SELIGMAN VALUE FUND SERIES INC, 485APOS, 1999-02-26

SELIGMAN VALUE FUND SERIES INC
485APOS, 1999-02-26

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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. 5 |X|

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|

Amendment No. 7 |X|

- --------------------------------------------------------------------------------

SELIGMAN VALUE FUND SERIES, 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
----------------
VALUE FUND
SERIES, INC.

LARGE-CAP
VALUE FUND

SMALL-CAP
VALUE FUND

GRAPHIC

PROSPECTUS

MAY 1, 1999

-------------

A Value Approach to

Seeking Long-Term

Capital Appreciation

managed by

[LOGO]

J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864

The Securities and Exchange Commission has neither approved nor disapproved
these Funds, and it has not determined the prospectus to be accurate or
adequate. Any representation to the contrary is a criminal offense.

An investment in these Funds or any other fund cannot provide a complete
investment program. The suitability of an investment in a 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 one or more of these
Funds is suitable for you.

EQVA1 5/99
<PAGE>

TABLE OF CONTENTS

THE FUNDS
Seligman Large-Cap Value Fund
Investment Objective/Principal Strategies 1
Principal Risks 2
Past Performance 3
Fees and Expenses 4
Seligman Small-Cap Value Fund
Investment Objective/Principal Strategies 5
Principal Risks 6
Past Performance 7
Fees and Expenses 8
Management of the Funds 9
The Portfolio Managers'
Historical Performance 10
Year 2000 12
SHAREHOLDER INFORMATION
Deciding Which Class of Shares to Buy 13
Pricing of Fund Shares 15
Opening Your Account 15
How to Buy Additional Shares 16
How to Exchange Shares Between
The Seligman Mutual Funds 17
How to Sell Shares 17
Important Policies That May Affect
Your Account 18
Dividends and Capital Gain Distributions 19
Taxes 19
The Seligman Mutual Funds 20

FINANCIAL HIGHLIGHTS 21

HOW TO CONTACT US 25

FOR MORE INFORMATION back cover

TIMES CHANGE ... VALUES ENDURE
<PAGE>

Large-Cap Value Fund

Investment Objective/Principal Strategies

The Fund's objective is long-term capital appreciation.

The Fund uses the following principal strategies to pursue its objective:

The Fund generally invests at least 65% of its total assets in the common
stocks of "value" companies with large market capitalization ($2 billion or
more) at the time of purchase by the Fund.

Value The Fund uses a bottom-up stock selection approach.
Companies: This means that the investment manager concentrates on
Those companies individual company fundamentals, rather than on a
believed by the particular industry. In selecting investments, the
investment investment manager seeks to identify value companies
manager to be that it believes display one or more of the following:
undervalued,
either . A low price-to-earning and/or low price-to-book ratio
historically, . Positive change in senior management
by the market, . Positive corporate restructuring
or by their . Temporary setback in price due to factors that no
peers. longer exist

The Fund generally holds a small number of securities because the investment
manager believes doing so allows it to adhere to its disciplined value
investment approach. The investment manager maintains close contact with the
management of each company in which the Fund invests and continually monitors
Fund holdings, remaining sensitive to overvaluation and deteriorating
fundamentals.

The Fund generally sells a stock if the investment manager believes it has
become fully valued, its fundamentals have deteriorated, or ongoing evaluation
reveals that there are more attractive investment opportunities available.

The Fund anticipates that it will be invested primarily in equity securities
of domestic issuers, including common stock, preferred stock, stock
convertible into or exchangeable for such securities, and common stock
purchase rights and warrants. The Fund may also invest in American Depositary
Receipts (ADRs). ADRs are publicly traded instruments generally issued by
domestic banks or trust companies that represent a security of a foreign
issuer. ADRs are quoted and settled in US dollars. The Fund uses the same
criteria in evaluating these securities as it does for common stocks.

The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund fro m achieving its objective.

The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold) and may invest up to 10% of its total
assets directly in foreign securities (which does not include ADRs, or
commercial paper and certificates of deposit issued by foreign banks). The
Fund may also purchase put options (which gives the Fund the right to sell an
underlying security at a particular price during a fixed period) in an attempt
to hedge against a decline in the price of securities it holds in its
portfolio. The Fund generally does not invest a significant amount of its
assets, if any, in illiquid securities, foreign securities, or put options.

The Fund may change its principal strategies if the Fund's Board of Directors
believes doing so is consistent with the Fund's objective. The Directors may
also change the parameters by which "large" market capitalization is defined
if they conclude such a change is appropriate.

The Fund's objective is a fundamental policy and may be changed only with the
approval of shareholders. As with any mutual fund, there is no guarantee the
Fund will achieve its objective.

1
<PAGE>

Large-Cap Value Fund

Principal Risks

Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate, especially in the short term. You may
experience a decline in the value of your investment and you could lose money.

The Fund holds a small number of securities. Consequently, if one or more of
the securities held in its portfolio declines in value or underperforms
relative to the market, it may have a greater impact on the Fund's performance
than if the Fund held a larger number of securities. The Fund may experience
more volatility, especially over the short term, than a fund with a greater
number of holdings.

The Fund generally avoids concentration in any one industry. However, the Fund
may invest more heavily in certain industries believed to offer good investment
opportunities. To the extent that an industry in which the Fund is invested
falls out of favor, the Fund's performance may be negatively affected. This
effect may be heightened because the Fund holds a smaller number of securities.

The Fund's performance may be affected by the broad investment environment in
the US or international securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.

To the extent that the Fund invests some of its assets in higher-risk
securities, such as foreign securities, illiquid securities, or options, it may
be subject to higher price volatility. Investing in securities of foreign
issuers involves risks not associated with US investments, including settlement
risk, currency fluctuations, foreign taxation, differences in financial
reporting practices, and changes in political conditions.

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.

2
<PAGE>

Large-Cap Value Fund
Past Performance

The Large-Cap Value Fund offers three Classes of shares. The information below
provides some indication of the risks of investing in the Fund by showing how
the Fund's performance compares to three widely-used measures of large company
performance.

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 return presented in the bar chart does not reflect the
effect of any sales charges. If these charges were included, the return would
be less. The average annual total returns presented in the table below the
chart do reflect the effect of the applicable sales charges. Both the bar chart
and table assume that all dividends and capital gain distributions were
reinvested.

Class A Annual Total Return for Year ended 12/31/98

[GRAPH]

1998 11.57%

Best calendar quarter return: 19.32% - quarter ended 12/31/98
Worst calendar quarter return: -17.80% - quarter ended 9/30/98

Average Annual Total Returns - Periods Ended 12/31/98

<TABLE>
<CAPTION>
ONE SINCE INCEPTION
YEAR 4/25/97
----- ---------------
<S> <C> <C>
Class A 6.31% 20.71%
Class B 5.85 21.27
Class D 9.85 23.33
Russell 1000 Index 27.02 31.41/(1)/
Russell 1000 Value Index 15.63 25.62/(1)/
S&P 500 28.58 31.37/(1)/
</TABLE>

The Russell 1000 Index, the Russell 1000 Value Index and
the Standard & Poor's Composite Stock Price Index (S&P
500) are unmanaged benchmarks that assume the
reinvestment of dividends and exclude the effect of fees
and sales charges. The Russell 1000 Index measures the
performance of large-cap growth stocks. The Russell 1000
Value Index measures the performance of large-cap value
stocks. The S&P 500 measures the performance of the 500
largest US companies based on market capitalization.

/(1)/ From April 30, 1997.

3
<PAGE>

Large-Cap Value Fund

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)........................ 4.75%(/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.................................... .80% .80% .80%
Distribution and/or Service (12b-1) Fees........... .25% 1.00% 1.00%
Other Expenses..................................... .45% .45% .45%
----- ----- -----
Total Annual Fund Operating Expenses............... 1.50% 2.25% 2.25%
===== ===== =====
</TABLE>

/(1)/ If you buy Class A shares for $1,000,000 or more you will not pay an
initial sales charge, but your shares will be subject to a 1% CDSC if sold
within 18 months.

Example
-------

Management Fees:
Fees paid out of Fund This example is intended to help you compare the
assets to the expenses of investing in the Fund with the
investment manager to expenses of investing in other mutual funds. It
compensate it for assumes (1) you invest $10,000 in the Fund for
managing the Fund. each period and then sell all of your shares at
the end of that period, (2) your investment has
12b-1 Fees: a 5% return each year, and (3) the Fund's
Fees paid by each operating expenses remain the same. Although
Class, pursuant to a your actual expenses may be higher or lower,
plan adopted by the based on these assumptions your expenses would
Fund under Rule 12b-1 be:
of the Investment
Company Act of 1940.
The plan allows each <TABLE>
Class to pay <CAPTION>
distribution and/or 1 Year 3 Years 5 Years 10 Years
service fees for the ------ ------- ------- --------
sale and distribution <S> <C> <C> <C> <C>
of its shares and for Class A $620 $ 927 $1,255 $2,180
providing services to Class B 728 1,003 1,405 2,396+
shareholders. Class D 328 703 1,205 2,585
</TABLE>
Other Expenses:
Miscellaneous expenses
of running the Fund,
including such things
as transfer agency,
registration, custody,
and auditing and legal
fees.

If you did not sell your shares at the end of
each period, your expenses would be:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $620 $927 $1,255 $2,180
Class B 228 703 1,205 2,396
Class D 228 703 1,205 2,585+
</TABLE>

+ Class B shares will automatically convert to
Class A shares after eight years.

4
<PAGE>

Small-Cap Value Fund

Investment Objective/Principal Strategies

The Fund's objective is long-term capital appreciation.

The Fund uses the following principal strategies to pursue its objective:

The Fund generally invests at least 65% of its total assets in the common
stocks of "value" companies with small market capitalization ($1 billion or
more) at the time of purchase by the Fund.

The Fund anticipates that it will be invested in primarily equity securities
of domestic issuers, including common stock, preferred stock, stock
convertible into or exchangeable for such securities, and common stock
purchase rights and warrants. The Fund may also invest in American Depository
Receipts (ADRs). ADRs are publicly traded instruments generally issued by
domestic banks or trust companies that represent a security of a foreign
issuer. ADRs are quoted and settled in US dollars. The Fund uses the same
criteria in evaluating these securities as it does for common stocks.

The Fund may change its principal strategies if the Fund's Board of Directors
believes doing so is consistent with the Fund's objective. The Directors may
also change the parameters by which "small" market capitalization is defined
if they conclude such a change is appropriate.

The Fund's objective is a fundamental policy and may be changed only with the
approval of shareholders. As with any mutual fund, there is no guarantee the
Fund will achieve its objective.

5
<PAGE>

Small-Cap Value Fund

Principal Risks

Small company stocks, as a whole, may experience larger price fluctuations than
large company stocks or other types of investments. Small companies tend to
have shorter operating histories and may have less experienced management.
During times of investor uncertainty, investor sentiment may favor larger well-
known companies over smaller lesser-known companies.

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.

6
<PAGE>

Small-Cap Value Fund
Past Performance

The Small-Cap Value Fund offers three Classes of shares. The information below
provides some indication of the risks of investing in the Fund by showing how
the Fund's performance compares to two widely-used measures of small company
stock performance and one measure of the performance of mutual funds with
investment objectives similar to the Fund.

Class A Annual Total Return for Year ended 12/31/98

[GRAPH]

1998 -18.81%

Best calendar quarter return: 20.45% - quarter ended 6/30/97
Worst calendar quarter return: -24.76% - quarter ended 9/30/98

Average Annual Total Returns - Periods Ended 12/31/98

<TABLE>
<CAPTION>
ONE SINCE INCEPTION
YEAR 4/25/97
------ ---------------
<S> <C> <C>
Class A -22.71% 3.17%
Class B -23.42 3.20
Class D -20.21 5.51
Russell 2000 Index -2.55 14.54/(1)/
Russell 2000 Value Index -6.45 12.56/(1)/
Lipper Small Cap Funds Average -0.40 17.04/(1)/
</TABLE>

The Russell 2000 Index, the Russell 2000 Value Index,
and the Lipper Small Cap Funds Average (Lipper Average)
are unmanaged benchmarks that assume the reinvestment of
dividends. The Lipper Average excludes the effect of
sales charges and the Russell 2000 Index and the Russell
2000 Value Index exclude the effect of fees and sales
charges. The Russell 2000 Index measures the performance
of small-cap growth stocks. The Russell 2000 Value Index
measures the performance of small cap value stocks. The
Lipper Average measures the performance of mutual funds
with investment objectives similar to the Fund.

