AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1999
SECURITIES ACT FILE NO. 333- ________
INVESTMENT COMPANY FILE NO. 811- ________
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [_]
POST-EFFECTIVE AMENDMENT NO. [_]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. [_]
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SELIGMAN NEW TECHNOLOGIES FUND, INC.
(Exact Name of Registrant as Specified in its Charter)
C/O J. & W. SELIGMAN & CO. INCORPORATED
100 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (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)
COPIES TO:
Donald R. Crawshaw, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
the following box. [X]
It is proposed that this filing will become effective when declared effective
pursuant to section 8(c).
If appropriate, check the following box:
[_] This [post-effective] amendment designates a new effective date for
a previously filed [post-effective amendment] [registration statement].
[_] This form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is - ______.
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
=======================================================================================
TITLE OF SECURITIES PROPOSED MAXIMUM AMOUNT OF
BEING REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, par value $0.01 per share $200,000,000 $ 55,600
=======================================================================================
<FN>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
=======================================================================================
</FN>
</TABLE>
<PAGE>
CROSS REFERENCE SHEET
PARTS A AND B OF PROSPECTUS
ITEM
NO. CAPTION LOCATION IN PROSPECTUS
- --- ------- ----------------------
1. Outside Front Cover Page........ Outside Front Cover Page
2. Inside Front and Outside
Back Cover Page................. Inside Front and Outside Back Cover Page
3. Fee Table and Synopsis.......... Summary of Fund Expenses
4. Financial Highlights............ Not Applicable
5. Plan of Distribution............ Outside Front Cover Page; How to
Purchase Fund Shares
6. Selling of Shareholders......... Not Applicable
7. Use of Proceeds................. Use of Proceeds
8. General Description of the
Registrant...................... Outside Front Cover Page; Investment
Objective and Principal Strategies; Risk
Factors; General Information
9. Management...................... Management of the Fund
10. Capital Stock, Long-Term Debt,
and Other Securities............ Capital Stock
11. Defaults and Arrears on Senior
Securities...................... Not Applicable
12. Legal Proceedings............... Not Applicable
13. Table of Contents of the
Statement of Additional
Information..................... Table of Contents of Statement of
Additional Information
14. Cover Page...................... Cover Page (SAI)
15. Table of Contents............... Table of Contents (SAI)
16. General Information and History. Appendix A (SAI)
17. Investment Objective and
Policies........................ Additional Investment Policies (SAI)
18. Management...................... Directors and Officers (SAI); Investment
Advisory and Other Services (SAI)
19. Control Persons and
Principal Holders of Securities. Not Applicable
20. Investment Advisory and Other
Services........................ Investment Advisory and Other Services
(SAI)
21. Brokerage Allocation and Other
Practices....................... To be Drafted
22. Tax Status...................... Not Applicable
23. Financial Statements............ Not Applicable
<PAGE>
RED HERRING TEXT
- ----------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE FUND MAY NOT SELL THESE SECURITIES UNTIL
THE REGISTRATION STATEMENT IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER, SOLICITATION OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 21, 1999
o Shares
SELIGMAN
NEW TECHNOLOGIES FUND, INC.
Common Stock
June ___, 1999
100 Park Avenue
New York, New York 10017
Seligman New Technologies Fund, Inc. is a newly organized,
non-diversified, closed-end management investment company. The Fund's investment
objective is to seek long-term capital appreciation. The Fund proposes to
achieve its objective by investing primarily in equity securities of U.S. and
non-U.S. technology companies and companies that derive a major portion of their
revenues from business lines that may benefit from technological events and
advances. The Fund may invest in companies of any size, but generally expects to
invest at least 65% of its assets in small and medium-sized companies with
market capitalizations of as little as $10 million and as much as $10 billion.
The Fund may invest up to 35% of its total assets in technology or
technology-related companies that are currently start-ups, early concept or late
stage companies and/or companies that have no public market for their shares.
These may include securities of, or interests in, investment funds that invest
primarily in start-up companies. THESE TYPES OF INVESTMENTS AND INVESTMENT
TECHNIQUES ARE SPECULATIVE AND POSE SPECIAL RISKS. THESE RISKS ARE MORE FULLY
EXPLAINED BELOW UNDER THE HEADING "RISK FACTORS." The Fund's investment manager
is J. & W. Seligman & Co. Incorporated.
NO MARKET EXISTS FOR THE FUND'S SHARES. THE FUND WILL NOT BE LISTED ON ANY
SECURITIES EXCHANGE, AND THE FUND DOES NOT ANTICIPATE THAT A SECONDARY MARKET
WILL DEVELOP FOR THE FUND'S SHARES. YOU MAY NOT BE ABLE TO SELL YOUR SHARES. In
order to provide liquidity to shareholders, the Fund will make quarterly offers
to repurchase 5% of its outstanding shares at their net asset value. See
"Repurchase Offers." The Fund intends to complete its first quarterly repurchase
offer in January 2000. All shares will be subject to a repurchase fee of up to
2% if they are repurchased by the Fund within two years.
The Fund's shares are being offered at a price of $25.00 per share. Of
this amount, $0.73 will be paid as a sales charge to the selected dealer who
arranges for the sale, and $24.27 will be invested in the Fund. Seligman
Advisors, Inc., an affiliate of the investment manager, will pay to the selected
dealers from its own resources an additional sales commission and structuring
and marketing fees equal to an additional $0.49 per share. The total proceeds to
the Fund from the initial offering are expected to be $ o million. The Fund will
pay organizational and offering expenses estimated at $500,000.
At least 30 days after the closing of the initial offering, the Fund may
commence a continuous offering of its shares through selected dealers at a price
equal to their net asset value plus a sales charge of 3%.
Any such continuous offering, if commenced, may be discontinued at any time.
This prospectus concisely provides the information that a prospective
investor should know about the Fund before investing. You are advised to read
this prospectus carefully and to retain it for future reference. Additional
information about the Fund, including a statement of additional information
("SAI") dated o, 1999, has been filed with the Securities and Exchange
Commission. The SAI is available upon request and without charge by writing the
Fund at the address above or by calling (800) 221-2450. The SAI is dated the
same date as this prospectus and is incorporated by reference into this
prospectus in its entirety. The table of contents of the SAI appears on page o
of this prospectus. The SAI, and other information about the Fund, is also
available on the SEC's website (http://www.sec.gov).
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. NOR HAVE THEY MADE, NOR WILL THEY MAKE,
ANY DETERMINATION AS TO WHETHER ANYONE SHOULD BUY THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
<PAGE>
TABLE OF CONTENTS
PAGE
----
Prospectus Summary ........................................................ iii
Summary of Fund Expenses .................................................. 1
Risk Factors .............................................................. 2
Year 2000 ................................................................. 4
Use of Proceeds ........................................................... 5
Investment Objective and Principal Strategies ............................. 6
Management of the Fund .................................................... 8
Repurchase Offers ......................................................... 9
Calculation of Net Asset Value ............................................ 11
Capital Stock ............................................................. 11
Distribution Policy ....................................................... 12
Taxes ..................................................................... 13
How to Purchase Fund Shares ............................................... 13
General Information ....................................................... 14
Table of Contents of Statement of Additional Information .................. 14
ii
<PAGE>
PROSPECTUS SUMMARY
THE FUND Seligman New Technologies Fund, Inc. (the "Fund") is
a newly organized non-diversified, closed-end
management investment company registered under the
Investment Company Act of 1940. See "General
Information."
INVESTMENT OBJECTIVE AND The Fund's investment objective is to seek long-term
PRINCIPAL STRATEGIES capital appreciation. The Fund proposes to achieve
its objective by investing primarily in equity
securities of U.S. and non-U.S. technology companies
and companies that derive a major portion of their
revenues from business lines that may benefit from
technological events and advances. The Fund may
invest in companies of any size, but generally
expects to invest at least 65% of its assets in small
and medium-sized companies with market
capitalizations of as little as $10 million and as
much as $10 billion. The Fund may invest up to 35% of
its total assets in technology or technology-related
companies that are currently start-ups, early concept
or late stage companies and/or companies that have no
public market for their shares. The Fund may invest
in securities of, or interests in, investment funds
that invest primarily in start-up companies. See
"Investment Objective and Principal Strategies."
THE MANAGER J. & W. Seligman & Co. Incorporated is the manager of
the Fund. Established in 1864, Seligman currently
serves as manager to 19 US registered investment
companies, which offer more than 50 investment
portfolios with approximately $21.8 billion in
aggregate assets as of March 31, 1999. Seligman also
provides investment management or advice to
institutional or other accounts having an aggregate
value at March 31, 1999 of approximately $8.8
billion.
The Fund is managed by Seligman's Technology Team,
and Mr. Paul H. Wick and Mr. Storm Boswick are
responsible for directing the investments of the
Fund. Mr. Wick, a Managing Director of Seligman, has
been Portfolio Manager of Seligman Communications and
Information Fund, Inc. since December 1989. He is
also Co- Portfolio Manager of the Global Technology
Fund of Seligman Henderson Global Fund Series, Inc.
Mr. Boswick is also a Managing Director of Seligman.
INVESTMENT ADVISER FEES The Fund will pay a fee to Seligman for its
management services at an annual rate of 2.00% of the
Fund's average daily net assets. See "Management of
the Fund."
LEVERAGE The Fund may borrow money to meet repurchase requests
and for cash management purposes. The Fund is also
authorized to borrow money or to issue preferred
stock to acquire portfolio securities but does not
currently intend to do so.
HEDGING The Fund may use derivative instruments to hedge
portfolio risks and for cash management purposes.
Hedging activity may relate to a specific security or
to the Fund's portfolio as a whole. The Fund may not
use derivative instruments to seek increased return
on its investments.
THE OFFERING The Fund is initially offering its shares through
selected dealers. The minimum investment is $10,000.
The purchase price per share of $25.00 includes a
sales charge equal to 3% of the net amount to be
invested in the Fund. In the initial offering,
Seligman will pay an additional commission to the
selected dealers equal to 1% of the net
iii
<PAGE>
amount invested in the Fund, plus a 1% structuring
and marketing fee to PaineWebber Incorporated. Each
selected dealer will also receive a shareholder
servicing fee from the Fund at the annual rate of
0.50% of the net asset value of the outstanding
shares owned by customers of such dealer.
Not less than 30 days after the completion of this
offering, the Fund may commence a continuous offering
of its shares through selected dealers at a price
equal to net asset value plus a sales charge of 3%.
Seligman will pay an additional commission to the
selected dealers equal to 1% of the net asset value
of shares purchased during any continuous offering.
Any such continuous offering, if commenced, may be
discontinued at any time. See "How to Purchase Fund
Shares."
DISTRIBUTION POLICY Dividends will be paid annually on the common stock
in amounts representing substantially all of the net
investment income, if any, earned each year. It is
likely that many of the companies in which the Fund
invests will not pay any dividends, and this means
that the Fund is unlikely to pay substantial
dividends.
Substantially all of any taxable net gain realized on
investments will be paid to common shareholders at
least annually.
An automatic reinvestment plan is available for any
holder of the Fund's common stock who wishes to
purchase additional shares using dividends and/or
capital gain distributions paid by the Fund. Shares
will be issued under the plan at their net asset
value on the ex-dividend date; there is no sales
charge or other charge for reinvestment. However, all
shares, including shares acquired upon reinvestment,
will be subject to a repurchase fee of up to 2% if
they are repurchased by the Fund within two years.
See "Repurchase Offers."
