<PAGE>
File 333-20621
No. 811-08031
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. 8 [X]
-----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 10 [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 [_] on (date) pursuant to paragraph
paragraph (b) (a)(1)
[X] on April 28, 2000 pursuant to [_] 75 days after filing pursuant to
paragraph (b) paragraph (a)(2)
[_] 60 days after filing pursuant to [_] on (date) pursuant to paragraph
paragraph (a)(1) (a)(2) of rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
SELIGMAN [GRAPHIC]
---------------------
VALUE FUND
SERIES, INC.
LARGE-CAP
VALUE FUND
SMALL-CAP
VALUE FUND
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 objectives, strategies and risks described in
this Prospectus, 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 5/2000
PROSPECTUS
MAY 1, 2000
---------
A Value Approach to
Seeking Long-Term
Capital Appreciation
managed by
[LOGO]
J.&W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
Table of Contents
Seligman Large-Cap Value Fund
Investment Objective 1
Principal Investment Strategies 1
Principal Risks 2
Past Performance 3
Fees and Expenses 4
Seligman Small-Cap Value Fund
Investment Objective 5
Principal Investment Strategies 5
Principal Risks 6
Past Performance 7
Fees and Expenses 8
Management of the Funds 9
The Portfolio Managers' Historical Performance 10
Shareholder Information
Deciding Which Class of Shares to Buy 12
Pricing of Fund Shares 14
Opening Your Account 14
How to Buy Additional Shares 15
How to Exchange Shares Among
the Seligman Mutual Funds 16
How to Sell Shares 16
Important Policies That May Affect
Your Account 17
Dividends and Capital Gain Distributions 18
Taxes 18
The Seligman Mutual Funds 19
Financial Highlights 21
How to Contact Us 25
For More Information back cover
TIMES CHANGE ... VALUES ENDURE
<PAGE>
Large-Cap Value Fund
Investment Objective
The Fund's investment objective is long-term capital appreciation.
Principal Investment Strategies
The Fund uses the following principal investment strategies to pursue its
investment 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-earnings and/or low price-to-book
historically, ratio
by the market, . Positive change in senior management
or by their . Positive corporate restructuring
peers. . Temporary setback in price due to factors that no
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 invests primarily in equity-related securities of domestic issuers.
These securities may include 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 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. The limit on foreign securities does
not include ADRs, or commercial paper and certificates of deposit issued by
foreign banks. The Fund may also purchase put options in an attempt to hedge
against a decline in the price of securities it holds in its portfolio. A put
option gives the Fund the right to sell an underlying security at a particular
price during a fixed period. 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, 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 from achieving its objective.
The Fund may change its principal strategies if the Fund's Board of Directors
believes doing so is consistent with the Fund's investment objective. The
Fund's objective may be changed only with shareholder approval.
The Fund's Board of Directors may change the parameters by which large market
capitalization is defined if it concludes such a change is appropriate.
There is no guarantee that 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
if you sell your shares at a price lower than you paid for them.
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 may not invest more than 25% of its total assets in securities of
companies 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.
Foreign securities, illiquid securities, or options in the Fund's portfolio
involve higher risk and may subject the Fund to higher price volatility.
Investing in securities of foreign issuers involves risks not associated with
US investments, including currency fluctuations, local withholding and other
taxes, different financial reporting practices and regulatory standards, high
costs of trading, changes in political conditions, expropriation, investment
and repatriation restrictions, and settlement and custody risks.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
2
<PAGE>
Large-Cap Value Fund
Past Performance
The Large-Cap Value Fund offers four Classes of shares. The information below
provides some indication of the risks of investing in the Fund by showing how
the performance of Class A shares has varied year to year, as well as how the
performance of each Class compares to three widely-used measures of large
company stock 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 returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be lower. 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 Returns
[BAR GRAPH]
1998 1999
------ ------
11.57% -2.68%
Best quarter return: 19.32% - quarter ended 12/31/98.
Worst quarter return: -17.80% - quarter ended 9/30/98.
Average Annual Total Returns - Periods Ended 12/31/99
<TABLE>
<CAPTION>
CLASS C
ONE SINCE INCEPTION SINCE INCEPTION
YEAR 4/25/97 5/27/99*
----- --------------- ---------------
<S> <C> <C> <C>
Class A -7.30% 11.40% --
Class B -8.24 11.68 --
Class C n/a -- -10.66%
Class D -4.38 12.60 --
Russell 1000 Index 20.91 27.37(/1/) 13.92(/2/)
Russell 1000 Value Index 7.35 18.43(/1/) -2.13(/2/)
S&P 500 Index 21.04 27.40(/1/) 13.68(/2/)
</TABLE>
The Russell 1000 Index, the Russell 1000 Value Index and the Standard &
Poor's Composite Stock Price Index (S&P 500 Index) 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
stocks. The Russell 1000 Value Index measures the performance of large-cap
value stocks. The S&P 500 Index measures the performance of 500 of the
largest US companies based on market capitalization.
In the future, the Fund will no longer be compared to the Russell 1000
Index, which reflects the performance of funds that invest in large
capitalization stocks. Instead, the Fund will be compared to the Russell
1000 Value Index, which the investment manager believes is a more
appropriate benchmark because it measures the performance of funds that
invest in large capitalization value stocks similar to those in which the
Fund primarily invests. Therefore, the Fund will continue to be compared to
the Russell 1000 Value Index and the S&P 500 Index.
*Total returns for periods of less than one year are not annualized.
(/1/) From April 30, 1997.
(/2/) From May 31, 1999.
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 your account. 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 C Class D
- ---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load)................. 4.75% 5% 2% 1%
Maximum Sales Charge (Load) on Purchases
(as a % of offering price)................ 4.75%(/1/) none 1% 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% 1%
Annual Fund Operating Expenses for 1999
- ---------------------------------------
(as a percentage of average net assets)
Management Fees............................. .80% .80% .80% .80%
Distribution and/or Service (12b-1) Fees.... .25% 1.00% 1.00% 1.00%
Other Expenses.............................. .45% .45% .45% .45%
----- ----- ----- -----
Total Annual Fund Operating Expenses........ 1.50% 2.25% 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
a 5% return each year, and (3) the Fund's
operating expenses remain the same. Although
your actual expenses may be higher or lower,
based on these assumptions your expenses would
be:
12b-1 Fees: 1 Year 3 Years 5 Years 10 Years
Fees paid by each ------ ------- ------- --------
Class, pursuant to a
plan adopted by the Class A $620 $ 927 $1,255 $2,180
Fund under Rule 12b-1 Class B 728 1,003 1,405 2,396+
of the Investment Class C 425 796 1,293 2,659
Company Act of 1940. Class D 328 703 1,205 2,585
The plan allows each
Class to pay
distribution and/or
service fees for the
sale and distribution If you did not sell your shares at the end of
of its shares and for each period, your expenses would be:
providing services to
shareholders.
Other Expenses: 1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Miscellaneous expenses
of running the Fund, Class A $620 $ 927 $1,255 $2,180
including such things Class B 228 703 1,205 2,396+
as transfer agency, Class C 326 796 1,293 2,659
registration, custody, Class D 228 703 1,205 2,585
auditing and legal
fees. + Class B shares will automatically convert to
Class A shares after eight years.
4
<PAGE>
Small-Cap Value Fund
Investment Objective
The Fund's investment objective is long-term capital appreciation.
Principal Investment Strategies
The Fund uses the following principal investment strategies to pursue its
investment objective:
The Fund generally invests at least 65% of its total assets in the common
stocks of "value" companies with small market capitalization (up to $1 billion)
at the time of purchase by the Fund.
Value The Fund uses a bottom-up stock selection approach. This
Companies: 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-earnings and/or low price-to-book
historically, ratio
by the market, . Positive change in senior management
or by their . Positive corporate restructuring
peers. . Temporary setback in price due to factors that no
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 invests primarily in equity-related securities of domestic issuers.
These securities may include 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 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. The limit on foreign securities does not
include ADRs, or commercial paper and certificates of deposit issued by foreign
banks. The Fund may also purchase put options in an attempt to hedge against a
decline in the price of securities it holds in its portfolio. A put option
gives the Fund the right to sell an underlying security at a particular price
during a fixed period. 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, 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 from achieving its objective.
The Fund may change its principal strategies if the Fund's Board of Directors
believes doing so is consistent with the Fund's investment objective. The
Fund's objective may be changed only with shareholder approval.
The Fund's Board of Directors may change the parameters by which small market
capitalization is defined if it concludes such a change is appropriate.
There is no guarantee that the Fund will achieve its objective.
5
<PAGE>
Small-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
if you sell your shares at a price lower than you paid for them.
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 large, well-
known companies over small, lesser-known companies.
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 may not invest more than 25% of its total assets in securities of
companies in any one industry. However, the Fund may invest more heavily in
certain industries believed to offer good investment opportunities. If 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.
Foreign securities, illiquid securities, or options in the Fund's portfolio
involve higher risk and may subject the Fund to higher price volatility.
Investing in securities of foreign issuers involves risks not associated with
US investments, including currency fluctuations, local withholding and other
taxes, different financial reporting practices and regulatory standards, high
costs of trading, changes in political conditions, expropriation, investment
and repatriation restrictions, and settlement and custody risks.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
6
<PAGE>
Small-Cap Value Fund
Past Performance
The Small-Cap Value Fund offers four Classes of shares. The information below
provides some indication of the risks of investing in the Fund by showing how
the performance of Class A shares has varied year to year, as well as how the
performance of each Class 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.
The following performance information is designed to assist you in comparing
the returns of the Fund with the returns of other mutual funds. How the Fund
has performed in the past, however, is not necessarily an indication of how the
Fund will perform in the future. Total returns will vary between each Class of
shares due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be lower. 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 Returns
[BAR CHART]
1998 -18.81%
1999 1.00%
Best quarter return: 23.70% - quarter ended 6/30/99
Worst quarter return: -24.76% - quarter ended 9/30/98
Average Annual Total Returns - Periods Ended 12/31/99
<TABLE>
<CAPTION>
CLASS C
ONE SINCE INCEPTION SINCE INCEPTION
YEAR 4/25/97 5/27/99*
----- --------------- ---------------
<S> <C> <C> <C>
Class A -3.77% 2.36% --
Class B -4.75 2.45 --
Class C n/a -- -5.61%
Class D -0.76 3.51 --
Russell 2000 Index 21.26 17.02(/1/) 15.97(/2/)
Russell 2000 Value Index -1.49 7.07(/1/) -3.02(/2/)
Lipper Small Cap Funds Average 30.04 22.01(/1/) 27.64(/2/)
</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 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.
In the future, the Fund will no longer be compared to the Russell 2000
Index, which reflects the performance of funds that invest in small
capitalization stocks. Instead, the Fund will be compared to the Russell
2000 Value Index, which the investment manager believes is a more
appropriate benchmark because it measures the performance of funds that
invest in small capitalization value stocks similar to those in which the
Fund primarily invests. Therefore, the Fund will continue to be compared to
the Russell 2000 Value Index and the Lipper Small Cap Funds Average.
*Total returns for periods of less than one year are not annualized.
(/1/)From April 30, 1997.
(/2/)From May 31, 1999.
7
<PAGE>
Small 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 your account. 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 C Class D
---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load)............... 4.75% 5% 2% 1%
Maximum Sales Charge (Load) on Purchases
(as a % of offering price)............... 4.75%(/1/) none 1% 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% 1%
Annual Fund Operating Expenses for 1999
---------------------------------------
(as a percentage of average net assets)
Management Fees........................... 1.00% 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees.. .25% 1.00% 1.00% 1.00%
Other Expenses............................ .61% .61% .61% .61%
----- ----- ----- -----
Total Annual Fund Operating Expenses...... 1.86% 2.61% 2.61% 2.61%
===== ===== ===== =====
</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
operating expenses remain the same. Although
your actual expenses may be higher or lower,
based on these assumptions your expenses would
be:
12b-1 Fees:
Fees paid by each
Class, pursuant to a
plan adopted by the 1 Year 3 Years 5 Years 10 Years
Fund under Rule 12b-1 ------ ------- ------- --------
of the Investment
Company Act of 1940. Class A $655 $1,032 $1,433 $2,551
The plan allows each Class B 764 1,111 1,585 2,762+
Class to pay Class C 460 903 1,471 3,015
distribution and/or Class D 364 811 1,385 2,944
service fees for the
sale and distribution
of its shares and for
providing services to If you did not sell your shares at the end of
shareholders. each period, your expenses would be:
Other Expenses: 1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Miscellaneous expenses
of running the Fund, Class A $655 $1,032 $1,433 $2,551
including such things Class B 264 811 1,385 2,762+
as transfer agency, Class C 361 903 1,471 3,015
registration, custody, Class D 264 811 1,385 2,944
auditing and legal
fees. + 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.
J. & W. Seligman & Co. Incorporated (Seligman), 100 Park Avenue, New York, New
York 10017, is the manager of each Fund. 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 20 US registered
investment companies, which offer more than 50 investment portfolios with
approximately $30 billion in assets as of March 31, 2000. Seligman also
provides investment management or advice to institutional or other accounts
having an aggregate value at March 31, 2000, of approximately $12 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. For the year ended
December 31, 1999, the management fee paid by the Large-Cap Value Fund to
Seligman was equal to an annual rate of .80% of the Fund's average daily net
assets. For the same period, the management fee paid by the Small-Cap Value
Fund to Seligman was equal to an annual rate of 1.00% of the Fund's average
daily net assets.
Affiliates of Seligman:
Seligman Advisors, Inc.:
The Funds' 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
broker or financial
advisor.
Seligman Data Corp. (SDC):
The Funds' shareholder
service agent; provides
shareholder account
services to the Funds at
cost.
Portfolio Management
The Funds are managed by Seligman's Value Team, which is headed by Mr. Neil T.
Eigen. Mr. Eigen is Vice President of Seligman Value Fund Series, Inc. and has
been Portfolio Manager of each Fund since its inception. Mr. Eigen joined
Seligman on January 3, 1997 as a Managing Director. Prior to joining Seligman,
Mr. Eigen served as Senior Managing Director, Chief Investment Officer and
Director of Equity Investing at Bear Stearns Asset Management from January 1990
to January 1997. Mr. Eigen is also a Vice President of Seligman Portfolios,
Inc., and Portfolio Manager of its Seligman Large-Cap Value Portfolio and
Seligman Small-Cap Value Portfolio.
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.
Prior to joining Seligman, Mr. Rosen served as a Managing Director and
Portfolio Manager at Bear Stearns Asset Management. Mr. Rosen is also Co-
Portfolio Manager of Seligman Large-Cap Value Portfolio and Seligman Small-Cap
Value Portfolio, two portfolios of Seligman Portfolios, Inc.
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 Index.
Average Annual Total Returns--Periods Ended 12/31/99
<TABLE>
<CAPTION>
CLASS C
SINCE INCEPTION SINCE INCEPTION
4/25/97 5/27/99*
--------------- ---------------
<S> <C> <C>
Class A
With Sales Charge 11.40% --
Without Sales Charge 13.46 --
Class B
With CDSC 11.68 --
Without CDSC 12.60 --
Class C
With Sales Charge and CDSC -- -10.66%
Without Sales Charge and CDSC -- -8.82
Class D
Without CDSC 12.60 --
Russell 1000 Index 27.37** 13.92***
Russell 1000 Value Index 18.43** -2.13***
S&P 500 Index 27.40** 13.68***
</TABLE>
* Returns for periods of less than one year are not annualized.
** From 4/30/97.
*** From 5/31/99.
The average annual total return figures for Class A, Class B and Class D shares
of the Large-Cap Value Fund are for the period April 25, 1997 through December
31, 1999, and total return figures for Class C shares of the Large-Cap Value
Fund are for the period from May 27, 1999 to December 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 C returns are calculated with and
without the effect of the initial 1% maximum sales charge and maximum 1% CDSC,
charged on sales of Fund shares made within 18 months of the date of purchase.