/(1)/ From April 30, 1997.

7
<PAGE>

Small Cap-Value Fund

Fees and Expenses

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.................................... 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees........... .25% 1.00% 1.00%
Other Expenses..................................... .44% .44% .44%
----- ----- -----
Total Annual Fund Operating Expenses............... 1.69% 2.44% 2.44%
===== ===== =====
</TABLE>

/(1)/ If you buy Class A shares for $1,000,000 or more you will not pay an
initial sales charge, but your shares will be subject to a 1% CDSC if sold
within 18 months.

Example
-------

Management Fees: This example is intended to help you compare the
Fees paid out of Fund expenses of investing in the Fund with the
assets to the expenses of investing in other mutual funds. It
investment manager to assumes (1) you invest $10,000 in the Fund for
compensate it for each period and then sell all of your shares at
managing the Fund. the end of that period, (2) your investment has
a 5% return each year, and (3) the Fund's
12b-1 Fees: operating expenses remain the same. Although
Fees paid by each your actual expenses may be higher or lower,
Class, pursuant to a based on these assumptions your expenses would be:
plan adopted by the
Fund under Rule 12b-1 <TABLE>
of the Investment <CAPTION>
Company Act of 1940. 1 Year 3 Years 5 Years 10 Years
The plan allows each ------ ------- ------- --------
Class to pay <S> <C> <C> <C> <C>
distribution and/or Class A $639 $ 982 $1,349 $2,378
service fees for the Class B 747 1,061 1,501 2,591+
sale and distribution Class D 347 761 1,301 2,776
of its shares and for </TABLE>
providing services to
shareholders. If you did not sell your shares at the end of
each period, your expenses would be:
Other Expenses:
Miscellaneous expenses <TABLE>
of running the Fund, <CAPTION>
including such things 1 Year 3 Years 5 Years 10 Years
as transfer agency, ------ ------- ------- --------
registration, custody, <S> <C> <C> <C> <C>
and auditing and legal Class A $639 $982 $1,349 $2,378
fees. Class B 247 761 1,301 2,591+
Class D 247 761 1,301 2,776
</TABLE>

+ Class B shares will automatically convert to
Class A shares after eight years.

8
<PAGE>

Management of the Funds

The Board of Directors provides broad supervision over the affairs of each
Fund.

Each Fund's manager is J. & W. Seligman & Co. Incorporated (Seligman), 100 Park
Avenue, New York, New York 10017. Seligman manages the investment of each
Fund's assets, including making purchases and sales of portfolio securities
consistent with each Fund's investment objective and strategies, and
administers each 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.

Each Fund pays Seligman a fee for its management services. The fee is based on
a percentage of each Fund's average daily net assets. The fee paid by the
Large-Cap Value Fund to Seligman for the year ended December 31, 1998 was equal
to an annual rate of .80% of the Fund's average daily net assets. The fee paid
by the Small-Cap Value Fund to Seligman for the year ended December 31, 1998
was equal to an annual rate of 1.00% of the Fund's average daily net assets.

Affiliates of Seligman:

Seligman Advisors, Inc.
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.

Portfolio Management

The Funds are managed by the Seligman Value Team, headed by Neil T. Eigen. Mr.
Eigen is Vice President of the Fund and has been Portfolio Manager of each Fund
since its inception. Mr. Eigen joined Seligman on January 3, 1997 as a Managing
Director. Before joining Seligman, Mr. Eigen served as Senior Managing
Director, Chief Investment Officer and Director of Equity Investing at Bear
Stearns Asset Management.

Mr. Richard S. Rosen is Co-Portfolio Manager of each Fund. Mr. Rosen joined
Seligman on January 3, 1997 as a Senior Vice President, Investment Officer.
Before joining Seligman, Mr. Rosen served as a Managing Director and Portfolio
Manager at Bear Stearns Asset Management.

9
<PAGE>

THE PORTFOLIO MANAGERS' HISTORICAL PERFORMANCE

PERFORMANCE OF THE LARGE-CAP VALUE FUND

The Large-Cap Value Fund commenced investment operations on April 25, 1997.
The data presented below illustrates comparative performance between the Large-
Cap Value Fund, the Russell 1000 Index, the Russell 1000 Value Index, and the
S&P 500.

TOTAL RETURNS

<TABLE>
<CAPTION>
Class A Class B Class D
--------------------------- --------------- ---------------
with without with 5% without with 1% without Russell Russell 1000 S&P
sales charge sales charge CDSL CDSL CDSL CDSL 1000 Index Value Index 500
------------ ------------ ------- ------- ------- ------- ---------- ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
% % % % % % % % %
</TABLE>

The total return figures for the Large-Cap Value Fund are for the period
April 25, 1997 through March 31, 1999. They reflect all changes in price per
share and assume the investment of dividend and capital gain distributions.
Class A returns are calculated with and without the effect of the initial 4.75%
maximum sales charge. Class B returns are calculated with and without the
effect of the maximum 5% CDSC, charged on sales of Fund shares made within one
year of the date of purchase, declining to 1% in the sixth year and 0%
thereafter. Class D returns are calculated with and without the effect of the
1% CDSC, charged only on Fund sales made within one year of the date of
purchase. The rates of return will vary and the principal value of an
investment will fluctuate. Shares, if redeemed, may be worth more or less than
their original cost. Past performance is not indicative of future investment
results.

The Russell 1000 Index, the Russell 1000 Value Index, and the S&P 500 are
unmanaged benchmarks that assume investment of dividends, and do not reflect
fees and sales charges. The Russell 1000 Index measures the performance of the
1000 largest US companies based on total market capitalization. The Russell
1000 Value Index measures the performance of the value companies within the
Russell 1000 Index. The S&P 500 measures the performance of the 500 largest US
companies based on market capitalization. Investors cannot invest directly in
an index. The total return figures provided for these indices are for the
period May 1, 1997 through March 31, 1999.

The Portfolio Managers' Performance For Other Large-Cap Value Accounts

The performance results presented below are for a composite representing large-
cap value institutional private accounts managed by Neil T. Eigen, Portfolio
Manager, and Richard S. Rosen, Co-Portfolio Manager, of the Large-Cap Value
Fund, including accounts that they managed while employed at their previous
employer (the Composite). The Composite does not include all private accounts
managed by Messrs. Eigen and Rosen while at their previous employer; however,
Seligman believes that the exclusion of such accounts does not materially
affect the performance shown or otherwise cause the performance to be
misleading. All accounts included in the Composite were managed with investment
objectives, policies, and strategies substantially similar to those of the
Large-Cap Value Fund. Messrs. Eigen and Rosen were employed at their previous
employer through December 31, 1996 and performance figures presented for
periods prior thereto represent results achieved while at that employer.
Additionally, calculations of certain "average annual total returns" and the
"annual rate of return" for the year ended March 31, 1997 combine the
performance achieved by Messrs. Eigen and Rosen while at their previous
employer with their performance while at Seligman.

Annual Rates of Return AVERAGE ANNUAL TOTAL RETURNS

<TABLE> [GRAPH]
<CAPTION>
Year Composite
Ended S&P S&P 500
March 31, Composite 500
--------- --------- ----- 1 Year 3 Years 5 Years 6 Years
<S> <C> <C>
1993.................. % %
1994..................
1995.................. Annualized through March 31, 1999
1996..................
1997..................
1998..................
1999..................
</TABLE>

10
<PAGE>

The performance of the Composite does not represent historical performance of
the Large-Cap Value Fund (which does not yet have a long-term performance
record) and should not be interpreted as a substitute for the Large-Cap Value
Fund's performance, or as an indication of the Large-Cap Value Fund's
performance, or as an indication of the Large-Cap Value Fund's future
performance.

Private accounts, which comprise the Composite, are not subject to certain
investment limitations, diversification requirements, and other restrictions
imposed by the Investment Company Act of 1940 and Internal Revenue Code of
1986, as amended which, if applicable, may have adversely affected the
performance results presented above.

The performance presented for the Composite is net of actual expenses (except
for custody fees) and net of the highest management fee rate that could have
been assessed on the accounts that comprise the Composite and assumes the
investment of dividends and capital gains, if any. The performance of the
Composite does not reflect the operating expenses of the Large-Cap Value Fund or
any applicable sales charges. If such expenses and sales charges were reflected,
performance would have been lower. The Large-Cap Value Fund's fees and expenses
are greater than those charged on the Composite. The method for calculating the
performance of the Composite differs from the method mandated by the Securities
and Exchange Commission for calculating the Large-Cap Value Fund's performance.
If the same method had been used, the Composite's performance results would have
been different.

11
<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 Funds rely upon
service providers and their computer systems for their day-to-day operations.
Many of the Funds' 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
Funds' 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 Funds' Board of Directors and its Audit Committee.

The team has identified the service providers and vendors who furnish critical
services or software systems to the Funds, including securities firms that
execute portfolio transactions for the Funds 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 Funds. 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 Funds. The team anticipates
finalizing these plans in the near future.

The Funds anticipate 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 Funds believe that the
critical systems on which they rely will function properly on and after the
year 2000, but this is not guaranteed. If these systems do not function
properly, or the Funds' critical service providers are not successful in
implementing their year 2000 plans, the Funds' operations may be adversely
affected, including pricing, securities trading and settlement, and the
provision of shareholder services.

In addition, the Funds may hold securities of issuers whose underlying business
leaves them susceptible to year 2000 issues. The Funds 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 a Fund holds these securities, its 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 Funds 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 Funds 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 Funds 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.

12
<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. When deciding which Class of shares
to buy, you should consider, among other things:

. The amount you plan to invest.
. How long you intend to remain invested in each Fund, or another Seligman
mutual fund.
. If you would prefer to pay an initial sales charge and lower ongoing 12b-1
fees, or be subject to a CDSC and pay higher ongoing 12b-1 fees.
. Whether you may be eligible for reduced or no sales charges when you buy
or sell shares.

Your financial advisor will be able to help you decide which Class of shares
best meets your needs.

Class A
. Initial sales charge on Fund purchases, as set forth below:

<TABLE>
<CAPTION>
Sales Charge Regular Dealer
Sales Charge as a % Discount
as a % of Net as a % of
Amount of your Investment of Offering Price/(1)/ Amount Invested Offering Price
------------------------- ---------------------- --------------- --------------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.25%
$50,000 - $ 99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and over /(2)/ 0.00 0.00 0.00
</TABLE>

/(1)/ "Offering Price" is the amount that you actually pay for Fund shares;
it includes the initial sales charge.
/(2)/ You will not pay a sales charge on purchases of $1 million or more, but
you will be subject to a 1% CDSC if you sell your shares within 18
months.

. Annual 12b-1 fee (for shareholder services) of up to 0.25%.
. No sales charge on reinvested dividends or capital gain distributions.

Class B
. No initial sales charge on purchases.
. A declining CDSC on shares sold within 6 years of purchase:

<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.

13
<PAGE>

Class D

. No initial sales charge on purchases.
. A 1% CDSC on shares sold within one year of purchase.
. 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 Funds' 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, each
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 either 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 a Fund, it will be assumed that you held the shares since the date
you purchased the shares of that Fund.

14
<PAGE>

Pricing of Fund Shares

When you buy or sell shares of a Fund, you do so at the applicable Class's net
asset value (NAV) next calculated after Seligman Advisors accepts your request.
Any applicable sales charge will be added to the purchase price for Class A
shares. 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 the 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 Advisors after the close of business, the order will be
dividing that executed at the Class's NAV calculated as of the close
Class's share of of regular trading on the next NYSE trading day. When
the net assets of you sell shares, you receive the Class's per share NAV,
the Fund (i.e., less any applicable CDSC.
its assets less
liabilities) by The NAV of each 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 Funds are valued at current
market prices. If reliable market prices are
unavailable, securities are valued in accordance with
procedures approved by the Funds' Board of Directors.

Opening Your Account

Each 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 a You may buy shares of each
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.