NO SECONDARY MARKET The Fund will not be listed on any securities
exchange and does not expect any secondary market to
develop for its shares. YOU WILL NOT BE ABLE TO
REDEEM YOUR SHARES ON A DAILY BASIS BECAUSE THE FUND
IS A CLOSED-END FUND.
REPURCHASE OFFERS In order to provide a degree of liquidity to
shareholders, the Fund will conduct quarterly
repurchase offers. The Fund intends to commence the
first repurchase offer in December 1999 and to
complete it in January 2000. In each repurchase
offer, the Fund will offer to repurchase 5% of its
outstanding shares at their net asset value. The Fund
may offer to repurchase more than 5% of its shares in
any quarter with the approval of the board of
directors. Shares repurchased within two years of
issuance will be subject to a repurchase fee that is
payable to the Fund to compensate it for its expenses
related to the repurchase offer. The repurchase fee
will be 2% of the redemption price during the first
year after issuance, 1% in the second year and zero
thereafter. If the number of shares tendered for
repurchase exceeds the number the Fund intends to
repurchase, the Fund may repurchase additional
shares, but only up to 2% of the outstanding shares.
Otherwise the Fund will repurchase shares on a
pro-rata basis. See "Repurchase Offers."
RISK FACTORS An investment in the Fund involves a high degree of
risk. These include the risks of:
o investing in an unlisted closed-end fund that will
be illiquid
o investing in the technology and related industries
iv
<PAGE>
o concentration in a small number of industry
sectors
o investing in small companies
o investing in start-up companies and venture
capital funds
o investing in securities that are illiquid and
volatile
See "Risk Factors."
v
<PAGE>
SUMMARY OF FUND EXPENSES
The following table illustrates the expenses and fees that the Fund
expects to incur and that shareholders can expect to bear.
SHAREHOLDER TRANSACTION EXPENSES
Sales load (as a percentage of amount invested in the Fund).. 3%
Automatic reinvestment plan fees............................. --
MAXIMUM REDEMPTION FEE (PAYABLE TO THE FUND)................. 2%
ANNUAL EXPENSES (as a percentage of net assets attributable
to common shares)
Management fees.............................................. 2.00%
Shareholder servicing fees................................... 0.50%
Other expenses............................................... 0.50%
Total annual expenses........................................ 3.00%
The purpose of the table above is to assist you in understanding the
various costs and expenses you would bear directly or indirectly as a
shareholder of the Fund. The annual expenses shown above are estimated, based on
net assets of the Fund of $200 million after the initial public offering. For a
more complete description of the various costs and expenses, see "Management of
the Fund."
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
You would pay the following expenses $780 $1192 $1822 $3512
on a $10,000 investment, assuming
a 5% annual return:
The example assumes that all of your shares are repurchased by the Fund at
the end of the first year and includes the 2% redemption fee. If you continue to
hold your shares, the expenses for the first year would be $585.
THE EXAMPLE DOES NOT PRESENT ACTUAL EXPENSES AND SHOULD NOT BE CONSIDERED
A REPRESENTATION OF FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN. Moreover, the Fund's actual rate of return may be greater or less
than the hypothetical 5% return shown in the example.
1
<PAGE>
RISK FACTORS
Stock prices fluctuate. Apart from the specific risks identified below,
the Fund's stock may be negatively affected by the broad investment environment
in the US and international securities markets, which investment environment is
influenced by, among other things, interest rates, inflation, politics, fiscal
policy, and current events. 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 investments and could lose money.
NEWLY ORGANIZED FUND
The Fund is a newly organized investment company with no previous
operating history. Although Seligman and the Fund's portfolio manager have
considerable experience managing other funds with investment objectives similar
to the Fund's, the Fund may not succeed in meeting its objective, and the Fund's
net asset value may decrease.
UNLISTED CLOSED-END INVESTMENT COMPANY
The Fund is a closed-end investment company designed primarily for
long-term investors and is not intended to be a trading vehicle. The Fund does
not intend to list its shares for trading on any national securities exchange.
There is no secondary trading market for Fund shares, and none is expected to
develop. The Fund's shares are therefore not readily marketable. Although the
Fund, as a fundamental policy, will make quarterly repurchase offers for 5% (or
more, at the discretion of the board of directors) of its outstanding common
shares at net asset value, the Fund's shares are less liquid than shares of
funds that trade on a stock exchange. Also, because the common stock will not be
listed on any securities exchange, the Fund is not required, and does not
intend, to hold annual meetings of shareholders.
REPURCHASE OFFERS
The Fund will offer to purchase only a small portion of its shares each
quarter, and there is no guarantee that you will be able to sell all of your
Fund shares that you desire to sell. If a repurchase offer is oversubscribed by
shareholders, the Fund will repurchase only a pro rata portion of the shares
tendered by each shareholder. The potential for pro-ration may cause some
investors to tender more shares for repurchase than they wish to have
repurchased. Moreover, the Fund's repurchase policy may have the effect of
decreasing the size of the Fund. This may force the Fund to sell assets it would
not otherwise sell. It may also reduce the investment opportunities available to
the Fund and cause its expense ratio to increase.
INVESTMENT IN THE TECHNOLOGY INDUSTRY
The Fund plans to invest primarily in the stock of technology companies
and companies deriving a substantial portion of their revenues from business
lines benefitting from technological innovation. The value of the Fund's shares
may be susceptible to factors affecting technology and technology-related
industries and to greater risk and market fluctuation than an investment in a
fund that invests in a broader range of portfolio securities. The specific risks
faced by technology and technology-related companies include:
o rapidly changing technologies and products that may quickly become
obsolete
o exposure to a high degree of government regulation, making these
companies susceptible to changes in government policy and failures to
secure regulatory approvals
o cyclical patterns in information technology spending which may result
in inventory write-offs
o scarcity of management, engineering and marketing personnel with
appropriate technological training
o the possibility of lawsuits related to technological patents
o changing investor sentiments and preferences with regard to technology
sector investments (which are generally perceived as risky)
INVESTMENTS IN SMALL COMPANIES
2
<PAGE>
The Fund plans to invest primarily in the stock of small and medium-sized
companies. There are specific risks associated with investments in small
companies, which include:
o poor corporate performance due to less experienced management, limited
product lines, undeveloped markets and/or limited financial resources
o due to shorter operating histories, less publicly available
information and little or no research by the investment community
o reduced or zero liquidity due to small market capitalization and
absence of exchange listing or dealers willing to make a market
o increased share price volatility due to the fact that, in periods of
investor uncertainty, investor sentiment may favor large, well-known
companies over small, lesser-known companies
o reliance, in many cases, on one or two key individuals for management
The Fund may invest a substantial portion of its assets in securities of
start-up companies, which present additional risks. These companies represent
highly speculative investments by the Fund, and the Fund may lose all or part of
its entire investment if these companies fail or their product lines fail to
achieve an adequate level of market recognition. Some companies may depend upon
managerial assistance provided by their investors. The Fund does not intend to
provide any such managerial assistance, and the value of its investments may
therefore depend upon the quality of managerial assistance provided by other
investors.
LARGE INVESTMENTS IN A SINGLE COMPANY OR A SINGLE SECTOR
Where your portfolio is concentrated in securities of a single company or
in securities of companies in single industry, the risk of any investment
decision is increased. The assets of the Fund will consist almost entirely of
companies within or related to various sectors of the technology industry.
Seligman will seek to reduce the company-specific risk, as opposed to
sector-specific risk, of the Fund's portfolio by investing in more than one
company in a particular sector, but this may not always be practicable.
INVESTMENTS IN VENTURE CAPITAL FUNDS
Venture capital funds involve all the risks of investing in small
companies described in this prospectus, plus certain additional risks. In
particular, the Fund must rely upon the judgment of the general partner or other
manager of a venture capital fund in selecting the companies in which the
venture capital fund invests and in deciding when to sell its investments. A
venture capital fund may employ a high degree of leverage, which can magnify any
losses incurred by its investors, including the Fund. A venture capital fund may
also be required to pay management fees and/or performance fees to its general
partner or manager, which can reduce the return to investors, including the
Fund. The Fund may also pay certain costs of evaluating each venture capital
investment, including fees of outside legal counsel, which may reduce the Fund's
return. Investments in venture capital funds may be highly illiquid. The Fund
may not be able to dispose of a venture capital holding when it wishes to, or
may be able to do so only at a disadvantageous price.
INVESTMENTS IN FOREIGN SECURITIES
The Fund plans to invest in the securities of foreign technology and
technology-related companies. Investments in foreign securities face specific
risks, which include:
o unfavorable changes in currency rates and exchange control regulations
o restrictions on, and costs associated with, the exchange of currencies
and the repatriation of capital invested abroad
o reduced availability of information regarding foreign companies
o foreign companies may be subject to different accounting, auditing and
financial standards and to less stringent reporting standards and
requirements
o reduced liquidity as a result of inadequate trading volume and
government-imposed trading restrictions
o the difficulty in obtaining or enforcing a judgment abroad
o increased market risk due to regional economic and political
instability
3
<PAGE>
o increased brokerage commissions and custody fees
o securities markets which are subject to a lesser degree of supervision
and regulation by competent authorities
o foreign withholding taxes
o the threat of nationalization and expropriation
LEVERAGE
Although the Fund does not currently intend to use leverage, it may do so
in the future. Leverage will tend to magnify gains and losses for holders of
common stock. Any gain in the value of securities purchased in excess of the
cost of leverage will cause the net asset value of the Fund's common stock to
increase more than otherwise would be the case. Conversely, any decline in the
value of securities purchased to below the cost amount of the borrowed money
causes the net asset value of the common stock to decline more sharply than
would be the case if there were no prior claim. Funds obtained through leverage
thus create investment opportunity, but also increase exposure to risk.
USE OF DERIVATIVES FOR HEDGING PURPOSES
The Fund intends to use derivative instruments to hedge portfolio risk and
for cash management purposes. Investing in derivative investments involves
numerous risks. For example,
o The underlying investment or security might not perform in the manner
that Seligman expects it to perform. This could make the effort to
hedge unsuccessful.
o The company issuing the instrument may be unable to pay the amount due
on the maturity of the instrument.
o Certain derivative investments held by the Fund may trade only in the
over-the-counter markets or not at all, and can be illiquid.
o Derivatives may change rapidly in value because of their inherent
leverage.
All of this can mean that the Fund's net asset value may change more often and
to a greater degree than it otherwise would.
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest a substantial portion of its assets in restricted
securities and other investments which are illiquid. Restricted securities are
securities that may not be resold to the public without an effective
registration statement under the Securities Act of 1933 or, if they are
unregistered, may be sold only in a privately negotiated transaction or pursuant
to an exemption from registration.
Restricted and other illiquid investments involve the risk that the
securities will not be able to be sold at the time desired by Seligman or at
prices approximating the value at which the Fund is carrying the securities on
its books.
YEAR 2000
As the millennium approaches, investment companies, financial and business
organizations, and individuals could be adversely affected if their computer
systems do not properly process and calculate date-related information and data
on and after January 1, 2000. Like other investment companies, the Fund relies
upon service providers and their computer systems for its day-to-day operations.
Many of the Fund's service providers in turn depend upon the computer systems of
their vendors. Seligman and the Fund's shareholder service agent, Seligman Data
Corp. ("SDC"), have established a year 2000 project team. The team's purpose is
to assess the state of readiness of Seligman and SDC and the Fund's other
service providers and vendors. The team is comprised of several information
technology and business professionals as well as outside consultants. The
project manager of the team reports directly to the administrative committee of
Seligman. The project manager and other members of the team also report to the
board of directors of the Fund and its audit committee.