Class D return is calculated without the effect of the maximum 1% CDSC. The
rates of return will vary and the principal value of an investment will
fluctuate. Shares, if sold, 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 Index 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
1,000 largest US companies based on total market capitalization. The Russell
1000 Value Index measures the performance of value companies within the Russell
1000 Index. The S&P 500 Index measures the performance of 500 of the largest US
companies based on market capitalization. Investors cannot invest directly in
an index.
10
<PAGE>
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.
ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
Year
Ended S&P 500
December 31, Composite Index
- ------------ --------- -------
<S> <C> <C>
1992.................. 10.80% 7.62%
1993.................. 10.63 10.08
1994.................. 1.79 1.32
1995.................. 43.35 37.78
1996.................. 20.54 22.96
1997.................. 40.31 33.36
1998.................. 12.93 28.57
1999.................. -1.17 21.04
</TABLE>
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 the Internal Revenue Code of
1986, which, if applicable, might 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 .80% 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>
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 its
ongoing 12b-1 fees may differ from other Classes. 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.
. Certain employer-sponsored defined contribution-type plans can purchase
shares with no initial sales charge.
Class B
. No initial sales charge on purchases.
. A declining CDSC on shares sold within 6 years of purchase:
<TABLE>
<CAPTION>
Years Since Purchase CDSC
-------------------- ----
<S> <C>
Less than 1 year 5%
1 year or more but less than 2 years 4 Your purchase of Class B
2 years or more but less than 3 shares must be for less than
years 3 $250,000, because if you
3 years or more but less than 4 invest $250,000 or more, you
years 3 will pay less in fees and
4 years or more but less than 5 charges if you buy another
years 2 Class of shares.
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 when you sell shares purchased with reinvested dividends or capital
gain distributions.
12
<PAGE>
Class C
. Initial sales charge on Fund purchases, as set forth below:
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Discount
Amount of your as a % as a % of Net as a % of
Investment of Offering Price(/1/) Amount Invested Offering Price
-------------- ---------------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000--$249,999 0.50 0.50 0.50
$250,000--
$1,000,000(/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/ Your)purchase of Class C shares must be for less than $1,000,000
because if you invest $1,000,000 or more you will pay less in fees
and charges if you buy Class A shares.
. A 1% CDSC on shares sold within eighteen months 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 sales charge on reinvested dividends or capital gain distributions.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
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 when you sell shares purchased with reinvested dividends or
capital gain distributions.
* Class D shares are not available to all investors. You may purchase
Class D shares only (1) if you already own Class D shares of the Fund or
another Seligman mutual fund, (2) if your financial advisor of record
maintains an omnibus account at SDC, or (3) pursuant to a 401(k) or
other retirement plan program for which Class D shares are already
available or for which the sponsor requests Class D shares because the
sales charge structure of Class D shares is comparable to the sales
charge structure of the other funds offered under the program.
Because the Fund's 12b-1 fees are paid out of each Class's assets on an
ongoing basis, over time these fees will increase your investment expenses
and may cost you more than other types of sales charges.
The Fund's Board of Directors believes that no conflict of interest currently
exists between the Fund's Class A, Class B, Class C 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 the CDSC you may pay when you sell your shares, the
Fund assumes that shares acquired through reinvested dividends and capital
gain distributions (which are not subject to a CDSC) are sold first. Shares
that have been in your account long enough so they are not subject to a CDSC
are sold next. After these shares are exhausted, shares will be sold in the
order they were purchased (oldest to youngest). The amount of any CDSC that
you pay will be based on the shares' original purchase price or current net
asset value, whichever is less.
You will not pay a CDSC when you exchange shares of the Fund to buy the same
class of shares of any other Seligman mutual fund. For the purpose of
calculating the CDSC when you sell shares that you acquired by exchanging
shares of the Fund, it will be assumed that you held the shares since the
date you purchased the shares of the Fund.
13
<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 and Class C 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 Seligman Advisors before
the close of business.
If your buy or sell order is received by your
broker/dealer or financial advisor after the close of
NAV: regular trading on the NYSE, or is accepted by Seligman
Computed Advisors after the close of business, the order will be
separately for executed at the Class's NAV calculated as of the close
each Class by of regular trading on the next NYSE trading day. When
dividing that you sell shares, you receive the Class's per share NAV,
Class's share of less any applicable CDSC.
the net assets of
the Fund (i.e., The NAV of each Fund's shares is determined each day,
its assets less Monday through Friday, on days that the NYSE is open for
liabilities) by trading. Because of their higher 12b-1 fees, the NAV of
the total number Class B, Class C and Class D shares will generally be
of outstanding lower than the NAV of Class A shares of the Fund.
shares of the
Class. 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 or lower
minimum investments. Ask your financial advisor if any of these programs apply
to you. Class D shares are not available to all investors. For more
information, see "Deciding Which Class of Shares to Buy -- Class D."
To make your initial investment in a Fund, contact your financial advisor or
complete an account application and send it with your check directly to SDC at
the address provided on the account application. If you do not choose a Class,
your investment will automatically be made in Class A shares.
The required minimum initial investments are:
. 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
You may buy shares of each Fund for all types of tax-deferred retirement
plans. Contact Retirement Plan Services at the address or phone number
listed on the inside back cover of this prospectus for information and
to receive the proper forms.
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 purchase, and any subsequent
transactions in your account. You will also be sent quarterly and annual
statements detailing your transactions in the Fund and the other Seligman funds
you own under the same account number. 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.
14
<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. Subsequent investments must be for
$100 or more.
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. Unless you
indicate otherwise, your investment will be made in the Class you already own.
Send investment checks to:
Seligman Data Corp.
P.O. Box 9766
Providence, RI 02940-9766
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 or Class C
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 MatrixSM. (Requires an initial total investment of
$10,000.) This is a needs-based investment process, designed to help you and
your financial advisor plan to seek your long-term financial goals. It
considers your financial needs, and helps frame a personalized asset allocation
strategy around the cost of your future commitments and the time you have to
meet them. Contact your financial advisor for more information.
Seligman Harvester SM. 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.
15
<PAGE>
How to Exchange Shares Among 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
or Class C shares of Seligman Cash Management Fund to buy the same Class 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). You should read and understand a fund's
prospectus before investing. Some funds may not offer all Classes of shares.
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 sell shares to the Fund through a broker/dealer or your financial
advisor. The Fund does not charge any fees or expenses, other than any
applicable CDSC for this transaction; however, the dealer or financial advisor
may charge a service fee. Contact your financial advisor for more information.
You may always send a written request to sell Fund shares; however, it may take
longer to get your money.
As an additional measure to protect you and the Fund, SDC may confirm written
redemption requests that are (1) for $25,000 or more, or (2) directed to be
paid to an alternate payee or sent to an address other than the address of
record, with you or your financial advisor by telephone before sending you your
money. This will not affect the date on which your redemption request is
actually processed.
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 the account owner; 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, Class C, or
Class D shares and reinvest your dividends and capital gain distributions, you
may withdraw 12%, 10%, or 10%, respectively, of the value of your Fund account
(at the time of election) annually without a CDSC.
16
<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 (which may
require a signature guarantee).
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.
17
<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:
(1) reinvest both dividends and capital gain
Dividend: distributions;
(2) receive dividends in cash and reinvest capital
A payment by a gain distributions; or
mutual fund,
usually derived (3) receive both dividends and capital gain
from the fund's distributions in cash.
net investment
income
(dividends and
interest earned
on portfolio
securities less
expenses).
Your dividends and capital gain distributions will be
reinvested if you do not instruct otherwise or if you
own either Fund's shares in a Seligman tax-deferred
retirement plan.
If you want to change your election, you may write SDC
at the address listed on the back cover of this
prospectus or, if you have telephone services, you or
your financial advisor may call SDC. Your request must
be received by SDC before the record date to be
effective for that dividend or capital gain
distribution.
Capital Gain Distribution:
A payment to
mutual fund
shareholders
which
represents
profits
realized on the
sale of
securities in a
fund's
portfolio.
Cash dividends or capital gain distributions will be
sent by check to your address of record or, if you
have current ACH bank information on file, directly
deposited into your predesignated bank account within
3-4 business days from the payable date.
Dividends and capital gain distributions are
reinvested to buy additional Fund shares on the
payable date using the NAV of the ex-dividend date.
Dividends on Class B, Class C and Class D shares will
Ex-dividend Date: be lower than the dividends on Class A shares as a
The day on result of their higher 12b-1 fees. Capital gain
which any distributions will be paid in the same amount for each
declared Class.
distributions
(dividends or
capital gains)
are deducted
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.
Dividends paid by a Fund are taxable to you as ordinary income. You may be
taxed at different rates on capital gains distributed by a 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.
18
<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 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 Emerging Markets 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 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 Global Growth 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 International Growth 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.
19
<PAGE>
Asset Allocation
Seligman Time Horizon/Harvester Series, Inc. is an asset-allocation type mutual
fund. It offers four different asset allocation funds that pursue their
investment objectives by allocating their assets among other mutual funds in
the Seligman Group.
Seligman Time Horizon 30 Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in aggressive growth-oriented domestic and international equity
securities weighted toward small- and medium-capitalization companies.
Seligman Time Horizon 20 Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in growth-oriented domestic and international equity securities,
with a more even weighting among small-, medium- and large-capitalization
companies than Seligman Time Horizon 30 Fund.
Seligman Time Horizon 10 Fund
Seeks capital appreciation by creating a portfolio of mutual funds that invests
in small-, medium- and large-capitalization domestic and international equity
securities as well as domestic fixed-income securities.
Seligman Harvester Fund
Seeks capital appreciation and preservation of capital with current income and
growth of income by creating a portfolio of mutual funds that invests in
medium- and large-capitalization domestic and international equity securities
supplemented by a larger allocation of fixed-income securities and cash than
Seligman Time Horizon 10 Fund.
20
<PAGE>
Financial Highlights
Large-Cap Value Fund
The tables below are intended to help you understand the financial performance
of the Fund's Classes 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. Deloitte & Touche LLP, 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.
<TABLE>
<CAPTION>
CLASS A
----------------------------
Year ended
December 31,
-----------------
4/25/97**
to
1999 1998 12/31/97
------- ------- ---------
<S> <C> <C> <C>
Per Share Data:*
Net asset value, beginning of period............ $10.04 $ 9.09 $7.14
------ ------ -----
Income from investment operations:
Net investment income (loss).................. 0.05 0.06 0.03
Net gains or losses on securities (both
realized and unrealized)..................... (0.32) 0.99 2.06
------ ------ -----
Total from investment operations................ (0.27) 1.05 2.09
------ ------ -----
Less distributions:
Dividends from net investment income.......... (0.02) (0.04) (0.01)
Distributions from capital gains.............. -- (0.06) (0.13)
------ ------ -----
Total distributions............................. (0.02) (0.10) (0.14)
------ ------ -----
Net asset value, end of period.................. $ 9.75 $10.04 $9.09
====== ====== =====
Total Return: (2.68)% 11.57% 29.28%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)........ $46,687 $49,297 $23,699
Ratio of expenses to average net assets......... 1.50% 1.50% 1.47%+
Ratio of net income (loss) to average
net assets..................................... 0.53% 0.61% 0.58%+
Portfolio turnover rate......................... 30.97% 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>
- --------------
See footnotes on page 24.
21
<PAGE>
Large-Cap Value Fund
<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------- ----------
Year ended
December 31, 4/25/97** 5/27/99**
----------------- to to
1999 1998 12/31/97 12/31/99
------- ------- --------- ---------
<S> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning of
period............................ $9.96 $9.04 $7.14 $10.55
----- ----- ----- ------
Income from investment operations:
Net investment income (loss)...... (0.02) (0.02) (0.01) (0.01)
Net gains or losses on securities
(both realized and unrealized)... (0.32) 1.00 2.04 (0.92)
----- ----- ----- ------
Total from investment operations... (0.34) 0.98 2.03 (0.93)
----- ----- ----- ------
Less distributions:
Distributions from capital gains.. -- (0.06) (0.13) --
----- ----- ----- ------
Total distributions................ -- (0.06) (0.13) --
----- ----- ----- ------
Net asset value, end of period..... $9.62 $9.96 $9.04 $9.62
----- ----- ----- ------
Total Return: (3.41)% 10.85 % 28.46% (8.82)%
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)........................ $56,926 $56,342 $16,930 $9,169
Ratio of expenses to average net
assets............................ 2.25% 2.25% 2.25%+ 2.36%+
Ratio of net income to average
net assets........................ (0.22)% (0.14)% (0.20)%+ (0.23)%+
Portfolio turnover rate............ 30.97% 10.44% 38.74% 30.97%++
Without management fee waiver:***
Ratios:
Expenses to average net assets.... 2.85%+
Net income to average net assets.. (0.80)%+
<CAPTION>
CLASS D
-----------------------------
Year ended
December 31, 4/25/97**
----------------- to
1999 1998 12/31/97
------- ------- ---------
<S> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning of
period............................ $9.96 $9.04 $7.14
----- ----- -----
Income from investment operations:
Net investment income (loss)...... (0.02) (0.02) (0.01)
Net gains or losses on securities
(both realized and unrealized)... (0.32) 1.00 2.04
----- ----- -----
Total from investment operations... (0.34) 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..... $9.62 $9.96 $9.04
----- ----- -----
Total Return: (3.41)% 10.85% 28.46%
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)........................ $34,355 $42,886 $10,358
Ratio of expenses to average net
assets............................ 2.25% 2.25% 2.25%+
Ratio of net income (loss) to
average net assets................ (0.22)% (0.14)% (0.20)%+
Portfolio turnover rate............ 30.97% 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>
- --------
See footnotes on page 24.
22
<PAGE>
Small-Cap Value Fund
The tables below are intended to help you understand the financial performance
of the Fund's Classes 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. Deloitte & Touche LLP, 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.
<TABLE>
<CAPTION>
CLASS A
-----------------------------
Year ended
December 31, 4/25/97**
----------------- to
1999 1998 12/31/97
------- ------- ---------
<S> <C> <C> <C>
Per Share Data:*
Net asset value, beginning of period........... $7.87 $9.73 $7.14
----- ----- -----
Income from investment operations:
Net investment income (loss).................. (0.07) (0.09) (0.07)
Net gains or losses on securities (both
realized and unrealized)..................... 0.15 (1.74) 2.67
----- ----- -----
Total from investment operations............... 0.08 (1.83) 2.60
----- ----- -----
Less distributions:
Dividends from net investment income.......... -- -- --
Distributions from capital gains.............. (0.04) (0.03) (0.01)
----- ----- -----
Total distributions............................ (0.04) (0.03) (0.01)
----- ----- -----
Net asset value, end of period................. $7.91 $7.87 $9.73
===== ===== =====
Total Return: 1.00% (18.81)% 36.38%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)....... $40,678 $60,383 $87,510
Ratio of expenses to average net assets........ 1.86% 1.69% 1.87%+
Ratio of net income (loss) to average
net assets.................................... (0.92)% (0.98)% (1.12)%+
Portfolio turnover rate........................ 41.48% 30.06% 15.91%
</TABLE>
- --------------
See footnotes on page 24.
