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. 32 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 24 |X|
SELIGMAN CASH MANAGEMENT FUND, INC.
(Exact name of registrant as specified in charter)
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or
Toll Free: 800-221-2450
THOMAS G. ROSE, Treasurer
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b)
|_| on (date) pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|X| on May 1, 1999 pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
SELIGMAN
- -----------------
Cash Management
Fund, Inc.
The Securities and Exchange Commission has neither approved nor disapproved this
Fund, and it has not determined the prospectus to be accurate or adequate.
Any representation to the contrary is a criminal offense.
An investment in this Fund or any other fund cannot provide a complete
investment program. The suitability of an investment in the Fund should be
considered based on the investment objective, strategies and risks described
herein, considered in light of all of the other investments in your portfolio,
as well as your risk tolerance, financial goals and time horizons. We recommend
that you consult your financial advisor to determine if this Fund is suitable
for you.
TXCMII 5/99
[GRAPHIC]
Prospectus
May 1, 1999
- ---------------
A Money Market
Mutual Fund Seeking to
Preserve Capital and to
Maximize Liquidity and
Current Income
managed by
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
Table of Contents
The Fund
Investment Objective/Principal Strategies 1
Principal Risks 2
Past Performance 3
Fees and Expenses 4
Management 5
Year 2000 6
Shareholder Information
Deciding Which Class of Shares to Buy 7
Pricing of Fund Shares 9
Opening Your Account 9
How to Buy Additional Shares 10
How to Exchange Shares Between
The Seligman Mutual Funds 11
How to Sell Shares 11
Important Policies That May Affect
Your Account 12
Dividend Distributions 13
Taxes 13
The Seligman Mutual Funds 14
Financial Highlights 15
How to Contact Us 17
For More Information back cover
TIMES CHANGE ... VALUES ENDURE
<PAGE>
The Fund
Investment Objective/Principal Strategies
The Fund's objectives are to preserve capital and to maximize liquidity and
current income.
The Fund uses the following principal strategies to seek its objectives:
The Fund invests in US-denominated high-quality money market instruments. Such
instruments include obligations of the US Treasury, its agencies or
instrumentalities, obligations of domestic and foreign banks (such as
certificates of deposit and fixed time deposits), commercial paper and short-
term corporate debt securities, and repurchase agreements with respect to these
types of instruments.
The Fund will invest only in US dollar-denominated securities having a
remaining maturity of 13 months (397) days or less and will maintain a US
dollar-weighted average portfolio maturity of 90 days or less.
In seeking to maintain a constant net asset value of $1.00, the Fund will limit
its investments to securities that, in accordance with guidelines approved by
the Fund's Board of Directors, present minimal credit risk. Accordingly, the
Fund will only purchase US Government securities, or securities rated in one of
the two highest rating categories assigned to short-term debt securities by at
least two nationally recognized statistical rating organizations (such as
Moody's Investors Service, Inc. (Moody's) or Standard and Poor's Rating Service
(S&P)), or if not so rated, determined to be of comparable quality.
Determination of quality is made at the time of investment, and is made in
accordance with procedures approved by the Fund's Board of Directors. If the
quality of investment later declines, the Fund may, in certain limited
circumstances, continue to hold the investment.
Presently, the Fund only invests in either US Government securities or
securities that are rated in the top category by Moody's and S&P. However, the
Fund is permitted to invest up to 5% of its assets in securities rated in the
second rating category by two nationally recognized statistical rating
organizations, provided that not more than the greater of 1% of its total
assets or $1,000,000 are invested in any one security.
The Fund may change its principal strategies if the Fund's Board of Directors
believes doing so is consistent with the Fund's investment objectives.
The Fund's objectives are a fundamental policy and may be changed only with the
approval of shareholders. As with any mutual fund, the Fund may not achieve its
investment objectives.
1
<PAGE>
Principal Risks
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
Yield and total return of the Fund will fluctuate with fluctuations in the
yields of the securities held by the Fund. In periods of declining interest
rates, the yields of the securities held by the Fund will tend to be somewhat
higher than prevailing market rates, and in periods of rising interest rates,
the yields of securities held by the Fund will tend to be lower than market
rates. Additionally, when interest rates are falling, the inflow of new money
to the Fund from the continuous sale of its shares will likely be invested in
securities producing lower yields than the balance of the Fund's assets,
thereby reducing the current yield of the Fund. In periods of rising interest
rates, the opposite may be true.
Repurchase agreements in which the Fund invests could involve certain risks in
the event of the default by the seller, including possible delays and expenses
in liquidating the securities underlying the agreement, decline in the value of
the underlying securities and loss of interest.
Investments in foreign banks and foreign branches of US banks involve certain
risks not generally associated with investments in US banks. While US banks are
required to maintain certain reserves and are subject to other regulations,
these requirements and regulations may not apply to foreign banks or foreign
branches of US banks. Investments in foreign banks or foreign branches may also
be subject to other risks, including political or economic developments, the
seizure or nationalization of foreign deposits and the establishments of
exchange controls or other restrictions.
2
<PAGE>
Past Performance
The Fund offers three Classes of shares. The information in the bar chart
provides some indication of the risks of investing in the Fund by showing how
the performance of Class A shares has varied year to year.
The following performance information is designed to assist you in comparing
the returns of the Fund with the returns of other mutual funds. How the Fund
has performed in the past, however, is not necessarily an indication of how the
Fund will perform in the future. Total returns will vary between each Class of
shares due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be less. The bar chart assumes that all dividends and capital gain
distributions were reinvested.
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
8.76% 7.53% 5.53% 3.10% 2.40% 3.46% 5.18% 4.71% 4.80% 4.59%
Average Annual Total Returns - Periods Ended 12/31/99
<TABLE>
<CAPTION>
CLASS B CLASS D
ONE FIVE TEN SINCE INCEPTION SINCE INCEPTION
YEAR YEARS YEARS 4/22/96 5/3/93
----- ----- ----- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Class A
Class B
Class D
</TABLE>
The Fund's Class A shares' 7-day yield as of December 31, 1998 was 3.78%.
To obtain the Fund's current 7-day yield, you may call (800)
622-4597.
3
<PAGE>
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to you. Annual fund operating expenses are deducted from Fund assets
and are therefore paid indirectly by you and other shareholders of the Fund.
<TABLE>
<CAPTION>
Shareholder Fees Class A Class B Class D
- ---------------- --------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge (Load) on Purchases
(as a % of offering price)..................... none(/1/) none none
Maximum Contingent Deferred Sales Charge (Load)
(CDSC) on Redemptions
(as a % of original purchase price or current
net asset value,
whichever is less)............................. none(/1/) 5% 1%
Annual Fund Operating Expenses for 1998
- ---------------------------------------
(as a percentage of average net assets)
Management Fees (/2/)........................... .40% .40% .40%
Distribution and/or Service (12b-1) Fees........ --(/3/) 1.00% 1.00%
Other Expenses.................................. .31% .31% .31%
--------- ----- -----
Total Annual Fund Operating Expenses............ .71% 1.71% 1.71%
========= ===== =====
</TABLE>
(/1/) A CDSC of 1% will be imposed on redemptions of Class A shares that were
acquired by exchange from Class A shares of another Seligman mutual fund
purchased within the past 18 months.
(/2/) Effective January 25, 1999, Seligman has agreed to reduce its management
fee temporarily by .10% of the Fund's average daily net assets.
(/3/) Class A shares are subject to a service fee of .25%; however the fee will
not be charged at least through April 30, 2000.
Example
This example is intended to help you compare the
Management Fees: expenses of investing in the Fund with the
Fees paid out of Fund expenses of investing in other mutual funds. It
assets to the assumes (1) you invest $10,000 in the Fund for
investment manager to each period and then sell all of your shares at
compensate it for the end of that period, (2) your investment has
managing the Fund. a 5% return each year, and (3) the Fund's
operating expenses remain the same. Although
12b-1 Fees: your actual expenses may be higher or lower,
Fees paid by each based on these assumptions your expenses would
Class, pursuant to a be:
plan adopted by the
Fund under Rule 12b-1 1 Year 3 Years 5 Years 10 Years
of the Investment ------ ------- ------- --------
Company Act of 1940.
The plan allows each Class A $ 73 $227 $ 395 $ 883
Class to pay Class B 674 839 1,128 1,754+
distribution and/or Class D 274 539 928 2,019
service fees for the
sale and distribution If you did not sell your shares at the end of
of its shares and for each period, your expenses would be:
providing services to
shareholders. 1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Other Expenses:
Miscellaneous expenses Class A $ 73 $227 $395 $ 883
of running the Fund, Class B 174 539 928 1,754+
including such things Class D 174 539 928 2,019
as transfer agency,
registration, custody, + Class B shares will automatically convert to
and auditing and legal Class A shares after eight years.
fees.
4
<PAGE>
Management
The Fund's Board of Directors provides broad supervision over the affairs of
the Fund.
The Fund's manager is J. & W. Seligman & Co. Incorporated (Seligman), 100 Park
Avenue, New York, New York 10017. Seligman manages the investment of the Fund's
assets, including making purchases and sales of portfolio securities consistent
with the Fund's investment objective and strategies, and administers the Fund's
business and other affairs.
Established in 1864, Seligman currently serves as manager to 18 US registered
investment companies, which offer more than 50 investment portfolios with
approximately $XX.X billion in assets as of March 31, 1999. Seligman also
provides investment management or advice to institutional or other accounts
having an aggregate value at March 31, 1999, of approximately $XX.X billion.
The Fund pays Seligman a fee for its management services. The fee rate equals a
percentage of the daily net assets of the Fund. The rate is calculated on a
sliding scale of 0.45% to 0.375% based on the average daily net assets of all
U.S. registered investment companies managed by Seligman. The fee paid by the
Fund to Seligman for the year ended December 31, 1998, was equal to an annual
rate of .40% of the Fund's average daily net assets.
Affiliates of Seligman:
Seligman Advisors, Inc. (Seligman Advisors):
The Fund's general
distributor; responsible
for accepting orders for
purchases and sales of Fund
shares.
Seligman Services, Inc.:
A limited purpose
broker/dealer; acts as the
broker/dealer of record for
shareholder accounts that
do not have a designated
financial advisor.
Seligman Data Corp. (SDC):
The Fund's shareholder
service agent; provides
shareholder account
services to the Fund at
cost.
5
<PAGE>
Year 2000
As the millennium approaches, mutual funds, financial and business
organizations, and individuals could be adversely affected if their computer
systems do not properly process and calculate date-related information and data
on and after January 1, 2000. Like other mutual funds, the Fund relies upon
service providers and their computer systems for its day-to-day operations.
Many of the Fund's service providers in turn depend upon computer systems of
their vendors. Seligman and SDC have established a year 2000 project team. The
team's purpose is to assess the state of readiness of Seligman and SDC and the
Fund's other service providers and vendors. The team is comprised of several
information technology and business professionals as well as outside
consultants. The Project Manager of the team reports directly to the
Administrative Committee of Seligman. The Project Manager and other members of
the team also report to the Board of Directors of the Fund and its Audit
Committee.
The team has identified the service providers and vendors who furnish critical
services or software systems to the Fund, including securities firms that
execute portfolio transactions for the Fund and firms responsible for
shareholder account recordkeeping. The team is working with these critical
service providers and vendors to evaluate the impact year 2000 issues may have
on their ability to provide uninterrupted services to the Fund. The team will
assess the feasibility of their year 2000 plans. The team has made progress on
its year 2000 contingency plans - recovery efforts the team will employ in the
event that year 2000 issues adversely affect the Fund. The team anticipates
finalizing these plans in the near future.