4
<PAGE>
The team has identified the service providers and vendors who furnish
critical services or software systems to the Fund, including securities firms
that execute portfolio transactions for the Fund and firms responsible for
shareholder account recordkeeping. The team is working with these critical
service providers and vendors to evaluate the impact year 2000 issues may have
on their ability to provide uninterrupted services to the Fund. The team will
assess the feasibility of their year 2000 plans. The team has made progress on
its year 2000 contingency plans -- recovery efforts the team will employ in the
event that year 2000 issues adversely affect the Fund. The team anticipates
finalizing these plans in the near future.
The Fund anticipates that the team will implement all significant
components of the team's year 2000 plans by mid-1999, including appropriate
testing of critical systems and receipt of satisfactory assurances from critical
service providers and vendors regarding their year 2000 compliance. The Fund
believes that the critical systems on which it relies will function properly on
and after the year 2000, but this is not guaranteed. If these systems do not
function properly, or the Fund's critical service providers are not successful
in implementing their year 2000 plans, the Fund's operations may be adversely
affected, including pricing, securities trading and settlement, and the
provision of shareholder services.
In addition, the Fund may hold securities of issuers whose underlying
business leaves them susceptible to year 2000 issues. The Fund may also hold
securities issued by governmental or quasi-governmental issuers, which, like
other organizations, are also susceptible to year 2000 concerns. Year 2000
issues may affect an issuer's operations, creditworthiness and ability to make
timely payment on any indebtedness and could have an adverse impact on the value
of its securities. If the Fund holds these securities, the Fund's performance
could be negatively affected. Seligman seeks to identify an issuer's state of
year 2000 readiness as part of the research it employs. However, the perception
of an issuer's year 2000 preparedness is only one of the many factors considered
in determining whether to buy, sell, or continue to hold a security. Information
provided by issuers concerning their state of readiness may or may not be
accurate or readily available. Further, the Fund may be adversely affected if
the exchanges, markets, depositories, clearing agencies, or government or third
parties responsible for infrastructure needs do not address their year 2000
issues in a satisfactory manner.
SDC has informed the Fund that it does not expect the cost of its services
to increase materially as a result of the modifications to its computer systems
necessary to prepare for the year 2000. The Fund will not pay to remediate the
systems of Seligman or directly bear the costs to remediate the systems of any
other service provider or vendor, other than SDC.
USE OF PROCEEDS
The net proceeds of this offering are estimated to be $ o after payment of
underwriting discounts and commissions, and organizational and offering expenses
estimated to be $500,000 payable by the Fund. The net proceeds of this offering
will be invested in accordance with the Fund's investment objective and
principal strategies as soon as practicable after the closing of this offering.
Seligman expects the Fund will be fully invested within one year. This lengthy
investment period reflects the fact that: (i) the Fund plans to spend
considerable time researching prospective investments; and (ii) the companies in
which the Fund plans to invest will be primarily small to medium-sized
technology and technology-related companies which may have limited amounts of
outstanding securities available for purchase. The Fund plans to minimize the
positive impact its purchases of securities will have on the price of these
securities by purchasing the securities over a period of time. Pending the full
investment of the proceeds of the offering in technology and technology-related
stocks, the proceeds of the offering will be invested in short-term, high
quality debt securities. Organizational expenses will be borne by investors in
the initial offering; investors in any subsequent continuous offering will not
bear any organizational expenses.
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INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
LONG-TERM CAPITAL APPRECIATION
The Fund's investment objective is to seek long-term capital appreciation.
Income is not an objective. There can be no assurance that the Fund will achieve
its investment objective.
INVESTMENT IN TECHNOLOGY-RELATED EQUITY SECURITIES
The Fund proposes to achieve its objective by investing primarily in the
equity securities of U.S. and non-U.S. technology companies and companies that
derive a major portion of their revenues from business lines that may benefit
from technological events and advances. The companies in which the Fund plans to
invest may operate in any of the following or similar fields: computer software,
computer services, computer hardware, semiconductors, communications and
telecommunications, the Internet, consumer electronics, biomedics and pharma-
ceuticals. The Fund may invest in companies of any size, but generally expects
to invest at least 65% of its assets in small and medium-sized companies with
market capitalizations of as little as $10 million and as much as $10 billion.
TYPES OF SECURITIES TO BE PURCHASED BY THE FUND
The Fund anticipates that it will invest primarily in common stocks.
However, the Fund may also invest in securities convertible into or exchangeable
for common stocks, rights and warrants to purchase common stocks, depository
receipts representing an ownership interest in equity securities, and in debt
securities or preferred stocks believed to provide opportunities for capital
gain.
The Fund may invest up to 35% of its total assets in technology or
technology-related companies that are currently start-ups, early concept or late
stage companies and/or companies that have no public market for their shares.
These are companies that typically have smaller market capitalizations and
limited or no liquidity. Of this amount, up to 10% of the Fund's total assets
may be invested in securities of, or interests in, investment funds that invest
primarily in start-up companies. The Fund may not acquire more than a 3%
interest in any one investment fund, and the Fund's investment in any one
investment fund may not exceed 5% of the Fund's total assets. These investments
may involve a high degree of risk. See "Risk Factors - Venture Capital Funds."
The Fund may invest in securities of non-U.S. issuers. The Fund may invest
directly in foreign securities or it may invest through depositary receipts,
which are certificates issued by a bank or other financial institution that
evidence the right to receive the underlying foreign security. Investments in
non-US securities involve certain risks in addition to those of technology
companies generally. These risks are discussed under "Risk Factors." The Fund
may not invest more than 25% of its total assets in non-US securities, but this
limit does not apply to investments in depositary receipts.
HEDGING
The Fund may seek to hedge portfolio risk through the use of financial
instruments known as derivatives. A derivative is generally defined as an
instrument whose value is derived from, or based upon, some underlying index,
reference rate (such as interest rates or currency exchange rates), security,
commodity or other asset. The Fund will use a specific type of derivative only
after consideration of, among other things, how the derivative instrument serves
the Fund's investment objective and the risk associated with the instrument. The
Fund may use derivatives only for the purposes of hedging portfolio risk and
cash management.
The Fund may buy or sell put or call options on transferable securities if
these options are traded on options exchanges or over-the-counter markets with
broker-dealers that are reputable financial institutions that specialize in
these types of transactions, that make markets in these options, or are
participants in over-the-counter markets. A put option gives the purchaser of
the option the right to sell, and obligates the writer of the put option to buy,
the underlying security at a stated exercise price at any time prior to the
expiration of the option. Similarly, a call option gives the purchaser of the
option the right to buy, and obligates the writer to the call option to sell,
the underlying security at a stated exercise price at any time prior to the
expiration of the option.
Seligman will consider changes in exchange rates in making investment
decisions. As one way of managing exchange rate risk, the Fund may enter into
forward currency exchange contracts (agreements to purchase or to sell US
dollars or non-US currencies at a future date). A forward contract may help
reduce the
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Fund's losses on securities denominated in a currency other than US dollars, but
it may also reduce the potential gain on the securities depending on changes in
the currency's value relative to the US dollar.
INVESTMENT CONCENTRATION
As a non-diversified investment company, the Fund faces few regulatory
restrictions on the proportion of its total assets it may invest in the
securities of any one company, or on the proportion of its total assets it
allocates to control interests in companies. However, the Fund does not intend
to invest more than 25% of its total assets in the securities of any one
company. Similarly, the Fund does not intend to invest more than 25% of its
total assets in controlling interests of companies. Market fluctuations could
cause these limits to be exceeded.
USE OF LEVERAGE
The Fund may borrow money to finance repurchase offers and to accommodate
cash flow requirements. The Fund may also borrow money or issue one or more
classes of preferred stock to purchase portfolio securities, although the Fund
does not currently expect to do so. The use of borrowed money or proceeds from
sales of preferred stock to acquire portfolio securities is referred to as
"leverage." Leverage involves certain risks for the holders of common stock.
These risks are discussed under "Risk Factors - Leverage." The Fund is
authorized to borrow money in an aggregate amount up to 33 1/3% of the Fund's
total assets (after giving effect to the amounts raised by borrowing and/or
issuance of preferred stock). The Fund's borrowing may be from banks or other
institutions, or the Fund may issue debt securities. The Fund is also authorized
to issue preferred stock in an aggregate amount (together with any borrowings)
up to 50% of the Fund's total assets (after giving effect to the issuance of the
preferred stock and any borrowings).
The rights of any lenders to the Fund to receive payments of interest on
and repayments of principal of their borrowings, and the rights of any holders
of preferred stock to receive dividends and the liquidation principal in respect
of such preferred stock, will be senior to the rights of the holders of the
Fund's common stock. The terms of any such borrowings or preferred stock may
contain provisions which limit certain activities of the Fund, including the
payment of dividends to holders of common stock in certain circumstances. The
Fund's ability to borrow may be limited because of its fundamental policy of
conducting periodic repurchase offers. The terms of such borrowings or preferred
stock also may grant lenders or preferred stockholders certain voting rights in
the event of default in the payment of amounts due. Payments of interest or
dividends, and fees incurred in connection with arranging such financings by the
Fund, will reduce the amount of net income available for payment to the holders
of common shares.
INVESTMENT DECISIONS BASED UPON EXTENSIVE FIRM-LEVEL RESEARCH
The Fund will use a bottom-up stock selection approach. This means that
Seligman will extensively research specific companies in the technology and
technology-related industries to find those companies that Seligman believes
offer the greatest prospects for future growth. In selecting individual
securities, Seligman will look for companies that it believes display or are
expected to display:
o robust growth prospects
o high profit margins or return on capital
o attractive valuation relative to expected earnings or cash flow
o quality management
o unique competitive advantages
CIRCUMSTANCES IN WHICH THE FUND WILL SELL A SECURITY
While it is the policy of the Fund to hold securities for investment, the
Fund will sell securities of a company if Seligman's target price for the
security has been reached or if Seligman believes that:
o the company's earnings are disappointing,
o the company's revenue growth has slowed, or
o the company's underlying fundamentals have deteriorated.
The Fund may also be forced to sell securities to meet its quarterly share
repurchase obligation. As a result, the annual portfolio turnover of the Fund
may exceed 100%. On the other hand, the Fund may invest a significant portion of
its assets in venture capital securities having very little liquidity. The Fund
may be
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forced to retain such assets even in circumstances where the Fund's investment
policies indicate the assets should be sold. See "Risk Factors - Restricted and
Illiquid Securities."
DEFENSIVE MEASURES
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 investment objective.
THE FUND MAY CHANGE ITS INVESTMENT STRATEGIES
The Fund may change any of the investment strategies outlined above, and
may change the definition of small and medium-sized companies, if the Fund's
board of directors believes doing so is consistent with the Fund's investment
objective of long-term capital appreciation. The Fund's investment objective is
a fundamental policy and may not be changed without the approval of
shareholders.
MANAGEMENT OF THE FUND
The board of directors provides broad supervision over the affairs of the
Fund.
J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New York, New York,
10017, is the manager of the Fund. Seligman is responsible for the Fund's
investments and administers the Fund's business and other affairs.
Established in 1864, Seligman currently serves as manager to 19 US
registered investment companies, which offer more than 50 investment portfolios
with approximately $21.8 billion in aggregate assets as of March 31, 1999.
Seligman also provides investment management or advice to institutional or other
accounts having an aggregate value at March 31, 1999 of approximately $8.8
billion.
The Fund will pay a fee to Seligman for its management services at an
annual rate of 2% of the Fund's average daily net assets. The fee is calculated
daily and payable monthly.