23
<PAGE>
Small-Cap Value Fund
<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------- ---------
Year ended
December 31, 4/25/97** 5/27/99**
----------------- to to
1999 1998 12/31/97 12/31/99
------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning
of period.................. $7.78 $9.69 $7.14 $8.10
----- ----- ----- -----
Income from investment
operations:
Net investment income
(loss).................... (0.14) (0.15) (0.11) (0.07)
Net gains or losses on
securities (both realized
and unrealized)........... 0.16 (1.73) 2.67 (0.23)
----- ----- ----- -----
Total from investment
operations................. 0.02 (1.88) 2.56 (0.30)
----- ----- ----- -----
Less distributions:
Distributions from
capital gains............. (0.04) (0.03) (0.01) (0.04)
----- ----- ----- -----
Total distributions......... (0.04) (0.03) (0.01) (0.04)
----- ----- ----- -----
Net asset value, end of
period..................... $7.76 $7.78 $9.69 $7.76
===== ===== ===== =====
Total Return: 0.24% (19.41)% 35.82% (3.72)%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)............. $46,030 $71,875 $88,330 $1,254
Ratio of expenses to average
net assets................. 2.61% 2.44% 2.63%+ 2.69%+
Ratio of net income (loss)
to average net assets...... (1.67)% (1.73)% (1.88)%+ (1.65)%+
Portfolio turnover rate..... 41.48% 30.06% 15.91% 41.48%++
<CAPTION>
CLASS D
-----------------------------
Year ended
December 31, 4/25/97**
----------------- to
1999 1998 12/31/97
------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value, beginning
of period.................. $7.78 $9.69 $7.14
----- ----- -----
Income from investment
operations:
Net investment income
(loss).................... (0.13) (0.15) (0.11)
Net gains or losses on
securities (both realized
and unrealized)........... 0.15 (1.73) 2.67
----- ----- -----
Total from investment
operations................. 0.02 (1.88) 2.56
----- ----- -----
Less distributions:
Distributions from
capital gains............. (0.04) (0.03) (0.01)
----- ----- -----
Total distributions......... (0.04) (0.03) (0.01)
----- ----- -----
Net asset value, end of
period..................... $7.76 $7.78 $9.69
===== ===== =====
Total Return: 0.24% (19.41)% 35.82%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)............. $24,936 $45,384 $63,360
Ratio of expenses to average
net assets................. 2.61% 2.44% 2.63%+
Ratio of net income (loss)
to average net assets...... (1.67)% (1.73)% (1.88)%+
Portfolio turnover rate..... 41.48% 30.06% 15.91%
</TABLE>
- --------
*Per share amounts are calculated based on average shares outstanding.
**Commencement of offering of shares.
*** Seligman, at its discretion, waived portions of its fees for the periods
presented.
+Annualized.
++For the year ended December 31, 1999.
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 automated 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. You may
also call these numbers to request other information about the Fund or to make
shareholder inquiries.
Statement of Additional Information (SAI) contains additional information about
the Funds. It is on file with the Securities and Exchange Commission, or 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 (202) 942-8090. The SAI,
Annual/Semi-Annual reports and other information about the Funds are also
available on the EDGARDatabase on the SEC's Internet site: http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by electronic request at the following E-mail address: [email protected], or by
writing: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102.
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, 2000
100 Park Avenue
New York, New York 10017
(212) 850-1864
Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information (SAI) expands upon and supplements the
information contained in the current Prospectus, dated May 1, 2000, which covers
Seligman Large-Cap Value Fund and Seligman Small-Cap Value Fund (individually, a
Fund), each a separate fund of Seligman Value Fund Series, Inc. (the Series).
This SAI, although not in itself a prospectus, is incorporated by reference into
the Prospectus in its entirety. It should be read in conjunction with the
Prospectus, which you may obtain by writing or calling the Series at the above
address or telephone numbers.
The financial statements and notes included in each Fund's Annual Report, and
the Independent Auditors' Reports thereon, are incorporated herein by reference.
The Annual Report will be furnished to you without charge if you request a copy
of this SAI.
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Series History........................................... 2
Description of the Series and its Investments and Risks.. 2
Management of the Series................................. 6
Control Persons and Principal Holders of Securities...... 10
Investment Advisory and Other Services................... 11
Brokerage Allocation and Other Practices................. 16
Capital Stock and Other Securities....................... 17
Purchase, Redemption, and Pricing of Shares.............. 17
Taxation of the Series................................... 23
Underwriters............................................. 24
Calculation of Performance Data.......................... 25
Financial Statements..................................... 29
General Information...................................... 29
Appendix A............................................... 30
Appendix B............................................... 33
</TABLE>
EQVA1
<PAGE>
Series History
Seligman Value Fund Series, Inc. was incorporated under the laws of the state of
Maryland on January 27, 1997.
Description of the Series 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 funds: Seligman Large-Cap
Value Fund and Seligman Small-Cap Value Fund.
Investment Strategies and Risks
The following information regarding each Fund's investments and risks
supplements the information contained in the Prospectus.
Derivatives. Each Fund may invest in financial instruments commonly known as
"derivatives" only for hedging or investment purposes. Each Fund will not
invest in derivatives for speculative purposes, which means 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. Each Fund will
not invest in a specific type of derivative without prior approval from the
Series' Board of Directors, after consideration of, among other things, how the
derivative instrument serves the Fund's investment objective, and the risks
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. Each Fund may purchase put options to protect its portfolio
holdings in an underlying security against a decline in market value. Each 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. Each Fund's maximum financial exposure will be limited to
these costs.
Each 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.
Put options on securities may not be available to a Fund on reasonable terms in
many situations and a Fund may frequently choose not to purchase options even
when they are available. Each Fund's ability to engage in option transactions
may be limited by tax considerations.
2
<PAGE>
Rights and Warrants. Each 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's 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 (Moody's) or Standard &
Poor's Ratings Services (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 either directly or through
American Depositary Receipts (ADRs), European Depositary Receipts (EDRs), or
Global Depositary Receipts (GDRs) (collectively, Depositary Receipts) in other
securities of foreign issuers. Foreign investments may be affected favorably or
unfavorably by changes in currency rates and exchange control regulations.
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 the
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.
Depositary Receipts are instruments generally issued by domestic banks or trust
companies that represent the deposits of a security of a foreign issuer. 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.
Each 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 Series' Board
of Directors, may determine, when appropriate, that specific Rule 144A
securities are liquid and not subject 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 a Fund, if and to the extent that,
qualified institutional buyers become for a time uninterested in purchasing Rule
144A securities.
Repurchase Agreements. Each 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
3
<PAGE>
for the period of time the instrument is held by the Fund and is unrelated to
the interest rate on the instrument. Each 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. However, as a matter of fundamental policy, each 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. Each Fund from time to time may borrow money only from banks and
only for temporary, extraordinary or emergency purposes in an amount up to 15%
of its total assets at prevailing interest rates and invest the funds in
additional securities. Each Fund may pledge its assets only to the extent
necessary to effect permitted borrowings on a secured basis. Each Fund's
borrowings are limited so that immediately after such borrowing the value of the
Fund's 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's 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, the Funds' investment strategies
are not fundamental and the Board of Directors of the Series may change such
policies without the vote of a Fund's 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;
- - 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 Series' 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 US
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 US
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 (1940 Act), and
other applicable law or for the purpose of hedging the Series' obligations
under its deferred compensation plan for directors;
4
<PAGE>
- - 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 investments 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 Series' knowledge, those directors or officers of the Series
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.
Each Fund also may not acquire any securities of a registered open-end
investment company or a registered unit investment trust in reliance on
subparagraph (F) or subparagraph (G) of Section 12(d)(1) of the 1940 Act. This
policy is not fundamental.
Temporary Defensive Position
In an attempt to respond to adverse market, economic, political, or other
conditions, each Fund may invest up to 100% of its assets in cash or cash
equivalents, 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 cash equivalents will be limited
to those that, in the opinion of the investment manager, equate generally to the
standards established for US cash equivalents. 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.
Portfolio Turnover
Each Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the year by the monthly average
of the value of the portfolio securities owned during the year. Securities whose
maturity or expiration date at the time of acquisition were one year or less are
excluded from the calculation. The portfolio turnovers rate for the Large-Cap
Value Fund for the years ended December 31, 1999 and 1998 were 30.97% and
10.44%, respectively. The portfolio turnover rates for the Small-Cap Value Fund
for the years ended December 31, 1999 and 1998 were 41.48% and 30.06%,
respectively.
5
<PAGE>
Management of the Series
Board of Directors
The Board of Directors provides broad supervision over the affairs of the
Series.
Management Information
Directors and officers of the Series, together with information as to their
principal business occupations during the past five years, are shown below.
Each Director who is an "interested person" of the Series, 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 Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
- ---------------------- ------------------------ ------------------------------------------------------------------
<S> <C> <C>
William C. Morris* Director, Chairman of Chairman, J. & W. Seligman & Co. Incorporated, Chairman and Chief
(62) the Board, Chief Executive Officer, the Seligman Group of investment companies;
Executive Officer and Chairman, Seligman Advisors, Inc., Seligman Services, Inc., and
Chairman of the Carbo Ceramics Inc., ceramic proppants for oil and gas industry;
Executive Committee and Director, Seligman Data Corp., Kerr-McGee Corporation,
diversified energy company. 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. Incorporated;
(47) Member of the Executive President (with the exception of Seligman Quality Municipal Fund,
Committee Inc. and Seligman Select Municipal Fund, Inc.) and Director or
Trustee, the Seligman Group of investment companies; Chairman,
Seligman Data Corp.; Member of the Board of Governors of the
Investment Company Institute; and Director, ICI Mutual Insurance
Company, Seligman Advisors, Inc., and Seligman Services, Inc.
Richard R. Schmaltz* Director and Member of Director and Managing Director, Director of Investments, J. & W.
(59) the Executive Committee Seligman & Co. Incorporated; Director or Trustee, the Seligman
Group of investment companies (except Seligman Cash Management
Fund, Inc.); Trustee Emeritus of Colby College. Formerly,
Director, Seligman Henderson Co. and 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 University;
(70) Director or Trustee, the Seligman Group of investment companies;
Tufts University Chairman Emeritus, American Council on Germany; Governor of the
Packard Avenue, Center for Creative Leadership; Director; Raytheon Co.,
Medford, MA 02155 electronics; National Defense University; and the Institute for
Defense Analyses. Formerly, Director, USLIFE Corporation, life
insurance; Ambassador, U.S. State Department for negotiations in
Bosnia; Distinguished Policy Analyst at Ohio State University and
Olin Distinguished Professor of National Security Studies at the
United States Military Academy. From June 1987 to June 1992, he
was the Supreme Allied Commander, Europe and the
Commander-in-Chief, United States European Command.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
- --------------------- ------------------------- ------------------------------------------------------------------
<S> <C> <C>
Alice S. Ilchman Director Retired President, Sarah Lawrence College; Director or Trustee,
(65) the Seligman Group of investment companies; Trustee, the
18 Highland Circle, Committee for Economic Development; and Chairman, The Rockefeller
Bronxville, NY Foundation, charitable foundation. Formerly, Trustee, The Markle
10708 Foundation, philanthropic organization; and Director, New York
Telephone Company; and International Research and Exchange Board,
intellectual exchanges.
Frank A. McPherson Director Retired Chairman and Chief Executive Officer of Kerr-McGee
(67) Corporation; Director or Trustee, the Seligman Group of
2601 Northwest investment companies; Director, Kimberly-Clark Corporation,
Expressway, consumer products; Conoco Inc, oil exploration and production;
Suite 805E Bank of Oklahoma Holding Company; Baptist Medical Center;
Oklahoma City, OK Oklahoma Chapter of the Nature Conservancy; Oklahoma Medical
73112 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 & Cromwell, law
(70) firm; Director or Trustee, the Seligman Group of investment
125 Broad Street, companies; Director, Commonwealth Industries, Inc., manufacturers
New York, NY of aluminum sheet products; the Foreign Policy Association;
10004 Municipal Art Society of New York; the U.S. Council for
International Business; and New York-Presbyterian Hospital;
Chairman, 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 investment
(57) companies; Trustee, The Geraldine R. Dodge Foundation, charitable
P.O. Box 719, foundation. Formerly, Chairman of the Board of Trustees of St.
Gladstone, NJ George's School (Newport, RI) and, Director, the National
07934 Association of Independent Schools (Washington, DC).
James C. Pitney Director Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm; Director
(73) or Trustee, the Seligman Group of investment companies.
Park Avenue at Formerly, Director, Public Service Enterprise Group, public
Morris County, P.O. utility.
Box 1945,
Morristown, NJ
07962
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(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 investment companies;
(72) Director, The Houston Exploration Company, oil exploration; The
2893 S. E. Ocean Brooklyn Museum, KeySpan Energy Corporation; and Public
Boulevard, Broadcasting Service; and Trustee, the Committee for Economic
Stuart, FL 34996 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., pharmaceuticals; Director or
(67) Trustee, the Seligman Group of investment companies. Formerly,
96 Evergreen Avenue, Director, USLIFE Corporation, life insurance.
Rye, NY 10580
James N. Whitson Director Director and Consultant, Sammons Enterprises, Inc., a diversified
(65) holding company; Director or Trustee, the Seligman Group of
6606 Forestshire investment companies; Director, C-SPAN, cable television, and
Drive, CommScope, Inc., manufacturer of coaxial cables. Formerly,
Dallas, TX 75230 Executive Vice President, Chief Operating Officer, Sammons
Enterprises, Inc.
Neil T. Eigen Vice President and Managing Director, J. & W. Seligman & Co. Incorporated. Vice
(57) Portfolio Manager President and Portfolio Manager, Seligman Portfolios, Inc.
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 & Co.
(43) Incorporated, Seligman Advisors, Inc., and Seligman Data Corp.;
Vice President, the Seligman Group of investment companies, and
Seligman Services, Inc.; Vice President and Treasurer, Seligman
International, Inc. Formerly, Treasurer, Seligman Henderson Co.
Frank J. Nasta Secretary General Counsel, Senior Vice President, Law and Regulation and
(35) Corporate Secretary, J. & W. Seligman & Co. Incorporated;
Secretary, the Seligman Group of investment companies, Seligman
Advisors, Inc., Seligman Services, Inc., Seligman International,
Inc. and Seligman Data Corp. Formerly, Secretary, Seligman
Henderson Co.
Thomas G. Rose Treasurer Treasurer, the Seligman Group of investment companies and
(42) Seligman Data Corp.
</TABLE>
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Series for
which no market valuation is available, and to elect or appoint officers of the
Series to serve until the next meeting of the Board.
Directors and officers of the Series are also directors and officers of some or
all of the other investment companies in the Seligman Group.
8
<PAGE>
<TABLE>
<CAPTION>
Compensation
Pension or Total Compensation
Aggregate Retirement Benefits from Series and
Name and Compensation Accrued as Part of Series Complex
Position with Fund from Series (1) Series Expenses to Directors (1)(2)
- ------------------------------------------ ----------------- ------------------- ----------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director N/A N/A N/A
John R. Galvin, Director $1,477 N/A $82,000
Alice S. Ilchman, Director 1,437 N/A 80,000
Frank A. McPherson, Director 1,437 N/A 78,000
John E. Merow, Director 1,477 N/A 80,000
Betsy S. Michel, Director 1,477 N/A 82,000
James C. Pitney, Director 1,397 N/A 74,000
James Q. Riordan, Director 1,437 N/A 80,000
Robert L. Shafer, Director 1,437 N/A 80,000
James N. Whitson, Director 1,437(3) N/A 80,000(3)
</TABLE>
(1) For the year ended December 31, 1999. Effective January 21, 2000, 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 twenty investment
companies.
(3) Deferred.
The Series has a compensation arrangement under which outside directors may
elect to defer receiving their fees. The Series 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 certain of the
investment companies advised by J. & W. Seligman & Co. Incorporated (Seligman),
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 Series to
Mr. Whitson as of December 31, 1999 was $4,243.
The Series may, but is not obligated to, purchase shares of the other funds in
the Seligman Group of investment companies to hedge its obligations in
connection with the Fund's 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
the Series, the other investment companies in the Seligman Group, and Seligman
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 Seligman or any affiliate. The sales may be made for investment
purposes only, and shares may be resold only to the Series.
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.