The Fund anticipates the team will implement all significant components of the
team's year 2000 plans by mid-1999, including appropriate testing of critical
systems and receipt of satisfactory assurances from critical service providers
and vendors regarding their year 2000 compliance. The Fund believes that the
critical systems on which it relies will function properly on and after the
year 2000, but this is not guaranteed. If these systems do not function
properly, or the Fund's critical service providers are not successful in
implementing their year 2000 plans, the Fund's operations may be adversely
affected, including pricing, securities trading and settlement, and the
provision of shareholder services.
In addition, the Fund may hold securities of issuers whose underlying business
leaves them susceptible to year 2000 issues. The Fund may also hold securities
issued by governmental or quasi-governmental issuers, which, like other
organizations, are also susceptible to year 2000 concerns. Year 2000 issues may
affect an issuer's operations, creditworthiness, and ability to make timely
payment on any indebtedness and could have an adverse impact on the value of
its securities. If the Fund holds these securities, the Fund's performance
could be negatively affected. Seligman seeks to identify an issuer's state of
year 2000 readiness as part of the research it employs. However, the perception
of an issuer's year 2000 preparedness is only one of the many factors
considered in determining whether to buy, sell, or continue to hold a security.
Information provided by issuers concerning their state of readiness may or may
not be accurate or readily available. Further, the Fund may be adversely
affected if the exchanges, markets, depositories, clearing agencies, or
government or third parties responsible for infrastructure needs do not address
their year 2000 issues in a satisfactory manner.
SDC has informed the Fund that it does not expect the cost of its services to
increase materially as a result of the modifications to its computer systems
necessary to prepare for the year 2000. The Fund will not pay to remediate the
systems of Seligman or bear directly the costs to remediate the systems of any
other service providers or vendors, other than SDC.
6
<PAGE>
Shareholder Information
Deciding Which Class of Shares to Buy
Each of the Fund's Classes represents an interest in the same portfolio of
investments. However, each Class has its own sales charge schedule and is
subject to different ongoing 12b-1 fees. You may only purchase Class B or
Class D shares of the Fund by exchanging shares of the same class of another
Seligman mutual fund or through you broker or financial advisor to facilitate
periodic investments in Class B or Class D shares of other Seligman mutual
funds.
When deciding which Class of shares to purchase, you should consider, among
other things:
. If you would like to participate in a periodic investment program.
. How long you plan to remain invested in the Fund, or another Seligman
mutual fund.
. Whether you may be eligible for reduced or no sales charges when you sell
shares of the Fund.
Your financial advisor will be able to help you decide which Class of shares
best meets your needs.
Class A
. No initial sales charge on purchases. (If you exchange Class A shares of
the Fund for Class A shares of another Seligman mutual fund, you will be
subject to an initial sales charge at the time of the exchange.)
. Annual 12b-1 fee (for shareholder services) of up to 0.25%. This fee is
currently not being charged through April 30, 2000.
. A CDSC of 1% will be imposed on redemptions of Class A shares that were
acquired by exchange from Class A Shares of another Seligman mutual fund
purchased within the past 18 months.
Class B
.No initial sales charge on purchases.
. A declining CDSC on shares sold within 6 years of purchase (or, in the
case of Class B shares acquired upon exchange, within six years of the
original Class B shares purchased).
<TABLE> Your purchase of Class B
<CAPTION> shares must be for less than
Years Since Purchase CDSC $250,000, because if you are
-------------------- ---- investing $250,000 or more
<S> <C> you will pay less in fees
Less than 1 year 5% and charges if you buy
1 year or more but less than 2 years 4 another Class of shares.
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>
.Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
.Automatic conversion to Class A shares after eight years, resulting in
lower ongoing 12b-1 fees.
.No CDSC on redemptions of shares purchased with reinvested dividends or
capital gain distributions.
7
<PAGE>
Class D
. No initial sales charge on purchases.
. A 1% CDSC on shares sold within one year of purchase (or in the case of
Class D Shares acquired upon exchange, within one year of the original
Class D Shares purchased).
. Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
. No automatic conversion to Class A shares, so you will be subject to
higher ongoing 12b-1 fees indefinitely.
. No CDSC on redemptions of shares purchased with reinvested dividends or
capital gain distributions.
Because 12b-1 fees are paid out of each Class's assets on an ongoing basis,
over time these fees will increase your investment expenses and may cost you
more than other types of sales charges.
The Fund's Board of Directors believes that no conflict of interest currently
exists between the Fund's Class A, Class B, and Class D shares. On an ongoing
basis, the Directors, in the exercise of their fiduciary duties under the
Investment Company Act of 1940 and Maryland law, will seek to ensure that no
such conflict arises.
How CDSCs Are Calculated
To minimize the amount of CDSC you may pay when you sell your shares, the
Fund assumes that shares acquired through reinvested dividends and capital
gain distributions (which are not subject to a CDSC) are sold first. Shares
that have been in your account long enough so they are not subject to a CDSC
are sold next. After these shares are exhausted, shares will be sold in the
order they were purchased (oldest to youngest). The amount of any CDSC that
you pay will be based on the shares' original purchase price or current net
asset value, whichever is less.
You will not pay a CDSC when you exchange shares of the Fund to buy the same
class of shares of any other Seligman mutual fund. For the purpose of
calculating the CDSC when you sell shares that you acquired by exchanging
shares of the Fund, it will be assumed that you held the shares since the
date you purchased the shares of the Fund.
8
<PAGE>
Pricing of Fund Shares
When you buy or sell shares, you do so at the Class's net asset value (NAV)
next calculated after Seligman Advisors accepts your request. Purchase or sale
orders received by an authorized dealer or financial advisor by the close of
regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m.
Eastern time) and accepted by Seligman Advisors before the close of business
(5:00 p.m. Eastern time) on the same day will be executed at the Class's NAV
calculated as of the close of regular trading on the NYSE on that day. Your
broker/dealer or financial advisor is responsible for forwarding your order to
Seligman Advisors before the close of business.
NAV: If your buy or sell order is received by your
Computed broker/dealer or financial advisor after the close of
separately for regular trading on the NYSE, or is accepted by Seligman
each Class by is accepted by Seligman Advisors after the close of
dividing that business, the order will be executed at the Class's NAV
Class's share of calculated as of the close of regular trading on the
the net assets of next NYSE trading day. When you sell shares, you receive
the Fund (i.e., the Class's per share NAV, less any applicable CDSC.
its assets less
liabilities) by The NAV of the Fund's shares is determined each day,
the total number Monday through Friday, on days that the NYSE is open for
of outstanding trading. Because of their higher 12b-1 fees, the NAV of
shares of the Class B and Class D shares will generally be lower than
Class. the NAV of Class A shares.
Securities owned by the Fund are valued at current
market prices. If reliable market prices are
unavailable, securities are valued in accordance with
procedures approved by the Fund's Board of Directors.
Opening Your Account
The Fund's shares are sold through authorized broker/dealers or financial
advisors who have sales agreements with Seligman Advisors. There are several
programs under which you may be eligible for reduced sales charges. Ask your
financial advisor if any of these programs apply to you.
To make your initial investment in the You may buy shares of the
Fund, contact your financial advisor or Fund for all types of tax-
complete an account application and send deferred retirement plans.
it with your check directly to SDC at the Contact Retirement Plan
address provided on the account Services at the address or
application. If you do not choose a phone number listed on the
Class, your investment will automatically inside back cover of this
be made in Class A shares. prospectus for information
and to receive the proper
The required minimum initial investments are: forms.
. Regular (non-retirement) accounts:$1,000
. For accounts opened concurrently with Invest-A-Check(R):
$100 to open if you will be making monthly investments
$250 to open if you will be making quarterly investments
If you buy shares by check and subsequently sell the shares, SDC will not send
your proceeds until your check clears, which could take up to 15 calendar days
from the date of your purchase.
You will be sent a statement confirming your Fund purchase, and any subsequent
transactions in your account. You will also be sent at least annually, a
statement detailing all your transactions in the Fund and all other Seligman
funds you own. Duplicate account statements will be sent to you free of charge
for the current year and most recent prior year. Copies of year-end statements
for prior years are available for a fee of $10 per year, per account, with a
maximum charge of $150 per account. Send your request and a check for the fee
to SDC.
If you want to be able to buy, sell, or exchange shares by telephone,
you should complete an application when you open your account. This
will prevent you from having to complete a supplemental election form
which may require a signature guarantee at a later date.
9
<PAGE>
How to Buy Additional Shares
After you have made your initial investment, there are many options available
to make additional purchases of Fund shares. Shares may be purchased through
your authorized financial advisor, or you may send a check directly to SDC.
Please provide either an investment slip or a note that provides your name(s),
Fund name, and account number. Your investment will be made in the Class you
already own. Send investment checks to:
Seligman Data Corp.
P.O. Box 9766
Providence, RI 02940-5051
Your check must be in US dollars and be drawn on a US bank. You may not use
third party or credit card convenience checks for investment.
You may also use the following account services to make additional investments:
Invest-A-Check(R). You may buy Fund shares electronically from a savings or
checking account of an Automated Clearing House (ACH) member bank. If your bank
is not a member of ACH, the Fund will debit your checking account by
preauthorized checks. You may buy Fund shares at regular monthly intervals in
fixed amounts of $100 or more, or regular quarterly intervals in fixed amounts
of $250 or more. If you use Invest-A-Check(R), you must continue to make
automatic investments until the Fund's minimum initial investment of $1,000 is
met or your account may be closed.
Automatic Dollar-Cost-Averaging. If you have at least $5,000 in the Fund, you
may exchange uncertificated shares of the Fund to buy shares of the same class
of another Seligman mutual fund at regular monthly intervals in fixed amounts
of $100 or more or regular quarterly intervals in fixed amounts of $250 or
more. If you exchange Class A shares, you may pay an initial sales charge to
buy Fund shares, depending on whether the exchanged Class A Shares were owned
as a result of an exchange of shares from another Seligman mutual fund on which
an initial sales charge was paid, in which event you may not pay an initial
sales charges or the initial charge may be reduced.
Automatic CD Transfer. You may instruct your bank to invest the proceeds of a
maturing bank certificate of deposit (CD) in shares of the Fund. If you wish to
use this service, contact SDC or your financial advisor to obtain the necessary
forms. Because your bank may charge you a penalty, it is not normally advisable
to withdraw CD assets before maturity.
Dividends From Other Investments. You may have your dividends from other
companies paid to the Fund. (Dividend checks must include your name, account
number, Fund name, and Class of shares.)
Direct Deposit. You may buy Fund shares electronically with funds from your
employer, the IRS, or any other institution that provides direct deposit. Call
SDC for more information.
Seligman Time Horizon MatrixSM. (Requires an initial total investment of
$10,000.) This is a needs-based investment process, designed to help you and
your financial advisor plan to seek your long-term financial goals. It
considers your financial needs, and helps frame a personalized asset allocation
strategy around the cost of your future commitments and the time you have to
meet them. Contact your financial advisor for more information.
Seligman Harvester. If you are a retiree or nearing retirement, this program is
designed to help you establish an investment strategy that seeks to meet your
needs throughout your retirement. The strategy is customized to your personal
financial situation by allocating your assets to seek to address your income
requirements, prioritizing your expenses, and establishing a prudent withdrawal
schedule. Contact your financial advisor for more information.
10
<PAGE>
How to Exchange Shares Between the Seligman Mutual Funds
You may sell Fund shares to buy shares of the same Class of another Seligman
mutual fund, or you may sell shares of another Seligman mutual fund to buy Fund
shares. Exchanges will be made at each fund's respective NAV. An initial sales
charge will be imposed when you exchange Class A shares of the Fund for Class A
shares of another Seligman mutual fund. You may be entitled to a reduced sales
charge on such exchange in certain circumstances. Contact your financial
advisor for more information.