PORTFOLIO MANAGEMENT
The Fund is managed by Seligman's Technology Team, and Mr. Paul H. Wick
and Mr. Storm Boswick are responsible for directing the investments of the Fund.
Mr. Wick is a Vice President of the Fund and has been a Managing Director
of Seligman since January 1995 and a Director of Seligman since November 1997.
He was formerly a Vice President, Investment Officer of Seligman from April 1993
to November 1997. Mr. Wick joined Seligman in 1987 as an Associate, Investment
Research. He has been Vice President and Portfolio Manager of Seligman
Communications and Information Fund, Inc. since January 1990 and December 1989,
respectively. Mr. Wick is a Vice President of Seligman Henderson Global Fund
Series, Inc., for which he has acted as Co-Portfolio Manager of the Global
Technology Fund since May 1994. Mr. Wick is also Vice President of Seligman
Portfolios, Inc. for which he acts as Portfolio Manager of its Seligman
Communications and Information Portfolio and Co-Portfolio manager of its
Seligman Henderson Global Technology Portfolio.
Mr. Boswick is also a Vice President of the Fund and has been a Managing
Director of Seligman since January 1999. He was formerly a Vice President,
Investment Officer of Seligman from January 1997 to December 1998. Mr. Boswick
joined Seligman in June 1996 as an Associate, Investment Research. Prior to
joining Seligman, Mr. Boswick was a Financial Analyst, Investment Research, with
Goldman, Sachs & Co. from February 1994 to May 1996.
EXPENSES OF THE FUND
The Fund pays a management fee to Seligman plus all its expenses other
than those assumed by Seligman. These include the shareholder servicing fee,
brokerage commissions, interest on any borrowings and dividends on any preferred
stock issued by the Fund, fees and expenses of outside legal counsel (including
fees and expenses associated with review of documentation for prospective
venture capital investments by the Fund) and independent auditors, taxes and
governmental fees, custody, expenses of printing and distributing prospectuses,
reports, notices and proxy material, expenses of printing and filing reports and
other documents with government agencies, expenses of shareholders' meetings,
expenses of corporate data processing and related services, shareholder record
keeping and shareholder account services, fees and disbursements, fees
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and expenses of directors of the Fund not employed by Seligman or its
affiliates, insurance premiums and extraordinary expenses such as litigation
expenses.
REPURCHASE OFFERS
The Fund expects that a substantial portion of its investments will be
illiquid and does not intend to maintain a significant cash position. For this
reason, the Fund is structured as a closed-end fund, which means that you will
not have the right to redeem your shares on a daily basis. In addition, the Fund
does not expect any trading market to develop for its shares. As a result, if
you invest in the Fund you will have limited opportunity to sell your shares.
To provide you with a degree of liquidity, and the ability to receive net
asset value on a disposition of your shares, the Fund will make quarterly offers
to repurchase its shares. The repurchase offers will be limited to a specified
percentage of the Fund's outstanding shares. Shares will be repurchased at their
net asset value. The Fund intends to commence the first quarterly repurchase
offer in December 1999. The quarterly offers will be made pursuant to a
fundamental policy of the Fund that may be changed only with the approval of the
Fund's shareholders.
THE FUND WILL OFFER TO REPURCHASE 5% OF ITS OUTSTANDING SHARES EACH QUARTER
Each quarter, the Fund will offer to repurchase 5% of the number of shares
outstanding on the date repurchase requests are due. The Fund's board of
directors may establish a larger percentage for any quarterly repurchase offer.
However, the percentage will not be less than 5% or more than 25% of the shares
outstanding on the date repurchase requests are due.
Approximately one month before each repurchase request due date, the Fund
will send shareholders a notification containing a repurchase offer, which will
specify, among other things:
o the percentage of shares that the Fund is offering to repurchase.
o the date on which the a shareholder's repurchase request is due.
o the date that will be used to determine the Fund's net asset value
applicable to the share repurchase. This is generally expected to be
the day after the date on which requests are due.
o the date by which shareholders will receive the proceeds from their
share sales.
o the net asset value of the common stock of the Fund no more than seven
days prior to the date of the notification.
Your shares of the Fund will be held through a financial intermediary.
Your intermediary may require additional time to mail the repurchase offer to
you, to process your request, and to credit your account with the proceeds of
any repurchased shares.
THE DUE DATE FOR REPURCHASE REQUESTS IS A DEADLINE THAT WILL BE STRICTLY
OBSERVED. If you or your intermediary fail to submit repurchase requests in good
order by the due date, you will be unable to liquidate your shares until a
subsequent quarter, and you will have to resubmit your request in that quarter.
You may, however, withdraw or change your repurchase request at any point before
the due date.
THE FUND'S FUNDAMENTAL POLICIES WITH RESPECT TO SHARE REPURCHASES
The Fund has adopted the following fundamental policies in relation to its
share repurchases which may only be changed by a majority vote of the
outstanding voting securities of the Fund:
o as stated above, the Fund will make share repurchases every three
months, pursuant to Rule 23c-3 under the 1940 Act, as it may be
amended from time to time;
o 5% of the Fund's outstanding common stock will be subject to the
repurchase offer, unless the board of directors establishes a
different percentage, which must be between 5% and 25%;
o the repurchase request due dates will be the second Wednesday of each
January, April, July and October (or the next business day if that day
is a holiday); and
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o there will be a maximum 14 day period between the due date for each
repurchase request and the date on which the Fund's net asset value
for that repurchase is determined.
PRO RATA PURCHASES OF SHARES IN THE EVENT OF AN OVERSUBSCRIBED REPURCHASE OFFER
There is no minimum number of shares that must be tendered before the Fund
will honor repurchase requests. However, the percentage determined by the board
of directors for each repurchase offer will set a maximum number of shares that
may be purchased by the Fund. In the event a repurchase offer by the Fund is
oversubscribed, the Fund may, but is not required to, repurchase additional
shares, but only up to a maximum amount of two percent of the outstanding shares
of the Fund. If the Fund determines not to repurchase additional shares beyond
the repurchase offer amount, or if shareholders tender an amount of shares
greater than that which the Fund is entitled to purchase, the Fund will
repurchase the shares tendered on a pro rata basis. If pro-ration is necessary,
the number of shares each investor asked to have repurchased will be reduced by
the same percentage. If any shares that you wish to have repurchased by the Fund
are not repurchased because of pro-ration, you will have to wait until the next
repurchase offer, and your repurchase request will not be given any priority
over other investors' requests. Thus, there is a risk that the Fund may not
purchase all of the shares you wish to sell in a given quarter or in any
subsequent quarter.
The Fund may suspend or postpone a repurchase offer in limited
circumstances, but only with the approval of a majority of the board of
directors, including a majority of independent directors.
DETERMINATION AND PAYMENT OF REPURCHASE PRICE AND REPURCHASE FEE
The repurchase price payable in respect of a repurchased share will be
equal to the share's net asset value on the date specified in the notice, less
any applicable repurchase fee as described below. The method by which the Fund
calculates net asset value is discussed under the caption "Calculation of Net
Asset Value."
All repurchases of shares held by shareholders for less than 2 years will
be subject to a repurchase fee. The repurchase fee is paid to the Fund and is
intended to compensate the Fund for expenses directly related to the repurchase
offer. The repurchase fee is calculated on a sliding scale as a percentage of
the net asset value of the shares redeemed:
YEARS SINCE PURCHASE REPURCHASE FEE
-------------------- --------------
Less than 1 year 2%
1 year or more, but less than 2 years 1%
2 years or more 0%
The Fund will seek to minimize any repurchase fee you pay by repurchasing
first the shares you have held the longest.
PAYMENT
The Fund expects to distribute payment for repurchased shares on the next
business day after the net asset value determination date. In any event, the
Fund will pay repurchase proceeds no later than 7 days after the date on which
net asset value for the repurchased shares is determined.
IMPACT OF REPURCHASE POLICIES ON THE LIQUIDITY OF THE FUND
From the time the Fund distributes each repurchase offer notification
until the date on which the net asset value for that repurchase is determined,
the Fund must maintain liquid assets at least equal to the percentage of its
shares subject to the repurchase offer. For this purpose, liquid assets means
assets that may be disposed of in the ordinary course of business at
approximately the price at which they are valued or which mature by the
repurchase payment date.
IN-KIND REPURCHASES
Under normal conditions, the Fund intends to repurchase its shares for
cash. However, the Fund reserves the right to pay for repurchased shares with an
in-kind distribution of a portion of its portfolio securities. Any such in-kind
distribution would be on a substantially pro rata basis.
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CONSEQUENCES OF REPURCHASE OFFERS
The Fund believes that repurchase offers will generally be beneficial to
the Fund's shareholders, and will generally be funded from available cash or
sales of portfolio securities. However, if the Fund borrows to finance
repurchases, interest on that borrowing may reduce the Fund's net investment
income. To the extent the Fund finances repurchase proceeds by selling Fund
investments, the Fund will hold a larger proportion of its total assets in
highly liquid securities. From time to time commencing at least 30 days after
the closing of this offering, the Fund may offer new shares continuously, which
may alleviate these potential consequences, but there is no assurance that the
Fund will be able to secure new investments or raise new cash.
Repurchase offers provide shareholders with the opportunity to dispose of
shares at net asset value. The Fund does not anticipate that a secondary market
will develop, but in the event that a secondary market were to develop, it is
possible that shares would trade in that market at a discount to net asset
value. The existence of periodic repurchase offers at net asset value may not
alleviate such discount.
In addition, the repurchase of shares by the Fund will be a taxable event
to shareholders. For a discussion of these tax consequences, see "Taxes."
CALCULATION OF NET ASSET VALUE
The Fund will compute its net asset value on each business day as of the
close of regular business of the New York Stock Exchange, which is currently
4:00 p.m. New York time. Securities owned by the Fund are valued at current
market prices. If reliable market prices are unavailable, securities are valued
in accordance with procedures approved by the Fund's board of directors. Venture
capital investments will be valued at cost unless Seligman determines, pursuant
to the Fund's valuation procedures, that such a valuation is no longer fair or
appropriate. For example, if a venture capital company in which the Fund has an
investment undertakes an initial public offering, the Fund's investment will be
revalued in a manner that Seligman determines best reflects its fair value. In
such cases, fair valuation would often be market value less a discount to
reflect contractual or legal restrictions limiting resale. All such
determinations by Seligman are subject to ratification by the board of
directors. Expenses of the Fund, including Seligman's investment management fee
and the costs of any borrowings, are accrued daily and taken into account for
the purpose of determining net asset value.
The net asset value per share is computed by dividing (i) the net asset
value of the Fund by (ii) the number of shares then outstanding. The net asset
value per share will be rounded up or down to the nearest cent. You may obtain
the Fund's daily net asset value per share by calling (800) 622-4597 or by
visiting Seligman's Internet website (http://www.seligman.com). The Fund also
intends to publish its net asset value once weekly in various financial
periodicals.
CAPITAL STOCK
The Fund is authorized to issue 100 million shares of capital stock, all
of one class called common stock, $0.01 par value. The board of directors is
authorized to classify and reclassify any unissued shares of capital stock from
time to time by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications or
terms or conditions of redemptions of such shares. The board of directors is
also authorized to increase or decrease the number of shares the Fund is
authorized to issue.
The common stock is entitled to one vote per share at all meetings of
shareholders. The Fund does not intend to hold annual meetings of shareholders.
Common shareholders do not have preemptive, subscription or conversion rights,
and are not liable for further calls or assessments. Common shareholders are
entitled to receive dividends only if and to the extent declared by the board of
directors and only after the board has made provision for working capital and
reserves as it in its sole discretion deems advisable. In addition, if at any
time any preferred stock of the Fund is outstanding, common shareholders will
not be entitled to receive any dividends until all accrued dividends on the
preferred stock have been paid and unless certain asset coverage ratios with
respect to the preferred stock are satisfied.