15
<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 each Fund's 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 Seligman Cash
Management Fund, you may exchange uncertificated shares of that 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 each Fund's shares.

Automatic CD Transfer. You may instruct your bank to invest the proceeds of a
maturing bank certificate of deposit (CD) in shares of either 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 either 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 Matrix/SM/. (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.

16
<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. You will not pay
an initial sales charge when you exchange, unless you exchange Class A shares
of Seligman Cash Management Fund to buy Class A shares of either Fund or
another Seligman mutual fund.

Only your dividend and capital gain 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 each
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 service to sell Fund shares:

Systematic Withdrawal Plan. If you have at least $5,000 in either Fund, you may
withdraw (sell) a fixed dollar 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 bought $1,000,000 or more of Class A shares
without an initial sales charge, your withdrawals may be subject to a 1% CDSC
if they occur within 18 months of purchase. If you own Class B or Class D
shares and reinvest your dividends and capital gain distributions, you may
withdraw 12% or 10%, respectively, of the value of your Fund account (at the
time of election) annually without a CDSC.

17
<PAGE>

Important Policies That May Affect Your Account

To protect you and other shareholders, each 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 and/or capital gain 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's
NAV may fluctuate during this time.

The Funds 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 either Fund's shares, you may, within 120 calendar days, use part
or all of the proceeds to buy shares of that Fund or any other Seligman mutual
fund (reinstate your investment) without paying an initial sales charge or, if
you paid a CDSC when you sold your shares, receiving a credit for the
applicable CDSC paid. This privilege is available only once each calendar year.
Contact your financial advisor for more information. You should consult your
tax advisor concerning possible tax consequences of exercising this privilege.

18
<PAGE>

Dividends and Capital Gain Distributions

Each Fund generally pays any dividends from its net investment income and
distributes net capital gains realized on investments annually. It is expected
that each Fund's distributions will be primarily capital gains.

You may elect to:

Dividend: (1) reinvest both dividends and capital gain
distributions;
A payment by a
mutual fund, (2) receive dividends in cash and reinvest capital
usually derived gain distributions; or
from the fund's
net investment (3) receive both dividends and capital gain
income distributions in cash.
(dividends and
interest earned Your dividends and capital gain distributions will be
on portfolio reinvested if you do not instruct otherwise or if you
securities less own either Fund's shares in a Seligman tax-deferred
expenses). retirement plan.

Capital Gain If you want to change your election, you may write SDC
Distribution: at the address listed on the back cover of this
prospectus, or, if you have telephone services, you or
A payment to your financial advisor may call SDC. Your request must
mutual fund be received by SDC before the record date to be
shareholders effective for that dividend or capital gain
which distribution.
represents
profits
realized on the Cash dividends or capital gain distributions will be
sale of sent by check to your address of record or, if you
securities in a have current ACH bank information on file, directly
fund's deposited into your predesignated bank account within
portfolio. 3-4 business days from the payable date.

Ex-dividend Date: Dividends and capital gain distributions are
reinvested to buy additional Fund shares on the
The day on payable date using the NAV of the ex-dividend date.
which any
declared
distributions Dividends on Class B and Class D shares will be lower
(dividends or than the dividends on Class A shares as a result of
capital gains) their higher 12b-1 fees. Capital gain distributions
are deducted will be paid in the same amount for each Class.
from a fund's
assets before
it calculates
its NAV.

Taxes

The tax treatment of dividends and capital gain 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 or capital
gain distributions or on exchanges.

You may be taxed at different rates on capital gains distributed by either Fund
depending on the length of time that Fund holds its assets.

When you sell Fund shares, any gain or loss you realize will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year, or as a short-term capital gain or loss if you held your shares
for one year or less. However, if you sell Fund shares on which a long-term
capital gain distribution has been received and you held the shares for six
months or less, any loss you realize will be treated as a long-term capital
loss to the extent that it offsets the long-term capital gain distribution.

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.

19
<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.

20
<PAGE>

Large-Cap Value Fund

The tables below are intended to help you understand each Class's financial
performance for 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

Ratios/Supplemental Data:
Net assets, end of period (in thousands)... $49,297 $23,699
Ratio of expenses to average net assets.... 1.50% 1.47%+
Ratio of net income to average net assets.. 0.61% .58%+
Portfolio turnover rate.................... 10.44% 38.74%
Without management fee waiver***

Ratios:
Expenses to average net assets............ 2.07%+
Net income to average net assets.......... (0.02)%+
</TABLE>
- --------------
* Per share amounts are calculated based on average shares outstanding.
** Commencement of operations.
*** Seligman at its discretion, waived a portion of its fees for the period
presented.
+ Annualized.

21
<PAGE>

Large-Cap Value Fund
<TABLE>
<CAPTION>
April 25, 1997**
Year ended to
December 31, 1998 December 31, 1997
CLASS B ----------------- -----------------
<S> <C> <C>
Per Share Data:*
Net asset value, beginning of period....... $ 9.04 $ 7.14
----- ----
Income from investment operations:
Net investment income..................... (0.02) (0.01)
Net gains or losses on securities (both
realized and unrealized)................. 1.00 2.04
----- ----
Total from investment operations........... 0.98 2.03
Less distributions:
Distributions (from capital gains)........ (0.06) (0.13)
----- ----
Total distributions........................ (0.06) (0.13)
----- ----
Net asset value, end of period............. $ 9.96 $ 9.04
===== ====
Total return............................... 10.85 % 28.46%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)... $56,342 $16,930
Ratio of expenses to average net assets.... 2.25 % 2.25%+
Ratio of net income to average net assets.. (0.14)% (0.20)%+
Portfolio turnover rate.................... 10.44 % 38.74%
Without management fee waiver***
Ratios:
Expenses to average net assets............ 2.85%+
Net income to average net assets.......... (0.80)%+

<CAPTION>
April 25, 1997**
Year ended to
December 31, 1998 December 31, 1997
CLASS D ----------------- -----------------
<S> <C> <C>
Per Share Data:*
Net asset value, beginning of period....... $ 9.04 $ 7.14
----- ----
Income from investment operations:
Net investment income..................... (0.02) (0.01)
Net gains or losses on securities (both
realized and unrealized)................. 1.00 2.04
----- ----
Total from investment operations........... 0.98 2.03
Less distributions:
Distributions (from capital gains)........ (0.06) (0.13)
Total distributions........................ (0.06) (0.13)
----- ----
Net asset value, end of period............. $ 9.96 $ 9.04
===== ====
Total return............................... 10.85 % 28.46%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)... $42,886 $10,358
Ratio of expenses to average net assets.... 2.25 % 2.25%+
Ratio of net income to average net assets.. (0.14)% (0.20)%+
Portfolio turnover rate.................... 10.44 % 38.74%
Without management fee waiver***
Ratios:
Expenses to average net assets............ 2.85%+
Net income to average net assets.......... (0.80)%+
</TABLE>
- --------
* Per share amounts are calculated based on average shares outstanding.
** Commencement of operations.
*** Seligman at its discretion, waived a portion of its fees for the period
presented.
+ Annualized.

22
<PAGE>

Small-Cap Value Fund

CLASS A

<TABLE>
<CAPTION>
April 25, 1997**
Year ended to
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
Per Share Data:*
Net asset value, beginning of period....... $ 9.73 $ 7.14
----- -----
Income from investment operations:
Net investment income .................... (0.09) (0.07)
Net gains or losses on securities (both
realized and unrealized)................. (1.74) 2.67
----- -----
Total from investment operations........... 1.83 2.60
Less distributions:
Distributions (from capital gains)........ (0.03) (0.01)
----- -----
Total distributions........................ (0.03) (0.01)
----- -----
Net asset value, end of period............. $7.87 $ 9.73
===== =====
Total return............................... (18.81)% 36.38%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)... $60,383 $87,510
Ratio of expenses to average net assets.... 1.69 % 1.87%+
Ratio of net income to average net assets.. (0.98)% (1.12)%+
Portfolio turnover rate.................... 30.06 % 15.91%
</TABLE>
- --------------
* Per share amounts are calculated based on average shares outstanding.
** Commencement of operations.
+ Annualized.

23
<PAGE>

Small-Cap Value Fund

<TABLE>
<CAPTION>
CLASS B
April 25, 1997**
Year ended to
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
Per Share Data:*
Net asset value, beginning of period....... $ 9.69 $ 7.14
----- -----
Income from investment operations:
Net investment income..................... (0.15) (0.11)
Net gains or losses on securities (both
realized and unrealized)................. (1.73) 2.67
----- -----
Total from investment operations........... (1.88) 2.56
----- -----
Less distributions:
Distributions (from capital gains)........ (0.03) (0.01)
----- -----
Total distributions........................ (0.03) (0.01)
----- -----
Net asset value, end of period............. $ 7.78 $ 9.69
===== =====
Total return............................... (19.41)% 35.82%

Ratios/Supplemental Data:
Net assets, end of period (in thousands)... $71,875 $88,330
Ratio of expenses to average net assets.... 2.44 % 2.63%+
Ratio of net income to average net assets.. (1.73)% (1.88)%+
Portfolio turnover rate.................... 30.06 % 15.91%
<CAPTION>

CLASS D
April 25, 1997**
Year ended to
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
Per Share Data:*
Net asset value, beginning of period....... $ 9.69 $ 7.14
----- -----
Income from investment operations:
Net investment income..................... (0.15) (0.11)
Net gains or losses on securities (both
realized and unrealized)................. (1.73) 2.67
----- -----
Total from investment operations........... (1.88) 2.56
----- -----
Less distributions:
Distributions (from capital gains)........ (0.03) (0.01)
----- -----
Total distributions........................ (0.03) (0.01)
----- -----
Net asset value, end of period............. $ 7.78 $ 9.69
===== =====
Total return............................... (19.41)% 35.82 %

Ratios/Supplemental Data:
Net assets, end of period (in thousands)... $45,384 $63,360
Ratio of expenses to average net assets.... 2.44 % 2.63%+
Ratio of net income to average net assets.. (1.73)% (1.88)%+
Portfolio turnover rate.................... (30.06)% 15.91%
</TABLE>
- --------------
* Per share amounts are calculated based on average shares outstanding.
** Commencement of operations.
+ Annualized.

24
<PAGE>

How to Contact Us

<TABLE>
<S> <C> <C>
The Funds Write: Corporate Communications/
Investor Relations Department
J. & W. Seligman & Co. Incorporated
100 Park Avenue, New York, NY 10017

Phone: Toll-Free (800) 221-7844 in the US or
(212) 850-1864 outside the US

Website: http://www.seligman.com

Your Regular
(Non-Retirement)
Account Write: Shareholder Services Department
Seligman Data Corp.
100 Park Avenue, New York, NY 10017

Phone: Toll-Free (800) 221-2450 in the US or
(212) 682-7600 outside the US

Website: http://www.seligman.com

Your Retirement
Account Write: Retirement Plan Services
Seligman Data Corp.
100 Park Avenue, New York, NY 10017

Phone: Toll-Free (800) 445-1777
</TABLE>

24-hour telephone access is available by
dialing (800) 622-4597 on a touchtone
telephone. You will have instant access to
price, yield, account balance, most recent
transaction, and other information.

25
<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 Funds. 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 each 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 affiliate of
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017

Information about the Funds, 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 Funds 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: 811-08031

<PAGE>

SELIGMAN VALUE FUND SERIES, INC.

Seligman Large-Cap Value Fund
Seligman Small-Cap Value Fund

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 expands upon and supplements the
information contained in the current Prospectus of Seligman Value Fund Series,
dated May 1, 1999. This Statement of Additional Information, 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 each Fund's Annual Report, and
the Independent Auditors' Report thereon, are incorporated herein by reference.
An 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 Funds and their Investments and Risks.............. 2
Management of the Funds............................................... 5
Control Persons and Principal Holders of Securities................... 10
Investment Advisory and Other Services................................ 10
Brokerage Allocation and Other Practices.............................. 16
Capital Stock and Other Securities ................................... 17
Purchase, Redemption, and Pricing of Shares........................... 17
Taxation of the Funds................................................. 22
Underwriters.......................................................... 23
Calculation of Performance Data ...................................... 25
Financial Statements.................................................. 27
General Information................................................... 27
Appendix A ........................................................... 28
Appendix B............................................................