Only your dividend distribution options and telephone services will be
automatically carried over to any new fund account. If you wish to carry over
any other account options (for example, Invest-a-Check(R) or Systematic
Withdrawals) to the new fund, you must specifically request so at the time of
your exchange.
If you exchange into a new fund, you must exchange enough to meet the new
fund's minimum initial investment.
See "The Seligman Mutual Funds" for a list of the funds available for exchange.
Before making an exchange, contact your financial advisor or SDC to obtain the
applicable fund prospectus(es), which you should read and understand before
investing.
How to Sell Shares
The easiest way to sell Fund shares is by phone. If you have telephone
services, you may be able use this service to sell Fund shares. Restrictions
apply to certain types of accounts. Please see "Important Policies That May
Affect Your Account."
When you sell Fund shares by phone, a check for the proceeds is sent to your
address of record. If you have current ACH bank information on file, you may
have the proceeds of the sale of your Fund shares directly deposited into your
bank account (typically, 3-4 business days after your shares are sold).
You may always send a written request to sell Fund shares. It may take longer
to get your money if you send your request by mail.
You will need to guarantee your signature(s) if the proceeds are:
(1) $50,000 or more;
(2) to be paid to someone other than all account owners, or
(3) mailed to other than your address of record.
Signature Guarantee:
Protects you and the Fund
from fraud. It guarantees
that a signature is
genuine. A guarantee must
be obtained from an
eligible financial
institution. Notarization
by a notary public is not
an acceptable guarantee.
You may need to provide additional documents to sell Fund shares if you are:
.a corporation;
.an executor or administrator;
.a trustee or custodian; or
.in a retirement plan.
If your Fund shares are represented by certificates, you will need to surrender
the certificates to SDC before you sell your shares.
Contact your financial advisor or SDC's Shareholder Services Department for
information on selling your shares under any of the above circumstances.
You may also use the following account services to sell Fund shares:
Systematic Withdrawal Plan. If you have at least $5,000 in the Fund, you may
withdraw (sell) a fixed amount (minimum of $50) of uncertificated shares at
regular intervals. A check will be sent to you at your address of record or, if
you have current ACH bank information on file, you may have your payments
directly deposited to your predesignated bank account in 3-4 business days
after your shares are sold. If you initially bought $1,000,000 or more of class
A shares of another Seligman mutual fund without an initial sales charge and
exchanged into class A shares of the Fund your withdrawals may be subject to a
1% CDSC if they occur within 18 months of the original purchase. If you own
Class B or Class D shares and reinvest your dividend distributions, you may
withdraw 12% or 10%, respectively, of the value of your Fund account (at the
time of election) annually without a CDSC.
Check Redemption Service. The Check Redemption Service allows a shareholder to
request SDC 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 SDC Shares
for which certificates have been issued will not be available for redemption
under this service. Contact your financial advisor for more information.
11
<PAGE>
Important Policies That May Affect Your Account
To protect you and other shareholders, the Fund reserves the right to:
. Refuse an exchange request if:
1. you have exchanged twice from the same fund in any three-month period;
2. the amount you wish to exchange equals the lesser of $1,000,000 or 1%
of the Fund's net assets; or
3. you or your financial advisor have been advised that previous patterns
of purchases and sales or exchanges have been considered excessive.
. Refuse any request to buy Fund shares.
. Reject any request received by telephone.
. Suspend or terminate telephone services.
. Reject a signature guarantee that SDC believes may be fraudulent.
. Close your fund account if its value falls below $500.
. Close your account if it does not have a certified taxpayer identification
number.
Telephone Services
You and your broker/dealer or financial advisor will be able to place the
following requests by telephone, unless you indicate on your account
application that you do not want telephone services:
. Sell uncertificated shares (up to $50,000 per day, payable to account
owner(s) and mailed to address of record)
. Exchange shares between funds
. Change dividend distribution options
. Change your address
. Establish systematic withdrawals to address of record
If you do not complete an account application when you open your account,
telephone services must be elected on a supplemental election form.
Restrictions apply to certain types of accounts:
. Trust accounts on which the current trustee is not listed may not sell Fund
shares by phone.
. Corporations may not sell Fund shares by phone.
. IRAs may only exchange Fund shares or request address changes by phone.
. Group retirement plans may not sell Fund shares by phone; plans that allow
participants to exchange by phone must provide a letter of authorization
signed by the plan custodian or trustee and provide a supplemental election
form signed by all plan participants.
Unless you have current ACH bank information on file, you will not be able to
sell Fund shares by phone within thirty days following an address change.
Your request must be communicated to an SDC representative. You may not request
any phone transactions via the automated access line.
You may cancel telephone services at any time by sending a written request to
SDC. Each account owner, by accepting or adding telephone services, authorizes
each of the other owners to make requests by phone. Your broker/dealer or
financial advisor representative may not establish telephone services without
your written authorization. SDC will send written confirmation to the address
of record when telephone services are added or terminated.
During times of heavy call volume, you may not be able to get through to SDC by
phone to request a sale or exchange of Fund shares. In this case, you may need
to write, and it may take longer for your request to be processed.
The Fund and SDC will not be liable for processing requests received by phone
as long as it was reasonable to believe that the request was genuine.
Reinstatement Privilege
If you sell Class B or Class D shares, you may, within 120 calendar days, use
all or a part of the proceeds to buy shares of another Seligman mutual fund
(reinstate your investment) and be entitled to a credit for the applicable CDSC
paid. If you sell Class A shares of the Fund that were owned as a result of an
exchange of shares from another Seligman mutual fund on which an initial sales
charge was paid you will be eligible to use part or all of the proceeds to buy
shares of another Seligman mutual fund without paying an initial sales charge.
You should consult your tax advisor concerning possible tax consequences of
exercising this privilege.
12
<PAGE>
Dividend Distributions
The Fund declares as a dividend substantially all of its net investment income
each day that the New York Stock Exchange is open for business.
You may elect to:
(1) reinvest dividends in shares; or
Dividend: (2) receive dividends in cash.
A payment by a Your dividends will be reinvested if you do not
mutual fund, instruct otherwise or if you own Fund shares in a
usually derived Seligman tax-deferred retirement plan.
from the fund's
net investment
income
(dividends and
interest earned
on portfolio
securities less
expenses).
If you want to change your election, you may write SDC
at the address listed on the back cover of this
prospectus, or, if you have telephone services, you or
your financial advisor may call SDC. Your request must
be received by SDC before the record date to be
effective for that dividend.
Cash dividends will be sent by check to your address
Ex-dividend Date: of record or, if you have current ACH bank information
The day on on file, directly deposited into your predesignated
which any bank account within 3-4 business days from the payable
declared date.
distributions
(dividends or
capital gains)
are deducted
from a fund's
assets before
it calculates
its NAV.
Dividend distributions are reinvested to buy
additional Fund shares on the payable date using the
NAV of the ex-dividend date.
Dividends on Class B and Class D shares will be lower
than the dividends on Class A shares as a result of
their higher 12b-1 fees.
Taxes
The tax treatment of dividend distributions is the same whether you take them
in cash or reinvest them to buy additional Fund shares. Tax-deferred retirement
plans are not taxed currently on dividends.
An exchange of Fund shares is a sale and may result in a gain or loss for
federal income tax purposes.
Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each
shareholder's situation is unique, you should always consult your tax advisor
concerning the effect income taxes may have on your individual investment.
13
<PAGE>
The Seligman Mutual Funds
Equity
Specialty
- --------------------------------------------------------------------------------
Seligman Communications and
Information Fund
Seeks capital appreciation by investing in companies operating in all aspects
of the communications, information, and related industries.
Seligman Henderson Global Technology Fund
Seeks long-term capital appreciation by investing primarily in global
securities (US and non-US) of companies in the technology and technology-
related industries.
Seligman Henderson Emerging Markets Growth Fund
Seeks long-term capital appreciation by investing primarily in equity
securities of companies in emerging markets.
Small Company
- --------------------------------------------------------------------------------
Seligman Frontier Fund
Seeks growth of capital by investing primarily in small company growth stocks.
Seligman Small-Cap Value Fund
Seeks long-term capital appreciation by investing in equities of small
companies, deemed to be "value" companies by the investment manager.
Seligman Henderson Global Smaller Companies Fund
Seeks long-term capital appreciation by investing in securities of smaller
companies around the world, including the US.
Medium Company
- --------------------------------------------------------------------------------
Seligman Capital Fund
Seeks capital appreciation by investing in the common stocks of companies with
significant potential for growth.
Large Company
- --------------------------------------------------------------------------------
Seligman Growth Fund
Seeks long-term growth of capital value and an increase in future income.
Seligman Henderson Global Growth Opportunities Fund
Seeks capital appreciation by investing primarily in equity securities of
companies that have the potential to benefit from global economic or social
trends.
Seligman Large-Cap Value Fund
Seeks long-term capital appreciation by investing in equities of large
companies, deemed to be "value" companies by the investment manager.
Seligman Common Stock Fund
Seeks favorable, but not the highest, current income and long-term growth of
both income and capital, without exposing capital to undue risk.
Seligman Henderson International Fund
Seeks long-term capital appreciation by investing in securities of medium- to
large-sized companies, primarily in the developed markets outside the US.
Balanced
- --------------------------------------------------------------------------------
Seligman Income Fund
Seeks high current income and improvement in capital value over the long term,
consistent with prudent risk of capital.
Fixed-Income
Income
- --------------------------------------------------------------------------------
Seligman High-Yield Bond Fund
Seeks to maximize current income by investing in a diversified portfolio of
high-yielding, high-risk corporate bonds, commonly referred to as "junk bonds."
Seligman U.S. Government Securities Fund
Seeks high current income primarily by investing in a diversified portfolio of
securities guaranteed by the US government, its agencies, or instrumentalities,
which have maturities greater than one year.
Municipal
- --------------------------------------------------------------------------------
Seligman Municipal Funds:
National Fund
Seeks maximum income, exempt from regular federal income taxes.
State-specific funds:*
Seek to maximize income exempt from regular federal income taxes and from
regular income taxes in the designated state.
<TABLE>
<S> <C> <C>
California Louisiana New Jersey
.High-Yield Maryland New York
.Quality Massachusetts North Carolina
Colorado Michigan Ohio
Florida Minnesota Oregon
Georgia Missouri Pennsylvania
South Carolina
</TABLE>
* A small portion of income may be subject to state taxes.
Money Market
- --------------------------------------------------------------------------------
Seligman Cash Management Fund
Seeks to preserve capital and to maximize liquidity and current income, by
investing only in high-quality money market securities having a maturity of 90
days or less. The fund seeks to maintain a constant net asset value of $1.00
per share.
14
<PAGE>
Financial Highlights
The tables below are intended to help you understand each Class's financial
performance for the past five years or, if less than five years, the period of
the Class's operations. Certain information reflects financial results for a
single share of a Class that was held throughout the periods shown. "Total
return" shows the rate that you would have earned (or lost) on an investment in
the Fund, assuming you reinvested all your dividends and capital gain
distributions. Total returns do not reflect any sales charges. ,
independent auditors, have audited this information. Their report, along with
the Fund's financial statements, is included in the Fund's annual report, which
is available upon request.