Code of Ethics
Seligman, Seligman Advisors, Inc. (Seligman Advisors), their subsidiaries and
affiliates, and the Seligman Group of Investment Companies have adopted a Code
of Ethics that sets forth the circumstances under which officers, directors and
employees (collectively, Employees) are permitted to engage in personal
securities transactions. 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 Director of Compliance, and sets forth a procedure of identifying,
for disciplinary action, those individuals who violate the Code of Ethics. The
Code of Ethics prohibits Employees (including all investment team members)
from purchasing or selling any security or an equivalent security that is being
purchased or sold by any client, or
9
<PAGE>
where the Employee intends, or knows of another's intention, to purchase or sell
a security on behalf of a client. The Code also prohibits all Employees from
acquiring securities in a private placement or in an initial or secondary public
offering, unless an exemption has been obtained from Seligman's Director of
Compliance.
The Code of Ethics 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) that the portfolio manager or investment team
manages; (2) each Employee from engaging in short-term trading (a purchase and
sale or vice-versa within 60 days); and (3) each member of an investment team
from engaging in short sales of a security if, at that time, any client managed
by that team has a long position in that security. Any profit realized pursuant
to any of these prohibitions must be disgorged.
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 Employees are also required to disclose all
securities beneficially owned by them upon commencement of employment and at the
end of each calendar year.
A copy of the Code of Ethics is on public file with, and is available upon
request from, the Securities and Exchange Commission (SEC). You can access it
through the SEC's Internet site, http://www.sec.gov.
Control Persons and Principal Holders of Securities
Control Persons
As of April 7, 2000, 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 April 7, 2000, 12.59% of the Large-Cap Value Fund's Class A shares of
capital stock then outstanding, 40.82% of the Large-Cap Value Fund's Class B
shares of capital stock then outstanding and 21.18% of the Large-Cap Value
Fund's Class D shares of capital stock then outstanding, were registered in the
name of Merrill Lynch, Pierce Fenner & Smith Incorporated, Attn. Fund
Administration, 4800 Deer Lake Drive East, Jacksonville, FL 32246. As of the
same date, no shareholders owned 5% or more of the Large-Cap Value Fund's Class
C shares of capital stock then outstanding.
As of April 7, 2000, 12.49% of the Small-Cap Value Fund's Class A shares of
capital stock then outstanding, 32.69% of the Small-Cap Value Fund's Class B
shares of capital stock then outstanding and 30.16% of the Small-Cap Value
Fund's Class D shares of capital stock then outstanding, were registered in the
name of Merrill Lynch, Pierce Fenner & Smith Incorporated, Attn. Fund
Administration, 4800 Deer Lake Drive East, Jacksonville, FL 32246. As of the
same date, 5.12% of the Small-Cap Value Fund's Class A shares of capital stock
then outstanding were registered in the name Sterling Trust Company Custodian
FBO Plumbers Local Union No 93, 1380 Lawrence Street, Suite 1400, Denver, CO
80204, and 6.01% of the Small-Cap Value Fund's Class C shares of capital stock
then outstanding were registered in the name of Investors Fiduciary Trust
Company, Custodian For Robert Harland, 38787 Road 74, Dinuba, CA 93618-9762.
Management Ownership
As of April 7, 2000, Directors and officers of the Series as a group owned 6.10%
of the Large-Cap Value Fund's Class A shares of capital stock then outstanding
and 3.24% of the Small-Cap Value Fund's Class A shares of capital stock then
outstanding. As of the same date, no Directors or officers of either Series
owned Class B shares, Class C shares or Class D shares of capital stock then
outstanding.
10
<PAGE>
Investment Advisory and Other Services
Investment Manager
Seligman manages each Fund of the Series. 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.
Mr. William C. Morris owns a majority of the outstanding voting securities of
Seligman. See Appendix B for further history of Seligman.
All of the officers of the Series listed above are officers or employees of
Seligman. Their affiliations with the Series and with Seligman are provided
under their principal business occupations.
Each Fund pays Seligman a management fee for its services, 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. Seligman, at its discretion, waived a portion of its fees for
the Large-Cap Value Fund for the period ended December 31, 1997. The management
fees paid by the Large-Cap Value Fund for the years ended December 31, 1999 and
1998 and for the period April 25, 1997 (inception) through December 31, 1997
were $1,303,424, $862,479 and $36,266, respectively, or .80%, .80% and .20% per
annum, respectively, of its average daily net assets. The management fees paid
by the Small-Cap Value Fund for the years ended December 31, 1999 and 1998 and
for the period April 25, 1997 (inception) through December 31, 1997 were
$1,413,866, $2,255,973 and $819,194, respectively, or 1% per annum of its
average daily net assets.
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 their
respective shares under Federal and State securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder record keeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees and expenses of
directors of the Series not employed by or serving as a director of Seligman or
its affiliates, insurance premiums and extraordinary expenses such as litigation
expenses. Certain expenses are allocated between each Fund in a manner
determined by the Board of Directors to be fair and equitable.
The Management Agreement also provides that Seligman will not be liable to the
Series 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
Management Agreement, except for willful misfeasance, bad faith, gross
negligence, or reckless disregard of its obligations and duties under the
Management 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, of each year if
(1) such continuance is approved in the manner required by the 1940 Act (i.e.,
by a vote of a majority of the Board of Directors or of the outstanding voting
securities of 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 the Series 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 either 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.
Principal Underwriter
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 Series and
of each of the other mutual funds in the Seligman Group. Seligman Advisors is
an "affiliated person" (as defined in the 1940 Act) of Seligman, which is itself
an affiliated person of the Series. Those individuals identified above under
"Management Information" as directors or officers of the Series and Seligman
Advisors are affiliated persons of both entities.
11
<PAGE>
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 its
business and other affairs. Seligman provides the Series with such office
space, administrative and other services and executive and other personnel as
are necessary for Series operations. Seligman pays all of the compensation of
directors of the Series who are employees or consultants of Seligman and of the
officers and employees of the Series. Seligman also provides senior management
for Seligman Data Corp., the Series' shareholder service agent.
Service Agreements
There are no other management-related service contracts under which services are
provided to the Series.
Other Investment Advice
No person or persons, other than directors, officers, or employees of Seligman,
regularly advise the Series 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 and Class C shares of each Fund, as set forth below:
Class A shares:
- ---------------
<TABLE>
<CAPTION>
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 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.
Class C shares:
- ---------------
<TABLE>
<CAPTION>
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 $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 - $1,000,000 0 0 0
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
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 Fund shares. For the years ended December 31,
1999 and 1998 and for the period April 25, 1997 (inception) through December 31,
1997, Seligman Services received commissions from certain sales of shares of the
Large-Cap Value Fund in the amount of $466, $3,184 and $725, respectively. For
the years ended December 31, 1999 and 1998 and for the period April 25, 1997
(inception) through December 31, 1997, Seligman Services received commissions
from certain sales of shares of the Small-Cap Value Fund in the amount of $883,
$2,646 and $4,687, respectively.
12
<PAGE>
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, each Fund may pay to Seligman Advisors an administration,
shareholder services and distribution fee in respect of such Fund's Class A,
Class B, Class C and Class D shares, respectively. Payments by each Fund under
its 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's 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 each Fund under its 12b-1 Plan are
intended to be used to encourage sales of each Fund, as well as to discourage
redemptions.
Fees paid by each Fund under its 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 are allocated between the classes of the Fund in
accordance with a methodology approved by the Series' Board of Directors.
Expenses of distribution activities that benefit both a Fund and other Seligman
funds will be allocated among the applicable funds based on relative gross sales
during the quarter in which such expenses are incurred, 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 such Fund's Class A shares. This 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 fee of up to .25% on
an annual basis, payable quarterly, of the average daily net assets of Class A
shares attributable to the particular Service Organization for providing
personal service and/or maintenance of shareholder accounts. The fee payable to
Service Organizations from time to time shall, within such limits, be determined
by the Board of Directors. Each 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 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, 1999 was $130,350
and $123,760, respectively, equivalent to .25% per annum 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 such Fund's Class B shares. This 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 Class B shares of each Fund (i) a 4% sales commission to Service
Organizations and (ii) a payment of up to .25% of sales to Seligman Advisors to
help defray its costs of distributing Class B shares; and (2) a service fee of
up to .25% per annum which is paid to Seligman Advisors. The service fee is
used by Seligman Advisors exclusively to make payments to Service Organizations
which have entered into agreements with Seligman Advisors. Such Service
Organizations receive from Seligman Advisors a continuing service fee of up to
.25% on an annual basis, payable quarterly, of the average daily net assets of
Class B shares attributable to the particular Service Organization for providing
personal service and/or maintenance of shareholder accounts. The amounts
expended by Seligman Advisors or FEP Capital, L.P. in any one year upon the
initial purchase of Class B shares of each Fund may exceed the 12b-1 fees paid
by the Fund in that year. Each
13
<PAGE>
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 each 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 its 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 paid in
respect of Class B shares of the Large-Cap Value Fund and the Small-Cap Value
Fund for the year ended December 31, 1999 was $614,698 and $580,076,
respectively, equivalent to 1% per annum of each Fund's Class B shares' average
daily net assets.
Class C
- -------
Under the 12b-1 Plan, the Fund, with respect to Class C shares, pays monthly to
Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of the average daily
net asset value of the Class C shares. This fee is used by Seligman Advisors as
follows: During the first year following the sale of Class C shares, a
distribution fee of .75% of the average daily net assets attributable to Class C
shares is used, along with any CDSC proceeds during the first eighteen months,
to (1) reimburse Seligman Advisors for its payment at the time of sale of Class
C shares of a 1.25% 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 C shares, a service fee of up to .25% of the average daily net assets
attributable to such Class C shares is used to reimburse Seligman Advisors for
its prepayment to Service Organizations at the time of sale of Class C shares of
a service fee of .25% of the net asset value of the Class C share sold (for
shareholder services to be provided to Class C shareholders over the course of
the one year immediately following the sale). The payment of service fees 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 C shares, the entire 12b-1 fee
attributable to such Class C shares is paid to Service Organizations for
providing continuing shareholder services and distribution assistance in respect
of the Fund. The total amounts paid to Seligman Advisors in respect of Class C
shares of the Large-Cap Value Fund and the Small-Cap Value Fund from May 27,
1999 (inception) to December 31, 1999 were $27,702 and $4,122, respectively,
equivalent to 1% per annum of each Fund's Class C shares' average daily net
assets.
The amounts expended by Seligman Advisors in any one year with respect to Class
C shares of each 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 C shares in one year to be paid from Class C 12b-1 fees in any other
year; however, in any year each Fund is not obligated to pay any 12b-1 fees in
excess of the fees described above.
As of December 31, 1999, Seligman Advisors incurred $149,489 and $22,061, of
unreimbursed expenses in respect of Class C shares of the Large-Cap Value Fund
and the Small-Cap Value Fund, respectively, equal to 1.63% and 1.76%,
respectively, of their net assets.
If the 12b-1 Plan is terminated in respect of Class C shares of a Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to its Class C shares.
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 such Fund's Class D shares. This 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 such Class D shares is used, along with any CDSC proceeds, to
(1) reimburse Seligman Advisors for its payment at the time of sale of Class D
shares of a .75% sales commission to Service Organizations, and (2) pay for
other distribution expenses, including paying for the preparation of advertising
and sales literature and the printing and distribution of such promotional
materials and prospectuses to prospective investors and other marketing costs of
Seligman Advisors. In addition, during the first year following the sale of
Class D shares, a service fee of up to .25% of the average daily net assets
attributable to such Class D shares is used to reimburse Seligman Advisors for
its prepayment to Service Organizations at the time of sale of Class D shares of
a service fee of .25% of the net asset value of the Class D shares sold (for
shareholder services to be provided to Class D shareholders of the Fund over the
course of the one year immediately following the sale). The payment of service
fees to Seligman Advisors is limited to
14
<PAGE>
amounts Seligman Advisors actually paid to Service Organizations at the time of
sale as service fees. After the initial one-year period following a sale of
Class D shares, the entire 12b-1 fee attributable to such Class D shares is paid
to Service Organizations for providing continuing shareholder services and
distribution assistance in respect of a Fund. The total amount 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, 1999 was $461,833 and $332,800,
respectively, equivalent to 1% per annum 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 each 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 each Fund is not obligated to pay any 12b-1 fees in
excess of the fees described above.
As of December 31, 1999, Seligman Advisors incurred $73,722 and $90,132, of
unreimbursed expenses in respect of Class D shares of the Large-Cap Value Fund
and the Small-Cap Value Fund, respectively equal to .21% and .36%, respectively,
of their net assets.
If the 12b-1 Plan is terminated in respect of Class D shares of a Fund, no
amounts (other than amounts accrued but 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, 1999, were spent on the
following activities in the following amounts:
<TABLE>
<CAPTION>
Compensation to Compensation to Other
Fund/Class Underwriters Broker/Dealers Compensation*
- ---------- --------------- --------------- -------------
<S> <C> <C> <C>
Large-Cap Value Fund/A $ -0- $130,350 $ -0-
Large-Cap Value Fund/B* $ -0- $153,874 $460,824
Large-Cap Value Fund/C** $ 27,702 $ -0- $ -0-
Large-Cap Value Fund/D $129,488 $332,345 $ -0-
Small-Cap Value Fund/A $ -0- $123,760 $ -0-
Small-Cap Value Fund/B* $ -0- $145,040 $435,036
Small-Cap Value Fund/C** $ 4,122 $ -0- $ -0-
Small-Cap Value Fund/D $ 66,145 $266,655 $ -0-
</TABLE>
* 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.
** From May 27, 1999 (inception) to December 31, 1999.
The 12b-1 Plans were approved on March 20, 1997 by the Board of Directors of the
Series, including a majority of the Directors who are not "interested persons"
(as defined in the 1940 Act) of the Series and who have no direct or indirect
financial interest in the operation of the 12b-1 Plans or in any agreement
related to the 12b-1 Plans (Qualified Directors) and by the sole shareholder of
each Fund on April 7, 1997. The 12b-1 Plan was approved in respect of the Class
C shares on May 20, 1999 by the Directors, including a majority of the Qualified
Directors, and became effective in respect of the Class C shares on June 1,
1999. The 12b-1 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 Series, cast in person at a meeting
called for the purpose of voting on such approval. The 12b-1 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 12b-1 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 12b-1 Plans as existing Class A shares, in which case the
Class B shares will thereafter convert into the new class instead of into Class
A shares. No material amendment to the 12b-1 Plans may be made except by a
majority of both the Directors and Qualified Directors.
The 12b-1 Plans require that the Treasurer of the Series shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the 12b-1
15
<PAGE>
Plans. Rule 12b-1 also requires that the selection and nomination of Directors
who are not "interested persons" of the Series be made by such disinterested
Directors.
Seligman Services acts as the broker/dealer of record for shareholder accounts
of the Series that do not have a designated financial advisor and receives
compensation pursuant to each Fund's 12b-1 Plan for providing personal services
and account maintenance to such accounts and other distribution services. For
the years ended December 31, 1999 and 1998, and for the period April 25, 1997
(inception) through December 31, 1997, Seligman Services received distribution
and service fees pursuant to the Large-Cap Value Fund's 12b-1 Plan in the
amounts of $14,754, $10,268 and $2,587, respectively. For the years ended
December 31, 1999 and 1998, and for the period April 25, 1997 (inception)
through December 31, 1997, Seligman Services received distribution and service
fees pursuant to the Small-Cap Value Fund's 12b-1 Plan in the amounts of
$10,364, $10,913 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 of the Series. 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, the Series 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 the Series' directors and/or officers are
affiliated.
For the years ended December 31, 1999 and 1998, and for the period April 25,
1997 (inception) through December 31, 1997, the Large-Cap Value Fund paid total
brokerage commissions to others for execution, research and statistical services
in the amounts of $133,709, $134,613 and $80,073, respectively. For the years
ended December 31, 1999 and 1998, and for the period April 25, 1997 (inception)
through December 31, 1997, the Small-Cap Value Fund paid total brokerage
commissions to others for execution, research and statistical services in the
amounts of $286,199, $235,785 and $333,924, respectively. The amount of
brokerage commissions paid by the Large-Cap Value Fund has increased materially
from 1997 due to the Fund's increase in new assets under management and the
Fund's completion of a full year of portfolio transactions for 1998 and 1999, in
comparison to 1997 where the Fund was only in operation for the period April 25,
1997 (inception) through December 31, 1997.