<PAGE>

Fund History

Seligman Value Fund Series, Inc. was incorporated under the laws of the state of
Maryland on January 27, 1997.

Description of the Fund and Its Investments and Risks

Classification

Seligman Value Fund Series, Inc. is a diversified open-end management investment
company, or mutual fund. It consists of two separate and distinct funds: the
Seligman Large-Cap Value Fund and the Seligman Small-Cap Value Fund.

Investment Strategies and Risks

The following information regarding the Funds' investments and risks supplements
the information contained in each Funds' Prospectus.

Derivatives. Each Fund may invest in financial instruments commonly known as
"derivatives" only for hedging or investment purposes. A Fund will not invest in
derivatives for speculative purposes, i.e., where the derivative investment
exposes the Fund to undue risk of loss, such as where the risk of loss is
greater than the cost of the investment.

A derivative is generally defined as an instrument whose value is derived from,
or based upon, some underlying index, reference rate (e.g., interest rates or
currency exchange rates), security, commodity or other asset. A Fund will not
invest in a specific type of derivative without prior approval from the Fund's
Board of Directors, after consideration of, among other things, how the
derivative instrument serves the Fund' investment objective, and the risk
associated with the investment. The only types of derivatives in which each Fund
is currently permitted to invest are stock purchase rights and warrants and put
options, as more fully described below.

Put Options. A Fund may purchase put options to protect its portfolio holdings
in an underlying security against a decline in market value. A Fund will not
purchase options for speculative purposes. Purchasing a put option gives a Fund
the right to sell, and obligates the writer to buy, the underlying security at
the exercise price at any time during the option period.

When a Fund purchases an option, it is required to pay a premium to the party
writing the option and a commission to the broker selling the option. If the
option is exercised by the Fund, the premium and the commission paid may be
greater than the amount of the brokerage commission charged if the security were
to be purchased or sold directly.

A put option provides hedge protection during its existence since a Fund, as
holder of the put option, can sell the underlying security at the put exercise
price regardless of any decline in the underlying security's market price. In
order for a put option to be profitable, the market price of the underlying
security must decline sufficiently below the exercise price to cover the premium
and transaction costs. By using put options in this manner, a Fund will reduce
any profit it might otherwise have realized in the underlying security by the
premium paid for the put option and by transaction costs.

Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, a Fund would let the put option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option. The cost of the put option is limited to the premium plus
commission paid. A Fund' maximum financial exposure will be limited to these
costs.

<PAGE>

A Fund may purchase options listed on public exchanges as well as
over-the-counter. Options listed on an exchange are generally considered very
liquid. OTC options are considered less liquid, and therefore, will only be
considered where there is not a comparable listed option. Because options will
be used solely for hedging, and due to their relatively low cost and short
duration, liquidity is not a significant concern.

A Fund' ability to engage in option transactions may be limited by tax
considerations.

Rights and Warrants. A Fund may invest in common stock rights and warrants
believed by the investment manager to provide capital appreciation
opportunities. Each Fund may not invest in rights and warrants if, at the time
of acquisition by the Fund, the investment in rights and warrants would exceed
5% of such Fund' net assets, valued at the lower of cost or market.

Fixed-Income Securities. Each Fund may invest in fixed-income securities that
are not required to be rated by a recognized rating agency. As a matter of
policy, each Fund will invest only in "investment grade" debt securities or, in
the case of unrated securities, debt securities that are, in the opinion of the
investment manager, of equivalent quality to "investment grade" securities.
"Investment grade" debt securities are rated within the four highest rating
categories as determined by Moody's Investors Service, Inc. ("Moody's") or
Standard and Poor's Rating Service ("S&P"). A description of the debt securities
ratings appears in Appendix A.

Foreign Securities. Each Fund may invest in commercial paper and certificates of
deposit issued by foreign banks and may invest in other securities of foreign
issuers either directly or through American Depositary Receipts (ADRs), European
Depositary Receipts (EDRs), or Global Depositary Receipts (GDRs) (collectively
"Depositary Receipts"). Foreign investments may be affected favorably or
unfavorably by changes in currency rates and exchange control regulation. There
may be less information available about a foreign company than about a US
company and foreign companies may not be subject to reporting standards and
requirements comparable to those applicable to US companies. Foreign securities
may not be as liquid as US securities and there may be delays and risks
attendant in local settlement procedures. Securities of foreign companies may
involve greater market risk than securities of US companies, and foreign
brokerage commissions and custody fees are generally higher than those in United
States. Investments in foreign securities may also be subject to local economic
or political risks, political instability, the possible nationalization of
issuers and the risk of expropriation or restrictions on the repatriation of
proceeds of sale. In addition, foreign investments may be subject to withholding
and other taxes. ADRs, which are traded in dollars on US Exchanges or
over-the-counter, are issued by domestic banks and evidence ownership of
securities issued by foreign corporations. EDRs are typically traded in Europe.
GDRs are typically traded in both Europe and the United States. Depositary
Receipts may be issued under sponsored or unsponsored programs. In sponsored
programs, the issuer has made arrangements to have its securities traded in the
form of a Depositary Receipt. In unsponsored programs, the issuers may not be
directly involved in the creation of the program. Although regulatory
requirements with respect to sponsored and unsponsored Depositary Receipt
programs are generally similar, the issuers of securities represented by
unsponsored Depositary Receipts are not obligated to disclose material
information in the United States, and therefore, the import of such information
may not be reflected in the market value of such receipts. Each Fund may invest
up to 10% of its total assets in foreign securities that it holds directly, but
this 10% limit does not apply to foreign securities held through Depositary
Receipts which are traded in the United States or to commercial paper and
certificates of deposit issued by foreign banks.

Illiquid Securities. Each Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933 (the
"1933 Act")) and other securities that are not readily marketable. Each Fund
does not currently expect to invest more than 5% of its assets in such
securities. A Fund may purchase restricted securities that may be offered and
sold only to "qualified institutional buyers" under Rule 144A of the 1933 Act,
and the investment manager, acting pursuant to procedures approved by the Fund's
Board of Directors, may determine, when appropriate, that specific Rule 144A
securities are liquid and not subject

<PAGE>

to the 15% limitation on illiquid securities. Should this determination be made,
the investment manager, acting pursuant to such procedures, will carefully
monitor the security (focusing on such factors, among others, as trading
activity and availability of information) to determine that the Rule 144A
security continues to be liquid. It is not possible to predict with assurance
exactly how the market for Rule 144A securities will further evolve. This
investment practice could have the effect of increasing the level of illiquidity
in the Fund, if and to the extent that qualified institutional buyers become for
a time uninterested in purchasing Rule 144A securities.

Repurchase Agreements. A Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term. A
repurchase agreement is an agreement under which a Fund acquires a money market
instrument, generally a US Government obligation qualified for purchase by a
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. A Fund's repurchase agreements will at all times be fully
collateralized, and the Fund will make payment for such securities only upon
physical delivery or evidence of book entry transfer to the account of its
custodian. 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. Repurchase agreements
usually are for short periods, such as one week or less, but may be for longer
periods. As a matter of fundamental policy, a Fund will not enter into
repurchase agreements of more than one week's duration if more than 10% of its
net assets would be so invested.

Borrowing. A Fund may from time to time borrow money for temporary,
extraordinary or emergency purposes in an amount up to 15% of its total assets
from banks at prevailing interest rates and invest the funds in additional
securities. The Fund may pledge its assets only to the extent necessary to
effect permitted borrowings on a secured basis. A Fund's borrowings are limited
so that immediately after such borrowing the value of the Fund' assets
(including borrowings) less its liabilities (not including borrowings) is at
least three times the amount of the borrowings. Should a Fund, for any reason,
have borrowings that do not meet the above test, then within three business
days, such Fund must reduce such borrowings so as to meet the foregoing test.
Under these circumstances, a Fund may have to liquidate portfolio securities at
a time when it is disadvantageous to do so. Gains made with additional funds
borrowed will generally cause the net asset value of a Fund' shares to rise
faster than could be the case without borrowings. Conversely, if investment
results fail to cover the cost of borrowings, the net asset value of a Fund
could decrease faster than if there had been no borrowings.

Except as otherwise specifically noted above, each Fund's investment strategies
are not fundamental and each Fund, with the approval of the Board of Directors,
may change such strategies without the vote of shareholders.

Fund Policies

Each Fund is subject to fundamental policies that place restrictions on certain
types of investments. Each Fund's policies cannot be changed except by vote of a
majority of its outstanding voting securities. Under these policies, each Fund
may not:

- - Issue senior securities or borrow money, except for temporary or emergency
purposes in an amount not to exceed 15% of the value of its total assets. A
Fund will not purchase any securities while outstanding borrowings are
greater than 5% of the value of its total assets;

- - Mortgage or pledge any of its assets, except to the extent necessary to
effect permitted borrowings on a secured basis;

<PAGE>

- - Make "short sales" of securities, or purchase securities on "margin," or
write or purchase put or call options, except a Fund may purchase put
options for hedging purposes as approved by the Board of Directors and as
described in the Prospectus and herein;

- - As to 75% of the value of its total assets, invest more than 5% of its
total assets (taken at market) in securities of any one issuer, other than
the U.S. Government, its agencies or instrumentalities, buy more than 10%
of the outstanding voting securities of any issuer, or invest to control or
manage any company;

- - Invest more than 25% of its total assets at market value in the securities
of issuers of any one industry, except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities;

- - Purchase securities of open-end or closed-end investment companies, except
as permitted by the Investment Company Act of 1940, as amended (the "1940
Act"), and other applicable law;

- - Purchase or hold any real estate, except each Fund may invest in securities
secured by real estate or interests therein or issued by persons (including
real estate investment trusts) which deal in real estate or interests
therein.

- - Purchase or hold the securities of any issuer (other than shares of the
Fund), if to the Fund's knowledge, those directors or officers of the Fund
individually own beneficially more than 0.5% of the outstanding securities
of such issuer, together own beneficially more than 5% of such outstanding
securities;

- - Purchase or sell commodities and commodity futures contracts;

- - Underwrite securities of other issuers, except insofar as a Fund may be
deemed an underwriter when purchasing or selling portfolio securities; or

- - Make loans, except loans of portfolio securities and except to the extent
the purchase of notes, bonds or other evidences of indebtedness, the entry
into repurchase agreements or deposits with banks may be considered loans.

Each Fund may not change its investment objective without shareholder approval.

Under the Investment Company Act of 1940 (1940 Act), a "vote of a majority of
the outstanding voting securities" of a 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 of the Fund are represented at the meeting in person or by
proxy.

Temporary Defensive Position

When the investment manager believes that market conditions warrant a temporary
defensive position, each Fund may invest up to 100% of its assets in short-term
instruments, including, but not limited to, prime commercial paper, bank
certificates of deposit, bankers' acceptances, or repurchase agreements for such
securities, and securities of the US Government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. Each Fund's investments in foreign short-term instruments will be
limited to those that, in the opinion of the investment manager, equate
generally to the standards established for US short-term instruments.
Investments in bank 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.

5
<PAGE>

Portfolio Turnover

A Fund' 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 portfolio turnover rates for the Large-Cap
Value Fund and the Small-Cap Value Fund for the year ended December 31, 1998 and
for the period April 25,1997 (inception) through December 31, 1997 were _____ %
and 38.74%, and _____ % and 15.91%, respectively.

Management of the Fund

Board of Directors

The Board of Directors provides broad supervision over the affairs of each Fund.

Management Information

Directors and officers of the Seligman Value Fund Series, Inc., together with
information as to their principal business occupations during the past five
years are shown below. Each Director who is an "interested person", 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>

<PAGE>

<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
Richard R. Schmaltz* Director and Member of the Director and Managing Director, Director of
(58) Executive Committee Investments, J. & W. Seligman & Co. Incorporated;
Director or Trustee, the Seligman Group of
investment companies; Director, Seligman Henderson
Co., and Trustee Emeritus of Colby College.
Formerly, Director, Investment Research at Neuberger
& Berman from May 1993 to September 1996.