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In general, any action requiring a vote of the holders of the common stock
of the Fund shall be effective if taken or authorized by the affirmative vote of
a majority of the aggregate number of the votes entitled to vote thereon. Any
change in the Fund's fundamental policies may also be authorized by the vote of
two-thirds of the votes present at a shareholders' meeting if the holders of a
majority of the aggregate number of votes entitled to vote are present or
represented by proxy. The Fund's charter requires the affirmative vote of
two-thirds of the aggregate number of votes entitled to be cast to authorize any
of the following actions: (i) the dissolution of the Fund; (ii) a merger or
consolidation of the Fund in which the Fund is not the surviving corporation;
(iii) the sale of all or substantially all of the assets of the Fund; or (iv)
any amendment of the charter of the Fund which makes the Fund's common stock a
redeemable security (as such term is defined in the 1940 Act) or reduces the
two-thirds vote required to authorize the actions listed in this paragraph. This
could have the effect of delaying, deferring or preventing changes in control of
the Fund.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Fund, after payment of all of the liabilities of the Fund, the
common shareholders are entitled to share ratably in all the remaining assets of
the Fund.
The board of directors may reclassify unissued shares as preferred stock,
with rights as determined by the board of directors. The board of directors has
no current plans to create any classes of preferred stock, but may do so from
time to time. The Fund would use the proceeds of any sales of preferred stock to
purchase additional portfolio securities. The issuance of preferred stock to
acquire additional securities is referred to as leverage and involves certain
risks for the holders of common stock. See "Risk Factors - Leverage."
The Fund anticipates that the net asset value per share of any preferred
stock would equal its original purchase price plus accrued dividends. The Fund
expects that any shares of preferred stock would be redeemable by the Fund at
any time for their net asset value. Upon the winding up of the Fund, holders of
preferred stock would be entitled to receive the net asset value of their shares
before any payments were made to common shareholders. The 1940 Act requires that
holders of preferred stock have certain voting rights. Preferred stockholders
would have the right to elect two directors and, if dividends are not paid for
two years, to elect a majority of the directors. In addition, the preferred
stockholders would have the right to vote separately as a class on certain
matters, including reorganizations of the Fund.
DISTRIBUTION POLICY
Dividends will be paid annually on the common stock in amounts
representing substantially all of the net investment income, if any, earned each
year. Payments on the common stock will vary in amount, depending on investment
income received and expenses of operation. It is likely that many of the
companies in which the Fund invests will not pay any dividends, and this means
that the Fund is unlikely to pay substantial dividends. The Fund is not a
suitable investment if you require regular dividend income. If any preferred
stock is issued, dividends to common stockholders will consist of net investment
income remaining after the payment of dividends on the preferred stock.
Substantially all of any taxable net gain realized on investments will be
paid to common shareholders at least annually.
The net asset value of each share that you own will be reduced by the
amount of the distributions or dividends that you receive from that share.
AUTOMATIC REINVESTMENT PLAN
The automatic reinvestment plan is available for any holder of the Fund's
common stock who wishes to purchase additional shares using dividends and/or
capital gain distributions paid by the Fund. You may elect to:
o reinvest both dividends and capital gain distributions;
o receive dividends in cash and reinvest capital gain distributions; or
o receive both dividends and capital gain distributions in cash.
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Your dividends and capital gain distributions will be reinvested if you do not
instruct otherwise.
Shares will be issued to you at their net asset value on the ex-dividend
date; there is no sales charge or other charge for reinvestment. However, shares
acquired upon reinvestment will be subject to the repurchase fee if they are
repurchased by the Fund within two years. You are free to change your elections
at any time by notifying SDC in writing. Your request must be received by SDC
before the record date to be effective for that dividend or capital gain
distribution.
TAXES
The Fund intends to qualify and elect to be treated as a regulated
investment company under the Internal Revenue Code. As a regulated investment
company, the Fund will generally be exempt from federal income taxes on net
investment income and capital gains distributed to shareholders, as long as at
least 90% of the Fund's 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 gain are taxable as ordinary income and, to the extent attributable to
dividends received by the Fund from US corporations, may be eligible for a 70%
dividends-received deduction for shareholders that are corporations.
Distributions from net capital gain are taxable as long-term capital gain,
regardless of how long shares in the Fund have been held by the shareholder, and
are not eligible for the dividends-received deduction. 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.
When you sell Fund shares or have shares repurchased by the Fund, 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.
The Fund does not intend to operate so as to be permitted to
"pass-through" to its shareholders credit for foreign taxes if any, payable by
the Fund.
Each January, you will be sent information on the tax status of any
distribution 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.
HOW TO PURCHASE FUND SHARES
INITIAL OFFERING
The Fund is offering its shares through a selected group of dealers led by
PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New York,
________________, ________________ and ________________. In the initial
offering, shares of common stock are offered at $25.00 per share. Selected
dealers will receive a sales commission equal to $0.73 per share, or 3% of the
net amount invested in the Fund. Seligman will pay an additional sales
commission to such selected dealers equal to $0.24, or 1% of the net amount
invested in the Fund. In addition, Seligman will pay PaineWebber Incorporated a
structuring and marketing fee equal to $0.25 per share in respect of shares
purchased in the initial offering.
CONTINUOUS OFFERING
Not less than 30 days after the completion of the initial offering, the
Fund may commence a continuous offering of its shares through securities dealers
that have entered into selected dealer agreements with Seligman Advisors. Any
such continuous offering, if commenced, may be discontinued at any time without
notice. During any continuous offering of the Fund's shares, shares of the Fund
may be purchased only from selected dealers.
13
<PAGE>
During any continuous offering, the Fund's shares will be offered at a
price equal to the net asset value per share plus a 3% sales charge. Seligman
will pay an additional sales commission to such selected dealers equal to 1% of
the net asset value of each share sold. The price will be determined based upon
the net asset value next calculated after Seligman Advisors accepts your
request. Purchase orders received by a selected dealer by the close of regular
business on the New York Stock Exchange, currently 4:00 p.m., New York time,
including orders received after the close of regular business on the previous
day, and accepted by Seligman Advisors before 5:00 p.m., New York time, on the
same day will be executed at the net asset value per share calculated as of the
close of business on the NYSE on that day. If your purchase order is received
after the times indicated above, your order will be executed at the net asset
value per share calculated as of the close of business on the NYSE the next
business day.
OPENING AN ACCOUNT WITH THE FUND
To make an investment in the Fund, contact your financial advisor.
Accounts may be opened only with selected dealers.
The required minimum initial investment in the Fund is $10,000. Additional
investments during a continuous offering, if any, must be at least $1,000.
DISTRIBUTOR AND DEALER COMPENSATION
As described above, selected dealers are compensated at a rate of 4% of
the net amount of each sale that is invested in the Fund in the initial
offering, and at a rate of 4% of the net asset value of shares sold during any
subsequent continuous offering. However, only 3% of the amount invested is
charged to you as a sales load. The remaining portion of the dealer compensation
is paid by Seligman Advisors from its own resources. In addition, Seligman will
pay PaineWebber Incorporated a structuring and marketing fee equal to $0.25 per
share in respect of shares purchased in the initial offering.
The Fund may also pay selected dealers a shareholder service fee to
compensate them for providing shareholder services and the maintenance of
accounts. These services include providing information and responding to
shareholder questions about the structure of the Fund, the availability of
shares in any continuous offering, and repurchase offers. The shareholder
service fee is payable quarterly at an annual rate of 0.50% of the value of the
outstanding shares owned by customers of such dealer. This fee is accrued daily
as an expense of the Fund.
SALES AT NET ASSET VALUE
The following persons are eligible to purchase shares of the Fund at net
asset value, without payment of the front-end sales charge: directors of the
Fund and directors/trustees of other funds managed by Seligman; employees of
Seligman; employees of broker-dealers that offer the Fund or mutual funds
managed by Seligman; and those partners and employees of outside legal counsel
to the Fund or its directors who regularly provide advice and services to the
Fund, to other funds managed by Seligman, or to their directors. All shares of
the Fund, including shares purchased at net asset value, will be subject to the
repurchase fee.
GENERAL INFORMATION
DESCRIPTION OF THE FUND
The Fund is registered under the Investment Company Act of 1940 as a
closed-end, non-diversified management investment company. The Fund was
incorporated under the laws of the State of Maryland on May 19, 1999 and has no
operating history. The Fund's office is located at 100 Park Avenue, New York,
New York 10017 and its telephone number is (212) 850-1864. Investment advisory
services are provided to the Fund by J. & W. Seligman & Co. Incorporated. The
Fund acts as its own transfer agent.
CONFLICTS OF INTEREST
It is expected that the Fund will have transactions in the ordinary course
of business with firms and companies of which one or more directors and officers
is a director and/or officer of the Fund.
14
<PAGE>
TABLE OF CONTENTS OF SAI
Additional Investment Policies ........................................ B-2
Directors and Officers ................................................ B-6
Investment Advisory and Other Services ................................ B-9
Experts ............................................................... B-9
Custodian, Stockholder Service Agent and Dividend Paying Agent ........ B-10
Principal Underwriter Following Initial Public Offering ............... B-10
Brokerage Commissions ................................................. B-10
Appendix A
15
<PAGE>
UNTIL o, 1999 (25 CALENDAR DAYS --------------------
AFTER THE COMMENCEMENT OF THE
OFFERING), ALL DEALERS EFFECTING
TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN
THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS DELIVERY SELIGMAN
REQUIREMENT IS IN ADDITION TO THE NEW TECHNOLOGIES FUND, INC.
DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS. --------------------
SELIGMAN
NEW TECHNOLOGIES FUND, INC. A MANAGEMENT TYPE
100 Park Avenue NON-DIVERSIFIED, CLOSED-END
New York, New York 10017 INVESTMENT COMPANY
INVESTMENT MANAGER
J. & W. Seligman & Co. --------------------
Incorporated
100 Park Avenue
New York, New York 10017
COMMON STOCK
SHAREHOLDER SERVICE AGENT ($0.01 PAR VALUE)
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
--------------------
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell PROSPECTUS
125 Broad Street
New York, New York 10004 o , 1999
<PAGE>
SELIGMAN NEW TECHNOLOGIES FUND, INC.
o , 1999
STATEMENT OF ADDITIONAL INFORMATION
100 Park Avenue
New York, New York 10017
THIS STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A PROSPECTUS. THIS
SAI RELATES TO AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF SELIGMAN
NEW TECHNOLOGIES FUND, INC. (THE "FUND"), DATED o, 1999. A COPY OF THE
PROSPECTUS MAY BE OBTAINED BY CONTACTING THE FUND AT THE TELEPHONE NUMBERS OR
ADDRESS SET FORTH ABOVE.
THE INFORMATION IN THIS SAI IS NOT COMPLETE AND MAY BE CHANGED. THE FUND MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") IS EFFECTIVE. THIS SAI IS
NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
TABLE OF CONTENTS
Additional Investment Policies............................................... 2
Directors and Officers....................................................... 8
Investment Advisory and Other Services...................................... 14
Experts..................................................................... 15
Custodian, Stockholder Service Agent and Dividend Paying Agent.............. 15
Principal Underwriter Following Initial Public Offering..................... 15
Brokerage Commissions....................................................... 15
Appendix A.................................................................. 17
B-1
<PAGE>
ADDITIONAL INVESTMENT POLICIES
The investment objective and principal investment strategies of the Fund,
as well as the principal risks associated with the Fund's investment strategies,
are set forth in the Prospectus. Certain additional investment information is
set forth below.