CLASS A
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning
of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ..... 0.05 0.05 0.05 0.05 0.03
Less distributions:
Dividends (from net
investment income)........ (0.05) (0.05) (0.05) (0.05) (0.03)
-------- -------- -------- -------- --------
Net asset value, end of
period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return................ 4.59% 4.80% 4.71% 5.18% 3.46%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)............. $273,427 $206,604 $208,950 $177,395 $194,406
Ratio of expenses to average
net assets................. 0.71% 0.78% 0.79% 0.86% 0.82%
Ratio of net income to
average net assets......... 4.50% 4.70% 4.61% 5.06% 3.41%
</TABLE>
- --------
*Per share amounts are calculated based on average shares outstanding.
15
<PAGE>
<TABLE>
<CAPTION>
Year ended
December 31, 4/22/96**
CLASS B ---------------- to
1998 1997 12/31/96
------- ------- ---------
<S> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00
------- ------- -------
Income from investment
operations:
Net investment income.......... 0.04 0.04 0.03
Less distributions:
Dividends (from net investment
income)....................... (0.04) (0.04) (0.03)
------- ------- -------
Net asset value, end of period.. $ 1.00 $ 1.00 $ 1.00
======= ======= =======
Total return.................... 3.56% 3.77% 2.44%
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)..................... $24,189 $10,858 $ 2,493
Ratio of expenses to average net
assets......................... 1.71% 1.78% 1.78%+
Ratio of net income to average
net assets..................... 3.50% 3.70% 3.58%+
<CAPTION>
Year ended December 31,
CLASS D --------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------
Income from investment
operations:
Net investment income.......... 0.04 0.04 0.04 0.04 0.02
Less distributions:
Dividends (from net investment
income)....................... (0.04) (0.04) (0.04) (0.04) (0.02)
------- ------- ------- ------- ------
Net asset value, end of period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======
Total return.................... 3.56% 3.77% 3.67% 4.08% 2.35%
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)..................... $52,243 $24,110 $22,309 $14,554 $3,458
Ratio of expenses to average net
assets......................... 1.71% 1.78% 1.79% 1.90% 1.90%
Ratio of net income to average
net assets..................... 3.50% 3.70% 3.61% 4.02% 2.32%
Without management fee waivers
or expense reimbursement:***
Ratios:
Expenses to average net
assets........................ 3.23%
Net income to average net
assets........................ .99%
</TABLE>
- --------------
*Per shares amounts are calculated based on average shares outstanding.
**Commencement of offering of shares.
***For the period ended December 31, 1993 to 1994, Seligman at its discretion
waived a portion of its management fees and/or reimbursed certain expenses for
Class D shares.
+ Annualized.
16
<PAGE>
For More Information
================================================================================
The following information is available without charge upon request: Call toll-
free (800) 221-2450 in the US or (212) 682-7600 outside the US.
Statement of Additional Information (SAI) contains additional information about
the Fund. It is on file with the Securities and Exchange Commission (SEC) and is
incorporated by reference into (is legally part of) this prospectus.
Annual/Semi-Annual Reports contain additional information about the Fund's
investments. In the Fund's annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund's performance during its last fiscal year.
================================================================================
SELIGMAN ADVISORS, INC.
an affilitate of
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
Information about the Fund, including the SAI, can be viewed and copied at the
SEC's Public Reference Room in Washington, DC.
For information about the operation of the Public Reference Room, call (800)
SEC-0330. The SAI, Annual/Semi-Annual reports and other information about the
Fund are also available on the SEC's Internet site: http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by writing: Public Reference Section of the SEC, Washington, DC 20549-6009.
SEC FILE NUMBER: 811-2650
<PAGE>
SELIGMAN CASH MANAGEMENT FUND, INC.
Statement of Additional Information
May 1, 1999
100 Park Avenue
New York, New York 10017
(212) 850-1864
Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information (SAI) expands upon and supplements the
information contained in the current Prospectus of the Seligman Cash Management
Fund, Inc., dated May 1, 1999. This SAI, although not in itself a prospectus, is
incorporated by reference into the Prospectus in its entirety. It should be read
in conjunction with the Prospectus, which you may obtain by writing or calling
the Fund at the above address or telephone numbers.
The financial statements and notes included in the Fund's Annual Report, and the
Independent Auditors' Report thereon, are incorporated herein by reference. The
Annual Report will be furnished to you without charge if you request a copy of
this SAI.
Table of Contents
Fund History.......................................................... 2
Description of the Fund and its Investments and Risks................. 2
Management of the Fund................................................ 5
Control Persons and Principal Holders of Securities................... 10
Investment Advisory and Other Services................................ 10
Portfolio Transactions and other Practices............................ 16
Capital Stock and Other Securities ................................... 17
Purchase, Redemption, and Pricing of Shares........................... 17
Taxation of the Fund.................................................. 22
Underwriters.......................................................... 23
Calculation of Yield ................................................. 25
Financial Statements.................................................. 27
General Information................................................... 27
Appendix A............................................................ 28
Appendix B............................................................
<PAGE>
Fund History
The Fund was incorporated under the laws of the state of Maryland on July 12,
1976.
Description of the Fund and Its Investments and Risks
Classification
The Fund is a diversified open-end management investment company, or mutual
fund.
Investment Strategies and Risks
The following information regarding the Fund's investments and risks supplements
the information contained in the Fund's Prospectus.
The Fund will invest only in US dollar-denominated securities having a remaining
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 security) unless (i) it
is rated in one of the two highest rating categories assigned to short-term debt
securities by at least two nationally recognized statistical rating
organizations ("NRSRO's) such as Moody's Investors Service, Inc. ("Moody's") and
Standard & Poor's 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 continue to hold the investment,
subject in certain circumstances to a finding by the Board of Directors that
disposing of the investment would not be in the Fund's best interest.
Presently, the Fund only invests in either US Government securities or
securities that are rated in the top category by Moody's and S&P. However, the
Fund is permitted to invest up to 5% of its assets in securities rated in the
second highest rating category by two NRSRO's, provided that not more than the
greater of 1% of its total assets or $1,000,000 are invested in any one such
security. A description of the debt securities ratings appears in Appendix "A".
Commercial Paper and Short-Term Corporate Debt Securities. The Fund may invest
in commercial paper and short-term corporate debt securities. Commercial paper
includes short-term unsecured promissory notes with maturities not exceeding
nine months issued in bearer form by bank holding companies, corporations and
finance companies to finance short-term credit needs. Corporate debt securities
include bonds and notes issued by corporations to finance longer-term credit
needs. Investments in commercial paper issued by bank holding companies will be
limited at the time of investment to the 100 largest US bank holding companies
in terms of assets.
Money Market Instruments. The Fund invests in high-quality money market
instruments having a remaining maturity of 13 months (397 days) or less,
including the following:
US Government, Agency and Instrumentality Obligations. These securities are
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
2
<PAGE>
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.
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. Investments in
such obligations will be limited at the time of investment to the obligations of
the 100 largest domestic banks in terms of assets which are subject to
regulatory supervision by the US Government or state governments and the
obligations of the 100 largest foreign banks in terms of assets with branches or
agencies in the United States.
Negotiable certificates of deposit are certificates issued against funds
deposited in a bank. They are for a definite period of time, earn a specific
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 earn a specific rate of return. Fixed time deposits
are made in foreign branches of domestic banks and in foreign banks. Fixed time
deposits, unlike negotiable certificates of deposit, generally do not have a
market and may be subject to penalties for early withdrawal of funds.
Investments in foreign banks and foreign branches of United States banks involve
certain risks not generally associated with investments in domestic banks. While
domestic banks are required to maintain certain reserves and are subject to
other regulations, such requirements and regulations may not apply to foreign
branches. Investments in foreign banks and branches may also be subject to other
risks, including future political and economic developments, the seizure or
nationalization of foreign deposits and the establishment of exchange controls
or other restrictions.
Repurchase Agreements. The Fund may enter into repurchase agreements under which
it acquires a money market instrument, qualified for purchase by the Fund,
subject to resale at an agreed upon price and date. Such resale price reflects
an agreed upon interest rate effective for the period of time the instrument is
held by the Fund and is unrelated to the interest rate on the instrument.
Repurchase agreements usually are for short periods, such as one week or less,
but may be for longer periods. Although the Fund may enter into repurchase
agreements with respect to any money market instruments qualified for purchase,
such agreements generally involve US Government securities. The Fund may enter
into repurchase agreements with broker/dealers and commercial banks. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default by the seller, including possible delays and expenses in liquidating the
securities underlying the agreement, decline in value of the underlying
securities and loss of interest.
The Fund will not invest more than 10% of its assets in repurchase agreements of
more than one week's duration and in fixed time deposits, other than overnight
deposits, subject to withdrawal penalties.
Lending of Portfolio Securities. The Fund may lend portfolio securities to
brokers, dealers and financial institutions provided that cash, or equivalent
collateral, equal to at least 100% of the market value of the securities loaned
is maintained by the borrower with the Fund. During the time such securities are
on loan, the borrower will pay the Fund any income accruing thereon and the Fund
may invest the cash collateral and earn additional income or may receive an
agreed upon fee from the borrower who has delivered equivalent collateral. 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 will not lend
more than 25% of the value of its total assets, and it is not intended that
payments received on account of interest paid on securities loaned will exceed
10% of the annual gross income of the Fund without offset for realized
short-term capital losses, if any. The Fund has not loaned any portfolio
securities to date.
3
<PAGE>
Except as otherwise specifically noted above, the Fund's investment strategies
are not fundamental and the Fund, with the approval of the Board of Directors,
may change such strategies without the vote of shareholders.
Fund Policies
The Fund is subject to fundamental policies that place restrictions on certain
types of investments. These policies cannot be changed except by vote of a
majority of the Fund's outstanding voting securities. Under these policies, 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 or for the purpose of hedging the Fund's obligations
under the Deferred Compensation Plan for Directors;
The Fund also may not change its investment objective without shareholder
approval.
4
<PAGE>
Under the Investment Company Act of 1940 (1940 Act), a "vote of a majority of
the outstanding voting securities" of the Fund means the affirmative vote of the
lesser of (l) more than 50% of the outstanding shares of the Fund; or (2) 67% or
more of the shares present at a shareholders' meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy.
Portfolio Turnover
The Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the year by the monthly average
of the value of the portfolio securities owned during the year. Securities whose
maturity or expiration date at the time of acquisition were one year or less are
excluded from the calculation. The Fund's portfolio turnover rates for the years
ended December 31, 1998 and 1997 were __% and __%, respectively.
Management of the Fund
Board of Directors
The Board of Directors provides broad supervision over the affairs of the Fund.
Management Information
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years are shown below. Each
Director who is an "interested person" of the Fund, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
William C. Morris* Director, Chairman of the Chairman, J. & W. Seligman & Co. Incorporated,
(60) Board, Chief Executive Chairman and Chief Executive Officer, the Seligman
Officer and Chairman of the Group of investment companies; Chairman, Seligman
Executive Committee Advisors, Inc, Seligman Services, Inc., and Carbo
Ceramics Inc., ceramic proppants for oil and gas
industry; Director, Seligman Data Corp.,
Kerr-McGee Corporation, diversified energy
company; and Sarah Lawrence College; and a Member
of the Board of Governors of the Investment
Company Institute. Formerly, Director, Daniel
Industries Inc., manufacturer of oil and gas
metering equipment.
Brian T. Zino* Director, President and Director and President, J. & W. Seligman & Co.
(46) Member of the Executive Incorporated; President (with the exception of
Committee 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.;
Director, ICI Mutual Insurance Company; Seligman
Advisors, Inc., and Seligman Services, Inc.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
John R. Galvin Director Dean, Fletcher School of Law and Diplomacy at
(69) Tufts University; Director or Trustee, the
Tufts University Seligman Group of investment companies; Chairman,
Packard Avenue, American Council on Germany; a Governor of the
Medford, MA 02155 Center for Creative Leadership; Director; Raytheon
Co., electronics; National Defense University; and
the Institute for Defense Analysis. Formerly,
Director, USLIFE Corporation; 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.