John R. Galvin Director Dean, Fletcher School of Law and Diplomacy at Tufts
(69) University; Director or Trustee, the Seligman Group
Tufts University of investment companies; Chairman, American Council
Packard Avenue, on Germany; a Governor of the Center for Creative
Medford, MA 02155 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; Director
(63) or Trustee, the Seligman Group of investment
18 Highland Circle companies; Director, the Committee for Economic
Bronxville, NY 10708 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.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address With Fund Past 5 Years

<S> <C> <C>
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; Bank
Oklahoma City, OK 73112 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 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 of
(56) 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).

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, Service Enterprise Group, public utility.
Morristown, NJ 07962
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Name, Principal
(Age) and Positions(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
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 Service;
New York, NY 10017 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 companies.
96 Evergreen Avenue, Formerly, Director, USLIFE Corporation.
Rye, NY 10580

James N. Whitson Director Director and Consultant, Sammons Enterprises, Inc.;
(63) 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.

Neil T. Eigen Vice President and Portfolio Managing Director, J. & W. Seligman & Co.
(56) Manager Incorporated; formerly, Senior Managing Director,
Chief Investment Officer and Director of Equity
Investing, Bear Stearns Asset Management.

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.

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
(41) companies and Seligman Data Corp.
</TABLE>

<PAGE>

The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by each Fund for
which no market valuation is available, and to elect or appoint officers of each
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 Trustees (1)(2)
------------------ ------------- ------------- ------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director N/A N/A N/A
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 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.

Seligman Value Fund Series, Inc. has a compensation arrangement under which
outside directors may elect to defer receiving their fees. Seligman Value Fund
Series, Inc. 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 each 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 $_____ .

Seligman Value Fund Series, Inc. may, but is not obligated to, purchase shares
of Seligman Group investment companies to hedge its obligations in connection
with its Deferred Compensation Plan.

Sales Charges

Class A shares of each Fund may be issued without a sales charge to present and
retired directors, trustees, officers, employees (and their family members) of
each Fund, the other investment companies in the Seligman Group, and J. & W.
Seligman & Co. Incorporated and its affiliates. Family members are defined to
include lineal descendants and lineal ancestors, siblings (and their spouses and
children) and any company or organization controlled by any of the foregoing.
Such sales may also be made to employee benefit plans and thrift plans for such
persons and to any investment advisory, custodial, trust or other fiduciary
account managed or advised by J. & W. Seligman & Co. Incorporated or any
affiliate.

<PAGE>

The sales may be made for investment purposes only, and shares may be resold
only to each Fund, respectively.

Class A shares may be sold at net asset value to these persons since such sales
require less sales effort and lower sales related expenses as compared with
sales to the general public.

Control Persons and Principal Holders of Securities

Control Persons

As of January 31, 1999, there was no person or persons who controlled either the
Large-Cap Value Fund or the Small-Cap Value Fund, either through a significant
ownership of shares or any other means of control.

Principal Holders

As of January 31, 1999, 15.22% of the Large-Cap Value Fund's Class A capital
stock then outstanding, 38.67% of the Large-Cap Value Fund's Class B capital
stock then outstanding and 23.77% of the Large-Cap Value Fund's capital stock
then outstanding, were registered in the name of Merrill Lynch Pierce Fenner &
Smith (MLPF&S), Attn: Fund Administrator, 4800 Deer Lake Drive East,
Jacksonville, FL 32246.

As of January 31, 1999, 16.34% of the Small-Cap Value Fund's Class A capital
stock then outstanding, 36.72% of the Small-Cap Value Fund's Class B capital
stock then outstanding and 38.85% of the Value Fund's Class D capital stock then
outstanding, were registered in the name of MLPF&S, Attn: Fund Administrator,
4800 Deer Lake Drive East, Jacksonville, FL 32246.

Management Ownership

As of January 31, 1999, directors and officers of the Fund as a group owned
directly or indirectly 63,652 Class A shares, or 3.77% of the outstanding shares
of the Class A capital stock of the Large-Cap Value Fund and 130,914 Class A
shares, or 1.76% of the outstanding shares of the Class A capital stock of the
Small-Cap Value Fund. No directors or officers owned Class B or Class D shares
of either Fund as of such date.

Investment Advisory and Other Services

Investment Manager

J. & W. Seligman & Co. Incorporated (Seligman) manages each 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 each Fund listed above are officers or employees of
Seligman. Their affiliations with each Fund and with Seligman are provided under
their principal business occupations.

Seligman is entitled to receive a management fee from each Fund for its services
to such Fund, calculated daily and payable monthly. The management fee is equal
to .80% of the Large-Cap Value Fund's average daily net assets and 1.00% of the
Small-Cap Value Fund's average daily net assets. The management fees paid by the
Large-Cap Value Fund for the year ended December 31, 1998 and for the period
April 25, 1997 (inception) through December 31, 1997 was $_____ and $36,266 or
_____% and .20% per annum of the average daily net assets of such Fund.
Seligman, at its discretion, waived a portion of its fee for the Large-Cap Value
Fund for the period ended December 31, 1997. The management fees paid by the

<PAGE>

Small-Cap Value Fund for the year ended December 31, 1998 and for the period
April 25, 1997 (inception) through December 31, 1997 was $_____ and $819,194 or
_____% and 1.00% per annum of the average daily net assets of such Fund.

Each 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 each 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 Seligman Value Fund Series, Inc. not employed by or serving as a
Director of the Manager or its affiliates, insurance premiums and extraordinary
expenses such as litigation expenses. Each Fund's expenses are allocated among
such Fund in a manner determined by the Directors to be fair and equitable.

The Management Agreement provides that Seligman will not be liable to either
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 on
March 20, 1997 and by the sole shareholder of each Fund on April 7, 1997. The
Management Agreement will continue in effect until December 31, 1998 and
thereafter from year to 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 each 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
either 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 any Fund,
without penalty, on 60 days' written notice to Seligman and will terminate
automatically in the event of its assignment. Each 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 each 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

<PAGE>

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.

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
each Fund 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 each Fund. Those individuals
identified above under "Management Information" as directors or officers of each
Fund and Seligman Advisors are affiliated persons of both entities.

Services Provided by the Investment Manager

Under the Management Agreement, dated March 20, 1997, subject to the control of
the Board of Directors, Seligman manages the investment of the assets of each
Fund, including making purchases and sales of portfolio securities consistent
with each Fund's' investment objectives and policies, and administers the
business and other affairs of each Fund. Seligman provides each 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 who are employees or consultants of Seligman and of
the officers and employees of each Fund. Seligman also provides senior
management for Seligman Data Corp., each Fund's shareholder service agent.

Service Agreements

There are no other management-related service contracts under which services are
provided to either Fund.

Other Investment Advice

No person or persons, other than directors, officers, or employees of Seligman,
regularly advise either Fund with respect to its investments.

Dealer Reallowances

Dealers and financial advisors receive a percentage of the initial sales charge
on sales of Class A shares of each Fund, as set forth below:

<PAGE>

<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
As a % of As a % of Net As a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- ------------------ ----------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 - $99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and over(2) 0 0 0
</TABLE>

(1) "Offering Price" is the amount that you actually pay for each Fund's
shares; it includes the initial sales charge.

(2) You will not pay a sales charge on purchases of $1 million or more, but you
will be subject to a 1% CDSC if you sell your shares within 18 months.

Seligman Services, Inc. (Seligman Services), an affiliate of Seligman, is a
limited purpose broker/dealer. Seligman Services is eligible to receive
commissions from certain sales of each Fund shares. For years ended December 31,
1998 and for the period April 25, 1997 (inception) through December 31, 1997,
Seligman Services received commissions from certain sales of the Large-Cap Value
Fund shares and the Small-Cap Value Fund shares in the amount of $_____ and
$725, and $_____ and $4,687, respectively.

Rule 12b-1 Plan

Each 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, a 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, respectively. Payments by a Fund 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 the 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 each Fund, respectively. Payments
made by a Fund under its 12b-1 Plan are intended to be used to encourage sales
of the Fund, as well as to discourage redemptions.

Fees paid by a Fund under the 12b-1 Plan with respect to any class of shares of
the Fund may not be used to pay expenses incurred solely in respect of any other
class of the Fund, or any other Seligman fund. Expenses attributable to more
than one class of a Fund will be allocated between the classes of the Fund in
accordance with a methodology approved by the Fund's Board of Directors. A Fund
may participate in joint distribution activities with other Seligman funds, and
the expenses of such activities will be allocated among the applicable funds
based on relative sales, in accordance with a methodology approved by the Board.

Class A

Under the 12b-1 Plan, each Fund, with respect to its Class A shares, pays
quarterly to Seligman Advisors a service fee at an annual rate of up to .25% of
the average daily net asset value of the Fund's Class A shares. These fees are
used by Seligman Advisors exclusively to make payments to Service

<PAGE>

Organizations which have entered into agreements with Seligman Advisors. Such
Service Organizations 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 for each Fund,
respectively. The fee payable to Service Organizations from time to time shall,
within such limits, be determined by the Board of Directors. A 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 a Fund may be paid from Class A 12b-1 fees received
from the Fund in any other year. If a Fund's' 12b-1 Plan is terminated in
respect of its 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 its
Class A shares. The total amount of service fees paid to Seligman Advisors in
respect of Class A shares of the Large-Cap Value Fund and the Small-Cap Value
Fund for the year ended December 31, 1998 was $_____ and $_____ equivalent to
_____% and _____% of each Fund's' Class A shares' average daily net assets.

Class B

Under the 12b-1 Plan, each Fund, with respect to its 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 Fund's' 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 a
Fund's' 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 of a Fund attributable to the
particular Service Organization for providing personal service and/or
maintenance of shareholder accounts for the Fund. The amounts expended by
Seligman Advisors or FEP Capital, L.P. in any one year upon the initial purchase
of Class B shares of a Fund may exceed the 12b-1 fees paid by the Fund in that
year. Each 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 a 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 a 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 the Fund to Seligman Advisors or FEP
Capital, L.P. with respect to its Class B shares. The total amount of
distribution and service fees paid to Seligman Advisors in respect of Class B
shares of the Large-Cap Value Fund and the Small-Cap Value Fund for the year
ended December 31, 1998 was $_____ and $_____ equivalent to _____% and _____% of
each Fund's' Class B shares' average daily net assets.

Class D

Under the 12b-1 Plan, each Fund, with respect to its 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 Fund' Class D shares. The Fee is used by
Seligman Advisors as follows: During the first year following the sale of Class
D shares, 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 of a Fund, 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 the Fund of a service fee of up to .25% of the net asset value
of the Class D share sold (for shareholder services to be provided to Class D
shareholders of the Fund over the course

<PAGE>

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 of a Fund, the entire 12b-1 fee
attributable to such Class D shares of the Fund is paid to Service Organizations
for providing continuing shareholder services and distribution assistance in
respect of assets invested in the Fund. The total amount of distribution and
service fees paid to Seligman Advisors in respect of Class D shares of the
Large-Cap Value Fund and the Small-Cap Value Fund for the year ended December
31, 1998 was $_____ and $_____ equivalent to _____% and _____% of each Fund's
Class D shares' average daily net assets.

The amounts expended by Seligman Advisors in any one year with respect to Class
D shares of a Fund may exceed the 12b-1 fees paid by the Fund in that year. Each
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 a 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 $_____ and $_____ of
unreimbursed expenses, equal to _____% and _____% of net assets in respect of
the Large-Cap Value Fund's and the Small-Cap Value Fund's Class D shares,
respectively.

If the 12b-1 Plan is terminated in respect of Class D shares of a Fund, no
amounts (other than amounts accrued by not yet paid) would be owed by the Fund
to Seligman Advisors with respect to its Class D shares.

