed on April 16, 1998.)
(14e) Flexible Nonstandardized Safe Harbor 401(k) Profit Sharing Plan
Adoption Agreement. (Incorporated by reference to Exhibit q(4) to
Registration No. 333-50295, Form N-2, filed on April 16, 1998.)
(14f) Simplified Employee Pension Plan. (Incorporated by reference to Exhibit
14(f) to Registration No. 2-10835, Post-Effective Amendment No. 76, filed
on April 29, 1998.)
(14g) Educational IRA. (Incorporated by reference to Exhibit 14(f) to
Registration No. 2-10835, Post-Effective Amendment No. 76, filed on April
29, 1998.)
(15) Form of Administration, Shareholder Services and Distribution Plan of
Registrant. (Incorporated by Reference to 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. (Incorporated 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. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 30, filed April 29, 1997.)
(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.)
Other Exhibits: Powers of Attorney
Item 25. Persons Controlled by or Under Common Control with Registrant -
- -------- -------------------------------------------------------------
Seligman Data Corp. ("SDC"), a New York corporation, is owned by the
Registrant and certain associated investment companies. The
Registrant's investment in SDC is recorded at a cost of $3,719.
Item 26. Number of Holders of Securities
- ------- -------------------------------
<TABLE>
<CAPTION>
(1) (2)
Numbers of Record
Title of Class Holders as of March 31, 1998
-------------- ----------------------------
<S> <C>
Class A Common Stock 9,882
Class B Common Stock 527
Class D Common Stock 1,142
</TABLE>
C-2
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
Item 27. Indemnification
- ------- ---------------
Reference is made to the provisions of Articles Twelfth and Thirteenth
of Registrant's Amended and Restated Articles of Incorporation filed as
Exhibit 24(b)(1) and Article IV of Registrant's Amended and Restated
By-laws filed as Exhibit 24(b)(2) to Registrant's Post-Effective
Amendment No. 30 to the Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised by the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser - 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, together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by the Manager pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-15798), which was
filed on March 31, 1998.
Item 29. Principal Underwriters
- ------- ----------------------
(a) The names of each investment company (other than the Registrant) for
which each principal underwriter is currently distributing securities
of the Registrant and also acts as a principal underwriter, depositor
or investment adviser are as follows:
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.
C-3
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 21:
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1998
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- -------------------------------------- ------------------------------------ -------------------------------------------------
<S> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board and Chief Executive Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director None
FRED E. BROWN* Director Director Emeritus
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
DAVID F. STEIN* Director None
STEPHEN J. HODGDON* President None
CHARLES W. KADLEC* Chief Investment Strategist None
LAWRENCE P. VOGEL* Senior Vice President, Finance Vice President
ED LYNCH* Senior Vice President, Director None
of Marketing
MARK R. GORDON* Senior Vice President, National None
Sales Manager
GERALD I. CETRULO, III Senior Vice President of Sales, None
140 West Parkway Regional Sales Manager
Pompton Plains, NJ 07444
JONATHAN G. EVANS Senior Vice President of Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
BRADLEY W. LARSON Senior Vice President of Sales, None
367 Bryan Drive Regional Sales Manager
Alamo, CA 94526
BRUCE TUCKEY Senior Vice President of Sales None
41644 Chathman Drive
Novi, MI 48375
ANDREW VEASEY Senior Vice President of Sales None
14 Woodside Drive
Rumson, NJ 07760
MICHELLE L. MCCANN Vice President, Manager, Retirement None
Plans Marketing
SCOTT H. NOVAK Vice President, Insurance Products None
Manager
MICHAEL R. SANDERS Vice President, Product Manager None
Managed Money Services
CHARLES L. VON BREITENBACH, II* Vice President, Product Manager None
Managed Money Services
ROBERT T. HAUSLER* Vice President, Global Mutual Funds, None
Product Management
MARSHA E. JACOBY* Vice President, Offshore Funds None
WILLIAM W. JOHNSON* Vice President, Order Desk None
TRACY A. SALOMON* Vice President, Retirement None
Marketing Manager
HELEN SIMON* Vice President, Sales None
Administration Manager
J. BRERETON YOUNG* Vice President, Mutual Funds None
Product Manager
</TABLE>
C-4
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 21:
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1998