FUNDAMENTAL POLICIES
The Fund's stated fundamental policies, which may not be changed without a
vote of stockholders, are listed below; within the limits of these fundamental
policies, the management has reserved freedom of action. The Fund:
(1) May not issue senior securities such as bonds, notes or other
evidences of indebtedness, or otherwise borrow money, or issue
preferred stock unless, immediately after issuance, the net assets of
the Fund provide asset coverage (as defined in the 1940 Act) of at
least 300% with respect to indebtedness and at least 200% with respect
to preferred stock.
(2) May not engage in the business of underwriting securities, except to
the extent it may be deemed to be engaged in such business by
disposing of portfolio securities.
(3) May not, with limited exceptions, purchase and sell real estate
directly, but may do so through majority-owned subsidiaries, so long
as its real estate investments do not exceed 10% of the value of the
Fund's total assets.
(4) May not lend portfolio securities to broker/dealers or other
institutions, unless the Fund's investment advisor, J. & W. Seligman &
Co. Incorporated ("Seligman") believes such loans will be beneficial
to the Fund. The borrower must maintain with the Fund cash or
equivalent collateral equal to at least 100% of the market value of
the securities loaned. Moreover, all such loans taken together cannot
exceed 10% of the value of total assets of the Fund. The Fund may make
loans represented by repurchase agreements, so long as such loans do
not exceed 10% of the value of total assets of the Fund.
(5) With respect to its share repurchases:
o the Fund will make share repurchases every three months, pursuant
to Rule 23c-3 under the 1940 Act, as it may be amended from time
to time;
o 5% of the Fund's outstanding common stock will be subject to the
repurchase offer, unless the board of directors establishes a
different percentage, which must be between 5% and 25%;
o the repurchase request due dates will be the second Wednesday of
each January, April, July and October (or the next business day
if that day is a holiday); and
o there will be a maximum 14 day period between the due date for
each repurchase request and the date on which the Fund's net
asset value for that repurchase is determined.
OTHER OPERATING POLICIES
Lending of Portfolio Securities. During the time portfolio securities are
on loan, the borrower pays the Fund any dividends or interest paid on the
securities. The Fund may invest the collateral and earn additional income or
receive an agreed upon amount of interest income from the borrower. Loans made
by the Fund will generally be short-term. Loans are subject to termination at
the option of the Fund or the borrower. The Fund may pay reasonable
administrative and custodial fees in connection
B-2
<PAGE>
with a loan and may pay a negotiated portion of the interest earned on the
collateral to the borrower or placing broker. The Fund does not have the right
to vote securities on loan, but would terminate the loan and regain the right to
vote if that were considered important with respect to the investment. The Fund
may lose money if a borrower defaults on its obligation to return securities and
the value of the collateral held by the Fund is insufficient to replace the
loaned securities. In addition, the Fund is responsible for any loss that might
result from its investment of the borrower's collateral.
Foreign Securities. The 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. For a discussion of the risks
associated with investments in foreign securities, see "Risk Factors - Foreign
Securities" in the Prospectus.
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. The Fund may invest up to 25% of its total assets in foreign
securities that it holds directly (which limitation may be changed without a
shareholder vote), but this 25% 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.
Investment income received by the Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of such taxes or exemption from taxes on such
income. It is impossible to determine the effective rate of foreign tax in
advance since the amounts of the Fund's assets to be invested within various
countries is not known.
Foreign Currency Transactions. A forward foreign currency exchange
contract is an agreement to purchase or sell a specific currency at a future
date and at a price set at the time the contract is entered into. The Fund will
generally enter into forward foreign currency exchange contracts to fix the U.S.
dollar value of a security it has agreed to buy or sell for the period between
the date the trade was entered into and the date the security is delivered and
paid for, or, to hedge the U.S. dollar value of securities it owns.
The Fund may enter into a forward contract to sell or buy the amount of a
foreign currency it believes may experience a substantial movement against the
U.S. dollar. In this case the contract would approximate the value of some or
all of the Fund's portfolio securities denominated in such foreign currency.
Under normal circumstances, the portfolio manager will limit forward currency
contracts to not greater than 75% of the Fund's portfolio position in any one
country as of the date the contract is entered into. This limitation will be
measured at the point the hedging transaction is entered into by the Fund. Under
extraordinary circumstances, the Manager may enter into forward currency
contracts in excess of 75% of the Fund's portfolio position in any one country
as of the date the contract is entered into. The precise matching of the forward
contract amounts and the value of securities involved will not
B-3
<PAGE>
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market involvement in the value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of short-term currency market movement is
extremely difficult, and the successful execution of a short-term hedging
strategy is highly uncertain. Under certain circumstances, the Fund may commit
up to the entire value of its assets which are denominated in foreign currencies
to the consummation of these contracts. Seligman will consider the effect a
substantial commitment of the Fund's assets to forward contracts would have on
the investment program of the Fund and its ability to purchase additional
securities.
Except as set forth above and immediately below, the Fund will also not
enter into such forward contracts or maintain a net exposure to such contracts
where the consummation of the contracts would oblige the Fund to deliver an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. The Fund, in order to
avoid excess transactions and transaction costs, may nonetheless maintain a net
exposure to forward contracts in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency provided the excess
amount is "covered" by cash or liquid, high-grade debt securities, denominated
in any currency, at least equal at all times to the amount of such excess. Under
normal circumstances, consideration of the prospect for currency parities will
be incorporated into the longer-term investment decisions made with regard to
overall diversification strategies. However, Seligman believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of the Fund will be served.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute precision
the market value of portfolio securities at the expiration of the forward
contract. Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver. However, the Fund may use liquid, high-grade
debt securities, denominated in any currency, to cover the amount by which the
value of a forward contract exceeds the value of the securities to which it
relates.
If the Fund retains the portfolio security and engages in offsetting
transactions, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. Of course, the Fund is not required
to enter into forward contracts with regard to its foreign currency-denominated
securities and will not do so unless deemed appropriate by
B-4
<PAGE>
Seligman. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange at
a future date. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of a hedged currency, at the same time,
they tend to limit any potential gain which might result from an increase in the
value of that currency.
Stockholders should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to the Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to resell that currency to the dealer.
Repurchase Agreements. The Fund may enter into repurchase agreements with
commercial banks and broker/dealers as a short-term cash management tool. A
repurchase agreement is an agreement under which the Fund acquires a security,
generally a US Government obligation, subject to resale at an agreed upon price
and date. The resale price reflects an agreed upon interest rate effective for
the period of time the Fund holds the security and is unrelated to the interest
rate on the security. The Fund's repurchase agreements will at all times be
fully collateralized.
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, a decline in
value of the underlying securities and a loss of interest. Repurchase agreements
are typically entered into for periods of one week or less. As a matter of
fundamental policy, the 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.
Illiquid Securities. The Fund may invest 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. These may include restricted
securities that can be offered and sold only to "qualified institutional buyers"
under Rule 144A of the 1933 Act. There is no limit to the percentage of the
Fund's net assets that may be invested in illiquid securities, but Seligman does
not expect that illiquid securities will ordinarily exceed 50% of the Fund's net
assets.
Rights and Warrants. The Fund may invest in common stock rights and
warrants believed by the investment manager to provide capital appreciation
opportunities. Common stock rights and warrants may be purchased separately or
may be received as part of a unit or attached to securities purchased.
Put Options. The Fund may purchase put options on portfolio securities in
an attempt to provide a hedge against a decrease in the market price of an
underlying security held by the Fund. The Fund will not purchase options for
speculative purposes.
Purchasing a put option gives the 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. This hedge protection is provided during the life of
the put option since the 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, the Fund will reduce any profit it might otherwise have realized
in the underlying security by the premium paid for the put option and by the
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, the Fund would let the
B-5
<PAGE>
option expire resulting in a reduced profit on the underlying security equal to
the cost of the put option premium and transaction costs.
When the 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. The cost of the put option is limited to the
premium plus commission paid. The Fund's maximum financial exposure will be
limited to these costs.
The Fund may purchase both listed and over-the-counter put options. The
Fund will be exposed to the risk of counterparty nonperformance in the case of
over-the-counter put options.
Put options on securities may not be available to the Fund on reasonable
terms in many situations and the Fund may frequently choose not to purchase
options even when they are available. The Fund's ability to engage in option
transactions may be limited by tax considerations.
Debt Securities. The Fund does not plan to invest more than 10% of its net
assets in debt securities which are not rated within the four highest rating
categories by Standard & Poor's Rating Services Inc. or Moody's Investors
Services, Inc.
Temporary Defensive Position. In an attempt to respond to adverse market,
economic, political, or other conditions, the 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. The 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.
Share Repurchases. The Fund may not suspend or postpone a repurchase offer
except pursuant to a vote of a majority of the directors, including a majority
of the disinterested directors, and only:
o If the repurchase would cause the Fund to lose its status as a
regulated investment company under Subchapter M of the Internal
Revenue Code;
o For any period during which the New York Stock Exchange or any other
market in which the securities owned by the Fund are principally
traded is closed, other than customary weekend and holiday closings,
or during which trading in such market is restricted;
o For any period during which an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably
practicable, or during which it is not reasonably practicable for the
Fund fairly to determine the value of its net assets; or
o For such other periods as the SEC may by order permit for the
protection of securityholders of the Fund.
DIRECTORS AND OFFICERS
B-6
<PAGE>
A listing of the directors and officers of the Fund and their business
experience for the past five years follows. An asterisk (*) indicates directors
who are "interested persons" of the Fund (as defined by the Investment Company
Act of 1940 (the "1940 Act")). Unless otherwise noted, the address of each
director and officer is 100 Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive
(61) Officer and Chairman of the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated;
Chairman and Chief Executive Officer, the Seligman
Group of investment companies; Chairman, Seligman
Advisors, Inc., Seligman Services, Inc., and Carbo
Ceramics Inc., ceramic proppants for oil and gas
industry; and Director, Seligman Data Corp. and
Kerr-McGee Corporation, diversified energy company.
Formerly, Director, Daniel Industries Inc.,
manufacturer of oil and gas metering equipment.
BRIAN T. ZINO* Director, President and Member of the Executive
(46) Committee
Director and President, J. & W. Seligman & Co.
Incorporated; President (with the exception of
Seligman Quality Municipal Fund, Inc. and Seligman
Select Municipal Fund, Inc.) and Director or
Trustee, the Seligman Group of investment
companies; Chairman, Seligman Data Corp.; Member of
the Board of Governors, the Investment Company
Institute and Director, ICI Mutual Insurance
Company, Seligman Advisors, Inc., and Seligman
Services, Inc.
RICHARD R. SCHMALTZ* Director and Member of the Executive Committee
(58)
Director and Managing Director, Director of
Investments, J. & W. Seligman & Co. Incorporated;
Director or Trustee, the Seligman Group of
investment companies (except Seligman Cash
Management Fund, Inc.); Director, Seligman
Henderson Co.; and Trustee Emeritus of Colby
College. Formerly, Director, Investment Research at
Neuberger & Berman from May 1993 to September 1996.
PAUL H. WICK Vice President and Portfolio Manager
(35)
Director and Managing Director, J. & W. Seligman &
Co. Incorporated since January 1995 and November
1997, respectively; Vice President and Portfolio
Manager, three open-end companies in the Seligman
Group of investment companies; Portfolio Manager,
Henderson Investment Management Limited. He joined
J. & W. Seligman & Co. Incorporated in 1987 as an
Associate, Investment Research. Formerly, Vice
President, Investment Officer, J. & W.