Alice S. Ilchman Director Retired President, Sarah Lawrence College;
(63) Director or Trustee, the Seligman Group of
18 Highland Circle investment companies; Director, the Committee for
Bronxville, NY 10708 Economic Development; and 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.
Frank A. McPherson Director Retired Chairman and Chief Executive Officer of
(65) Kerr-McGee Corporation; Director or Trustee, the
2601 Northwest Expressway, Seligman Group of investment companies; Director,
Suite 805E Kimberly-Clark Corporation, consumer products;
Oklahoma City, OK 73112 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, Oklahoma
City Public Schools Foundation; and Director,
Federal Reserve System's Kansas City Reserve Bank
and the Oklahoma City Chamber of Commerce.
John E. Merow Director Retired Chairman and Senior Partner, Sullivan &
(69) Cromwell, law firm; Director or Trustee, the
125 Broad Street, Seligman Group of investment companies; Director,
New York, NY 10004 Commonwealth Industries, Inc., manufacturers of
aluminum sheet products; the Foreign Policy
Association; Municipal Art Society of New York;
the U.S. Council for International Business; and
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C>
New York Presbyterian Hospital; Chairman, American
Australian Association; and New York Presbyterian
Healthcare Network, Inc.; Vice-Chairman, the
U.S.-New Zealand Council; and Member of the
American Law Institute and Council on Foreign
Relations.
Betsy S. Michel Director Attorney; Director or Trustee, the Seligman Group
(56) of investment companies; Trustee, The Geraldine R.
P.O. Box 449 Dodge Foundation, charitable foundation; and
Gladstone, NJ 07934 Chairman of the Board of Trustees of St. George's
School (Newport, RI). Formerly, Director, the
National Association of Independent Schools
(Washington, DC).
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
James C. Pitney Director Retired Partner, Pitney, Hardin, Kipp & Szuch, law
(72) firm; Director or Trustee, the Seligman Group of
Park Avenue at Morris County, investment companies. Formerly, Director, Public
P.O. Box 1945, Morristown, NJ Service Enterprise Group, public utility.
07962
James Q. Riordan Director Director or Trustee, the Seligman Group of
(71) investment companies; Director, The Houston
675 Third Avenue, Exploration Company; The Brooklyn Museum, KeySpan
Suite 3004 Energy Corporation; and Public Broadcasting
New York, NY 10017 Service; and Trustee, the Committee for Economic
Development. Formerly, Co-Chairman of the Policy
Council of the Tax Foundation; Director, Tesoro
Petroleum Companies, Inc. and Dow Jones & Company,
Inc.; Director and President, Bekaert Corporation;
and Co-Chairman, Mobil Corporation.
Robert L. Shafer Director Retired Vice President, Pfizer Inc.; Director or
(66) Trustee, the Seligman Group of investment
96 Evergreen Avenue, companies. Formerly, Director, USLIFE Corporation.
Rye, NY 10580
James N. Whitson Director Director and Consultant, Sammons Enterprises,
(63) Inc.; Director or Trustee, the Seligman Group of
6606 Forestshire Drive investment companies; C-SPAN; and CommScope, Inc.
Dallas, TX 75230 manufacturer of coaxial cables. Formerly,
Executive Vice President, Chief Operating Officer,
Sammons Enterprises, Inc.; and Director, Red Man
Pipe and Supply Company, piping and other
materials.
Gary S. Zeltzer Vice President and Portfolio Senior Vice President, J. & W. Seligman & Co.
(47) Manager Incorporated; Vice President and Portfolio
Manager, two other open-end investment companies
in the Seligman Group.
Lawrence P. Vogel Vice President Senior Vice President, Finance, J. & W. Seligman &
(42) Co. Incorporated, Seligman Advisors, Inc., and
Seligman Data Corp.; Vice President, the Seligman
Group of investment companies, and Seligman
Services, Inc.; and Treasurer, Seligman Henderson
Co.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
Frank J. Nasta Secretary General Counsel, Senior Vice President, Law and
(34) Regulation and Corporate Secretary, J. & W.
Seligman & Co. Incorporated; Secretary, the
Seligman Group of investment companies, Seligman
Advisors, Inc., Seligman Henderson Co., Seligman
Services, Inc., and Seligman Data Corp.
Thomas G. Rose Treasurer Treasurer, the Seligman Group of investment
companies (41) and Seligman Data Corp.
</TABLE>
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund for
which no market valuation is available, and to elect or appoint officers of the
Fund to serve until the next meeting of the Board.
Directors and officers of the Fund are also directors and officers of some or
all of the other investment companies in the Seligman Group.
Compensation
<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
John R. Galvin, Director $ N/A $79,000
Alice S. Ilchman, Director N/A 73,000
Frank A. McPherson, Director N/A 79,000
John E. Merow, Director N/A 77,000
Betsy S. Michel, Director N/A 79,000
James C. Pitney, Director N/A 75,000
James Q. Riordan, Director N/A 75,000
Robert L. Shafer, Director N/A 75,000
James N. Whitson, Director (d) N/A 79,000(d)
</TABLE>
- ----------
(1) For the Fund's year ended December 31, 1998. 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) The Seligman Group of investment companies consists of eighteen investment
companies.
(d) Deferred.
The Fund has a compensation arrangement under which outside directors may elect
to defer receiving their fees. The Fund has adopted a Deferred Compensation Plan
under which a director who has elected deferral of his or her fees may choose a
rate of return equal to either (1) the interest rate on short-term Treasury
bills, or (2) the rate of return on the shares of any of the investment
companies advised by J. & W. Seligman & Co. Incorporated, as designated by the
director. The cost of such fees and earnings is included in directors' fees and
expenses, and the accumulated balance thereof is included in other liabilities
in the Fund's financial statements. The total amount of deferred compensation
(including earnings) payable in respect of the Fund to Mr. Whitson as of
December 31, 1998 was $___. Messrs. Merow and Pitney no longer defer current
compensation; however, they have accrued deferred compensation in the amounts of
$___ and $___, respectively, as of December 31, 1998.
9
<PAGE>
The Fund will purchase shares of Seligman Group investment companies to hedge
its obligations in connection with the Fund's Deferred Compensation Plan.
Control Persons and Principal Holders of Securities
Control Persons
As of January 31, 1999, there was no person or persons who controlled the Fund,
either through a significant ownership of shares or any other means of control.
Principal Holders
As of January 31, 1999, 7.97% of the Fund's Class A capital stock then
outstanding, were owned by J. & W. Seligman & Co. , Incorporated, John R. Bilbo,
Controller, 100 Park Avenue, New York, NY 10017-5516. The following entities
owned the stated percentages of the Fund's Class D capital stock then
outstanding as of January 31, 1999:
o 9.21% - Paine Webber for the benefit of Victor G. Warren TR UAD
07/14/93 for the Victor G. Warren Trust, 724 S. Garfield, Hinsdale, IL
60521
o 5.81% - CIBC Oppenheimer Corp for the benefit of 033-88914-19, P.O.
Box 3484, Church Street Station, New York, NY 10008-8484
o 5.73% - CIBC Oppenheimer Corp for the benefit of 033-72244-14, P.O.
Box 3484, Church Street Station, New York, NY 10008-8484
o 5.88% - First James Corp TR for the benefit of James Econn IRA, A/C#
141960-0001, U/A 3/6/96, P.O. Box 173301, Denver, CO 80217
Management Ownership
Directors and officers of the Fund as a group owned directly or indirectly
8,549,032 shares or 3.76% of the Fund's Class A capital stock as of January 31,
1999. As of the same date, no Directors or officers owned shares of the Fund's
Class B or Class D capital stock.
Investment Advisory and Other Services
Investment Manager
J. & W. Seligman & Co. Incorporated (Seligman) manages the Fund. Seligman 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 Seligman was purchased by Mr. William C. Morris and a simultaneous
recapitalization of Seligman occurred. See Appendix "B" for further history of
Seligman.
All of the officers of the Fund listed above are officers or employees of
Seligman. Their affiliations with the Fund and with Seligman are provided under
their principal business occupations.
The Fund pays Seligman a management fee for its services, calculated daily and
payable monthly. The management fee is equal to .45% per annum of the Fund's
average daily net assets on the first $4 billion of net assets and .425% per
annum of the Fund's average daily net assets on the next $2 billion of net
assets, .40% per annum of the Fund's average daily net assets on the next $2
billion of net assets and .375% per annum of the Fund's average daily net assets
in excess of $8 billion. For the year ended December 31, 1998, the Fund paid
Seligman $___, equal to __% per annum of its average daily net assets. For the
year ended December 31, 1997, the Fund paid Seligman $945,343, equal to .40% per
annum of its average daily net assets, and for the year ended December 31, 1996,
the Fund paid Seligman $846,790 equal to .41% per annum of its average daily net
assets.
10
<PAGE>
The Fund pays all of its expenses other than those assumed by Seligman,
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 of qualifying the Fund
and its shares under Federal and State securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder 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 Management Agreement provides that Seligman will not be liable to the Fund
for any error of judgment or mistake of law, or for any loss arising out of any
investment, or for any act or omission in performing its duties under the
Agreement, except for willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties under the Agreement.
The Management Agreement was initially approved by the Board of Directors at a
Meeting held 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 (i.e., 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) Seligman 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
or by Seligman, without penalty, on 60 days' written notice to Seligman 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 Seligman's business.
Officers, directors and employees of Seligman are permitted to engage in
personal securities transactions, subject to Seligman's Code of Ethics. The Code
of Ethics 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 Seligman's Compliance Officer,
and sets forth a procedure of identifying, for disciplinary action, those
individuals who violate the Code of Ethics. The Code of Ethics prohibits each of
the officers, directors and employees (including all portfolio managers) of
Seligman from purchasing or selling any security that the officer, director, or
employee knows or believes (1) was recommended by Seligman for purchase or sale
by any client, including the Fund, within the preceding two weeks, (2) has been
reviewed by Seligman for possible purchase or sale within the preceding two
weeks, (3) is being purchased or sold by any client, (4) is being considered by
a research analyst, (5) is being acquired in a private placement, unless prior
approval has been obtained from Seligman's Compliance Officer, or (6) is being
acquired during an initial or secondary public offering. The Code of Ethics 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 Code of Ethics also prohibits (1) 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 (2) 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.
11
<PAGE>
Officers, directors, and employees are required, except under very limited
circumstances, to engage in personal securities transactions through Seligman'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.
Principal Underwriter
Seligman Advisors, Inc., (Seligman Advisors) an affiliate of Seligman, 100 Park
Avenue, New York, New York 10017, acts as general distributor of the shares of
the Fund and of the other mutual funds in the Seligman Group. Seligman Advisors
is an "affiliated person" (as defined in the 1940 Act) of Seligman, which is
itself an affiliated person of the Fund. Those individuals identified above
under "Management Information" as directors or officers of both the Fund and
Seligman Advisors are affiliated persons of both entities.
Services Provided by the Investment Manager
Under the Management Agreement, dated December 29, 1988, as amended May 15,
1991, subject to the control of the Board of Directors, Seligman 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. Seligman provides the
Fund with such office space, administrative and other services and executive and
other personnel as are necessary for Fund operations. Seligman pays all of the
compensation of directors of the Fund who are employees or consultants of
Seligman and of the officers and employees of the Fund. Seligman also provides
senior management for Seligman Data Corp., the Fund's shareholder service agent.
Service Agreements
There are no other management-related service contracts under which services are
provided to the Fund.
Other Investment Advice
No person or persons, other than directors, officers, or employees of Seligman,
regularly advise the Fund with respect to its investments.
Rule 12b-1 Plan
The Fund has adopted an Administration, Shareholder Services and Distribution
Plan (12b-1 Plan) in accordance with Section 12(b) of the 1940 Act and Rule
12b-1 thereunder.
Under the 12b-1 Plan, the Fund may pay to Seligman Advisors an administration,
shareholder services and distribution fee in respect of the Fund's Class A,
Class B, and Class D shares. Payments under the 12b-1 Plan may include, but are
not limited to: (1) compensation to securities dealers and other organizations
(Service Organizations) for providing distribution assistance with respect to
assets invested in the Fund; (2) compensation to Service Organizations for
providing administration, accounting and other shareholder services with respect
to Fund shareholders; and (3) otherwise promoting the sale of shares of the
Fund, including paying for the preparation of advertising and sales literature
and the printing and distribution of such promotional materials and prospectuses
to prospective investors and defraying Seligman Advisors' costs incurred in
connection with its marketing efforts with respect to shares of the Fund.
Seligman, in its sole discretion, may also make similar payments to Seligman
Advisors from its own resources, which may include the management fee that
Seligman receives from the Fund. Payments made by the Fund under the 12b-1 Plan
are intended to be used to encourage sales of the Fund, as well as to discourage
redemptions.
12
<PAGE>
Fees paid by the Fund under the 12b-1 Plan with respect to any class of shares
may not be used to pay expenses incurred solely in respect of any other class or
any other Seligman fund. Expenses attributable to more than one class of the
Fund will be allocated between the classes in accordance with a methodology
approved by the Fund's Board of Directors. Expenses of distribution activities
that benefit both the Fund and other Seligman funds will be allocated among the
applicable funds based on relative gross sales over the prior quarter, in
accordance with a methodology approved by the Board.
Class A
Under the 12b-1 Plan, the Fund, with respect to Class A shares, may pay
quarterly to Seligman Advisors a service fee at an annual rate of up to .25% of
the average daily net asset value of the Class A shares. Such payments are not
currently being made but may commence after April 30, 2000. These fees would be
used by Seligman Advisors exclusively to make payments to Service Organizations
which have entered into agreements with Seligman Advisors. Such Service
Organizations will receive from Seligman Advisors 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 maintenance of shareholder accounts. The fee payable to
Service Organizations from time to time shall, within such limits, be determined
by the Directors of the Fund. The Fund is not obligated to pay Seligman Advisors
for any such costs it incurs in excess of the fee described above. No expense
incurred in one year by Seligman Advisors with respect to Class A shares of the
Fund may be paid from Class A 12b-1 fees received from the Fund in any other
year. If the Fund's 12b-1 Plan is terminated in respect of Class A shares, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to Class A shares. The Fund did not make
payments under the 12b-1 Plan with respect to Class A shares during the year
ended December 31, 1998.
Class B
Under the 12b-1 Plan, the Fund, with respect to Class B shares, pays monthly a
12b-1 fee at an annual rate of up to 1% of the average daily net asset value of
the Class B shares. The fee is comprised of (1) a distribution fee equal to .75%
per annum, which is paid directly to a third party, FEP Capital, L.P., to
compensate it for having funded, at the time of sale of Fund shares (i) a 4%
commission payment to Service Organizations in connection with the sale of the
Class B shares and (ii) a payment of up to .25% of sales to Seligman Advisors to
help defray its costs of distributing Class B shares; and (2) a service fee of
up to .25% per annum which is paid to Seligman Advisors. The service fee is used
by Seligman Advisors exclusively to make payments to Service Organizations which
have entered into agreements with Seligman Advisors. Such Service Organizations
receive from Seligman Advisors a continuing service fee of up to .25% on an
annual basis, payable quarterly, of the average daily net assets of Class B
shares attributable to the particular Service Organization for providing
personal service and/or maintenance of shareholder accounts. The amounts
expended by Seligman Advisors or FEP Capital, L.P. in any one year upon the
initial purchase of Class B shares of the Fund may exceed the 12b-1 fees paid by
the Fund in that year. The Fund's 12b-1 Plan permits expenses incurred in
respect of Class B shares in one year to be paid from Class B 12b-1 fees
received from the Fund in any other year; however, in any year the Fund is not
obligated to pay any 12b-1 fees in excess of the fees described above. Seligman
Advisors and FEP Capital, L.P. are not reimbursed for expenses which exceed such
fees. If the Fund's 12b-1 Plan is terminated in respect of Class B shares, no
amounts (other than amounts accrued but not yet paid) would be owed by that Fund
to Seligman Advisors or FEP Capital, L.P. with respect to Class B shares. The
total amount paid by the Fund in respect of Class B shares for the year ended
December 31, 1998 was $___, equivalent to __% per annum of the average daily net
assets of Class B shares.
Class D
Under the 12b-1 Plan, the Fund, with respect to Class D shares, pays monthly to
Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of the average daily
net asset value of the Class D shares. The Fee is used by Seligman Advisors as
follows: During the first year following the sale of Class D shares,
13
<PAGE>
a distribution fee of .75% of the average daily net assets attributable to Class
D shares is used, along with any CDSC proceeds, to (1) reimburse Seligman
Advisors for its payment at the time of sale of Class D shares of a .75% sales
commission to Service Organizations, and (2) pay for other distribution
expenses, including paying for the preparation of advertising and sales
literature and the printing and distribution of such promotional materials and
prospectuses to prospective investors and other marketing costs of Seligman
Advisors. In addition, during the first year following the sale of Class D
shares, a service fee of up to .25% of the average daily net assets attributable
to such Class D shares is used to reimburse Seligman Advisors for its prepayment
to Service Organizations at the time of sale of Class D shares of a service fee
of up to .25% of the net asset value of the Class D shares sold (for shareholder
services to be provided to Class D shareholders over the course of the one year
immediately following the sale). The payment to Seligman Advisors is limited to
amounts Seligman Advisors actually paid to Service Organizations at the time of
sale as service fees. After the initial one-year period following a sale of
Class D shares, the entire 12b-1 fee attributable to such Class D shares is paid
to Service Organizations for providing continuing shareholder services and
distribution assistance in respect of assets invested in the Fund. The total
amount paid by the Fund in respect of Class D shares for the year ended December
31, 1998 was $___, equivalent to __% per annum of the average daily net assets
of Class D shares.
The amounts expended by Seligman Advisors in any one year with respect to Class
D shares of the Fund may exceed the 12b-1 fees paid by the Fund in that year.
The Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in respect
of Class D shares in one year to be paid from Class D 12b-1 fees in any other
year; however, in any year the Fund is not obligated to pay any 12b-1 fees in
excess of the fees described above.
As of December 31, 1998 Seligman Advisors has incurred $___ of unreimbursed
expenses in respect of the Fund's Class D shares. This amount is equal to __% of
the net assets of Class D shares at December 31, 1998.
If the 12b-1 Plan is terminated in respect of Class D shares of the Fund, no
amounts (other than amounts accrued by not yet paid) would be owed by the Fund
to Seligman Advisors with respect to Class D shares.
Payments made by the Fund under the 12b-1 Plan for its fiscal year ended
December 31, 1998, were spent on the following activities in the following
amounts:
Class A(1) Class B Class D
---------- ------- -------
Compensation to underwriters $ $
Compensation to broker/dealers $ $ $
Other* $
(1) The Fund did not make payments under the Plan for fiscal year ended 1998.
* Payment is made to FEP Capital, L. P. to compensate it for having funded at
the time of sale, payments to broker/dealers and underwriters.
The 12b-1 Plan was approved on July 16, 1992 by the Directors, including a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of the Fund and who have no direct or indirect financial interest in
the operation of the Plan or in any agreement related to the 12b-1 Plan (the
"Qualified Directors") and was approved by shareholders of the Fund at a Special
Meeting of the Shareholders held on November 23, 1992. Although the 12b-1 Plan
became effective in respect of the Class A shares on January 1, 1993, the
manager elected to waive the fee through April 30, 1999. The 12b-1 Plan was
approved in respect of the Class B shares on March 21, 1996 by the Board of
Directors of the Fund, including a majority of the Qualified Directors, and
became effective in respect of the Class B shares on April 22, 1996. The 12b-1
Plan was approved in respect of the Class D shares on March 18,
14
<PAGE>
1993 by the Directors, including a majority of the Qualified Directors, and
became effective in respect of the Class D shares on May 1, 1993. The 12b-1 Plan
will continue in effect until December 31 of each year so long as such
continuance is approved annually by a majority vote of both the Directors of the
Fund and the Qualified Directors, cast in person at a meeting called for the
purpose of voting on such approval. The 12b-1 Plan may not be amended to
increase materially the amounts payable to Service Organizations with respect to
a class without the approval of a majority of the outstanding voting securities
of the class. If the amount payable in respect of Class A shares under the 12b-1
Plan is proposed to be increased materially, the Fund will either (1) permit
holders of Class B shares to vote as a separate class on the proposed increase
or (2) establish a new class of shares subject to the same payment under the
12b-1 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 12b-1 Plan may be made except by vote of a majority of
both the Directors and the Qualified Directors.
The 12b-1 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 12b-1 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.
Seligman Services acts as a broker/dealer of record for shareholder accounts
that do not have a designated financial advisor and receives compensation from
the Fund pursuant to the 12b-1 Plan for providing personal services and account
maintenance to such accounts and other distribution services. For the years
ended December 31, 1998, 1997, and 1996, Seligman Services received distribution
and service fees from the Fund pursuant to its 12b-1 Plan of $___, $22,937 and
$10,159, respectively.
Portfolio Transactions and Other Practices
Portfolio Transactions
Seligman will seek the most favorable price and execution in the purchase and
sale of portfolio securities of the Fund. When two or more of the investment
companies in the Seligman Group or other investment advisory clients of Seligman
desire to buy or sell the same security at the same time, the securities
purchased or sold are allocated by Seligman in a manner believed to be equitable
to each. There may be possible advantages or disadvantages of such transactions
with respect to price or the size of positions readily obtainable or saleable.
Corporate bonds and other fixed-income securities are generally traded on the
over-the-counter market on a "net" basis without a stated commission, through
dealers acting for their own account and not as brokers. The Fund will engage in
transactions with these dealers or deal directly with the issuer. Prices paid to
dealers will generally include a "spread," i.e., the difference between the
prices at which a dealer is willing to purchase or to sell the security at that
time. The Management Agreement recognizes that in the purchase and sale of
portfolio securities, Seligman will seek the most favorable price and execution
and, consistent with that policy, may give consideration to the research,
statistical and other services furnished by dealers to Seligman for its use in
connection with its services to the Fund as well as to other clients.
Commissions
For the fiscal years ended December 31, 1998, 1997, and 1996, no brokerage
commissions were paid by the Fund.
Dealer Selection
Consistent with seeking the most favorable price and execution when buying or
selling portfolio securities, Seligman may give consideration to the research,
statistical, and other services furnished by dealers to Seligman for its use, as
well as the general attitude toward and support of investment
15
<PAGE>
companies demonstrated by such dealers. Such services include supplemental
investment research, analysis, and reports concerning issuers, industries, and
securities deemed by Seligman to be beneficial to the Fund. In addition,
Seligman is authorized to place orders with dealers who provide supplemental
investment and market research and security and economic analysis although the
use of such dealers may result in the Fund paying a higher spread, than the use
of dealers selected solely on the basis of seeking the most favorable price and
execution and although such research and analysis may be useful to Seligman in
connection with its services to clients other than the Fund.
Directed Brokerage
During the year ended December 31, 1998 neither the Fund nor Seligman directed
any of the Fund's portfolio transactions to a dealer because of research
services provided.
Regular Broker-Dealers
During the year ended December 31, 1998, the Fund did not acquire securities of
its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or
of their parents.
Capital Stock and Other Securities
Capital Stock
The Fund is authorized to issue 1,400,000,000 shares of common stock, each with
a par value of $0.01 per share, divided into three classes, designated Class A,
Class B, and Class D shares. 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 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. All shares have noncumulative voting rights for the election of
directors. Each outstanding share is fully paid and non-assessable, and each is
freely transferable. There are no liquidation, conversion, or preemptive rights.
The Board of Directors is authorized to classify or reclassify and issue and
issue any unissued common stock of the Fund into any number of other classes
without further action by shareholders.
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.
Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
by the provisions of the 1940 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.
16
<PAGE>
Other Securities
The Fund has no authorized securities other than common stock.
Purchase, Redemption, and Pricing of Shares
Purchase of 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 or 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 A
Since Class A shares of the Fund are offered to investors at net asset value,
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 charge was paid will be
included for purposes of determining a shareholder's eligibility for a reduced
sales charge on additional investments in Class A shares of the Seligman Mutual
Funds sold with an initial sales charge, as described in each of the other
Seligman Mutual Funds' prospectuses and SAIs. To receive the reduced initial
sales charge on such additional investments, the shareholder or dealer will have
to notify Seligman Advisors 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 charge.
A CDSC of 1% will also be imposed on the redemption of Class A shares acquired
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 CDSC of 1% for terminations
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 provides 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% CDSC normally imposed on redemptions of certain Class A shares (i.e.
those acquired by exchange which were originally purchased during the preceding
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. by
certain Chilean investors (i.e. pension plans, insurance companies and mutual
funds). Upon redemption of such shares within an eighteen month period, Morgan
Stanley will reimburse Seligman Advisors a pro rata portion of the fee it
received from Seligman Advisors at the time of sale of such shares.
Class B
Class B shares are sold without an initial sales charge but are subject to a
CDSC 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.
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<PAGE>
Years Since Purchase CDSC
- -------------------- ----
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%
Approximately eight years after purchase, Class B shares will convert
automatically into Class A shares of the Fund, which are subject to an annual
service fee of .25% but no distribution fee. Shares purchased through the
reinvestment of dividends on Class B shares also will convert automatically to
Class A shares together with the underlying shares on which they were earned.
Conversion occurs at the end of the month which precedes the eighth anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to the
Class B shares acquired in the exchange will apply, and the holding period of
the shares exchanged will be tacked on to the holding period of the shares
acquired.
Class B shareholders of the Fund exercising the exchange privilege will continue
to be subject to the Fund's CDSC schedule if such schedule is higher or longer
than the CDSC 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 CDSC schedule if such schedule is higher or longer than
the CDSC schedule relating to the Class B shares of the Fund from which the
exchange has been made.
Class D
Class D shares may be purchased at a price equal to the next determined net
asset value, without an initial sales charge. Class D shares are subject to a
CDSC of 1% imposed on certain redemptions within one year of purchase (or, in
the case of Class D shares acquired upon exchange, within one year of the
purchase of the original Class D Shares).
Systematic Withdrawals. Class B and Class D shareholders who reinvest both their
dividends and capital gain distributions to purchase additional shares of the
Fund, may use the Fund's Systematic Withdrawal Plan to withdraw up to 12% and
10%, respectively, of the value of their accounts per year without the
imposition of a CDSC. Account value is determined as of the date the systematic
withdrawals begin.
CDSC Waivers. The CDSC on Class B and Class D shares (and certain Class A
shares, as discussed above) will be waived or reduced in the following
instances:
(1) on redemptions following the death or disability (as defined in Section
72(m)(7) of the Internal Revenue Code) of a shareholder or beneficial
owner;
(2) in connection with (1) distributions from retirement plans qualified under
Section 401(a) of the Internal Revenue Code when such redemptions are
necessary to make distributions to plan participants (such payments
include, but are not limited to, death, disability, retirement, or
separation of service), (2) distributions from a custodial account under
Section 403(b)(7) of the Internal Revenue Code or an IRA due to death,
disability, 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 (3) a tax-free return of an excess contribution to an IRA;
(3) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund;
18
<PAGE>
(4) 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 any registered investment
management company;
(5) in whole or in part, in connection with systematic withdrawals;
(6) in connection with participation in the Merrill Lynch Small Market 401(k)
Program.
If, with respect to a redemption of any Class A, Class B, or Class D shares sold
by a dealer, the CDSC is waived because the redemption qualifies for a waiver as
set forth above, the dealer shall remit to Seligman Advisors promptly upon
notice, an amount equal to the payment or a portion of the payment made by
Seligman Advisors at the time of sale of such shares.
Regardless of the method of redemption, a check for the proceeds ordinarily will
be sent within seven calendar days following
Payment in Securities. 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.
Fund Reorganizations
Any CDSC will be waived in connection with the redemption of shares of the Fund
if the Fund is combined with another Seligman mutual fund, or in connection with
a similar reorganization transaction.
Offering Price
When you buy or sell fund shares, you do so at the Class's net asset value (NAV)
next calculated after Seligman Advisors accepts your request.
NAV per share of each class of the Fund is determined as of the close of regular
trading on the New York Stock Exchange (normally, 4:00 p.m. Eastern time), on
each day that the NYSE is open for business. The NYSE is currently closed on New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The Fund
will also determine NAV for each class on each day in which there is a
sufficient degree of trading in the Fund's portfolio securities that the NAV of
Fund shares might be materially affected. NAV per share for a class is computed
by dividing such class's share of the value of the net assets of the Fund (i.e.,
the value of its assets less liabilities) by the total number of outstanding
shares of such class. All expenses of the Fund, including the management fee,
are accrued daily and taken into account for the purpose of determining NAV. The
NAV of Class B and Class D shares will generally be lower than the NAV of Class
A shares as a result of the higher 12b-1 fees with respect to such shares.
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
19
<PAGE>
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 US 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.
Specimen Price Make-Up
Under the current distribution arrangements between the Fund and Seligman
Advisors, Class A, Class B and Class D shares are sold at NAV(1). Using each
Class's NAV at December 31, 1998, the maximum offering price of the Fund's
shares is as follows:
Class A
Net asset value and offering price per share(1).................. $1.00
Class B
Net asset value and offering price per share(1) ................. $1.00
Class D
Net asset value and offering price per share(1) ................. $1.00
- --------------
(1) Class A shares acquired by exchange that were originally purchased at net
asset value due to the size of the purchase are subject to a 1% CDSC, if
such shares are redeemed within 18 months of the original purchase. Class B
shares are subject to a CDSC declining from 5% in the first year after
purchase to 0% after six years. Class D shares are subject to a CDSC of 1%
on redemptions within one year of purchase.
Redemption in Kind
The procedures for selling Fund shares under ordinary circumstances are set
forth in the Prospectus. In unusual circumstances, payment may be postponed, or
the right of redemption postponed for more than seven days, if the orderly
liquidation of portfolio securities is prevented by the closing of, or
restricted trading on, the NYSE during periods of emergency, or such other
periods as ordered by the Securities and Exchange Commission. Under these
circumstances, redemption proceeds may be made in securities. If payment is made
in securities, a shareholder may incur brokerage expenses in converting these
securities to cash.
Taxation of the Fund
The Fund intends to continue to qualify as a regulated investment company under
the Code. For each year so qualified, the Fund will not be subject to federal
income taxes on its net investment income realized during any taxable year,
which it distributes to its shareholders, provided that at least 90% of its net
investment income and net short-term capital gains are distributed to
shareholders each year. Dividends from net investment income are taxed at
ordinary income rates to the shareholders, whether received in cash or
reinvested in additional shares, and are not eligible for the dividends received
deduction for corporations.
20
<PAGE>
The Fund will generally be subject to an excise tax of 4% on the amount of any
income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned by the Fund.
Unless a shareholder includes a certified taxpayer identification number (social
security number for individuals) on the account application and certifies that
the shareholder is not subject to backup withholding, the fund is required to
withhold and remit to the US Treasury a portion of distributions and other
reportable payments to the shareholder. The rate of backup withholding is 31%.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed, the Fund may charge a service fee of up to $50 that may be
deducted from the shareholder's account and offset against any undistributed
dividends and capital gain distributions. The Fund also reserves the right to
close any account which does not have a certified taxpayer identification
number.
Underwriters
Distribution of Securities
The Fund and Seligman Advisors are parties to a Distributing Agreement dated
January 1, 1993 under which Seligman Advisors acts as the exclusive agent for
distribution of shares of the Fund. Seligman Advisors accepts orders for the
purchase of Fund shares, which are offered continuously. As general distributor
of the Fund's common stock.
Compensation
Seligman Advisors, which is an affiliated person of Seligman, which is an
affiliated person of the Fund, received the following commissions and other
compensation from the Fund during its fiscal year ended December 31, 1998:
Compensation on
Redemptions and
Repurchases
(CDSC on Class A and Brokerage Other
Class D Retained) Commissions Compensation (1)
----------------- ----------- ----------------
$ $ $
(1) Seligman Advisors has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to FEP Capital, L.P., in connection with an
arrangement with FEP Capital, L.P. as discussed above under "12b-1 Plan."
In connection with this arrangement, Seligman Advisors receives payments
from FEP Capital, L.P. based on the value of Class B shares sold. Such
payments received for the year ended December 31, 1998 are reflected in the
table.
Seligman Advisors 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. Seligman Advisors may from time
to time pay a bonus or other incentive to dealers that sell shares of the
Seligman mutual funds. 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 Seligman
Advisors of such promotional activities and payments shall be consistent with
the rules of the National Association of Securities Dealers, Inc., as then in
effect.
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
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<PAGE>
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 CDSC 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, 1998.
<TABLE>
<CAPTION>
Class A shares Class B shares Class D shares
-------------- -------------- --------------
<S> <C> <C> <C>
Total dividends per share from net investment income $ $ $
(seven days ended December 31, 1998)
Annualized (365 day basis)
Average net asset value per share
Annualized historical net yield per share for seven * * *
calendar days ended December 31, 1998
Effective yield (seven days ended December 31, 1998) ** ** **
</TABLE>
Weighted average life to maturity of investments was __ days at December 31,
1998.
- ----------
* This represents the annualized average net investment income per share for
the seven days ended December 31, 1998.
** Annualized average of net investment income for the same period with
dividends reinvested.
From time to time, reference may be made in advertising or promotional material
to performance information, including mutual fund rankings, prepared by Lipper
Analytical Service, Inc., an independent reporting service which monitors the
performance of mutual funds. In calculating the total return of the Fund's Class
A, Class B and Class D shares, the Lipper analysis assumes investment of all
dividends and distributions paid but does not take into account applicable sales
charges. The Fund may also refer in advertisements in other promotional material
to articles, comments, listings and columns in the financial press pertaining to
the Fund's performance. Examples of such financial and other press publications
include BARRON'S, BUSINESS WEEK, CDA/WIESENBERGER MUTUAL FUNDS INVESTMENT
REPORT, CHRISTIAN SCIENCE MONITOR, FINANCIAL PLANNING, FINANCIAL TIMES,
FINANCIAL WORLD, FORBES, FORTUNE, INDIVIDUAL INVESTOR, INVESTMENT ADVISOR,
INVESTORS BUSINESS DAILY, KIPLINGER'S, LOS ANGELES TIMES, MONEY MAGAZINE,
MORNINGSTAR, INC., PENSION AND INVESTMENTS, SMART MONEY, THE NEW YORK TIMES, THE
WALL STREET JOURNAL, USA TODAY, U.S. NEWS AND WORLD REPORT, WORTH MAGAZINE,
WASHINGTON POST AND YOUR MONEY.