Commissions
For the years ended December 31, 1999 and 1998, and for the period April 25,
1997 (inception) through December 31, 1997, the Series did not execute any
portfolio transactions with, and therefore did not pay any commissions to, any
broker affiliated with either the Series, 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 the
Series 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 the
Series.
16
<PAGE>
Directed Brokerage
During the year ended December 31, 1999, neither the Series nor Seligman,
through an agreement or understanding with a broker, or otherwise through an
internal allocation procedure, directed any of its brokerage transactions to a
broker because of research services provided.
Regular Broker-Dealers
During the year ended December 31, 1999, neither Fund of the Series 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 Series are authorized to issue, create and classify shares
of capital stock in separate funds without further action by shareholders.
Shares of capital stock of each Fund have a par value of $.001 and are divided
into four classes, designated as Class A common stock, Class B common stock,
Class C common stock and Class D common stock. Each share of a Fund's Class A,
Class B, Class C 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 Series has adopted a Plan (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
The Series 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 of the Series 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 under
"Persons Entitled to Reductions") 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 the 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
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
17
<PAGE>
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 a 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.
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 Series, to
receive in bulk and to distribute to each participant on a timely basis the
Series 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 Series 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 the Prospectus
applies to sales to "eligible employee benefit plans," except that the Series
may sell shares at net asset value to "eligible 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 Series' shareholder service
agent. "Eligible employee benefit plan" means any plan or arrangement, whether
or not tax qualified, which provides for the purchase of Series' 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. Section
403(b) plans sponsored by public educational institutions are not eligible for
net asset value purchases based on the aggregate investment made by the plan or
number of eligible employees.
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 in the following instances:
(1) to any registered unit investment trust which is the issuer of periodic
payment plan certificates, the net proceeds of which are invested in
Series' shares;
(2) to separate accounts established and maintained by an insurance company
which are exempt from registration under Section 3(c)(11) of the 1940 Act;
(3) to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with Seligman Advisors;
18
<PAGE>
(4) to financial institution trust departments;
(5) to registered investment advisers exercising discretionary investment
authority with respect to the purchase of Series' shares;
(6) 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;
(7) 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
Series;
(8) to other investment companies in the Seligman Group in connection with a
deferred fee arrangement for outside directors;
(9) to certain "eligible employee benefit plans" as discussed above;
(10) to those partners and employees of outside counsel to the Fund or its
directors or trustees who regularly provide advice and services to the
Fund, to other funds managed by Seligman, or to their directors or
trustees; and
(11) in connection with sales pursuant to a 401(k) alliance program which has an
agreement with Seligman Advisors.
CDSC Applicable to Class A Shares. Class A shares purchased without an initial
sales charge due to a purchase of $1,000,000 or more either alone or through 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 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 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.
Class B
- -------
Class B shares of each Fund of the Series may be purchased at a price equal to
the next determined net asset value, without an initial sales charge. However,
Class B shares 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. 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.
19
<PAGE>
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 each Fund exercising the 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 each 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 Seligman mutual fund from which
the exchange has been made.
Class C
- -------
Class C shares may be purchased at a price equal to the next determined net
asset value, plus an initial sales charge. Purchases of Class C shares by a
"single person" may be eligible for the reductions in initial sales charges
described above for Class A shares. Class C shares are subject to a CDSC of 1%
if the shares are redeemed within eighteen months of purchase, charged as a
percentage of the current net asset value or the original purchase price,
whichever is less.
Class D
- -------
Class D shares of each Fund of the Series may be purchased at a price equal to
the next determined net asset value, without an initial sales charge. However,
Class D shares 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. Unlike Class B shares, Class D
shares do not automatically convert to Class A shares after eight years.
Systematic Withdrawals. Class B, Class C 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's Systematic
Withdrawal Plan to withdraw up to 12% and 10%, respectively, of the value of
their accounts per year without the imposition of a CDSC. Account value is
determined as of the date the systematic withdrawals begin.
CDSC Waivers. The CDSC on Class B, Class B and Class D shares of each Fund of
the Series (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 Series;
(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, Class C or Class D
shares sold by a dealer, the CDSC is waived because the redemption qualifies for
a waiver as set forth above, the dealer shall remit to Seligman
20
<PAGE>
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, the Series may accept securities in
payment for Series' shares sold at the applicable public offering price (net
asset value and, if applicable, any sales charge), although the Series does not
presently intend to accept securities in payment for its shares. Generally, the
Series 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 Series and in a sufficient amount for
efficient management. Although no minimum has been established, it is expected
that the Series would not accept securities with a value of less than $100,000
per issue in payment for shares. The Series may reject in whole or in part
offers to pay for Series' shares with securities, may require partial payment in
cash for applicable sales charges, and may discontinue accepting securities as
payment for Series' shares at any time without notice. The Series will not
accept restricted securities in payment for shares. The Series will value
accepted securities in the manner provided for valuing portfolio securities of
the Series. Any securities accepted by the Series in payment for Series' shares
will have an active and substantial market and have a value which is readily
ascertainable.
Fund Reorganizations
Class A shares and Class C shares of each Fund of the Series 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's 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
and Class C 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 Series will also determine NAV for each class of a Fund 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, Class C 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 60 days remaining to maturity are generally valued at
amortized cost. Short-term obligations with more than 60 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 each Fund's 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 each Fund will be subtracted from its 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
21
<PAGE>
on the NYSE. The values of such securities used in computing the net asset value
of the shares of each 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 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 each 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 Series and Seligman
Advisors, Class A shares and Class C shares are sold with a maximum initial
sales charge of 4.75% and 1.00%(1), respectively, and Class B and Class D shares
are sold at NAV(2). Using each Class's NAV at December 31, 1999, the maximum
offering price of each Fund's shares is as follows:
<TABLE>
<CAPTION>
Large-Cap Small-Cap
Value Fund Value Fund
---------- ----------
<S> <C> <C>
Class A
- -------
Net asset value per share.......................... $ 9.75 $7.91
Maximum sales charge (4.75% of offering price)..... .49 .39
------ -----
Offering price to public........................... $10.24 $8.30
====== =====
Class B
- -------
Net asset value and offering price per share(2).... $ 9.62 $7.76
====== =====
Class C
- -------
Net asset value per share.......................... $ 9.62 $7.76
Maximum sales charge (1.00% of offering price(1)).. .10 .08
------ -----
Offering price to public........................... $ 9.72 $7.84
====== =====
Class D
- -------
Net asset value and offering price per share(2).... $ 9.62 $7.76
====== =====
- -----------------------
</TABLE>
(1) In addition to the front-end sales charge of 1.00%, Class C shares are
subject to a 1% CDSC if you redeem your shares with in 18 months of
purchase.
(2) 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 also subject to a
1% CDSC if you redeem your shares within one year of purchase.
Redemption in Kind
The procedures for selling Series' shares under ordinary circumstances are set
forth in the Prospectus. In unusual circumstances, payment may be postponed, or
the right of redemption postponed for more than seven days, if the orderly
liquidation of portfolio securities is prevented by the closing of, or
restricted trading on, the NYSE during periods of emergency, or such other
periods as ordered by the SEC. 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.
22
<PAGE>
Taxation of the Series
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's 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
the Series 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 the Series' capital gains from property
held for more than one year.
Any gain or loss realized upon a sale or redemption of shares in each 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
each 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 such Fund.
In determining gain or loss on shares of each 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 Series. 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.
Each 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 Series 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
23
<PAGE>
promulgated by the Internal Revenue Service, the Series 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 Series 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 Series also reserves the right to close any account which
does not have a certified taxpayer identification number.
Underwriters
Distribution of Securities
The Series 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 the Series. Seligman Advisors accepts orders for the
purchase of the Series' shares, which are offered continuously. As general
distributor of the Series' shares, Seligman Advisors allows reallowances to all
dealers on sales of Class A shares and Class C shares, as set forth above under
"Dealer Reallowances." Seligman Advisors retains the balance of sales charges
and any CDSCs paid by investors.
Total initial sales charges paid by shareholders of Class A shares of the Large-
Cap Value Fund for the years ended December 31, 1999 and 1998 and for the period
April 25, 1997 (inception) through December 31, 1997, amounted to $291,421,
$505,337 and $442,967, respectively, of which $34,003, $57,852 and $29,676,
respectively, was retained by Seligman Advisors. Total initial sales charges
paid by shareholders of Class C shares of the Large-Cap Value Fund for the
period from May 27, 1999 (inception) to December 31, 1999 amounted to $96,255,
none of which was retained by Seligman Advisors. No Class C shares of the
Large-Cap Value Fund were issued or outstanding during the year ended December
31, 1998 or the period from April 25, 1997 (inception) through December 31,
1997.
Total initial sales charges paid by shareholders of Class A shares of the Small-
Cap Value Fund for the years ended December 31, 1999 and 1998 and for the
period April 25, 1997 (inception) through December 31, 1997 amounted to
$104,451, $556,351 and $2,115,552, respectively, of which $11,928, $61,808 and
$194,285, respectively, was retained by Seligman Advisors. Total initial sales
charges paid by shareholders of Class C shares of the Small-Cap Value Fund for
the period from May 27, 1999 (inception) to December 31, 1999 amounted to
$13,377, none of which was retained by Seligman Adviors. No Class C shares of
the Small-Cap Value Fund were issued or outstanding during the year ended
December 31, 1998 or the period from April 25, 1997 (inception) through December
31, 1997.
Compensation
Seligman Advisors, which is an affiliated person of Seligman, which is an
affiliated person of the Series, received the following commissions and other
compensation from each Fund during its year ended December 31, 1999:
<TABLE>
<CAPTION>
Compensation on
Net Underwriting Redemptions and
Discounts and Repurchases
Commissions (CDSC on Class A,
(Class A Sales Class C and Class D Brokerage Other
Fund Charges Retained) Shares Retained) Commissions Compensation(1)
- ---- ----------------- ------------------- ----------- ---------------
<S> <C> <C> <C> <C>
Large-Cap Value $34,003 $39,625 $-0- $18,643
Small-Cap Value $11,928 $36,980 $-0- $7,678
</TABLE>
(1) Seligman Advisors has sold its rights to collect the distribution fees paid
by each Fund in respect of Class B shares and 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, 1999 are reflected in the
table.
24
<PAGE>
Other Payments
Seligman Advisors shall pay broker/dealers, from its own resources, a fee on
purchases of Class A shares 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 trustee or other fiduciary purchasing for a single fiduciary account or single
trust. Purchases made by a trustee 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 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. Dealers may limit the
participation of registered representatives in such informational programs by
means of sales incentive programs which may require the sale of minimum dollar
amounts of shares of Seligman mutual funds. Seligman Advisors may from time to
time pay a bonus or other incentive to dealers that sell shares of the Seligman
mutual funds. In some instances, these bonuses or incentives may be offered
only to certain dealers which employ registered representatives who have sold or
may sell a significant amount of shares of the Fund and/or certain other mutual
funds managed by Seligman during a specified period of time. Such bonus or
other incentive will be made in the form of cash or, if permitted, may take the
form of non-cash payments. The non-cash payments will include (i) business
seminars at Seligman's headquarters or other locations, (ii) travel expenses,
including meals, entertainment and lodging, incurred in connection with trips
taken by qualifying registered representatives and members of their families to
places within or outside the United States, or (iii) the receipt of certain
merchandise. The cash payments may include payment of various business expenses
of the dealer. 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
Class A
- -------
The average annual total returns for Class A shares of the Large-Cap Value Fund
for the one year ended December 31, 1999 and for the period April 25, 1997
(inception) through December 31, 1999 were (7.30)% and 11.40%, respectively.
The average annual total returns for Class A shares of the Small-Cap Value Fund
for the one year ended December 31, 1999 and for the period April 25, 1997
(inception) through December 31, 1999 were (3.77)% and 2.36%, respectively.
These returns were computed by subtracting the maximum sales charge of 4.75% of
the public offering price and assuming that all of the dividends and capital
gain distributions paid by each Fund's Class A shares, if any, were reinvested
over the relevant time period. It was then assumed that at the end of each
period, the entire amount was redeemed. The average annual total returns were
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).
Table A below illustrates the total return (income and capital) on Class A
shares of each Fund, assuming all dividends and capital gain distributions are
reinvested in additional shares. It shows that a $1,000 investment in Class A
shares of the Large-Cap Value Fund made on April 25, 1997 (commencement of
offering) had a value of
25
<PAGE>
$1,336 on December 31, 1999, resulting in an aggregate total return of 33.63%;
and a $1,000 investment in Class A shares of the Small-Cap Value Fund made on
April 25, 1997 (commencement of offering) had a value of $1,065 on December 31,
1999, resulting in an aggregate total return of 6.46%.
Class B
- -------
The average annual total returns for Class B shares of the Large-Cap Value Fund
for the one year ended December 31, 1999 and for the period April 25, 1997
(inception) through December 31, 1999 were (8.24)% and 11.68%, respectively. The
average annual total returns for Class B shares of the Small-Cap Value Fund for
the one year ended December 31, 1999 and for the period April 25, 1997
(inception) through December 31, 1999 were (4.75)% and 2.45%, respectively.
These returns were computed assuming that all of the dividends and capital 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 each period,
the entire amount was redeemed, subtracting the applicable CDSC.
Table B illustrates the total return (income and capital) on Class B shares of
each Fund, assuming all dividends and capital gain distributions are reinvested
in additional 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 $1,345 on December 31, 1999, resulting in an aggregate total return of
34.53%; 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 $1,067 on
December 31, 1999, resulting in an aggregate total return of 6.72%.
Class C
- -------
The total return for Class C shares of the Large-Cap Value Fund for the period
from May 27, 1999 (inception) through December 31, 1999 was (10.66)%. The total
return for Class C shares of the Small-Cap Value Fund for the period from May
27, 1999 (inception) through December 31, 1999 was (5.61)%. These returns were
computed by subtracting the maximum sales charge of 1.00% of the public offering
price and assuming that all of the dividends and capital gain distributions paid
by each Fund's Class C shares, if any, were reinvested over the period. It was
then assumed that at the end of the period, the entire amount was redeemed,
subtracting the 1% CDSC.
Table C illustrates the total return (income and capital) on Class C shares of
each Fund, assuming all dividends and capital gain distributions are reinvested
in additional shares. It shows that a $1,000 investment in Class C shares of
the Large-Cap Value Fund made on May 27, 1999 (commencement of offering) had a
value of $893 on December 31, 1999, resulting in an aggregate total return of
(10.66)%; and a $1,000 investment in Class C shares of the Small-Cap Value Fund
made on May 27, 1999 (commencement of offering) had a value of $944 on December
31, 1999, resulting in an aggregate total return of (5.61)%.
Class D
- -------
The average annual total returns for Class D shares of the Large-Cap Value Fund
for the one year ended December 31, 1999 and for the period April 25, 1997
(inception) through December 31, 1999 were (4.38)% and 12.60%, respectively.
The average annual total returns for Class D shares of the Small-Cap Value Fund
for the one year ended December 31, 1999 and for the period April 25, 1997
(inception) through December 31, 1999 were (0.76)% and 3.51%, respectively.
These returns were computed assuming that all of the dividends and capital 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
each period, the entire amount was redeemed, subtracting the 1% CDSC, if
applicable.
Table D illustrates the total return (income and capital) on Class D shares of
each Fund, assuming all dividends and capital gain distributions are reinvested
in additional 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 $1,375 on December 31, 1999, resulting in an aggregate total return of
37.53%; 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 $1,097 on
December 31, 1999, resulting in an aggregate total return of 9.72%.
26
<PAGE>
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 Series today.