B-7
<PAGE>
Seligman & Co. Incorporated from April 1993 to
November 1997.
STORM BOSWICK Vice President and Portfolio Manager
(30)
Managing Director, J. & W. Seligman & Co.
Incorporated since January 1999. He joined J. & W.
Seligman & Co. Incorporated in June 1996 as an
Associate, Investment Research. Formerly, Vice
President, Investment Officer of J. & W. Seligman &
Co. Incorporated from January 1997 to December
1998; and Financial Analyst, Investment Research,
Goldman, Sachs & Co. from February 1994 to May
1996.
LAWRENCE P. VOGEL Vice President
(42)
Senior Vice President, Finance, J. & W. Seligman &
Co. 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.; and Treasurer,
Seligman Henderson Co.
FRANK J. NASTA Secretary
(34)
General Counsel, Senior Vice President, Law and
Regulation, and Corporate Secretary, J. & W.
Seligman & Co. Incorporated; Secretary, the
Seligman Group of investment companies; and
Corporate Secretary, Seligman Advisors, Inc.,
Seligman Henderson Co., Seligman Services, Inc.,
Seligman International, Inc. and Seligman Data
Corp.
THOMAS G. ROSE Treasurer
(41)
Treasurer, the Seligman Group of investment
companies and Seligman Data Corp.
COMPENSATION
- --------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE PENSION OR TOTAL COMPENSATION
WITH FUND COMPENSATION FROM RETIREMENT BENEFITS RECEIVED FROM FUND
FUND (1) ACCRUED AS PART OF AND FUND COMPLEX
FUND EXPENSES (1)(2)
- --------------------------------------------------------------------------------
William C. Morris, N/A N/A N/A
Director and
Chairman
- --------------------------------------------------------------------------------
Brian T. Zino, N/A N/A N/A
Director and
President
B-8
<PAGE>
- --------------------------------------------------------------------------------
Richard R. Schmaltz, N/A N/A N/A
Director
- ----------
(1) Based on remuneration expected to be paid to the Directors of the Fund for
the fiscal year ended December 31, 1999.
(2) The Seligman Group of Investment Companies consists of nineteen investment
companies.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is accrued
on the deferred balances. The annual cost of such fees and interest is included
in the director's fees and expenses and the accumulated balance thereof is
included in "Liabilities" in the Fund's financial statements. The Fund has
applied for and received exemptive relief that would permit a director who has
elected deferral of his or her fees to choose a rate of return equal to either
(i) the interest rate on short-term Treasury bills, or (ii) the rate of return
on the shares of any of the investment companies advised by the Manager, as
designated by the director. The Fund may, but is not obligated to, purchase
shares of such investment companies to hedge its obligations in connection with
this deferral arrangement.
Directors and officers of the Fund are also directors, trustees and
officers of some or all of the other investment companies in the Seligman Group.
The Executive Committee of the board of directors has the power to (a)
determine the value of securities and assets owned by the Fund, (b) elect or
appoint officers of the Fund to serve until the next meeting of the Directors
succeeding such action and (c) determine the price at which shares of Common
Stock of the Fund shall be issued and sold. All action taken by the Executive
Committee is recorded and reported to the board of directors at their meeting
succeeding such action. The members of the Executive Committee consist of Mr.
William C. Morris, Chairman, Richard R. Schmaltz, and Brian T. Zino, President.
INVESTMENT ADVISORY AND OTHER SERVICES
Subject to the control of the Fund's board of directors, J. & W. Seligman
& Co. Incorporated ("Seligman") manages the investment of the assets of the Fund
and administers its business and other affairs pursuant to a Management
Agreement approved by the board of directors and the stockholders of the
Corporation. Seligman also serves as investment adviser to eighteen other U.S.
registered investment companies which, together with the Fund, make up the
"Seligman Group". There are no other management-related service contracts under
which services are provided to the Fund. No person or persons, other than the
directors, officers or employees of Seligman and the Fund, regularly advise the
Fund with respect to its investments.
Seligman is a successor firm to an investment banking business founded in
1864 which has thereafter provided investment services to individuals, families,
institutions, and corporations. On December 29, 1988, a majority of the
outstanding voting securities of Seligman was purchased by Mr. William C.
Morris, Chairman and C.E.O. of Seligman and Chairman of the Board and C.E.O. of
the Fund, and a simultaneous recapitalization of Seligman occurred. See Appendix
A for information regarding the history of Seligman.
B-9
<PAGE>
All of the officers of the Fund listed above are officers or employees of
Seligman. Their affiliations with the Fund and with Seligman are provided under
their principal business occupations.
The Fund pays Seligman a management fee for its services, calculated daily
and payable monthly, equal to 2.00% of the daily net assets of the Fund.
As part of its services to the Fund, Seligman provides the Fund with such
office space, administrative and other services and executive and other
personnel as are necessary for the operations of the Fund. Seligman also
provides senior management for Seligman Data Corp., an affiliate of the Fund and
certain other investment companies in the Seligman Group. Seligman pays all of
the compensation of the directors of the Fund who are employees or consultants
of Seligman and its affiliates, of the officers and employees of the Fund and of
certain executive officers of Seligman Data Corp.
EXPERTS
___________________________ acts as independent auditors for the Fund and
in such capacity will audit the Fund's annual and semi-annual financial
statements and financial highlights.
CUSTODIAN, STOCKHOLDER SERVICE AGENT AND
DIVIDEND PAYING AGENT
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City, Missouri
64105, serves as custodian to the Fund. It also maintains, under the general
supervision of Seligman, the Fund's accounting records and is responsible for
the determination of the net asset value of the Fund.
Seligman Data Corp., an affiliate of both Seligman and the Fund, acts as
the stockholder service agent and dividend paying agent of the Fund, and
performs, at cost, certain recordkeeping functions for the Fund. In other words,
Seligman Data Corp. maintains the records of shareholder accounts and furnishes
dividend paying, redemption and related services.
PRINCIPAL UNDERWRITER FOLLOWING INITIAL PUBLIC OFFERING
Seligman Advisors, Inc., an affiliate of both Seligman and the Fund,
located at 100 Park Avenue, New York, New York 10017, will act as general
distributor of the shares of the Fund during any continuous offering of the
Fund's shares following the initial public offering.
BROKERAGE COMMISSIONS
Seligman will seek the most favorable price and execution in the purchase
and sale of portfolio securities of the Fund. When two or more of the investment
companies in the Seligman Group or other investment advisory clients of Seligman
desire to buy or sell the same security at the same time, the securities
purchased or sold are allocated by Seligman in a manner believed to be equitable
to each. There may be possible advantages or disadvantages to such transactions
with respect to price or the size of positions readily obtainable or saleable.
In over-the-counter markets, the Fund deals with responsible primary
market makers unless a more favorable execution or price is believed to be
obtainable. The Fund may buy securities from or sell securities to dealers
acting as principal, except dealers with which its directors and/or officers are
affiliated.
B-10
<PAGE>
The Fund does not plan to execute any portfolio transactions with, and
therefore will not pay any commissions to, any broker affiliated, directly or
indirectly, with either the Fund, Seligman, or Seligman Advisors, Inc.
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 the
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 Fund than the use of brokers selected solely on the basis of
seeking the most favorable price and execution, and although such research and
analysis may be useful to Seligman in connection with its services to clients
other than the Fund.
B-11
<PAGE>
APPENDIX A
Established in 1864, J. & W. Seligman's more than 130 years of providing
financial services have been marked not by fanfare, but rather by a quiet and
firm adherence to managing investments and giving prudent financial advice.
Seligman is proud of its distinctive past and traditional values, which continue
to shape its business decisions and investment judgment.
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest
of eight brothers, arrived in the United States from Germany. Nearly 30 years
later, in 1864, after achieving success as international bankers, the Seligmans
established the investment firm of J. & W. Seligman & Co.
In the years that followed, Seligman played a major role in the
geographical expansion and industrial development of the United States. It
helped finance the westward path of the railroads and the building of the Panama
Canal. In the late 1800s, and early 1900s, the firm was instrumental in
financing the fledgling American automobile and steel industries.
Throughout the first quarter of this century, Seligman participated in
hundreds of successful underwritings, including those for some of the country's
most important companies: United Artists Theatre Circuit, Dodge Brothers,
General Motors, Victor Talking Machine, Minneapolis-Honeywell Regulator, and
Maytag, to name just a few. In 1929, Seligman organized its first investment
company, Tri-Continental Corporation, today the nation's largest, diversified,
publicly traded, closed-end investment company, with more than $o billion in
assets as of March 31, 1999. In the following year, the firm began managing its
first mutual fund, Broad Street Investing Co. Inc., now known as Seligman Common
Stock Fund.
Today, Seligman manages institutional accounts - including some of the
nation's largest public funds, endowments, and foundations and offers individual
investors a full range of investment products. The Seligman Group of Funds
includes more than 50 investment portfolios, several closed-end municipal bond
funds that trade on the New York Stock Exchange, and a range of offshore
investment funds available for non-US residents.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
1. Financial Statements:
Part A: Financial Highlights (not applicable)
Part B: Financial Statements (to be filed by amendment)
2. Exhibits: (Exhibits marked with an asterisk (*) will be filed by
amendment.)
a. Charter of Registrant.
b. By-laws of Registrant.*
e. Registrant's Automatic Reinvestment Plan.*
g. Management Agreement between Registrant and J. & W. Seligman & Co.
Incorporated.*
h. Underwriting Agreement.*
i. Deferred Compensation Plan for Directors.*
j. Form of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company.*
l. Opinion and Consent of Counsel.*
n. Consent of Independent Auditors.*
o. Agreement with respect to seed capital.*
r. Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
Item 25. Marketing Arrangements: Not Applicable
Item 26. Other Expenses of Issuance and Distribution:
Registration fees $
Legal fees
Accounting fees
Miscellaneous (mailing, etc.)
Item 27. Persons Controlled by or Under Common Control with Registrant: None.
Item 28. Number of Holders of Securities
As of May 21, 1999:
Title of Class Number of Recordholders
Common Stock 0
Item 29. Indemnification:
Reference is made to the provisions of Article VIII of Registrant's
Charter and Article __, Section __ of Registrant's By-laws, each filed as
an exhibit to this
C-1
<PAGE>
Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised by the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 30. Business and Other Connections of Investment Adviser:
J. & W. Seligman & Co. Incorporated, a Delaware corporation, is the
Registrant's investment manager. Seligman also serves as investment
manager to eighteen associated investment companies. They are Seligman
Capital Fund, Inc., Seligman Cash Management Fund, Inc., Seligman Common
Stock Fund, Inc., Seligman Communications and Information Fund, Inc.,
Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman High Income Fund Series,
Seligman Income Fund, Inc., Seligman Municipal Fund Series, Inc., Seligman
Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc., Seligman
Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc., Seligman
Quality Municipal Fund, Inc., Seligman Select Municipal Fund, Inc.,
Tri-Continental Corporation and Seligman Value Fund Series, Inc.
The Manager has an advisory service division which provides investment
management or advice to private clients. The list required by this Item 30
of officers and directors of the Manager together with information as to
any other business, profession, vocation or employment of a substantial
nature engaged in by such officers and directors during the past two
years, in incorporated by reference to Schedules A and D of Form ADV,
filed by the Manager, pursuant to the Investment Advisers Act of 1940 (SEC
File No. 801-15798) which was filed on March 31, 1999.
Item 31. Location of Accounts and Records:
Custodian: Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
AND
Seligman New Technologies Fund, Inc.