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ----------------------------------- ----------------------------------- ---------------------
<S> <C> <C>
PETER J. CAMPAGNA Vice President, Regional Retirement None
1130 Green Meadow Court Plans Manager
Acworth, GA 30102
MASON S. FLINN Vice President, Regional Retirement None
159 Varennes Plans Manager
San Francisco, CA 94133
CHARLES E. WENZEL Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
JAMES R. BESHER Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
RICHARD B. CALLAGHAN Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
BRADFORD C. DAVIS Regional Vice President None
241 110th Avenue SE
Bellevue, WA 98004
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
KENNETH DOUGHERTY Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
ANDREW DRALUCK Regional Vice President None
4032 E. Williams Drive
Phoenix, AZ 85024
EDWARD S. FINOCCHIARO Regional Vice President None
120 Screenhouse Lane
Duxbury, MA 02332
MICHAEL C. FORGEA Regional Vice President None
32 W. Anapamu Street #186
Santa Barbara, CA 93101
David Gardner Regional Vice President None
2403 Cayenne Drive
McKinney, TX 75070
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine Drive
Houston, TX 77077
T. WAYNE KNOWLES Regional Vice President None
104 Morninghills Court
Cary, NC 27511
JUDITH L. LYON Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
DAVID MEYNCKE Regional Vice President None
4957 Cross Pointe Drive
Oldsmar, FL 34677
</TABLE>
C-5
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 21:
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1998
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ---------------------------------- ------------------------------------ ---------------------
<S> <C> <C>
TIM O'CONNELL Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
THOMAS PARNELL Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
JULIANA PERKINS Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
DAVE PETZKE Regional Vice President None
4016 Saint Lucia Street
Boulder, CO 80301
NICHOLAS ROBERTS Regional Vice President None
200 Broad Street, Apt. 2225
Stamford, CT 06901
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
STEVE WILSON Regional Vice President None
83 Kaydeross Park
Saratoga Springs, NY 12866
KELLI A. WIRTH-DUMSER Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
JEFFREY S. DEAN* Assistant Vice President, Marketing None
SANDRA FLORIS* Assistant Vice President, Order Desk None
KEITH LANDRY* Assistant Vice President, Order Desk None
GAIL S. CUSHING* Assistant Vice President, None
National Accounts Manager
JOSEPH M. MCGILL* Assistant Vice President and None
Compliance Officer
JACK TALVY* Assistant Vice President, Internal None
Marketing Services Manager
JOYCE PERESS* Assistant Secretary None
</TABLE>
* The principal business address of each of these directors and/or officers
is 100 Park Avenue, NY, NY 10017.
(c) Not applicable.
C-6
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
Item 30. Location of Accounts and Records
- ------- --------------------------------
(1) Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105 AND
(2) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Item 31. Management Services -Seligman Data Corp. ("SDC") the Registrant's
- ------- -------------------
shareholder service agent, has an agreement with First Data 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, 1997, 1996 and 1995, the approximate cost of
these services were:
<TABLE>
<CAPTION>
1997 1996 1995
---------- ------- --------
<S> <C> <C> <C>
Class A shares $68,507.28 $72,000 $59,600
Class B shares 4,498.32 400 --
Class D shares 12,661.44 10,600 --
</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.
C-7
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of the Post-Effective Amendment pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment No. 31 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 30th day of April, 1998.
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. 31 has been
signed below by the following persons in the capacities indicated on April 30,
1998.
Signature Title
--------- -----
/s/ William C. Morris Chairman of the Board (Principal
- ---------------------- executive officer) and Director
William C. Morris*
/s/ Brian T. Zino Director and President
- ------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- -------------------
Thomas G. Rose
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
Robert L. Shafer, Director )
James N. Whitson, Director )
C-8
<PAGE>
SELIGMAN CASH MANAGEMENT FUND, INC.
Post-Effective Amendment No. 31 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ----------------- -----------
24(b)(7)(a) Deferred Compensation Plan for Directors
24(b)(11) Consent of Independent Auditors
(14f) Simplified Employee Pension Plan. (Incorporated by
reference to Exhibit 14(f) to Registration No. 2-
10835, Post-Effective Amendment No. 76, filed on
April , 1998.)