TABLE A - CLASS A SHARES
<TABLE>
<CAPTION>
Value of Value of Value Total Value
Period/Year 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 1,339 27 7 1,373
12/31/99 1,300 26 10 1,336 33.63%
Small-Cap
Value Fund
12/31/97 $1,297 $ 1 $-0- $1,298
12/31/98 1,049 5 -0- 1,054
12/31/99 1,055 10 -0- 1,065 6.46%
</TABLE>
TABLE B - CLASS B SHARES
<TABLE>
<CAPTION>
Value of Value of Value Total Value
Period/Year 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 $1,267 $18 $-0- $1,285
12/31/98 1,395 29 -0- 1,424
12/31/99 1,317 28 -0- 1,345 34.53%
Small-Cap
Value Fund
12/31/97 $1,357 $ 1 $-0- $1,358
12/31/98 1,090 5 -0- 1,095
12/31/99 1,057 10 -0- 1,067 6.72%
</TABLE>
TABLE C - CLASS C 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
12/31/99 $893 $-0- $-0- $893 (10.66)%
Small-Cap
Value Fund
12/31/99 $939 $ 5 $-0- $944 (5.61)%
</TABLE>
27
<PAGE>
TABLE D - CLASS D SHARES
<TABLE>
<CAPTION>
Value of Value of Value Total Value
Period/Year 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 $1,267 $18 $-0- $1,285
12/31/98 1,395 29 -0- 1,424
12/31/99 1,347 28 -0- 1,375 37.53%
Small-Cap
Value Fund
12/31/97 $1,357 $ 1 $-0- $1,358
12/31/98 1,090 5 -0- 1,095
12/31/99 1,087 10 -0- 1,097 9.72%
</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 from April
25, 1997 (commencement of offering) through December 31, 1997. For the year
ended December 31, 1999, the performance for Class C shares represents the
performance for the period from May 27, 1999 (commencement of offering)
through December 31, 1999.
(2) The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales charge 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 each Fund is calculated by
assuming a hypothetical initial investment of $1,000 at the beginning of the
period specified; subtracting the maximum sales charge for Class A shares
and Class C 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, Class
C 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.
Each Fund may, from time to time, make reference in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Services, Inc., an independent reporting service which
monitors the performance of mutual funds. In calculating the total return of
each Fund's Class A, Class B, Class C 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. Each Fund may also refer
in advertisements in other promotional material to articles, comments, listings
and columns in the financial press pertaining to such 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.
Each Fund's advertising or promotional material may make reference to such
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.
28
<PAGE>
Financial Statements
Each Fund's Annual Report to shareholders for the year ended December 31, 1999
contains a schedule of investments as of December 31, 1999 as well as certain
other financial information as of that 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 SAI.
General Information
Custodian. Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
Missouri 64105, serves as custodian of the Series. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for each Fund of the Series.
Auditors. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Series. Their address is Two World Financial Center, New York,
New York 10281.
29
<PAGE>
Appendix A
MOODY'S INVESTORS SERVICE (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.
30
<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 RATINGS SERVICES (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.
31
<PAGE>
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.
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.
32
<PAGE>
Appendix B
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of
J. & W. Seligman & Co. In the years that followed, the Seligman Complex played
a major role in the geographical expansion and industrial development of the
United States.
The Seligman Complex:
...Prior to 1900
. Helps finance America's fledgling railroads through underwritings.
. Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
. Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
. Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
. Is appointed U.S. Navy fiscal agent by President Grant.
. Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
. Helps Congress finance the building of the Panama Canal.
...1910s
. Participates in raising billions for Great Britain, France and Italy, helping
to finance World War I.
...1920s
. Participates in hundreds of 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 $2 billion in
assets, and one of its oldest.
...1930s
. Assumes management of Broad Street Investing Co. Inc., its first mutual fund,
today known as Seligman Common Stock Fund, Inc.
. Establishes Investment Advisory Service.
33
<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 50
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.
. Introduces to the public Seligman Frontier Fund, Inc., a small capitalization
mutual fund.
. Launches Seligman Global Fund Series, Inc., which today offers five separate
series: Seligman International Growth Fund, Seligman Global Smaller
Companies Fund, Seligman Global Technology Fund, Seligman Global Growth
Fund and Seligman Emerging Markets Fund.
. Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
. Launches innovative Seligman New Technologies Fund, Inc., a closed-end
"interval" fund seeking long-term capital appreciation by investing in
technology companies, including venture capital investing.
...2000
. Introduces Seligman Time Horizon/Harvester Series, Inc., an asset allocation
type mutual fund containing four funds: Seligman Time Horizon 30 Fund,
Seligman Time Horizon 20 Fund, Seligman Time Horizon 10 Fund and Seligman
Harvester Fund.
34
<PAGE>
File 333-20621
No. 811-08031
PART C. OTHER INFORMATION
- ------ -----------------
Item 23. Exhibits.
- ------- ---------
All Exhibits listed below have been previously filed, except Exhibits
marked with an asterisk (*), which are filed herewith.
(a) Articles Supplementary dated May 24, 1999. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 7 filed on May 28, 1999.)
(a)(1) 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.)
(c) Specimen Stock Certificate.
(d) 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) Addendum to Sales/Bank Agreement. (Incorporated by reference to Post-
Effective Amendment No. 57 to the Registration Statement of Seligman
Capital Fund, Inc. (File No. 811-1886) filed on May 28, 1999.)
(e)(1) Form of Bank Agreement between Seligman Advisors, Inc. and Banks.
(Incorporated by reference to Post-Effective Amendment No. 57 to the
Registration Statement of Seligman Capital Fund, Inc. (File No. 811-1886)
filed on May 28, 1999.)
(e)(2) Distributing Agreement between Registrant and Seligman Advisors, Inc.
(Incorporated by reference to Registrant's Pre-Effective Amendment No. 2
filed on April 17, 1997.)
(e)(3) Sales Agreement between Seligman Advisors, Inc. and Dealers.
(Incorporated by reference to Registrant's Pre-Effective Amendment No. 2
filed on April 17, 1997.)
(f) 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)(1) 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 in respect of Class C shares.
(Incorporated by reference to Registrant's Post-Effective Amendment No. 7
filed on May 28, 1999.)
(i)(1) 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.
C-1
<PAGE>
File 333-20621
No. 811-08031
PART C. OTHER INFORMATION
- ------ -----------------
(l) Form of Purchase Agreement (Investment Letter) in respect of Class C
shares between Registrant and J. & W. Seligman & Co. Incorporated.
(Incorporated by reference to Registrant's Post-Effective Amendment No. 7
filed on May 28, 1999.)
(l)(1) Purchase Agreement (Investment Letter) between Registrant. (Incorporated
by reference to Registrant's Pre-Effective Amendment No. 2 filed on April
17, 1997.)
(l)(2) Amended Administration, Shareholder Services and Distribution Plan of
each of the Seligman Large-Cap Value and Small-Cap Value Funds.
(Incorporated by reference to Registrant's Post-Effective Amendment No. 7
filed on May 28, 1999.)
(m)(1) Amended Administration, Shareholder Services and Distribution Agreement
between Seligman Advisors, Inc. and Dealers. (Incorporated by reference
to Post-Effective Amendment No. 57 to the Registration Statement of
Seligman Capital Fund, Inc. (File No. 811-1886) filed on May 28,
1999.)
(o) Plan of Multiple Classes of Shares (four Classes) pursuant to Rule 18f-3
under the Investment Company Act of 1940. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 7 filed on May 28, 1999.)
(p) *Code of Ethics.
(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, as amended, 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 (Seligman), is the
Registrant's investment adviser. Seligman also serves as investment
adviser to nineteen other 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 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 New Technologies Fund, Inc., Seligman
Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc.,
Seligman Quality Municipal Fund, Inc. Seligman Select Municipal Fund,
Inc., Seligman Time Horizon/Harvester Series, Inc. and Tri-Continental
Corporation.
C-2
<PAGE>
File 333-20621
No. 811-08031
PART C. OTHER INFORMATION (continued)
- ------- -----------------
Seligman has an investment advisory service division which provides
investment management or advice to private clients. The list required by
this Item 26 of officers and directors of Seligman, 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 Seligman pursuant to the Investment Advisers Act of
1940, as amended (SEC File Nos. 801-15798), which was filed on March 30,
2000.
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 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 Time
Horizon/Harvester Series, Inc.
(b) Name of each director, officer or partner of Registrant's principal
underwriter named in response to Item 20:
Seligman Advisors, Inc.
-----------------------
As of March 31, 2000
--------------------
<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
Brian T. Zino* Director Executive Officer
Ronald T. Schroeder* Director President and Director
Fred E. Brown* Director None
William H. Hazen* Director Director Emeritus
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 None
Edward F. Lynch* Senior Vice President, National Vice President
Sales Director None
James R. Besher Senior Vice President, Division
14000 Margaux Lane Sales Director None
Town & Country, MO 63017
Gerald I. Cetrulo, III Senior Vice President, Sales
140 West Parkway None
Pompton Plains, NJ 07444
Matthew A. Digan* Senior Vice President,
Domestic Funds None
Jonathan G. Evans Senior Vice President, Sales
222 Fairmont Way None
Ft. Lauderdale, FL 33326
</TABLE>
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- -------------------------------- ------------------------------- -------------------------------
<S> <C> <C>
T. Wayne Knowles Senior Vice President, Division None
104 Morninghills Court Sales Director
Cary, NC 27511
</TABLE>
C-3
<PAGE>
File 333-20621
No. 811-08031
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
Seligman Advisors, Inc.
-----------------------
As of March 31, 2000
--------------------
<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
Michelle L. McCann-Rappa* Senior Vice President, Retirement Plans None
Scott H. Novak* Senior Vice President, Insurance None
Jeff Rold Senior Vice President, Product None
181 East 73rd Street, Apt 20B Business Management
New York, New York 10021
Ronald W. Pond* Senior Vice President, Division None
Sales Director
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 Drive
Rumson, NJ 07760
Charles L. von Breitenbach, II* Senior Vice President, Managed None
Money
Gail S. Cushing* Vice President, National Accounts None
Jeffrey S. Dean* Vice President, Business Analysis None
Ron Dragotta* Vice President, Regional Retirement None
Plans Manager
Mason S. Flinn Vice President, Regional Retirement None
2130 Filmore Street Plans Manager
PMB 280
San Francisco, CA 94115-2224
Marsha E. Jacoby* Vice President, Offshore Business None
Manager
Jody Knapp* Vice President, Regional Retirement None
17011 East Monterey Drive Plans Manager
Fountain Hills, AZ 85268
David W. Mountford* Vice President, Regional Retirement None
7131 NW 46th Street Plans Manager
Lauderhill, FL 33319
Jeffery C. Pleet* Vice President, Regional Retirement None
Plans Manager
Tracy A. Salomon* Vice President, Retirement Marketing None
Helen Simon* Vice President, Sales Administration None
</TABLE>
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ---------------------------------------- --------------------------------------- ---------------------
<S> <C> <C>
Gary A. Terpening* Vice President, Director of Business None
Development
</TABLE>
C-4
<PAGE>
File 333-20621
No. 811-08031
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
Seligman Advisors, Inc.
-----------------------
As of March 31, 2000
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ---------------------------------------- ----------------------------------- ---------------------
<S> <C> <C>
John E. Skillman* Vice President, Portfolio Advisor None
Charles E. Wenzel Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
Robert McBride Vice President, Marketing Director None
Seligman International, Inc. Latin America
Sucursal Argentina
Edificio Laminar Plaza
Ingeniero Butty No. 240, 4th Floor
C1001ASB Buenos Aires, Argentina
Daniel Chambers Regional Vice President None
4618 Lorraine Avenue
Dallas, TX 75209
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Kevin Casey Regional Vice President None
19 Bayview Avenue
Babylon, NY 11702
Bradford C. Davis Regional Vice President None
241 110th Avenue SE
Bellevue, WA 98004
Cathy Des Jardins Regional Vice President None
PMB 152
1705 14th Street
Boulder, CO 80302
Kenneth Dougherty Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
Kelli A. Wirth Dumser Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
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
Carla A. Goehring Regional Vice President None
11426 Long Pine Drive
Houston, TX 77077
Michael K. Lewallen Regional Vice President None
908 Tulip Poplar Lane
Birmingham, AL 35244
Judith L. Lyon Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
</TABLE>
C-5
<PAGE>
File 333-20621
No. 811-08031
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
Seligman Advisors, Inc.
-----------------------
As of March 31, 2000
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ---------------------------------- --------------------------------- ---------------------
<S> <C> <C>
Leslie A. Mudd Regional Vice President None
5243 East Calle Redonda
Phoenix, AZ 85018
Tim O'Connell Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
George M. Palmer, Jr. Regional Vice President None
1805 Richardson Place
Tampa, FL 33606
Thomas Parnell Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
Craig Prichard Regional Vice President None
300 Spyglass Drive
Fairlawn, OH 44333
Nicholas Roberts Regional Vice President None
200 Broad Street, Apt. 2451
Stamford, CT 06901
Diane H. Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
James Taylor Regional Vice President None
290 Bellington Lane
Creve Coeur, MO 63141
Steve Wilson Regional Vice President None
83 Kaydeross Park Road
Saratoga Springs, NY 12866
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
Sandra G. Floris* Assistant Vice President, Order Desk None
Keith Landry* Assistant Vice President, Order Desk None
Albert A. Pisano* Assistant Vice President and None
Compliance Officer
Joyce Peress* Assistant Secretary Assistant Secretary
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, NY 10017.
(c) Not Applicable.
Item 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, and (2) Seligman Data Corp., 100 Park
Avenue, New York, NY 10017, as shareholder servicing agent, maintains
shareholder records for the Registrant.
C-6
<PAGE>
File 333-20621
No. 811-08031
Item 29. Management Services. Not Applicable.
- -------- --------------------
Item 30. Undertakings. The Registrant undertakes: (1) to furnish a copy of
- -------- ------------
the Registrant's latest Annual Report, upon request and without
charge, to every person to whom a prospectus is delivered; and, (2) if
requested to do so by the holders of at least 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, as amended.
C-7
<PAGE>
File 333-20621
No. 811-08031
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment No. 8 pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment No. 8 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on the 28th day of April, 2000.
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. 8 has been signed below by
the following persons in the capacities indicated on April 28, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William C. Morris 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
</TABLE>
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/Brian T. Zino
) -----------------
James C. Pitney, Director ) Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
File 333-20621
No. 811-08031
SELIGMAN VALUE FUND SERIES, INC.
Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
Item 23(j) Consent of Independent Auditors
Item 23(p) Code of Ethics
<PAGE>
Exhibit 99.23J
CONSENT OF INDEPENDENT AUDITORS
Seligman Value Fund Series, Inc.:
We consent to the use in Post-Effective Amendment No. 8 to Registration
Statement No. 333-20621 of our reports dated February 11, 2000, appearing in the
Annual Reports to Shareholders for the year ended December 31, 1999, which are
incorporated by reference in the Statement of Additional Information, which is
included in such Registration Statement, and to the references to us under the
captions "Financial Highlights" in the Prospectus and "General Information" in
the Statement of Additional Information, which are also included in such
Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 24, 2000
<PAGE>
Exhibit 99.23(P)
CODE OF ETHICS
--------------
J. & W. Seligman & Co. Incorporated
Seligman Advisors, Inc.
Seligman Services, Inc.
Seligman Data Corp.
Seligman International, Inc.
Seligman International UK Limited
The Seligman Group of Investment Companies
I. Introduction
A primary duty of all directors, officers and employees (collectively
"Employees") of J. & W. Seligman & Co. Incorporated, its subsidiaries and
affiliates (collectively, "Seligman") is to be faithful to the interest of the
various Seligman advisory clients, including the registered and unregistered
companies advised by Seligman (collectively, "Clients"). Directors of the
Seligman Registered Investment Companies also have a duty to the Seligman
Registered Investment Companies and their shareholders. Persons who are
Disinterested Directors are "Employees" for purposes of this Code of Ethics.