Payments made by the Large-Cap Value Fund and the Small-Cap Value Fund under
each Fund's 12b-1 Plan for the year ended December 31, 1998, were spent on the
following activities in the following amounts:

Compensation to Compensation to Other
Fund/Class Underwriters Broker/Dealers Compensation*
- ---------- ------------ -------------- -------------

Large-Cap Value Fund/A -- $ --
Large-Cap Value Fund/B $ $ $
Large-Cap Value Fund/D $ $ --

Small-Cap Value Fund/A -- $ --
Small-Cap Value Fund/B $ $ $
Small-Cap Value Fund/D $ $ --

* 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 Plans were approved on March 20, 1997 by the Board of Directors,
including a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) of the Seligman Value Fund Series, Inc. and who have no
direct or indirect financial interest in the operation of the Plans or in any
agreement related to the Plans (the "Qualified Directors") and by the sole
shareholder of each Fund on April 7, 1997. The Plans will continue in effect
through December 31 of each year so long as such continuance is approved
annually by a majority vote of both the Directors and the Qualified Directors of
the Seligman Value Fund Series, Inc., cast in person at a meeting called for the
purpose of voting on such approval. The Plans 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 Plans 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 Plans as
existing Class A shares, in which case the Class B shares will thereafter
convert into the new

<PAGE>

class instead of into Class A shares. No material amendment to the Plans may be
made except by a majority of both the Directors and Qualified Directors.

The 12b-1 Plans require that the Treasurer of each 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 Plans. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Seligman Value Fund Series, Inc. be made by such disinterested
Directors.

Seligman Services acts as the broker/dealer of record for shareholder accounts
of each Fund that do not have a designated financial advisor and receives
compensation from each Fund pursuant to its 12b-1 Plan for providing personal
services and account maintenance to such accounts and other distribution
services. For year ended December 31, 1998 and for the period April 25, 1997
(inception) through December 31, 1997, Seligman Services received distribution
and service fees from the Large-Cap Value Fund and the Small-Cap Value Fund in
the amounts of $_____ and $2,587, and $_____ and $3,777, respectively.

Brokerage Allocation and Other Practices

Brokerage Transactions

Seligman will seek the most favorable price and execution in the purchase and
sale of portfolio securities for each 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.

In over-the-counter markets, each Fund deals with responsible primary market
makers unless a more favorable execution or price is believed to be obtainable.
Each Fund may buy securities from or sell securities to dealers acting as
principal, except dealers with which its directors and/or officers are
affiliated.

For the year ended December 31, 1998 and for the period April 25, 1997
(inception) through December 31, 1997, the Large-Cap Value Fund and the
Small-Cap Value Fund paid total brokerage commissions to others for execution,
research and statistical services in the amounts of $_____ and $_____ , and
$_____ and $_____ , respectively.

Commissions

For the year ended December 31, 1998 and for the period April 25, 1997
(inception) through December 31, 1997 each Fund did not execute any portfolio
transactions with, and therefore did not pay any commissions to, any broker
affiliated with either Fund, Seligman, or Seligman Advisors.

Brokerage 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 brokers or dealers to Seligman for
its use, as well as the general attitude toward and support of investment
companies demonstrated by such brokers or dealers. Such services include
supplemental investment research, analysis, and reports concerning issuers,
industries, and securities deemed by Seligman to be beneficial to a Fund. In
addition, Seligman is authorized to place orders with brokers who provide
supplemental investment and market research and security and economic analysis
although the use of such brokers may result in a higher brokerage charge to a
Fund than the use of brokers selected solely on the basis of seeking the most
favorable price and execution and although such research and analysis may be
useful to Seligman in connection with its services to clients other than a Fund.

<PAGE>

Directed Brokerage

During the year ended December 31, 1998 neither Fund nor Seligman directed any
of its brokerage transactions to a broker because of research services provided.

Regular Broker-Dealers

During the year ended December 31, 1998, neither Fund acquired 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 Directors of the Seligman Value Fund Series, Inc. are authorized to issue,
create and classify shares of common stock in separate Funds without further
action by shareholders. Shares of common stock of each Fund have a par value of
$.001 and are divided into three classes. Each share of a Fund' Class A, Class B
and Class D common stock is equal as to earnings, assets and voting privileges,
except that each class bears its own separate distribution and, potentially,
certain other class expenses and has exclusive voting rights with respect to any
matter to which a separate vote of any class is required by the 1940 Act or
Maryland law. The Fund has adopted a Plan (the "Multiclass Plan") pursuant to
Rule 18f-3 under the 1940 Act permitting the issuance and sale of multiple
classes of common stock. In accordance with the Articles of Incorporation, the
Board of Directors may authorize the creation of additional classes of common
stock with such characteristics as are permitted by the Multiclass Plan and Rule
18f-3. The 1940 Act requires that where more than one class exists, each class
must be preferred over all other classes in respect of assets specifically
allocated to such class. Shares have non-cumulative voting rights for the
election of directors. Each outstanding share will be fully paid and
non-assessable, and freely transferable. There are no liquidation, conversion or
prescriptive rights.

Other Securities

Seligman Value Fund Series, Inc. has no authorized securities other than the
above-mentioned common stock.

Purchase, Redemption, and Pricing of Shares

Purchase of Shares

Class A

Class A shares of each Fund may be purchased at a price equal to the next
determined net asset value per share, plus an initial sales charge.

Purchases of Class A shares by a "single person" (as defined below) may be
eligible for the following reductions in initial sales charges:

Volume Discounts are provided if the total amount being invested in Class A
shares of a Fund alone, or in any combination of shares of the other mutual
funds in the Seligman Group which are sold with an initial sales charge, reaches
levels indicated in the sales charge schedule set forth in each Fund'
Prospectus.

The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of a Fund and shares of the other Seligman mutual
funds sold with an initial sales charge with the total net asset value of shares
of those mutual funds already owned that were sold with an initial sales charge

<PAGE>

and the total net asset value of shares of Seligman Cash Management Fund which
were acquired through an exchange of shares of another Seligman mutual fund on
which there was an initial sales charge at the time of purchase to determine
reduced sales charges in accordance with the schedule in the Prospectus. The
value of the shares owned, including the value of shares of Seligman Cash
Management Fund acquired in an exchange of shares of another Seligman mutual
fund on which there was an initial sales charge at the time of purchase will be
taken into account in orders placed through a dealer, however, only if Seligman
Advisors is notified by an investor or a dealer of the amount owned by the
investor at the time the purchase is made and is furnished sufficient
information to permit confirmation.

A Letter of Intent allows an investor to purchase Class A shares over a 13-month
period at reduced initial sales charges in accordance with the schedule in the
Prospectus, based on the total amount of Class A shares of the Fund that the
letter states the investor intends to purchase plus the total net asset value of
shares that were sold with an initial sales charge of the other Seligman mutual
funds already owned and the total net asset value of shares of Seligman Cash
Management Fund which were acquired through an exchange of shares of another
Seligman mutual fund on which there was an initial sales charge at the time of
purchase. Reduced sales charges also may apply to purchases made within a
13-month period starting up to 90 days before the date of execution of a letter
of intent.

CDSC Applicable to Class A Shares. Class A shares purchased without an initial
sales charge in accordance with the sales charge schedule in the Prospectus, or
pursuant to a Volume Discount, Right of Accumulation, or Letter of Intent are
subject to a CDSC of 1% on redemptions of such shares within eighteen months of
purchase. Employee benefit plans eligible for net asset value sales (as
described below) may be subject to a CDSC of 1% for terminations at the plan
level only, on redemptions of shares purchased within eighteen months prior to
plan termination. The 1% CDSC will be waived on shares of each Fund that were
purchased through Morgan Stanley Dean Witter & Co. by certain Chilean
institutional investors (i.e. pension plans, insurance companies, and mutual
funds). Upon redemption of such shares within an eighteen-month period, Morgan
Stanley Dean Witter will reimburse Seligman Advisors a pro rata portion of the
fee it received from Seligman Advisors at the time of sale of such shares.

See "CDSC Waivers" below for other waivers which may be applicable to Class A
shares.

Persons Entitled To Reductions. Reductions in initial sales charges apply to
purchases of Class A shares by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
director or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code of 1986,
as amended, organizations tax exempt under Section 501(c)(3) or (13) of the
Internal Revenue Code, and non-qualified employee benefit plans that satisfy
uniform criteria are considered "single persons" for this purpose. The uniform
criteria are as follows:

1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
prospectus, reports, and other shareholder communications.

2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.

3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.

Eligible Employee Benefit Plans. The table of sales charges in each Fund'
Prospectus applies to sales to "eligible employee benefit plans," except that
the Fund may sell shares at net asset value to "eligible

<PAGE>

employee benefit plans" which have at least (1) $500,000 invested in the
Seligman Group of mutual funds or (2) 50 eligible employees to whom such plan is
made available. Such sales must be made in connection with a payroll deduction
system of plan funding or other systems acceptable to Seligman Data Corp., the
Fund's shareholder service agent. "Eligible employee benefit plan" means any
plan or arrangement, whether or not tax qualified, which provides for the
purchase of Fund shares. Sales of shares to such plans must be made in
connection with a payroll deduction system of plan funding or other system
acceptable to Seligman Data Corp.

Such sales are believed to require limited sales effort and sales-related
expenses and therefore are made at net asset value. Contributions or account
information for plan participation also should be transmitted to Seligman Data
Corp. by methods which it accepts. Additional information about "eligible
employee benefit plans" is available from financial advisors or Seligman
Advisors.

Further Types of Reductions. Class A shares may also be issued without an
initial sales charge to any registered unit investment trust which is the issuer
of periodic payment plan certificates, the net proceeds of which are invested in
Fund shares; to separate accounts established and maintained by an insurance
company which are exempt from registration under Section 3(c)(11) of the 1940
Act; to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with Seligman Advisors; to
financial institution trust departments; to registered investment advisers
exercising discretionary investment authority with respect to the purchase of
Fund shares; to accounts of financial institutions or broker/dealers that charge
account management fees, provided Seligman or one of its affiliates has entered
into an agreement with respect to such accounts; pursuant to sponsored
arrangements with organizations which make recommendations to, or permit group
solicitations of, its employees, members or participants in connection with the
purchase of shares of the Fund; to other investment companies in the Seligman
Group in connection with a deferred fee arrangement for outside directors; and
to "eligible employee benefit plans" which have at least (1) $500,000 invested
in the Seligman mutual funds or (2) 50 eligible employees to whom such plan is
made available.

Class B

Class B shares of each Fund may be purchased at a price equal to the next
determined net asset value, without an initial sales charge. However, Class B
shares of each Fund are subject to a CDSC if the shares are redeemed within six
years of purchase at rates set forth in the table below, charged as a percentage
of the current net asset value or the original purchase price, whichever is
less.

Years Since Purchase 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 to Class A shares, which are subject to an annual service fee of
.25% but no distribution fee. Shares purchased through reinvestment of dividends
and distributions on Class B shares also will convert automatically to Class A
shares along with the underlying shares on which they were earned. Conversion
occurs at the end of the month which precedes the eighth anniversary of the
purchase date. If Class B shares of a Fund are exchanged for Class B shares of
another Seligman Mutual Fund, the conversion period applicable to the Class B
shares acquired in the exchange will apply, and the holding period of the shares
exchanged will be tacked onto the holding period of the shares acquired. Class B
shareholders of a Fund exercising the

<PAGE>

exchange privilege will continue to be subject to such 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 a Fund acquired by exchange will
be subject to such 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 of each Fund may be purchased at a price equal to the next
determined net asset value, without an initial sales charge. However, Class D
shares of each Fund are subject to a CDSC of 1% if the shares are redeemed
within one year of purchase, charged as a percentage of the current net asset
value or the original purchase price, whichever is less.

Systematic Withdrawals. Class B and Class D shareholders of each Fund who
reinvest both their dividends and capital gain distributions to purchase
additional shares of each Fund, respectively, may use the Fund' 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 of each Fund (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;

(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 of a
Fund 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.

Payment in Securities. In addition to cash, a Fund may accept securities in
payment for Fund shares sold at the applicable public offering price (net asset
value and, if applicable, any sales charge), although each Fund does not
presently intend to accept securities in payment for Fund shares. Generally, a
Fund will only consider accepting securities (l) to increase its holdings in a
portfolio security, or (2) if Seligman determines that the offered securities
are a suitable investment for the Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that a Fund

<PAGE>

would not accept securities with a value of less than $100,000 per issue in
payment for shares. A Fund may reject in whole or in part offers to pay for Fund
shares with securities, may require partial payment in cash for applicable sales
charges, and may discontinue accepting securities as payment for Fund shares at
any time without notice. A Fund will not accept restricted securities in payment
for Fund shares. Each Fund will value accepted securities in the manner provided
for valuing its portfolio securities. Any securities accepted by a Fund in
payment for Fund shares will have an active and substantial market and have a
value which is readily ascertainable.