(14g) Educational IRA. (Incorporated by reference to
Exhibit 14(f) to Registration No. 2-10835, Post-
Effective Amendment No. 76, filed on April , 1998.)
24(b)(17) Financial Data Schedules
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELIGMAN CASH MANAGEMENT FUND CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 219256
<INVESTMENTS-AT-VALUE> 219256
<RECEIVABLES> 24208
<ASSETS-OTHER> 439
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 243903
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2331
<TOTAL-LIABILITIES> 2331
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 241577
<SHARES-COMMON-STOCK> 206609<F1>
<SHARES-COMMON-PRIOR> 208954<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 206604<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11080<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (1575)<F1>
<NET-INVESTMENT-INCOME> 9505<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9505<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9505)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1706695<F1>
<NUMBER-OF-SHARES-REDEEMED> (1717326)<F1>
<SHARES-REINVESTED> 8286<F1>
<NET-CHANGE-IN-ASSETS> (2346)<F1>
<ACCUMULATED-NII-PRIOR> (5)<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 813<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 1575<F1>
<AVERAGE-NET-ASSETS> 201805<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .047<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.047)<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .78<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> 002
<NAME> SELIGMAN CASH MANAGEMENT FUND CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 219256
<INVESTMENTS-AT-VALUE> 219256
<RECEIVABLES> 24208
<ASSETS-OTHER> 439
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 243903
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2331
<TOTAL-LIABILITIES> 2331
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 241577
<SHARES-COMMON-STOCK> 10858<F1>
<SHARES-COMMON-PRIOR> 2493<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 10858<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 426<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (138)<F1>
<NET-INVESTMENT-INCOME> 288<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 288<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (288)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 56667<F1>
<NUMBER-OF-SHARES-REDEEMED> (48536)<F1>
<SHARES-REINVESTED> 234<F1>
<NET-CHANGE-IN-ASSETS> 8365<F1>
<ACCUMULATED-NII-PRIOR> (5)<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 31<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 138<F1>
<AVERAGE-NET-ASSETS> 7744<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .037<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.037)<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> 003
<NAME> SELIGMAN CASH MANAGEMENT FUND CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 219256
<INVESTMENTS-AT-VALUE> 219256
<RECEIVABLES> 24208
<ASSETS-OTHER> 439
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 243903
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2331
<TOTAL-LIABILITIES> 2331
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 241577
<SHARES-COMMON-STOCK> 24110<F1>
<SHARES-COMMON-PRIOR> 22309<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 24110<F1>
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1391<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> (452)<F1>
<NET-INVESTMENT-INCOME> 939<F1>
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 939<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (939)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 560285<F1>
<NUMBER-OF-SHARES-REDEEMED> (559125)<F1>
<SHARES-REINVESTED> 641<F1>
<NET-CHANGE-IN-ASSETS> 1801<F1>
<ACCUMULATED-NII-PRIOR> (5)<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 101<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 452<F1>
<AVERAGE-NET-ASSETS> 25208<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .037<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> (.037)<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 D only. All other data are fund level.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99.7A
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
SELIGMAN CASH MANAGEMENT FUND, INC.
("FUND")
1. Election to Defer Payments. Any member of the Board of Directors (herein, a
--------------------------
"Director") of the Fund may elect to have payment of that Director's annual
retainer or meeting fees or both for Board service deferred as provided in this
Plan. The election shall be made in writing prior to, and to take effect from,
the beginning of a calendar year. For any Director in the year in which this
Plan is adopted or for a person elected a director in other than the last
calendar month of a year, the election shall be made within 30 days after that
event and prior to, and to take effect from, the beginning of the calendar
quarter next ensuing after that event. Elections shall continue in effect until
terminated in writing, any such termination to take effect on the first day of
the calendar year beginning after receipt of the notice of termination. An
election shall be irrevocable as to payments deferred in conformity with that
election.
2. Deferred Payment Account. Each deferred retainer or fee shall be credited
------------------------
at the time when it otherwise would have been payable to an account to be
established in the name of the Director on the books of the Fund (the "Deferred
Payment Account") adjusted for notional investment experience as hereinafter
described.
3. Return on Deferred Payment Account Balance. (a) For purposes of measuring
------------------------------------------
the investment return on his Deferred Payment Account, the Director may elect to
have the aggregate amount of his deferred compensation (or a specified portion
thereof) receive a return (i) at a rate equal to the return earned on three-
month U.S. Treasury Bills at the beginning of each calendar quarter (the
"Treasury Bill Rate") and such interest shall be credited to the account
quarterly at the end of each calendar quarter, or (ii) at a rate of return
(positive or negative) equal to the rate of return on the shares of any of the
registered investment companies managed by J. & W. Seligman & Co. Incorporated
("Seligman") or any other entity controlling, controlled by, or under common
control with (as such terms are defined in the Investment Company Act of 1940)
Seligman (each, a "Notional Fund"), assuming reinvestment of dividends and
distributions from the Notional Funds. (b) A Director may amend his designation
of investment return as of the end of each calendar quarter by giving written
notice to the President of the Fund at least 30 days prior to the end of such
calendar quarter. A timely change to a Director's designation of investment
return shall become effective on the first day of the calendar quarter following
receipt by the President of the Fund (the "President").
4. Notional Investment Experience. Amounts credited to a Deferred Payment
------------------------------
Account shall be periodically adjusted for notional investment experience. In
each case such notional investment experience shall be determined by treating
the Deferred Payment Account as though an equivalent dollar amount had been
invested and reinvested in one or more of the Notional Funds. The Notional
Funds used as a basis for determining notional investment experience with
respect to any Director's Deferred Payment Account shall be designated by the
Director in writing by instrument of election substantially in the form attached
hereto as Exhibit C and may be changed prospectively by similar written election
effective as of the first day of any calendar quarter. The President may from
time to time limit the Notional Funds available for purposes of such election.
If at any time any Notional Fund that has previously been
1
<PAGE>
designated by a Director as a notional investment shall cease to exist or shall
be unavailable for any reason, or if the Director fails to designate one or more
Notional Funds pursuant to this Section 4, the President may, at his discretion
and upon notice to the Director, treat any amounts notionally invested in such
Notional Fund (whether representing past amounts credited to a Director's
Deferred Payment Account or subsequent fee deferrals or both) as having been
invested at the Treasury Bill Rate, only until such time as the Director shall
have made another investment election in accordance with the foregoing
procedures. Deferred Payment Accounts shall continue to be adjusted for notional
investment experience until distributed in full in accordance with the
distribution method elected by the Director pursuant to Section 5 hereof.
5. Payment of Deferred Amounts. All amounts credited to an account pursuant to
---------------------------
any election by the Director made as provided in Section 1 hereof shall be paid
to the Director
(a) in, or beginning in, the calendar year following the calendar year in
which the Director ceases to be a Director of the Fund, or
(b) in, or beginning in, the calendar year following the earlier of the
calendar year in which the Director ceases to be a Director of the
Fund or attains age 70,
and shall be paid
(c) in a lump sum payable on the first day of the calendar year in which
payment is to be made, or
(d) in 10 or fewer installments, payable on the first day of each year
commencing with the calendar year in which payment is to begin, all as
the Director shall specify in making the election. If the payment is
to be made in installments, the amount of each installment shall be
equal to a fraction of the total of the amounts in the account at the
date of the payment the numerator of which shall be one and the
denominator of which shall be the then remaining number of unpaid
installments (including the installment then to be paid). If the
Director dies at any time before all amounts in the account have been
paid, such amounts shall be paid at that time in a lump sum to the
beneficiary or beneficiaries designated by the Director in writing to
receive such payments or in the absence of such a designation to the
estate of the Director.
2
<PAGE>
The Board of Directors may, in the case of an unforseeable emergency, at its
sole discretion accelerate the payment of any unpaid amount for any or all
Directors. For purposes of this paragraph, an unforseeable emergency is severe
financial hardship to the Director resulting from a sudden and unexpected
illness or accident of the Director or of a dependent (as defined in section
152(a) of the Internal Revenue Code) of the Director, loss of the Director's
property due to casualty, or other similar extraordinary and unforseeable
circumstances arising as a result of events beyond the control of the Director.
Payment due to an unforseeable emergency may not be made to the extent that such
hardship is or may be relieved (i) through reimbursement or compensation by
insurance or otherwise; (ii) by liquidation of the Director's assets, to the
extent the liquidation of such assets would not itself cause severe financial
hardship, or (iii) by cessation of deferrals under the Plan. Examples of what
are not considered to be unforseeable emergencies include the need to send a
Director's child to college or the desire to purchase a home. Withdrawals of
amounts because of an unforseeable emergency are only permitted to the extent
reasonably necessary to satisfy the emergency need.
6. Assignment. No deferred amount or unpaid portion thereof may be assigned or
----------
transferred by the Director except by will or the laws of descent and
distribution.
7. Withholding Taxes. The Fund shall deduct from all payments any federal,
-----------------
state or local taxes and other charges required by law to be withheld with
respect to such payments.
8. Nature of Rights; Nonalienation. A Director's rights to deferred payment
-------------------------------
under the Plan shall be solely those of an unsecured general creditor of the
Fund, and any payments by the Fund pursuant to the Plan will be made solely from
the Fund's general assets and property. The Fund will be under no obligation to
purchase, hold or dispose of any investment for the specific benefit of any
Director but, if the Fund should choose to purchase shares of any Notional Fund
in order to cover all or a portion of its obligations under the Plan, then such
investments will continue to be a part of the general assets and property of the
Fund. A Director's rights under the Plan may not be transferred, assigned,
pledged or otherwise alienated, and any attempt by the Director to do so shall
be null and void.
9. Status of Director. Nothing in the Plan nor any election hereunder shall be
------------------
construed as conferring on any Director the right to remain a Director of the
Fund or to receive fees at any particular rate.
10. Amendment and Acceleration. The Board of Directors may at any time at its
--------------------------
sole discretion amend or terminate this Plan, provided that no such amendment or
termination shall adversely affect the right of Directors to receive deferred
amounts credited to their account.
11. Administration. The Plan shall be administered by the President or by such
--------------
person or persons as the President may designate to carry out administrative
functions hereunder. The President shall have complete discretion to interpret
and administer the Plan in accordance with its terms, and his determinations
shall be binding on all persons.
Amended as of March 19, 1998
EXHIBIT A
SELIGMAN INVESTMENT COMPANIES
3
<PAGE>
DEFERRED COMPENSATION PLAN
ELECTION FORM
Pursuant to the Deferred Compensation Plan for Directors, as amended as of
March 19, 1998, (the "Plan") adopted by each of the Seligman Investment
Companies (the "Funds"), I hereby elect to have ___% of my annual retainer fees
and ___% of my meeting fees for service to the Funds deferred as provided in the
Plan. This election will take effect at such time as is provided in section 1
of the Plans, and shall continue in effect until terminated in writing, any such
termination to take effect of the first day of the next calendar year beginning
after receipt of the notice of termination.
The Deferred Compensation Plan Return Designation Form attached hereto
indicates the percentage of each of the above amounts that should earn the
designated returns. Such designations shall remain in effect until changed by
submission of a new form as provided in the Plan.
All amounts deferred with respect to any Fund and the earnings thereon made
pursuant to any election by me shall be credited to an account for my benefit
and shall be paid to me:
Check (a) or (b)
(a) in, or beginning in, the calendar year following the
- ------------ calendar year in which I cease to be a director of the
Fund, or
(b) in, or beginning in, the calendar year following the
- ------------ earlier of the calendar year in which I cease to be a
Director of the Fund or attain age 70,
and shall be paid
Check (c) or (d)
(c) in a lump sum payable on the first day of the calendar
- ------------ year in which payment is to be made, or
(d) in 10 or fewer installments, payable on the first day
- ------------ of each year commencing with the calendar year in which
payment is to begin.
If (d) is selected, enter number of annual installments _________.
If the payment is to be made in installments, the amount of each
installment shall be equal to a fraction of the total of the amounts in the
account at the date of the payment the numerator of which shall be one and the
denominator of which shall be the then remaining number of unpaid installments
(including the installment then to be paid). If I die at any time before all
amounts in the account have been paid, such amounts shall be paid at that time
in a lump sum to the beneficiary or beneficiaries designated by me on the
attached Beneficiary Designation Form or in the absence of such a designation to
my estate.