Through the years, Seligman and its predecessor organizations have had a
reputation of maintaining the highest business and ethical standards and have
been favored with the confidence of investors and the financial community. Such
a reputation and confidence are not easily gained and are among the most
precious assets of Seligman. In large measure, they depend on the devotion and
integrity with which each Employee discharges his or her responsibilities.
Their preservation and development must be a main concern of each Employee, and
each Employee has a primary obligation to avoid any action or activity that
could produce conflict between the interest of the Clients and that Employee's
self-interest.
The purpose of this Code of Ethics ("Code") is to set forth the policies of
Seligman in the matter of conflicts of interest and to provide a formal record
for each Employee's reference and guidance. This Code is also designed to
prevent any act, practice or course of business prohibited by the rules and
regulations governing our industry.
Each Employee owes a fiduciary duty to each Client. Therefore, all Employees
must avoid activities, interests and relationships that might appear to
interfere with making decisions in the best interest of the Clients.
As an Employee, you must at all times:
1. Avoid serving your own personal interests ahead of the interests of Clients.
You may not cause a Client to take action, or not to take action, for your
personal benefit rather than the Client's benefit.
2. Avoid taking inappropriate advantage of your position. The receipt of
investment opportunities, perquisites or gifts from persons seeking business
with Clients or with Seligman could call into question the exercise of your
better judgment. Therefore, you must not give or receive benefits that would
compromise your ability to act in the best interest of the Clients.
3. Conduct all personal Securities Transactions in full compliance with the
Code, including the pre-authorization and reporting requirements, and comply
fully with the Seligman Insider Trading Policies and Procedures (See Appendix
A).
While Seligman encourages you and your families to develop personal investment
programs, you must not take any action that could cause even the appearance that
an unfair or improper action has been taken. Accordingly, you must follow the
policies set forth below with respect to trading in your Account(s). This Code
places reliance on the good sense and judgment of you as an Employee; however,
if you are unclear as to the Code's meaning, you should seek the advice of the
Law and Regulation Department and assume the Code will be interpreted in the
most restrictive manner. Questionable situations should be resolved in favor of
Clients.
<PAGE>
Technical compliance with the Code's procedures will not insulate from scrutiny
any trades that indicate a violation of your fiduciary duties.
Application of the Code to Disinterested Directors
- --------------------------------------------------
Disinterested Directors are only subject to the reporting requirements in
Section III.5(b) of the Code. Disinterested Directors are not subject to other
provisions of the Code but are subject to the requirements of the federal
securities laws and other applicable laws, such as the prohibition on trading in
securities of an issuer while in possession of material non-public information.
II. Definitions
(a) "Accounts" means all Employee Accounts and Employee Related Accounts.
(b) "Beneficial Interest" is broadly interpreted. The SEC has said that
the final determination of Beneficial Interest is a question to be
determined in the light of the facts of each particular case. The
terms Employee Account and Employee Related Account, as defined below,
generally define Beneficial Interest. However, the meaning of
"Beneficial Interest" may be broader than that described below. If
there are any questions as to Beneficial Interest, please contact the
Director of Compliance, General Counsel or Associate General Counsel.
(i) "Employee Account" means the following securities Accounts: (i)
any of your personal account(s); (ii) any joint or tenant-in-
common account in which you have an interest or are a participant;
(iii) any account for which you act as trustee, executor, or
custodian; (iv) any account over which you have investment
discretion or otherwise can exercise control, including the
accounts of entities controlled directly or indirectly by you; (v)
any account in which you have a direct or indirect interest
through a contract, arrangement or otherwise (e.g., economic,
voting power, power to buy or sell, or otherwise); (vi) any
account held by pledges, or for a partnership in which you are a
member, or by a corporation which you should regard as a personal
holding company; (vii) any account held in the name of another
person in which you do not have benefits of ownership, but which
you can vest or revest title in yourself at once or some future
time; (viii) any account of which you have benefit of ownership;
and (ix) accounts registered by custodians, brokers, executors or
other fiduciaries for your benefit.
(ii) "Employee Related Account" means any Account of (i) your spouse
and minor children and (ii) any account of relatives or any other
persons to whose support you materially contribute, directly or
indirectly.
(c) "Disinterested Director" means a director or trustee of a Seligman
Registered Investment Company who is not an "interested person" of
such investment company within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940.
(d) "Equivalent Security" includes, among other things, an option to
purchase or sell a Security or an instrument convertible or
exchangeable into a Security.
(e) "Investment Team" means one or more Investment Teams formed by the
Manager in various investment disciplines to review and approve
Securities for purchase and sale by Client Accounts. This includes a
team's leader, portfolio managers, research analysts, traders and
their direct supervisors.
(f) "Security" includes, among other things, stocks, notes, bonds,
debentures, and other evidences of indebtedness (including loan
participation and assignments), limited partnership interests,
investment contracts, and all derivative instruments (e.g., options
and warrants).
<PAGE>
(g) "Securities Transaction" means a purchase or sale of a Security.
(h) "Seligman Registered Investment Company" means an investment company
registered under the Investment Company Act of 1940 for which Seligman
serves as investment manager or adviser.
III. Personal Securities Transactions
1. Prohibited Transactions
-----------------------
These apply to all of your Accounts.
(a) Seven-Day Blackout: If you are a member of an Investment Team,
------------------
Securities Transactions are prohibited within seven calendar days
either before or after the purchase or sale of the relevant security
(or an Equivalent Security) by a Client whose Account is managed by
your Investment Team.
(b) Intention to Buy or Sell for Clients: Securities Transactions are
------------------------------------
prohibited at a time when you intend, or know of another's intention,
to purchase or sell that Security (or an Equivalent Security) on
behalf of a Client.
(c) Sixty-Day Holding Period: Profits on Securities Transactions made
------------------------
within a sixty-day period are prohibited and must be disgorged. This
is a prohibition of short term trading. Specifically,
. Purchase of a Security within 60 days of your sale of the
Security (or an Equivalent Security), at a price that is less
than the price in the previous sale is prohibited.
. Sale of a Security within the 60 day period of your purchase of
the Security (or an Equivalent Security), at a price that is
greater than the price in the previous purchase is prohibited.
Examples are as follows:
1. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($15 a share) on February 15.
Employee must disgorge $500.
2. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee purchases 50 shares of XYZ ($12 a share) on January 30.
Employee sells 50 shares of XYZ ($15 a share) on March 15.
Employee must disgorge $150. (The March 15 sale may not be
matched to the January 1 purchase).
3. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($10 a share) on February 1.
Employee purchases 100 shares of XYZ ($9 a share) on March 1
Employee must disgorge $100. (The February 1 sale is permissible
because no profit was made. However, the March 1 purchase is
matched against the February 1 sale resulting in a $100 profit).
(d) Restricted Transactions: Transactions in a Security are prohibited (i)
-----------------------
on the day of a purchase or sale of the Security by a Client, or (ii)
anytime a Client's order in the Security is open on the trading desk.
Other Securities may be restricted from time to time as deemed
appropriate by the Law and Regulation Department.
<PAGE>
(e) Short Sales: If you are a member of an Investment Team, you may not
-----------
engage in any short sale of a Security if, at the time of the
transaction, any Client managed by your Team has a long position in
that same Security. However, this prohibition does not prevent you
from engaging short sales against the box and covered call writing, as
long as these personal trades are in accordance with the sixty-day
holding period described above.
(f) Public Offerings: Acquisitions of Securities in initial and secondary
----------------
public offerings are prohibited, unless granted an exemption by the
Director of Compliance. An exemption for an initial public offering
will only be granted in certain limited circumstances, for example,
the demutualization of a savings bank.
(g) Private Placements: Acquisition of Securities in a private placement
------------------
is prohibited absent prior written approval by the Director of
Compliance.
(h) Market Manipulation: Transactions intended to raise, lower, or
-------------------
maintain the price of any Security or to create a false appearance of
active trading are prohibited.
(i) Inside Information: You may not trade, either personally or on behalf
------------------
of others, on material, non-public information or communicate
material, non- public information to another in violation of the law.
This policy extends to activities within and outside your duties at
Seligman. (See Appendix A).
2. Maintenance of Accounts
-----------------------
All Accounts that have the ability to engage in Securities Transactions
must be maintained at Ernst & Company (Investec) and/or the specific
Merrill Lynch branch office located at 712 Fifth Avenue, New York, NY. You
are required to notify the Director of Compliance of any change to your
account status. This includes opening a new Account, converting,
transferring or closing an existing account or acquiring Beneficial
Interest in an Account through marriage or otherwise. You must place all
orders for Securities Transactions in these Account(s) with the Equity
Trading Desk or the appropriate Fixed Income Team as set forth in Section
III.3 ("Trade Pre-authorization Requirements").
The Director of Compliance may grant exceptions to the foregoing
requirements on a case by case basis. All requests for exceptions must be
applied for in writing and submitted for approval to the Director of
Compliance and will be subject to certain conditions.
3. Trade Pre-authorization Requirements
------------------------------------
All Securities Transactions in an Employee Account or Employee Related
Account must be pre-authorized, except for Securities Transactions set
forth in Section III.4 ("Exempt Transactions").
(a) Trade Authorization Request Form: Prior to entering an order for a
--------------------------------
Securities Transaction in an Employee Account or Employee Related
Account, which is subject to pre-authorization, you must complete a
Trade Authorization Request Form (set forth in Appendix B) and submit
the completed Form (faxed or hand delivered) to the Director of
Compliance (or designee).
(b) Review of the Form and Trade Execution: After receiving the completed
---------------------------------------------------------------------
Trade Authorization Request Form, the Director of Compliance (or
designee) will review the information and, as soon as practical,
determine whether to authorize the proposed Securities Transaction.
The authorization, date and time of the authorization must be
reflected on the Form. Once approved the order may then be executed by
Equity Trading Desk or the appropriate Fixed Income Team, except for
accounts for which an exemption was granted under Section III.2.
<PAGE>
(c) Length of Trade Authorization Approval: Any authorization, if
--------------------------------------
granted, is effective until the earliest of (i) its revocation, (ii)
the close of business on the day from which authorization was granted
or (iii) your discovery that the information in the Trade
Authorization Request Form is no longer accurate. If the Securities
Transaction was not placed or executed within that period, a new pre-
authorization must be obtained. A new pre-authorization need not be
obtained for orders which cannot be filled in one day due to an
illiquid market, so long as such order was placed for execution on
the day the original pre-authorization was given.
No order for a Securities Transaction may be placed prior to the Director
of Compliance (or designee) receiving the completed Trade Pre-
authorization Form and approving the transaction. In some cases, trades
may be rejected for a reason that is confidential.
4. Exempt Transactions
-------------------
The prohibitions of this Code shall not apply to the following Securities
Transactions in your Account(s):
(a) Purchases or sales of Securities which are non-volitional (i.e., not
involving any investment decision or recommendation).
(b) Purchases of Securities through certain corporate actions (such as
stock dividends, dividend reinvestments, stock splits, mergers,
consolidations, spin-offs, or other similar corporate reorganizations
or distributions generally applicable to all holders of the same class
of Securities).
(c) Purchases of Securities effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of its Securities, to the
--------
extent such rights were acquired from the issuer.
(d) Purchases or sales of open-end registered investment companies, U.S.
Government Securities and money market instruments (e.g., U.S.
Treasury Securities, bankers acceptances, bank certificates of
deposit, commercial paper and repurchase agreements).
(e) Purchases of Securities which are part of an automatic dividend
reinvestment plan or stock accumulation plan; however, quarterly
account statement of such plans must be sent to the Director of
Compliance.
(f) Securities Transactions that are granted a prior exemption by the
Director of Compliance, the General Counsel or the Associate General
Counsel.
5. Reporting
---------
(a) You must arrange for the Director of Compliance to receive from the
executing broker, dealer or bank duplicate copies of each confirmation
and account statement for each Securities Transaction in an Employee
Account or Employee Related Account.
(b) If you are a Disinterested Director you are required to report the
information specified below with respect to any Securities Transaction
in any Securities Account in which you have Beneficial Interest, if
you knew, or in the ordinary course of fulfilling your official duties
as a Disinterested Director, should have known, that during 15 days
immediately before or after the date of your transaction, the Security
(or Equivalent Security) was purchased or sold by a Seligman
Registered Investment Company or considered for purchase or sale by a
Seligman Registered Investment Company. Such report shall be made not
later than 10 days after the end of the calendar quarter in which the
Transaction was effected and shall contain the following information:
<PAGE>
(i) The date of the transaction, the name of the company, the number
of shares, and the principal amount of each Security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(v) The date the report is submitted.
(c) You are required to disclose all Securities beneficially owned by you
within ten days of commencement of employment and at the end of each
calendar year within 10 days thereafter (See Appendix C).
(d) You are also required to disclose all Employee and Employee Related
Securities Accounts, Private Securities Transactions and Outside
Activities, Affiliations and Investments upon commencement of
employment and annually thereafter (See Appendix D).
(e) Any report may contain a statement that the report shall not be
construed as an admission by you, that you have any direct or indirect
beneficial ownership in the Security to which the report relates.
(f) The Director of Compliance or his designee will review all reports.
6. Dealings with the Clients
-------------------------
You should not have any direct or indirect investment interest in the
purchase or sale of any Security or property from or to Clients. This is
a prohibition against dealings between you and the Clients and is not
intended to preclude or limit investment transactions by you in Securities
or property, provided such transactions are not in conflict with the
provisions of this Code.
7. Preferential Treatment, Favors and Gifts
----------------------------------------
You are prohibited from giving and receiving gifts of significant value or
cost from any person or entity that does business with or on behalf of any
Client. You should also avoid preferential treatment, favors, gifts and
entertainment which might, or might appear to, influence adversely or
restrict the independent exercise of your best efforts and best judgments
on behalf of the Clients or which might tend in any way to impair
confidence in Seligman by Clients. Cash Gifts that do not exceed $100 in
value per person for a calendar year are permissible. Ordinary courtesies
of business life, or ordinary business entertainment, and gifts of
inconsequential value are also permissible. However, they should not be
so frequent nor so extensive as to raise any question of impropriety.
8. Outside Business Activities and Service as a Director, Trustee or in a
----------------------------------------------------------------------
Fiduciary Capacity of any Organization
--------------------------------------
You may not engage in any outside business activities or serve as a
Director, Trustee or in a fiduciary capacity of any organization, without
the prior written consent of the Director of Compliance.
<PAGE>
9. Remedies of the Code
--------------------
Upon discovering a violation of this Code, sanctions may be imposed
against the person concerned as may be deemed appropriate, including,
among other things, a letter of censure, fines, suspension or termination
of personal trading rights and/or employment.
As part of any sanction, you may be required to absorb any loss from the
trade. Any profits realized, as a result of your personal transaction
that violates the Code must be disgorged to a charitable organization,
which you may designate.
10. Compliance Certification
------------------------
At least once a year, you will be required to certify on the Employee
Certification Form (set forth in Appendix E) that you have read and
understand this Code, that you have complied with the requirements of the
Code, and that you have disclosed or reported all personal Securities
Transactions pursuant to the provisions of the Code.
11. Inquiries Regarding the Code
----------------------------
If you have any questions regarding this Code or any other compliance-
related matter, please call the Director of Compliance, or in his absence,
the General Counsel or Associate General Counsel.
________________________________
William C. Morris
Chairman
December 22, 1966
Revised: March 8, 1968 December 7, 1990
January 14, 1970 November 18, 1991
March 21, 1975 April 1, 1993
May 1, 1981 November 1, 1994
May 1, 1982 February 28, 1995
April 1, 1985 November 19, 1999*
March 27, 1989
*Refers to the incorporation of the Code of Ethics of the Seligman Investment
Companies originally adopted June 12, 1962, as amended.