Financial Statements
The Annual Report to shareholders for the year ended December 31, 1998 contains
a schedule of the investments of the Fund as of December 31, 1998, as well as
certain other financial information as of that date. The financial statements
and notes included in the Annual Report, and the Independent
22
<PAGE>
Auditors' Report thereon, are incorporated herein by reference. The Annual
Report will be furnished without charge to investors who request copies of this
SAI.
General Information
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. ____________________,independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York, NY
10281.
23
<PAGE>
Appendix A
MOODY'S INVESTORS SERVICE, INC. (MOODY'S)
DEBT SECURITIES
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated Aa are judged 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 fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be characteristically lacking or may be unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact may have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in high
degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.
24
<PAGE>
COMMERCIAL PAPER
Moody's Commercial Paper Ratings are opinions of the ability of issuers to repay
punctually promissory senior debt obligations not having an original maturity in
excess of one year. Issuers rated "Prime-1" or "P-1" indicates the highest
quality repayment ability of the rated issue.
The designation "Prime-2" or "P-2" indicates that the issuer has a strong
ability for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
The designation "Prime-3" or "P-3" indicates that the issuer has an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high Financial leverage.
Adequate alternate liquidity is maintained.
Issues rated "Not Prime" do not fall within any of the Prime rating categories.
STANDARD & POOR'S RATING SERVICE ("S&P")
DEBT SECURITIES
AAA: Debt issues rated AAA are highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Debt issues rated A are regarded as upper medium grade. They have a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB: Debt issues rated BBB are regarded as having an adequate capacity to pay
interest and re-pay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and re-pay principal for
bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC: Debt issues rated BB, B, CCC and CC are regarded on balance, as
predominantly speculative with respect to capacity to pay interest and pre-pay
principal in accordance with the terms of the bond. BB indicates the lowest
degree of speculation and CC the highest degree of speculation. While such bonds
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposure to adverse conditions.
C: The rating C is reserved for income bonds on which no interest is being paid.
D: Debt issues rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.
COMMERCIAL PAPER
S&P Commercial Paper ratings are current assessments of the likelihood of timely
payment of debts having an original maturity of no more than 365 days.
25
<PAGE>
A-1: The A-1 designation indicates that the degree of safety regarding timely
payment is very strong.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3: Issues carrying this designation have adequate capacity for timely payment.
They are, however more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B: Issues rated "B" are regarded as having only a speculative capacity for
timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful
capacity of payment.
D: Debt rated "D" is in payment default.
The ratings assigned by S&P may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within its major rating categories.
26
<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
o Helps finance America's fledgling railroads through underwritings.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
o Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o Participates in hundreds of successful 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.
o Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion in
assets, and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
o Establishes Investment Advisory Service.
27
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios. o Helps pioneer state-specific, municipal bond
funds, today managing a national and 18 state-specific municipal funds.
o Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson plc, of London, known as
Seligman Henderson Co., to offer global investment products.
o Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
o 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.
o Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
28
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION
Item 23. Exhibits
All Exhibits have been previously filed, except Exhibits marked with an
asterisk (*) which will be filed by amendment.
(a) Form of Amendment and Restatement of Articles of Incorporation of
Registrant. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 30 filed on April 29, 1997.)
(b) Amended and Restated By-laws of the Registrant. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 30 filed on April
29, 1997.)
(c) Specimen Certificate of Class D Capital Stock. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 24 filed on April 23, 1993.)
(c)(1) Specimen Certificate of Class B Capital Stock. (Incorporated by reference
to Form SE filed by the Registrant on April 16, 1996.)
(d) Amended Management Agreement between Registrant and J. & W. Seligman &
Co. Incorporated. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 26 filed on May 1, 1995.)
(e) Copy of the Amended Distributing Agreement between Registrant and
Seligman Advisors, Inc. (formerly, Seligman Financial Services, Inc.).
(Incorporated by reference to Registrant's Post-Effective Amendment No.
30 filed on April 29, 1997.)
(f) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by reference to Exhibit 7 of Registration Statement No.
2-92487, to Registrant's Post-Effective Amendment No. 21 filed on January
29, 1997.)
(f)(1) Deferred Compensation Plan for Directors of Seligman Cash Management
Fund, Inc. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 31 filed on April 30, 1998.)
(g) Copy of Custody Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 30 filed on April 29, 1997.)
(h) Not applicable.
(i) Opinion and Consent of Counsel. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 30 filed on April 29, 1997.)
(j) *Consent of Independent Auditors.
(k) Not applicable.
(l) Purchase Agreement (Investment Letter) for Initial Capital between
Registrant's Class B shares and J. & W. Seligman & Co. Incorporated.
(Incorporated by reference to Registrant's Post-Effective Amendment No.
29 filed on April 19, 1996.)
(l)(1) Purchase Agreement (Investment Letter) 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 on April 29, 1997.)
(m) Form of Administration, Shareholder Services and Distribution Plan of
Registrant. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 29 filed on April 19, 1996.)
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
(m)(1) Form of Administration, Shareholder Services and Distribution Agreement
between Seligman Advisors, Inc. (formerly, Seligman Financial Services,
Inc.) and Dealers. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 29 filed on April 19, 1996.)
(n) *Financial Data Schedules.
(o) Copy of Multi-class Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 27 filed on
February 16, 1996.)
Other Exhibits: Powers of Attorney. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 30 filed on April 29, 1997.)
Item 24. 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. Registrant's
investment in SDC is recorded at a cost of $3,719.
Item 25. 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 26. 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 25, 1998.
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
Item 27. 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.
(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 20:
<TABLE>
Seligman Advisors, Inc.
As of January 31, 1999
<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 President and Director
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 and Director None
Charles W. Kadlec* Chief Investment Strategist None
Lawrence P. Vogel* Senior Vice President, Finance Vice President
Edward F. Lynch* Senior Vice President, National None
Sales Director
James R. Besher Senior Vice President, Divisional None
14000 Margaux Lane Sales Director
Town & Country, MO 63017
Gerald I. Cetrulo, III Senior Vice President, Sales None
140 West Parkway
Pompton Plains, NJ 07444
Jonathan G. Evans Senior Vice President, Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
T. Wayne Knowles Senior Vice President, None
104 Morninghills Court Divisional Sales Director
Cary, NC 27511
</TABLE>
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
<TABLE>
Seligman Advisors, Inc.
As of January 31, 1999
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ --------------------- ----------------------
<S> <C> <C>
Joseph Lam Senior Vice President, Regional None
Seligman International Inc. Director, Asia
Suite 1133, Central Building
One Pedder Street
Central Hong Kong
Bradley W. Larson Senior Vice President, Sales None
367 Bryan Drive
Alamo, CA 94526
Richard M. Potocki Senior Vice President, Regional None
Seligman International UK Limited Director, Europe and the Middle East
Berkeley Square House 2nd Floor
Berkeley Square
London, United Kingdom W1X 6EA
Bruce M. Tuckey Senior Vice President, Sales None
41644 Chathman Drive
Novi, MI 48375
Andrew S. Veasey Senior Vice President, Sales None
14 Woodside
Rumson, NJ 07760
J. Brereton Young* Senior Vice President, National None
Accounts Manager
Peter J. Campagna Vice President, Regional Retirement None
1130 Green Meadow Court Plans Manager
Acworth, GA 30102
Matthew A. Digan* Senior Vice President, Director of None
Mutual Fund Marketing
Mason S. Flinn Vice President, Regional Retirement None
159 Varennes Plans Manager
San Francisco, CA 94133
Robert T. Hausler* Senior Vice President, Senior None
Portfolio Specialist
Marsha E. Jacoby* Vice President, Offshore Business None
Manager
William W. Johnson* Vice President, Order Desk None
Michelle L. McCann (Rappa)* Senior Vice President, Director of None
Retirement Plans
Scott H. Novak* Senior Vice President, Insurance None
Ronald W. Pond* Vice President, Portfolio Advisor None
Tracy A. Salomon* Vice President, Retirement Marketing None
Michael R. Sanders* Vice President, Product Manager None
Managed Money Services
Helen Simon* Vice President, Sales None
Administration Manager
Gary A. Terpening* Vice President, Director of Business None
Development
Charles L. von Breitenbach, II* Senior Vice President, Director of None
Managed Money Services
Joan M. O'Connell Vice President, Regional Retirement None
3707 5th Avenue #136 Plans Manager
San Diego, CA 92103
Charles E. Wenzel Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
Jeffery C. Pleet* Vice President, Regional Retirement None
Plans Manager
</TABLE>
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
<TABLE>
Seligman Advisors, Inc.
As of January 31, 1999
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ --------------------- ----------------------
<S> <C> <C>
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Bradford C. Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Christopher J. Derry Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
Kenneth Dougherty Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
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 L. Gardner Regional Vice President None
2504 Clublake Trail
McKinney, TX 75070
Carla A. Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Michael K. Lewallen Regional Vice President None
908 Tulip Poplar Lane
Birmingham, AL 35244
Judith L. Lyon Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
Stephen A. Mikez Regional Vice President None
11786 E. Charter Oak
Scottsdale, AZ 85259
Tim O'Connell Regional Vice President None
14872 Summerbreeze Way
San Diego, CA 92128
Thomas Parnell Regional Vice President None
5250 Greystone Drive #107
Inver Grove Heights, MN 55077
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
Craig Prichard Regional Vice President None
300 Spyglass Drive
Fairlawn, OH 44333
</TABLE>
<PAGE>
File No. 2-56805
811-2650
PART C. OTHER INFORMATION (continued)
<TABLE>
Seligman Advisors, Inc.
As of January 31, 1999
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ --------------------- ----------------------
<S> <C> <C>
Steve Wilson Regional Vice President None
83 Kaydeross Park Road
Saratoga Springs, NY 12866
Eugene P. Sullivan Regional Vice President None
8 Charles Street, Apt. 603
Baltimore, MD 21201
Kelli A. Wirth Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
Jeffrey S. Dean* Vice President, Business Analyst None
Sandra G. Floris* Assistant Vice President, Order Desk None
Keith Landry* Assistant Vice President, Order Desk None
Gail S. Cushing* Assistant Vice President, National None
Accounts Manager
Albert A. Pisano* Assistant Vice President and None
Compliance Officer
Jack Talvy* Assistant Vice President, Internal None
Marketing Services Manager
Joyce Peress* Assistant Secretary Assistant Secretary
</TABLE>
* The principal business address of each of these directors and/or officers
is 100 Park Avenue, New York, NY 10017.
(c) Not applicable.
Item 30. Location of Accounts and Records
(1) Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105 and
(2) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Item 31. Management Services. Not Applicable.
Item 32. Undertakings. The Registrant undertakes, (1) to furnish a copy of the
Registrant's latest annual report, upon request and without charge, to
every person to whom a prospectus is delivered and (2) if requested to
do so by the holders of at least ten percent of its outstanding
shares, to call a meeting of shareholders for the purpose of voting
upon the removal of a director or directors and to assist in
communications with other shareholders as required by Section 16(c) of
the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 32 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 26th day of February, 1999.
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. 32 has been
signed below by the following persons in the capacities indicated on February
26, 1999.
Signature Title
--------- -----
/s/ Brian T. Zino 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 )