- ----------------------------- ---------------------------------
Date Signature
4
<PAGE>
EXHIBIT B
DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION FORM
I hereby designate the following beneficiary or beneficiaries to receive at my
death the amounts held in my Deferred Payment Accounts from my participation in
the Deferred Compensation Plans for Directors/Trustees of all registered
investment companies advised by J. & W. Seligman & Co. Incorporated for which I
serve as a director or trustee (the "Plans").
A. PRIMARY BENEFICIARY(IES)
1. Name: % Share:
--------------------------------------------------- ----------
Address:
--------------------------------------------------------------------
Relationship: DOB: Social Security #:
------------------ ------------ -----------
Trustee Name and Date (if beneficiary is a trust):
--------------------------
Trustee of Trust:
----------------------------------------------------------
2. Name: % Share:
---------------------------------- -----------------------------
Address:
--------------------------------------------------------------------
Relationship: DOB: Social Security #:
---------------------- ----------- --------
Trustee Name and Date (if beneficiary is a trust):
--------------------------
Trustee of Trust:
-----------------------------------------------------------
B. Contingent Beneficiary(ies)
1. Name: % Share:
------------------------------- --------------------------------
Address:
--------------------------------------------------------------------
Relationship: DOB: Social Security #:
---------------------- ------------ -------
Trustee Name and Date (if beneficiary is a trust):
--------------------------
Trustee of Trust:
-----------------------------------------------------------
2. Name: % Share:
------------------------------------- --------------------------
Address:
--------------------------------------------------------------------
Relationship: DOB: Social Security #:
-------------------- ------------- -------
Trustee Name and Date (if beneficiary is a trust):
-------------------------
Trustee of Trust:
----------------------------------------------------------
5
<PAGE>
I understand that I may revoke or amend the above designation at any time. I
understand that payment will be made to my Contingent Beneficiary(ies) only if
there is no surviving Primary Beneficiary(ies). I further understand that if I
am not survived by any Primary or Contingent Beneficiaries, payment will be made
to my estate as set forth under the Plans.
- --------------------------------- ----------------------------------
Date Signature
----------------------------------
Participant's Name Printed
6
<PAGE>
EXHIBIT C
SELIGMAN INVESTMENT COMPANIES
DEFERRED COMPENSATION PLANS
RETURN DESIGNATION FORM
I elect to have my deferred compensation for all registered investment companies
advised by J. & W. Seligman & Co. Incorporated for which I serve as a Director
or Trustee deemed to be invested as specified below:
<TABLE>
<CAPTION>
% Allocation
% Allocation for accumulated
for future fees balances
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
At the prevailing three-month U.S. Treasury Bill Rate
Seligman Capital Fund, Inc.
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Growth Opportunities Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Smaller Companies Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson Global Technology Fund
Seligman Henderson Global Fund Series, Inc. -
Seligman Henderson International Fund
Seligman High Income Fund Series -
Seligman High-Yield Bond Series
Seligman High Income Fund Series -
Seligman U.S. Government Securities Series
Seligman Income Fund, Inc.
Seligman Value Fund Series, Inc. -
Seligman Large-Cap Value Fund
Seligman Value Fund Series, Inc. -
Seligman Small-Cap Value Fund
Tri-Continental Corporation
- ----------------------------------------------------------------------------------------------------------
Total 100% 100%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
I acknowledge that I may amend this Return Designation in the manner, and
at such time as permitted, under the Plans. Furthermore, I acknowledge that in
certain circumstances, and pursuant to Section 4 of the Plans, the President may
at his discretion, and upon notice to me, disregard the designations made above
and cause all or a portion of my Deferred Account to receive a return equal to
the prevailing three-month U.S. Treasury Bill Rate.
7
<PAGE>
- ---------------------- --------------------------------------------
Date Signature
8
<PAGE>
EXHIBIT 99.11
CONSENT OF INDEPENDENT AUDITORS
Seligman Cash Management Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 31 to Registration
Statement No. 2-56805 of our report dated January 30, 1998, appearing in the
Annual Report to Shareholders for the year ended December 31, 1997, which is
incorporated by reference in the Statement of Additional Information, which is
included in such Registration Statement, and to the references to us under the
captions "Financial Highlights" in the Prospectus and "General Information" in
the Statement of Additional Information, which are also included in such
Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 24, 1998