<PAGE>
Appendix A
Amended November 19, 1999
J. & W. Seligman & Co. Incorporated - Insider Trading Policies and Procedures
SECTION I. BACKGROUND
Introduction
- ------------
United States law creates an affirmative duty on the part of broker-
dealers and investment advisers to establish, maintain and enforce written
policies and procedures that provide a reasonable and proper system of
supervision, surveillance and internal control to prevent the misuse of
material, non-public information by the broker-dealer, investment adviser or any
person associated with them. The purpose of these procedures is to meet those
requirements. The following procedures apply to J. & W. Seligman & Co.
Incorporated, its subsidiaries and affiliates (collectively, "Seligman") and all
officers, directors and employees (collectively, "Employees") thereof.
Statement of Policy
- -------------------
No Employee may trade, either personally or on behalf of others, on
material, non-public information or communicate material, non-public information
to another in violation of the law. This policy extends to activities within
and outside their duties at Seligman. Each Employee must read, acknowledge
receipt and retain a copy of these procedures.
Inside Information
- ------------------
The term "insider trading" is not defined in the federal securities
laws, but generally is used to refer to the use of material, non-public
information to trade in securities or to communicate material, non-public
information to others.
While the law concerning insider trading is not
static, it is understood that the law generally prohibits:
A. trading by an insider, while in possession of material, non-public
information, or
B. trading by a non-insider, while knowingly in possession of material,
non-public information, where the information either was disclosed to
the non-insider in violation of an insider's duty to keep it
confidential or was misappropriated, or
C. communicating material, non-public information to others.
The elements of insider trading and the penalties for such unlawful conduct
are discussed below. If you have any questions after reviewing these
procedures, you should consult the Director of Compliance, General Counsel or
Associate General Counsel.
1. Who Is An Insider?
------------------
The concept of "insider" is broad. It includes Employees of a company. In
addition, a person can be a "temporary insider" if he or she enters into a
special confidential relationship in the conduct of a company's affairs and
as a result is given access to information solely for the company's
purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the
Employees of such organizations. In addition, Seligman may become a
temporary insider of a company it advises or for which it performs other
services. According to the Supreme Court, the company must expect the
outsider to keep the disclosed non-public information
<PAGE>
confidential and the relationship must at least imply such a duty before
the outsider will be considered an insider.
2. What Is Material Information?
-----------------------------
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment
decisions, or information that is reasonably certain to have a substantial
affect on the price of a company's securities. Information that Employees
should consider material includes, but is not limited to: dividend changes,
earnings estimates, changes in previously released earnings estimates,
significant merger or acquisition proposals or agreements, major
litigation, liquidation problems and extraordinary management developments.
In addition, information about major contracts or new customers could also
qualify as material, depending upon the importance of such developments to
the company's financial condition or anticipated performance.
Material information does not have to relate to a company's business. For
example, in Carpenter v. U.S., 408 U.S. 316 (1987), the Supreme Court
considered as material certain information about the contents of a
forthcoming newspaper column that was expected to affect the market price
of a Security. In that case, a Wall Street Journal reporter was found
criminally liable for disclosing to others the dates that reports on
various companies would appear in the Journal and whether those reports
would be favorable or not.
3. What Is Non-Public Information?
-------------------------------
Information is non-public until it has been effectively communicated to the
market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones, Reuters Economic Services,
The Wall Street Journal or other publications of general circulation would
be considered public. However, see Section II, Paragraph 2.
4. Penalties for Insider Trading
-----------------------------
Penalties for trading on or communicating material, non-public information
are severe, both for individuals involved in such unlawful conduct and
their employers. A person can be subject to some or all of the penalties
below even if he or she does not personally benefit from the violation.
Penalties include:
- Civil injunctions
- Disgorgement of profits
- Jail sentences
- Fines for the person who committed the violation of up to three times
the profit gained or loss avoided, whether or not the person actually
benefited, and
- Fines for the employer or other controlling person of up to the greater
of $1,000,000 or three times the amount of the profit gained or loss
avoided.
In addition, any violation of policies and procedures set forth herein can be
expected to result in serious sanctions by Seligman, including dismissal of the
persons involved.
<PAGE>
SECTION II. PROCEDURES
Procedures to Implement Policy Against Insider Trading.
The following procedures have been established to assist the Employees of
Seligman in avoiding insider trading, and to aid Seligman in preventing,
detecting and imposing sanctions against insider trading. Every Employee of
Seligman must follow these procedures or risk serious sanctions, including
dismissal, substantial personal liability and criminal penalties. If you have
any questions about these procedures you should consult the Director of
Compliance, the General Counsel or Associate General Counsel.
1. Identifying Inside Information.
Before trading for yourself or others (including investment companies and
private Accounts managed by Seligman), in the securities of a company about
which you may have potential inside information, ask yourself the following
questions:
a. Is the information material? Is this information that an investor would
consider important in making his or her investment decisions? Is this
information that would substantially affect the market price of the
securities if generally disclosed?
b. Is the information non-public? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace in a publication of general circulation or does it fall
within the circumstances set forth in paragraph 2 below.
If, after consideration of the above, you believe that the information is
material and non-public, or if you have questions as to whether the information
is material and non-public, you should take the following steps:
c. Report the matter immediately to the Director of Compliance, General
Counsel or Associate General Counsel.
d. Do not purchase or sell the securities on behalf of yourself or others,
including investment companies or private Accounts managed by Seligman.
e. Do not communicate the information inside or outside Seligman other than
to the Director of Compliance, General Counsel or Associate General
Counsel.
f. After the Director of Compliance, General Counsel or Associate General
Counsel has reviewed the issue, you will be instructed to continue the
prohibitions against trading and communication, or you will be allowed to
trade and communicate the information.
2. Important Specific Examples
---------------------------
a. If you have a telephone or face-to-face conversation with a senior
executive of a publicly-traded company and are provided information
about the company that you have reason to believe has not yet been
disclosed in a widely-disseminated publication such as a press
release, quarterly report or other public filing, you have received
non-public information. This information is considered non- public
even if you believe that the company executive would provide the same
information to other analysts or portfolio managers who call the
company. Until information has been disclosed in a manner that makes
it available to (or capable of being accessed by) the investment
community as a whole, it is considered non-public. If the information
is material, as described above, you may not trade while in possession
of this information unless you first discuss the matter and obtain
approval from the Director of Compliance, General Counsel or Associate
General Counsel. Although it may be lawful for an analyst to act on
the basis of material information that the company's management has
chosen to disclose selectively to that analyst, where the information
is provided in a one-on-one context,
<PAGE>
regulators are likely to question such conduct. Approval from the Law
and Regulation Department will therefore depend on the specific
circumstances of the information and the disclosure. Under the Supreme
Court's important decision of Dirks v. SEC, 463 U.S. 646 (1983),
securities analysts may be free to act on selectively disclosed
material information if it is provided by company executives
exclusively to achieve proper corporate purposes.
b. If you obtain material information in the course of an analysts'
conference call or meeting conducted by a publicly-traded company in
the ordinary course of its business in which representatives of
several other firms or investors are also present (as distinguished
from the one-on-one situation described in the preceding paragraph),
you may act on the basis of that information without need to consult
with the Director of Compliance, General Counsel or Associate General
Counsel, even if the information has not yet been published by the
news media. You should be aware, however, that if there is something
highly unusual about the meeting or conference call that leads you to
question whether it has been authorized by the company or is otherwise
suspect, you should first consult with the Director of Compliance,
General Counsel or Associate General Counsel.
c. If you are provided material information by a company and are
requested to keep such information confidential, you may not trade
while in possession of that information before first obtaining the
approval of the Director of Compliance, General Counsel or the
Associate General Counsel.
As these examples illustrate, the legal requirements governing insider
trading are not always obvious. You should therefore always consult with the
Director of Compliance, General Counsel or Associate General Counsel if you have
any question at all about the appropriateness of your proposed conduct.
3. Restricting Access To Material, Non-Public Information
------------------------------------------------------
Information in your possession that you identify as material and non-public
may not be communicated to anyone, including persons within Seligman, except
as provided in paragraphs 1 and 2 above. In addition, care should be taken
so that such information is secure. For example, files containing material,
non-public information should be sealed; access to computer files containing
material, non-public information should be restricted.
4. Resolving Issues Concerning Insider Trading
-------------------------------------------
If, after consideration of the items set forth in paragraphs 1 and 2, doubt
remains as to whether information is material or non-public, or if there is
any unresolved question as to the applicability or interpretation of the
foregoing procedures, or as to the propriety of any action, it must be
discussed with the Director of Compliance, General Counsel and or the
Associate General Counsel before trading or communicating the information to
anyone.
5. Personal Securities Trading
---------------------------
All Employees shall follow with respect to personal Securities trading the
procedures set forth in the Code of Ethics. In addition, no Employee shall
establish a brokerage Account with a Firm other than those previously
approved without the prior consent of the Director of Compliance and every
Employee shall be subject to reporting requirements under Section III.5 of
the Code of Ethics. The Director of Compliance, or his designee, shall
monitor the personal Securities trading of all Employees.
<PAGE>
Appendix B
Amended November 19, 1999
J. & W. SELIGMAN & CO. INCORPORATED
-----------------------------------
TRADE AUTHORIZATION REQUEST FORM
<TABLE>
<CAPTION>
<S> <C> <C>
1. Name of Employee/Telephone Number: ______________________________
2. If different than #1, name of the person in whose
account the trade will occur: ______________________________
3. Relationship of (2) to (1): ______________________________
4. Name the firm at which the account is held: ______________________________
5. Name of Security: ______________________________
6. Number of shares or units to be bought or
sold or amount of bond: ______________________________
7. Approximate price per share, unit or bond: ______________________________
8. Check those that are applicable: _______ Purchase ______ Sale
_____ Market Order ______ Limit Order (Price of Limit Order: _____)
9. Do you possess material non public information regarding
the Security or the issuer of the Security? ______ Yes ______ No
10. To your knowledge, are there any outstanding (purchase or
sell) orders for this Security or any Equivalent Security by
a Seligman Client? ______ Yes ______ No
11. To your knowledge, is this Security or Equivalent Security
being considered for purchase or sale for one or more
Seligman Clients? ______ Yes ______ No
12. Is this Security being acquired in an initial or secondary public
offering? ______ Yes ______ No
13. Is this Security being acquired in a private placement? ______ Yes ______ No
14. Have you or any Related Account covered by the pre-
authorization provisions of the Code purchased or sold
this Security within the past 60 days? ______ Yes ______ No
</TABLE>
<PAGE>
- - - - - -
For Investment Team Members Only:
---------------------------------
15. Has any Client Account managed by your team purchased or
sold this Security or Equivalent Security within the past
seven calendar days or do you expect any such account to
purchase or sell this Security or Equivalent Security within
seven calendar days of your purchase or sale? ______ Yes ______ No
16. Why is this Security Transaction appropriate for you and not for one or
more of your team's Clients?
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
- - - - - -
I have read the J. & W. Seligman & Co. Incorporated Code of Ethics, as revised
on November 19, 1999, within the prior 12 months and believe that the proposed
trade(s) fully complies with the requirements of the Code of Ethics and Insider
Trading policy.
____________________________
Employee Signature
____________________________
Date Submitted
Authorized by: ________________________
Date: _____________________________
<PAGE>
Appendix C
Amended November 19, 1999
REPORT OF SECURITIES BENEFICIALLY OWNED
AS OF DECEMBER 31, 1999
The following is a list of all Securities positions (except open-end
investment companies, U.S. Government Securities and money market instruments)
in which I have direct or indirect beneficial ownership, as defined in the Code
of Ethics. This includes Securities held at home, in safe deposit boxes or by
an issuer.
<TABLE>
<CAPTION>
Description of Security No. of Shares Principal Amount Location of Security
<S> <C> <C> <C>
- ---------------------- ------------------ ----------------- ----------------
- ---------------------- ------------------ ----------------- ----------------
- ---------------------- ------------------ ----------------- ----------------
- ---------------------- ------------------ ----------------- ----------------
- ---------------------- ------------------ ----------------- ----------------
- ---------------------- ------------------ ----------------- ----------------
</TABLE>
_______ The list above (and any additional sheets I have attached) represents
all my Securities positions in which I have direct or indirect
beneficial ownership as defined in the Code of Ethics.
_______ I only have a beneficial ownership interest in open-end investment
companies, U.S. Government Securities and money market instruments,
and/or I do not beneficially own any Securities.
Date: ________________________ _____________________________
First Last, Company
<PAGE>
<TABLE>
<CAPTION>
Appendix D
Amended November 19, 1999
EMPLOYEE REPORTING QUESTIONNAIRE
--------------------------------
<S> <C> <C>
Employee Name: ___________________________ Ext: ______ Department: ___________________
Please Print
Company/Affiliate: ______________________________ Supervisor: ___________________
</TABLE>
1. Securities Accounts
-------------------
Do you have any Accounts in which Securities can be purchased or sold over
which you have control or in which you have a Beneficial Interest, as
defined in Seligman's Code of Ethics?
Yes _______ No ________
If yes, please list all such Accounts:
<TABLE>
<CAPTION>
Account Account Type of
Institution Number Title Account
----------- ------ ----- -------
<S> <C> <C> <C>
---------------------------- ---------------- -------------------------- --------------
---------------------------- ---------------- -------------------------- --------------
---------------------------- ---------------- -------------------------- --------------
</TABLE>
2. Financial Interests
-------------------
Do you have any private placements, restricted stock warrants, general or
limited partnerships, or other investment interests in any organization
(public, private or charitable) not held in the accounts listed above?
Please include Securities and certificates held in your custody.
Yes _______ No _______
If yes, please describe: _________________________________________________
--------------------------------------------------------------------------
3. Outside Activities/Affiliations
-------------------------------
a) Do you have any activities outside Seligman or its affiliates for
which you receive additional compensation:
Yes _______ No _______
If yes, please describe: _____________________________________________
----------------------------------------------------------------------
b) Do you serve in the capacity of officer, director, partner or employee
(or in any other fiduciary capacity) for any company or organization
(public, private or charitable) other than Seligman or its affiliates.
Yes ________ No _______
If yes, please describe: _____________________________________________
----------------------------------------------------------------------
I hereby certify that I have read and understand the foregoing statements
and that each of my responses thereto are true and complete. I agree to
immediately inform the Director of Compliance if there is any change in any
of the above answers. I also understand that any misrepresentation or
omissions of facts in response to this questionnaire and failure to
immediately inform the Director of Compliance of any changes to responses
provided herein may result in termination of my employment.
------------------------------------ ------------------------------
Employee's Signature Date
------------------------------------
Title
<PAGE>
Appendix E
Amended November 19, 1999
Annual Certification of Compliance with the Code of Ethics
----------------------------------------------------------
I acknowledge that I have received and read the Code of Ethics and Insider
Trading Policies and Procedures, as amended on November 19, 1999 and hereby
agree, in consideration of my continued employment by J. & W. Seligman & Co.
Incorporated, or one of its subsidiaries or affiliates, to comply with the Code
of Ethics and Insider Trading Policies and Procedures.
I hereby certify that during the past calendar year:
1. In accordance with the Code of Ethics, I have fully disclosed the Securities
holdings in my Employee Account(s) and Employee Related Account(s) (as
defined in the Code of Ethics).
2. In accordance with the Code of Ethics, I have maintained all Employee
Accounts and Employee Related Accounts at Ernst & Company (Investec) or
Merrill Lynch located at 712 Fifth Avenue, New York, NY except for Accounts
as to which the Director of Compliance has provided written permission to
maintain elsewhere.
3. In accordance with the Code of Ethics, except for transactions exempt from
reporting under the Code of Ethics, I have arranged for the Director of
Compliance to receive duplicate confirmations and statements for each
Securities Transaction of all Employee Accounts and Employee Related
Accounts, and I have reported all Securities Transactions in each of my
Employee Accounts and Employee Related Accounts.
4. I have complied with the Code of Ethics in all other respects.
________________________________
Employee Signature
________________________________
Date:____________ Print Name