Fund Reorganizations

Class A shares of each Fund may be issued without an initial sales charge in
connection with the acquisition of cash and securities owned by other investment
companies. Any CDSC will be waived in connection with the redemption of a Fund'
shares 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 shares of each Fund, you do so at the Class's net asset
value (NAV) next calculated after Seligman Advisors accepts your request. Any
applicable sales charge will be added to the purchase price for Class A shares.

NAV per share of each class of a 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 of its classes on each day in which there is a
sufficient degree of trading in a Fund's portfolio securities that the NAV of
Fund shares might be materially affected. NAV per share for a class of a Fund 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 a 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.

Portfolio securities, including open short positions and options written, are
valued at the last sale price on the securities exchange or securities market on
which such securities primarily are traded. Securities traded on a foreign
exchange or over-the-counter market are valued at the last sales price on the
primary exchange or market on which they are traded. United Kingdom securities
and securities for which there are no recent sales transactions are valued based
on quotations provided by primary market makers in such securities. Any
securities for which recent market quotations are not readily available,
including restricted securities, are valued at fair value as determined in
accordance with procedures approved by the Board of Directors. Short-term
obligations with less than sixty days remaining to maturity are generally valued
at amortized cost. Short-term obligations with more than sixty days remaining to
maturity will be valued on an amortized cost basis based on the value of such
date unless the Board determines that this amortized cost value does not
represent fair market value. Expenses and fees, including the management fee,
are accrued daily and taken into account for the purpose of determining the net
asset value of Fund shares. Premiums received on the sale of call options will
be included in the net asset value, and the current market value of the options
sold by a Fund will be subtracted from net asset value.

Generally, trading in foreign securities, as well as US Government securities,
money market instruments and repurchase agreements, is substantially completed
each day at various times prior to the close of regular trading on the NYSE. The
values of such securities used in computing the net asset value of the shares of
a Fund are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of regular trading on the NYSE.
Occasionally, events affecting the value of such securities and such exchange
rates may occur between the times at which they are determined and

<PAGE>

the close of regular trading on the NYSE, which will not be reflected in the
computation of net asset value. If during such periods events occur which
materially affect the value of such securities, the securities will be valued at
their fair market value as determined in accordance with procedures approved by
the Board of Directors.

For purposes of determining the net asset value per share of a Fund, all assets
and liabilities initially expressed in foreign currencies will be converted into
US dollars at the mean between the bid and offer prices of such currencies
against US dollars quoted by a major bank that is a regular participant in the
foreign exchange market or on the basis of a pricing service that takes into
account the quotes provided by a number of such major banks.

Specimen Price Make-Up

Under the current distribution arrangements between the Fund and Seligman
Advisors, Class A shares of each Fund are sold with a maximum initial sales
charge of 4.75% and Class B and Class D shares of each Fund are sold at NAV(1).
Using each Class's NAV at December 31, 1998, the maximum offering price of each
Fund's shares is as follows:

Large-Cap Value Fund

Class A
Net asset value per share...................................... $

Maximum sales charge (4.75% of offering price)................. $

Offering price to public....................................... $
=====

Class B
Net asset value and offering price per share(1) ............... $

Class D
Net asset value and offering price per share(1) ............... $

Small-Cap Value Fund

Class A
Net asset value per share...................................... $

Maximum sales charge (4.75% of offering price)................. $

Offering price to public....................................... $
=====

Class B
Net asset value and offering price per share(1) ............... $

Class D
Net asset value and offering price per share(1) ............... $

- ----------
(1) 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.

<PAGE>

Redemption in Kind

The procedures for selling a Fund shares under ordinary circumstances are set
forth in each Fund's 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 Funds

Each Fund is qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code. For each
year so qualified, each Fund will not be subject to federal income taxes on its
net investment income and capital gains, if any, realized during any taxable
year, which it distributes to its shareholders, provided that at least 90% of
its net investment income and net short-term capital gains are distributed to
shareholders each year.

Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to shareholders, whether received
in cash or reinvested in additional shares. To the extent designated as derived
from a Fund' dividend income that would be eligible for the dividends received
deduction if the Fund were not a regulated investment company, they are
eligible, subject to certain restrictions, for the 70% dividends received
deduction for corporations.

Distributions of net capital gains (i.e., the excess of net long-term capital
gains over any net short-term losses) are taxable as long-term capital gain,
whether received in cash or invested in additional shares, regardless of how
long the shares have been held by a shareholder. Such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Shareholders receiving distributions in the form of additional shares issued by
a Fund will be treated for federal income tax purposes as having received a
distribution in an amount equal to the fair market value on the date of
distribution of the shares received. Individual shareholders generally will be
subject to federal tax on distributions of net capital gains at a maximum rate
of 20% if designated as derived from a Fund's capital gains from property held
for more than one year.

Any gain or loss realized upon a sale or redemption of shares in a Fund by a
shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. Individual shareholders
will be subject to federal income tax on net capital gains at a maximum rate of
20% in respect of shares held for more than one year. Net capital gain of a
corporate shareholder is taxed at the same rate as ordinary income. However, if
shares on which a long-term capital gain distribution has been received are
subsequently sold or redeemed and such shares have been held for six months or
less, any loss realized will be treated as long-term capital loss to the extent
that it offsets the long-term capital gain distribution. In addition, no loss
will be allowed on the sale or other disposition of shares of a Fund if, within
a period beginning 30 days before the date of such sale or disposition and
ending 30 days after such date, the holder acquires (including shares acquired
through dividend reinvestment) securities that are substantially identical to
the shares of the Fund.

In determining gain or loss on shares of a Fund that are sold or exchanged
within 90 days after acquisition, a shareholder generally will not be permitted
to include in the tax basis attributable to such shares the sales charge
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales charge by reason of the Exchange or Reinstatement Privilege offered by
the Fund. Any sales charge not taken into account in determining the tax basis
of shares sold or exchanged within 90 days after acquisition will be added to
the shareholder's tax basis in the shares acquired pursuant to the Exchange or
Reinstatement Privilege.

<PAGE>

A Fund will generally be subject to an excise tax of 4% on the amount of any
income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned. Furthermore, dividends
declared in October, November or December, payable to shareholders of record on
a specified date in such a month and paid in the following January will be
treated as having been paid by the Fund and received by each shareholder in
December. Under this rule, therefore, shareholders may be taxed in one year on
dividends or distributions actually received in January of the following year.

Shareholders are urged to consult their tax advisors concerning the effect of
federal income taxes in their individual circumstances.

Unless a shareholder includes a certified taxpayer identification number (social
security number for individuals) on the account application and certifies that
the shareholder is not subject to backup withholding, the Fund is required to
withhold and remit to the 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 of its
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
March 20, 1997 under which Seligman Advisors acts as the exclusive agent for
distribution of shares of each Fund. Seligman Advisors accepts orders for the
purchase of Fund shares, which are offered continuously. As general distributor
of each Fund shares, Seligman Advisors allows reallowances to all dealers on
sales of Class A shares, as set forth above under "Dealer Reallowances."
Seligman Advisors retains the balance of sales charges and any CDSCs paid by
investors.

Total sales charges paid by shareholders of Class A shares of the Large-Cap
Value Fund and the Small-Cap Value Fund for the year ended December 31, 1998 and
for the period April 25, 1997 (inception) through December 31, 1997 amounted to
$_____ and $_____ , and $_____ and $_____ , respectively, of which $_____ and
$_____ , and $_____ and $_____ , respectively, was retained by Seligman
Advisors.

<PAGE>

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 each Fund during its year ended December 31, 1998:

Large-Cap Value Fund

<TABLE>
<CAPTION>
Net Underwriting Compensation on
Discounts and Redemptions and
Commissions Repurchases
(Class A Sales (CDSC on Class A and Brokerage Other
Charge Retained) Class D Retained) Commissions Compensation (1)
---------------- ---------------- ----------- ------------

<S> <C> <C> <C>
$ $ $ $

Small-Cap Value Fund

<CAPTION>
Net Underwriting Compensation on
Discounts and Redemptions and
Commissions Repurchases
(Class A Sales (CDSC on Class A and Brokerage Other
Charge Retained) 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.

Other Payments

Seligman Advisors shall pay broker/dealers, from its own resources, a fee on
purchases of Class A shares of each Fund of $1,000,000 or more (NAV sales),
calculated as follows: 1.00% of NAV sales up to but not including $2 million;
.80% of NAV sales from $2 million up to but not including $3 million; .50% of
NAV sales from $3 million up to but not including $5 million; and .25% of NAV
sales from $5 million and above. The calculation of the fee will be based on
assets held by a "single person," including an individual, members of a family
unit comprising husband, wife and minor children purchasing securities for their
own account, or a director or other fiduciary purchasing for a single fiduciary
account or single trust. Purchases made by a director or other fiduciary for a
fiduciary account may not be aggregated purchases made on behalf of any other
fiduciary or individual account.

Seligman Advisors shall also pay broker/dealers, from its own resources, a fee
on assets of certain investments in Class A shares of the Seligman mutual funds
participating in an "eligible employee benefit plan" that are attributable to
the particular broker/dealer. The shares eligible for the fee are those on which
an initial sales charge was not paid because either the participating eligible
employee benefit plan has at least (1) $500,000 invested in the Seligman mutual
funds or (2) 50 eligible employees to whom such plan is made available. Class A
shares representing only an initial purchase of Seligman Cash Management Fund
are not eligible for the fee. Such shares will become eligible for the fee once
they are exchanged for shares of another Seligman mutual fund. The payment is
based on cumulative sales for each Plan during a single calendar year, or
portion thereof. The payment schedule, for each calendar year, is as follows:
1.00% of sales up to but not including $2 million; .80% of sales from $2 million
up

<PAGE>

to but not including $3 million; .50% of sales from $3 million up to but not
including $5 million; and .25% of sales from $5 million and above.

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 Performance Data

The total returns for Class A shares of the Large-Cap Value Fund and the
Small-Cap Value Fund for the year ended December 31, 1998 and for the period
April 25, 1997 (inception) through December 31, 1997 were _____% and 23.08%,
respectively. These returns were computed by subtracting the maximum sales load
of 4.75% of the public offering price and assuming that all of the dividends and
gain distributions paid by each Fund's Class A shares over the relevant time
period were reinvested. It was then assumed that at the end of the period, the
entire amount was redeemed. The total return was then determined by calculating
the rate required for the initial investment to grow to the amount which would
have been received upon redemption (income and capital). The total returns for
Class B shares of the Large-Cap Value Fund and the Small-Cap Value Fund for the
year ended December 31, 1998 and for the period April 25, 1997 (inception)
through December 31, 1997 were _____% and 23.46%, respectively. This return was
computed assuming that all of the dividends and gain distributions paid by each
Fund's Class B shares, if any, were reinvested over the relevant time period. It
was then assumed that at the end of the period the entire amount was redeemed,
subtracting the 5% CDSC. The total returns for Class D shares of the Large-Cap
Value Fund and the Small-Cap Value Fund for the year ended December 31, 1998 and
for the period April 25, 1997 (inception) through December 31, 1997 were _____%
and 27.46%, respectively. These returns were computed assuming that all of the
dividends and gain distributions paid by each Fund's Class D shares, if any,
were reinvested over the relevant time period. It was then assumed that at the
end of the period, the entire amount was redeemed, subtracting the 1% CDSC.