100 Park Avenue
New York, New York 10017
Item 32. Management Services: Not Applicable
Item 33. Undertakings:
I. The Registrant undertakes to suspend the offering of shares until the
prospectus is amended if (1) subsequent to the effective date of its
registration statement, the net asset
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<PAGE>
value declines more than ten percent from its net asset value as of
the effective date of the registration statement.
II. The Registrant undertakes:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to the registration statement:
(1) to include any prospectus required by Section 10(a)(3) of
the 1933 Act;
(2) to reflect in the prospectus any facts or events after the
effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and
(3) to include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(b) that, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of those securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
III. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
IV. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery within two business days of
receipt of a written or oral request, the Registrant's Statement of
Additional Information.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, its duly authorized
representative, in the City of New York, State of New York, on the 21st day of
May, 1999.
SELIGMAN NEW TECHNOLOGIES FUND, INC.
By: /s/ WILLIAM C. MORRIS
--------------------------------
William C. Morris
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, in the
capacities indicated on May 21, 1999
NAME TITLE
/s/ WILLIAM C. MORRIS Chairman of the Board (Principal executive officer and
- ----------------------- Director)
(William C. Morris)
/s/ BRIAN T. ZINO President and Director
- -----------------------
(Brian T. Zino)
/s/ RICHARD R. SCHMALTZ Director
- -----------------------
(Richard R. Schmaltz)
/s/ THOMAS G. ROSE Treasurer (Principal financial and accounting officer)
- -----------------------
(Thomas G. Rose)
<PAGE>
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
a. Certificate of Incorporation
ARTICLES OF INCORPORATION
OF
SELIGMAN NEW TECHNOLOGIES FUND, INC.
ARTICLE I
INCORPORATOR
I, the incorporator, Billie Swoboda, whose post office address is 125
Broad Street, New York, New York 10004, being at least eighteen years of age,
hereby, under and by virtue of the general laws of the State of Maryland
authorizing the formation of corporations, form a corporation.
ARTICLE II
NAME
The name of the corporation (hereinafter, the "Corporation") is
SELIGMAN NEW TECHNOLOGIES FUND, INC.
ARTICLE III
PURPOSES AND POWERS
The purpose for which the Corporation is formed is to act as an
investment company of the management type registered as such with the Securities
and Exchange Commission pursuant to the Investment Company Act of 1940 (the
"1940 Act") and to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the general laws of
the State of Maryland now or hereafter in force.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
Section 1. The post office address of the principal office of the
Corporation in the State of Maryland is c/o The Corporation Trust Incorporated,
300 East Lombard Street, Baltimore, Maryland 21202.
<PAGE>
Section 2. The name of the Corporation's resident agent is The
Corporation Trust Incorporated, and its post office address is 300 East Lombard
Street, Baltimore, Maryland 21202. Said resident agent is a corporation of the
State of Maryland.
ARTICLE V
CAPITAL STOCK
Section 1. The total number of shares of capital stock that the
Corporation has authority to issue is 100,000,000 shares, all of one class
called Common Stock, having a par value of $0.01 per share and an aggregate par
value of $1,000,000.
Section 2. The Board of Directors of the Corporation may classify or
reclassify any unissued shares of capital stock from time to time by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, or qualifications of such shares of
stock.
Section 3. To the extent permitted by Maryland law, the Board of
Directors of the Corporation, without any action by the stockholders of the
Corporation, may amend these Articles of Incorporation from time to time to
increase or decrease the aggregate number of shares of stock or the number of
shares of stock of any class or series that the Corporation has authority to
issue.
Section 4. The Board of Directors of the Corporation is hereby
empowered to authorize the issuance from time to time of shares of any class of
the Corporation's capital stock, whether now or hereafter authorized, or
securities convertible into shares of any class or classes of its capital stock,
whether now or hereafter authorized.
Section 5. The Board of Directors of the Corporation is hereby
empowered to authorize the repurchase by the Corporation from time to time of
shares of any class of its capital stock, whether now or hereafter authorized,
or securities convertible into shares of any class or classes of its capital
stock, whether now or hereafter authorized, upon such terms, at such prices
(which may be determined by formula) and subject to such conditions (which may
include pro ration of shares tendered for repurchase) as the Board of Directors
of the Corporation may determine.
Section 6. Unless otherwise expressly provided in these Articles of
Incorporation, including any Articles Supplementary creating any class of
capital stock, the holders of each class of capital stock shall be entitled to
dividends and distributions in such
2
<PAGE>
amounts, at such times and to such stockholders of record as may be determined
by the Board of Directors of the Corporation, and the dividends and
distributions paid with respect to the various classes of capital stock may vary
among such classes.
Section 7. Unless otherwise expressly provided in these Articles of
Incorporation, including any Articles Supplementary creating any class of
capital stock, on each matter submitted to a vote of stockholders, each holder
of a share of capital stock of the Corporation shall be entitled to one vote for
each share held in such holder's name on the books of the Corporation,
irrespective of the class thereof, and all shares of all classes of capital
stock shall vote together as a single class; provided, however, that as to any
matter with respect to which a separate vote of any class is required by the
1940 Act or any rules, regulations or orders issued thereunder, or the Maryland
General Corporation Law, such requirement as to a separate vote by that class
shall apply in lieu of a vote of all classes voting together as a single class
as described above.
Section 8. The presence in person or by proxy of stockholders holding
of record one-third of the shares of the capital stock of the Corporation
issued, outstanding and entitled to vote thereat shall constitute a quorum for
the transaction of any business at all meetings of the stockholders except as
otherwise provided by law or in these Articles of Incorporation or in the Bylaws
of the Corporation, provided that the Bylaws shall not provide for a quorum of
less than the holders of record of one-third of all shares of the capital stock
of the Corporation issued, outstanding and entitled to vote.
Section 9. Notwithstanding any provision of the general laws of the
State of Maryland requiring action to be taken or authorized by the affirmative
vote of the holders of a designated proportion greater than a majority of the
votes of all classes of capital stock of the Corporation (or of any class
entitled to vote thereon as a separate class), such action shall, except as
otherwise provided in Section 10 of this Article V, be valid and effective if
taken or authorized by the affirmative vote of the holders of a majority of the
aggregate number of shares of capital stock of the Corporation outstanding and
entitled to vote thereon (or a majority of the aggregate number of shares of a
class entitled to vote thereon as a separate class).
Section 10. Unless otherwise indicated below, the affirmative vote of
at least 66 2/3% of the shares of capital stock of the Corporation outstanding
and entitled to vote thereon shall be necessary to authorize any of the
following actions:
3
<PAGE>
(a) a merger or consolidation or statutory stock exchange of the
Corporation with or into another corporation;
(b) a sale of all or substantially all of the Corporation's assets
(other than in the regular course of the Corporation's investment
activities or in connection with the repurchase of the
Corporation's shares in the open market);
(c) a liquidation or dissolution of the Corporation, unless such
action has been approved, adopted or authorized by the
affirmative vote of 66 2/3% of the total number of directors
fixed in accordance with the Bylaws, in which case the
affirmative vote of only a majority of the outstanding voting
securities is required;
(d) the conversion of the Corporation to an "open-end company" (as
defined in the 1940 Act);
(e) an increase in the maximum number of directors set forth in
Article VI hereof;
(f) the removal of a director; or
(g) any amendment of these Articles of Incorporation to reduce the
66-2/3% vote requirement to authorize any of the actions in this
Section 10.
Section 11. No holder of shares of the capital stock of the Corporation
shall, as such holder, have any preemptive right to purchase or subscribe for
any part of any new or additional issue of stock of any class, or of rights or
options to purchase any stock, or of securities convertible into, or carrying
rights or options to purchase, stock of any class, whether now or hereafter
authorized or whether issued for money, for a consideration other than money or
by way of a dividend or otherwise, and all such rights are hereby waived by each
holder of capital stock and of any other class of stock or securities of the
Corporation that may hereafter be created.
Section 12. All persons who shall acquire capital stock in the
Corporation shall acquire the same subject to the provisions of these Articles
of Incorporation.
4
<PAGE>
ARTICLE VI
DIRECTORS
Section 1. The initial number of directors of the Corporation shall be
three, and the names of those persons who shall act as such until the first
annual meeting and until their successors are elected and qualified are as
follows: William C. Morris, Brian T. Zino and Richard R. Schmaltz. The Bylaws of
the Corporation may fix the number of directors at a certain number and may
authorize the Board of Directors of the Corporation, by the vote of a majority
of the entire Board of Directors of the Corporation, to increase or decrease the
number of directors provided that in no case shall the number of directors be
less than three, and to fill the vacancies created by any such increase in the
number of directors. Unless otherwise provided by the Bylaws of the Corporation,
the directors of the Corporation need not be stockholders.
Section 2. A director may be removed only with cause, and any such
removal may be made only by the stockholders of the Corporation in accordance
with the requirements of Section 10 of Article V hereof.
ARTICLE VII
MANAGEMENT OF THE AFFAIRS OF THE CORPORATION
Section 1. All corporate powers and authority of the Corporation
(except as at the time otherwise provided by statute, by these Articles of
Incorporation or by the Bylaws) shall be vested in and exercised by the Board of
Directors of the Corporation.
Section 2. The Board of Directors of the Corporation shall have the
power to adopt, alter or repeal the Bylaws of the Corporation except to the
extent that the Bylaws otherwise provide.
Section 3. The Board of Directors of the Corporation shall have the
power from time to time to determine whether and to what extent, and at what
times and places and under what conditions and regulations, the accounts and
books of the Corporation or any of them shall be open to the inspection of
stockholders, and no stockholder shall have any right to inspect any account,
book or document of the Corporation except to the extent required by statute or
permitted by the Bylaws.
5
<PAGE>
Section 4. The Board of Directors of the Corporation shall have the
power to determine, as provided in these Articles of Incorporation, or if
provision is not made herein, in accordance with generally accepted accounting
principles, what constitutes net income, total assets and the net asset value of
the shares of capital stock of the Corporation.
ARTICLE VIII
LIABILITY
Section 1. A director or officer of the Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director or officer, except to the extent such exemption
from liability or limitation thereof is not permitted by law (including the 1940
Act) as currently in effect or as the same may hereafter be amended.
Section 2. No amendment, modification or repeal of this Article VIII
shall adversely affect any right or protection of a director or officer that
exists at the time of such amendment, modification or repeal.
ARTICLE IX
PERPETUAL EXISTENCE
The duration of the Corporation shall be perpetual.
ARTICLE X
AMENDMENTS
From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed, and other provisions that
may, under the statutes of the State of Maryland at the time in force, be
lawfully contained in articles of incorporation may be added or inserted, except
as otherwise provided in Section 10 of Article V of these Articles of
Incorporation, upon the vote of the holders of a majority of the shares of
capital stock of the Corporation outstanding and entitled to vote thereon. All
rights at any time conferred upon the stockholders of the Corporation by these
Articles of Incorporation are subject to the provisions of this Article X.
------------------------
6
<PAGE>
The term "Articles of Incorporation" as used herein and in the Bylaws
of the Corporation shall be deemed to mean these Articles of Incorporation as
from time to time amended, amended and restated, or supplemented.
The undersigned incorporator of SELIGMAN NEW TECHNOLOGIES FUND, INC.
hereby executes the foregoing Articles of Incorporation and acknowledges the
same to be his act and further acknowledges that, to the best of his knowledge,
the matters and facts set forth herein are true in all material respects under
the penalties of perjury.
May 19, 1999
/s/ BILLIE SWOBODA
-----------------------------------
BILLIE SWOBODA
INCORPORATOR
7