Table A below illustrates the total return (income and capital) on Class A
shares of each Fund with dividends invested and gain distributions taken in
shares. It shows that a $1,000 investment in Class A shares of the Large-Cap
Value Fund, assuming payment of the 4.75% sales load, made on April 25, 1997
(commencement of offering) had a value of $_____ on December 31, 1998, resulting
in an aggregate total return of _____%; and a $1,000 investment in Class A
shares of the Small-Cap Value Fund, assuming payment of the 4.75% sales load,
made on April 25, 1997 (commencement of offering) had a value of $_____ on
December 31, 1998, resulting in an aggregate total return of _____%. Table B
illustrates the total return (income and capital) on Class B shares of each Fund
with dividends invested and gain distributions, if any, taken in shares. It
shows that a $1,000 investment in Class B shares of the Large-Cap Value Fund
made on April 25, 1997 (commencement of offering) had a value of $_____ on
December 31, 1998, after subtracting the 5% CDSC, resulting in an aggregate
total return of _____%; and a $1,000 investment in Class B shares of the
Small-Cap Value Fund made on April 25, 1997 (commencement of offering) had a
value of $_____ on December 31, 1998, after subtracting the 5% CDSC, resulting
in an aggregate total return of _____%. Table C illustrates the total return
(income and capital) on Class D shares of each Fund with dividends invested and
gain distributions, if any, taken in shares. It shows that a $1,000 investment
in Class D shares of the Large-Cap Value Fund made on April 25, 1997
(commencement of offering) had a value of $_____ on December 31, 1998, after
subtracting the 1% CDSC, resulting in an aggregate total return of _____%; and a
$1,000 investment in Class D shares of the Small-Cap Value Fund made on April
25, 1997 (commencement of offering) had a value of $_____ on December 31, 1998,
after subtracting the 1% CDSC, resulting in an aggregate total return of _____%.
The results shown should not be considered a representation of the dividend
income or gain in capital value which may be realized from an investment made in
a class of shares of the Fund today.

<PAGE>

TABLE A - CLASS A SHARES

<TABLE>
<CAPTION>
Value of Value of Value Total Value
Period Initial Capital Gain of of Total
Ended(1) Investment(2) Distributions Dividends Investment(2) Return(1,3)
- ------- ------------- ------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Large-Cap Value Fund
12/31/97 $1,212 $18 $ 1 $1,231
12/31/98

Small-Cap Value Fund
12/31/97 $1,297 $ 1 $-- $1,298
12/31/98

TABLE B - CLASS B SHARES

<CAPTION>
Value of Value of Value Total Value
Period Initial Capital Gain of of Total
Ended(1) Investment(2) Distributions Dividends Investment(2) Return(1,3)
- ------- ------------- ------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Large-Cap Value Fund
12/31/97 $1,217 $18 $-- $1,235
12/31/98

Small-Cap Value Fund
12/31/97 $1,307 $ 1 $-- $1,308
12/31/98

TABLE C - CLASS D SHARES

Small-Cap Value Fund
12/31/97 $1,347 $ 1 $-- $1,348
12/31/98
</TABLE>
- ----------

1 For the year ended December 31, 1997 the performance of the Class A, Class
B and Class D shares represents the performance for the period April 25,
1997 (commencement of offering) through December 31, 1997.

2 The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load or CDSC, if applicable, assumes that all
dividends and capital gain distributions were taken in cash and reflects
changes in the net asset value of the shares purchased with the
hypothetical initial investment. "Total Value of Investment" reflects the
effect of the CDSC, if applicable, and assumes investment of all dividends
and capital gain distributions.

3 "Total Return" for each class of shares of a Fund is calculated by assuming
a hypothetical initial investment of $1,000 at the beginning of the period
specified; subtracting the maximum sales load for Class A shares;
determining total value of all dividends and capital gain distributions
that would have been paid during the period on such shares assuming that
each dividend or capital gain distribution was invested in additional
shares at net asset value; calculating the total value of the investment at
the end of the period; subtracting the CDSC on Class B and Class D shares,
if applicable; and finally, by dividing the difference between the amount
of the hypothetical initial investment at the beginning of the period and
its total value at the end of the period by the amount of the hypothetical
initial investment.

A Fund may from time to time, make reference 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

28
<PAGE>

return of the Fund's Class A, Class B and Class D shares, respectively, the
Lipper analysis assumes investment of all dividends and distributions paid but
does not take into account applicable sales charges. A 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.

A Fund's advertising or promotional material may make reference to the Fund's
"Beta." "Standard Deviation," or "Alpha." Beta measures the volatility of a
Fund, as compared to that of the overall market. Standard deviation measures how
widely a Fund's performance has varied from its average performance, and is an
indicator of a Fund's potential for volatility. Alpha measures the difference
between the returns of a Fund and the returns of the market, adjusted for
volatility.

Financial Statements

The Annual Reports to shareholders for the year ended December 31, 1998 contains
schedules of the investments of each Fund as of December 31, 1998 as well as
certain other financial information as of the applicable date. The financial
statements and notes included in the Annual Reports, and the Independent
Auditors' Reports thereon, are incorporated herein by reference. These Reports
will be furnished without charge to investors who request copies of this
Statement of Additional Information.

General Information

Custodian. Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
Missouri 64105, serves as custodian for the Fund. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset values for each Fund.

Auditors. _____, independent auditors, have been selected as auditors of the
Fund. Their address is Two World Financial Center, New York, New York 10281.

<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.

<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.

<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.

<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.

33
<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.

Appendix B

HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED

The Seligman Complex:

.... Prior to 1900

Helps finance America's fledgling railroads through underwriting. Is
admitted to the New York Stock Exchange in 1869. Seligman remained a member
of the NYSE until 1993, when the evolution of its business made it
unnecessary. Becomes a prominent underwriter of corporate securities,
including New York Mutual Gas Light Company, later part of Consolidated
Edison. Provides financial assistance to Mary Todd Lincoln and urges the
Senate to award her a pension. Is appointed US Navy fiscal agent by
President Grant. Becomes a leader in raising capital for America's
industrial and urban development.

.... 1900-1910

Helps Congress finance the building of the Panama Canal.

.... 1910s

Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.

.... 1920s

Participates in hundreds of 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.
? Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $3 billion in
assets, and one of its oldest.

.... 1930s

Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
Establishes Investment Advisory Service.

<PAGE>

.... 1940s

Helps shape the Investment Company Act of 1940.

Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.

Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.

Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.

.... 1950-1989

Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.

Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.

Establishes J. & W. Seligman Trust Company, and J. & W. Seligman Valuations
Corporation.

Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.

.... 1990s

Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.

In 1991 establishes a joint venture with Henderson plc, of London, known as
Seligman Henderson Co., to offer global and international investment
products.

Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.

Launches Seligman Henderson Global Fund Fund, Inc., which today offers five
separate Fund: Seligman Henderson International Fund, Seligman Henderson
Global Smaller Companies Fund, Seligman Henderson Global Technology Fund,
Seligman Henderson Global Growth Opportunities Fund and Seligman Henderson
Emerging Markets Growth Fund.

Launches Seligman Value Fund Fund, Inc., which currently offers two
separate Fund: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.

VALUESER

<PAGE>

File No. 2-56805
811-2650

PART C. OTHER INFORMATION

Item 23. Exhibits.

All Exhibits listed below have been previously filed, except Exhibits
marked with an asterisk (*) which will be filed by amendment.

(a) Articles of Incorporation of Registrant. (Incorporated by reference to
Registrant's Initial Registration Statement filed on January 29,
1997.)

(b) By-laws of Registrant. (Incorporated by reference to Registrant's
Pre-Effective Amendment No. 2 filed on April 17, 1997.)

(d)(1) Management Agreement between Registrant and J. & W. Seligman & Co.
Incorporated. (Incorporated by reference to Registrant's Pre-Effective
Amendment No. 2 filed on April 17, 1997.)

(e)(1) Distributing Agreement between Registrant and Seligman Advisors, Inc.
(formerly, Seligman Financial Services, Inc.) (Incorporated by
reference to Registrant's Pre-Effective Amendment No. 2 filed on April
17, 1997.)

(e)(2) Sales Agreement between Seligman Advisors , Inc. (formerly, Seligman
Financial Services, Inc.) and Dealers. (Incorporated by reference to
Registrant's Pre-Effective Amendment No. 2 filed on April 17, 1997.)

(f)(1) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by reference to Registrant's Pre-Effective Amendment No.
2 filed on April 17, 1997.)

(f)(2) Deferred Compensation Plan for Directors of Seligman Value Fund
Series, Inc. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 4 filed on April 30, 1998.)

(g) Form of Custody and Investment Accounting Agreement between Registrant
and Investors Fiduciary Trust Company. (Incorporated by reference to
Registrant's Pre-Effective Amendment No. 2 filed on April 17, 1997.)

(h) Not applicable.

(i) Opinion and Consent of Counsel. (Incorporated by reference to
Registrant's Pre-Effective Amendment No. 2 filed on April 17, 1997.)

(j) *Consent of Independent Auditors.

(k) Not applicable.

(l) Purchase Agreement (Investment Letter) between Registrant and Seligman
Advisors, Inc. (formerly, Seligman Financial Services, Inc.)
(Incorporated by reference to Registrant's Pre-Effective Amendment No.
2 filed on April 17, 1997.)

(m)(1) Administration, Shareholder Services and Distribution Plan of Seligman
Large-Cap Value Fund. (Incorporated by reference to Registrant's
Pre-Effective Amendment No. 2 filed on April 17, 1997.)

(m)(2) Administration, Shareholder Services and Distribution Plan for
Seligman Small-Cap Value Fund. (Incorporated by reference to
Registrant's Pre-Effective Amendment No. 2 filed on April 17, 1997.)

(m)(3) 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 Pre-Effective Amendment No. 2 filed on April 17, 1997.)

<PAGE>

File No. 2-56805
811-2650

PART C. OTHER INFORMATION

(n) *Financial Data Schedules.

(o) Seligman Group of Funds Multi-class Plan pursuant to Rule 18f-3.
(Incorporated by reference to Registrant's Pre-Effective Amendment No.
2 filed on April 17, 1997.)

Other Exhibits: Powers of Attorney. (Incorporated by reference to Registrant's
Pre-Effective Amendment No. 2 filed on April 17, 1997.)

Item 24. Persons Controlled by or Under Common Control with Registrant. None.

Item 25. Indemnification. Reference is made to the provisions of Article
Twelfth of Registrant's Articles of Incorporation filed as Exhibit
24(b)(1) of the Registrant's Registration Statement, filed on Form
N-1A on January 31, 1997 and Article VII of Registrant's By-laws filed
as Exhibit 24(b)(2) to Registrant's Pre-Effective Amendment No. 2 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 as 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 adviser. The Manager also serves as investment
adviser to several associated investment companies. They are: Seligman
Capital Fund, Inc., Seligman Cash Management Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc.,
Seligman Henderson Global Fund Series, Inc., Seligman High Income Fund
Series, Seligman Income Fund, Inc., Seligman 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., 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 Forms ADV, filed by the Manager pursuant to the
Investment Advisers Act of 1940 (SEC File Nos. 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 Registrant's principal underwriter is currently distributing
securities of the Registrant and also acts as a principal underwriter,
depositor or investment adviser are as follows:

Seligman Capital Fund, Inc.
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.

(b) Name of each director, officer or partner of each principal
underwriter named in the answer to Item 20:

Seligman Advisors, Inc.
As of January 31, 1999

<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
William C. Morris* Director Chairman of the Board and Chief Executive Officer

Brian T. Zino* Director 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)

Seligman Advisors, Inc.
As of January 31, 1999

<TABLE>
<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
</TABLE>

<PAGE>

File No. 2-56805
811-2650

PART C. OTHER INFORMATION (continued)

Seligman Advisors, Inc.
As of January 31, 1999

<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
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

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
</TABLE>

<PAGE>

File No. 2-56805
811-2650

PART C. OTHER INFORMATION (continued)

Seligman Advisors, Inc.
As of January 31, 1999

<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
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

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.

Item 28. Location of Accounts and Records. The accounts, books and documents
required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder are kept in the
possession of J.& W. Seligman & Co. Incorporated at its offices at 100
Park Avenue, New York, NY 10017 or at the following locations:

(1) Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
Missouri 64105 is custodian of the Registrant's cash and securities.
It also is agent to perform certain accounting and record-keeping
functions relating to portfolio transactions and to calculate the net
asset value of the Registrant.

(2) Seligman Data Corp., 100 Park Avenue, New York, NY 10017, as
shareholder servicing agent, maintains shareholder records for the
Registrant.

Item 29. Management Services. Not Available.

Item 30. Undertakings. The Registrant undertakes to: (1) 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 10% of its outstanding shares, to
call a meeting of shareholders for the purpose of voting upon the
removal of a director or directors and to assist in communications
with other shareholders as required by Section 16(c) of the Investment
Company Act of 1940.

<PAGE>

File No. 2-56805
811-2650

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 5to 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 VALUE FUND SERIES, 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. 5 to the
Registration Statement 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)
William C. Morris* and Director

/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
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )