<PAGE>
As filed with the Securities and Exchange Commission on December 22, 1999
Registration Nos. 333-85111
811-9545
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 2 [X]
Post-Effective Amendment No. [_]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 2 [X]
- --------------------------------------------------------------------------------
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
(Exact name of registrant as specified in charter)
- --------------------------------------------------------------------------------
100 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices)
- --------------------------------------------------------------------------------
Registrant's Telephone Number: 212-850-1864 or
Toll Free: 800-221-2450
- --------------------------------------------------------------------------------
THOMAS G. ROSE, Treasurer,
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
- --------------------------------------------------------------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after
effective date of this Registration Statement.
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective (check appropriate box):
[_] immediately upon filing pursuant to [_] on (date) pursuant to paragraph
paragraph (b) (a)(1)
[_] on (date) pursuant to paragraph (b) [_] 75 days after filing pursuant to
paragraph (a)(2)
[_] 60 days after filing pursuant to [_] on (date) pursuant to paragraph
paragraph (a)(1) (a)(2) of rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
SELIGMAN
--------
Time Horizon/
Harvester
Series, Inc.
Seligman Time Horizon 30 Fund
Seligman Time Horizon 20 Fund
Seligman Time Horizon 10 Fund
Seligman Harvester Fund
The Securities and Exchange Commission has neither approved nor disapproved
these Funds, and it has not determined the prospectus to be accurate or
adequate. Any representation to the contrary is a criminal offense.
An investment in these Funds or any other fund cannot provide a complete
investment program. The suitability of an investment in a Fund should be
considered based on the investment objective, strategies and risks described in
this Prospectus, considered in light of all of the other investments in your
portfolio, as well as your risk tolerance, financial goals and time horizons. We
recommend that you consult your financial advisor to determine if these Funds
are suitable for you.
Seligman Time Horizon/Harvester Series, Inc. is based on two processes developed
by J.& W. Seligman & Co. Incorporated: Seligman Time Horizon Matrix/sm/, an
asset allocation strategy and Seligman Harvester/sm/, a combined income-
withdrawal and asset allocation strategy. Seligman Time Horizon Matrix and
Seligman Harvester are proprietary service marks of Seligman Advisors, Inc.
Patent pending on the business methodologies and apparatus for implementing the
Seligman Harvester Risk Management System.
Prospectus
JANUARY 3, 2000
Asset Allocation Strategies
Seeking to Manage Risk
Over Time
managed by
[LOGO]
J. & W. SELIGMAN & CO.
<PAGE>
Table of Contents
The Funds
Overview 1
Investment Objectives and Asset Allocation Strategies of the Funds 1
Principal Strategies of the Funds 2
Principal Risks of an Investment in the Funds 4
Past Performance of the Funds 5
Fees and Expenses of the Funds 5
Examples of Each Fund's Expenses 8
Questions and Answers About the Funds 9
Additional Information About the Funds' Investment Strategies and Risks 13
Management of the Funds 15
The Underlying Funds
Investment Objectives and Principal Strategies of the Underlying Funds 16
Principal Risks of the Underlying Funds 18
Year 2000 21
Shareholder Information
Deciding Which Class of Shares to Buy 22
How CDSCs Are Calculated 23
Pricing of Fund Shares 24
Opening Your Account 24
How to Buy Additional Shares 25
How to Exchange Shares Among the Seligman Mutual Funds 26
How to Sell Shares 26
Important Policies That May Affect Your Account 27
Telephone Services 27
Reinstatement Privilege 27
Dividends and Capital Gain Distributions 28
Taxes 29
Appendix A
Appendix B
Appendix C
For More Information back cover
<PAGE>
The Funds
Overview
J. & W. Seligman & Co. Incorporated (the "Manager") serves as the investment
manager to Seligman Time Horizon/Harvester Series, Inc. (the "Series"), an
asset-allocation type mutual fund containing four funds: Seligman Time Horizon
30 Fund, Seligman Time Horizon 20 Fund, Seligman Time Horizon 10 Fund and
Seligman Harvester Fund (collectively the "Funds"). The Funds are designed for
investors who are seeking to have their asset allocation decisions made by a
professional investment manager. Each of the Time Horizon Funds is named in
accordance with an investor's "time-horizon" for the achievement of one or more
investment goals. The Harvester Fund is designed for investors who are seeking
to generate current income from their capital, growth of income and growth of
capital over time. An investor may choose to invest in one or more of the Funds
based on individual investment goals, investment time horizons, risk tolerance,
and financial circumstances.
Each Fund is a "fund of funds," which means that each seeks to achieve its
objectives(s) by investing in a combination of other Seligman mutual funds (the
"Underlying Funds"). In pursuing its investment objective(s), each Fund may
also invest directly in US Government securities and high-quality, short-term
instruments.
Investment Objectives and Asset Allocation Strategies of the Funds
The table below provides an overview of each Fund's investment objective(s) and
asset allocation strategy. A more complete description of each Fund's asset
allocation strategy is provided under "Principal Strategies of the Funds."
Under normal market conditions, each Fund invests in Underlying Funds to
produce a portfolio that primarily invests in:
<TABLE>
<CAPTION>
INVESTMENT
FUND OBJECTIVE(S) ASSET ALLOCATION STRATEGY
---- ------------ -------------------------
<S> <C> <C>
Seligman Time Horizon 30 Long-term Aggressive growth-oriented domestic
Fund -- capital and international equity securities
Intended for investors appreciation weighted toward small- and medium-
with long-term financial capitalization.
goals
(i.e., approximately 30
years away).
Seligman Time Horizon 20 Long-term Growth-oriented domestic and
Fund -- capital international equity securities,
Intended for investors appreciation with a more even weighting among
with long-term financial small-, medium-, and large-
goals capitalization companies than the
(i.e., approximately 20 Time Horizon 30 Fund.
years away).
Seligman Time Horizon 10 Capital Small-, medium-, and large-
Fund -- appreciation capitalization domestic and
Intended for investors international equity securities as
with intermediate-term well as domestic fixed-income
financial goals (i.e., securities.
approximately 10 years
away).
Seligman Harvester Capital Medium- and large-capitalization and
Fund -- appreciation and dividend-producing domestic and
Intended for investors preservation of international equity securities
who seek current income capital with supplemented by a larger allocation
from their capital, current income of domestic fixed-income securities
growth of income and and growth of and cash and cash equivalents than
growth of capital over income the Time Horizon 10 Fund.
time.
</TABLE>
1
<PAGE>
Principal Strategies of the Funds
Each Fund seeks to achieve its investment objective(s) primarily by investing a
certain percentage of its assets in the Class A shares of the Underlying Funds
(which are described under the section of this Prospectus titled "The
Underlying Funds"). Each Fund is managed as an asset allocation program with
target allocations and ranges for its investments in the Underlying Funds.
These target allocations and ranges are based on two asset allocation
strategies developed by the Manager, Seligman Time Horizon Matrix and Seligman
Harvester. A series of questions and answers explaining more about Seligman
Time Horizon Matrix and Seligman Harvester, as well as how an investor may
invest in the Funds to take advantage of these strategies, appears later in
this prospectus under "Questions and Answers About the Funds."
The table on page 3 illustrates the current allocation targets and ranges for
each Fund under normal market conditions. The Underlying Funds are grouped
below into three broad categories: Domestic Equity Funds, Global Equity Funds
and Fixed Income Funds. Within each category, the ordering of the Underlying
Funds begins with the most aggressively managed and concludes with the most
conservatively managed. For information about the investment objectives,
strategies and risks of each Underlying Fund, see "The Underlying Funds."
Under normal market conditions, the Manager will allocate each Fund's assets
according to the allocation targets described in the table. The Manager will
attempt to use cash in-flows and out-flows from the purchase or sale of each
Fund's shares to remain within the allocation ranges. On a semi-annual basis,
the Manager will re-allocate each Fund's assets to its current targets if the
allocations on the semi-annual re-allocation date are outside the allocation
ranges. (Each Fund may hold a portion of its assets in cash or cash equivalents
in order to meet redemptions or because it has not yet invested the proceeds
from the sale of Fund shares, for example. This cash and cash equivalents are
not included in the Fund's assets for purposes of determining the allocations
among the Underlying Funds.)
Each Fund may change the allocation targets and ranges for each Underlying Fund
at any time if the Manager believes that doing so will better enable the Fund
to pursue its investment objective(s). Each Fund may also change the Underlying
Funds to which it will allocate its assets depending on the Manager's outlook
on the economy, financial markets in general and factors related to the asset
classes in which each Underlying Fund invests.
2
<PAGE>
[CHART]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
TIME TIME TIME
HORIZON HORIZON HORIZON HARVESTER
UNDERLYING FUND 30 FUND 20 FUND 10 FUND FUND
- ----------------------------------------------------------------------------------------------------
DOMESTIC EQUITY FUNDS
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Frontier Fund Target: 3% 3% 3%
Range: 2%-4% 2%-4% 2%-4%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Small-Cap Value Target: 13% 12% 6%
Fund Range: 10%-16% 10%-14% 4%-8%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Communications Target: 16% 10% 10%
and Information Fund Range: 13%-19% 8%-12% 8%-12%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Capital Fund Target: 22% 20% 20% 10%
Range: 18%-26% 16%-24% 16%-24% 8%-12%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Growth Fund Target: 3% 9% 9% 9%
Range: 2%-4% 7%-11% 7%-11% 7%-11%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Large-Cap Value Target: 3% 9% 9% 9%
Fund Range: 2%-4% 7%-11% 7%-11% 7%-11%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Common Stock Target: 15%
Fund Range: 12%-18%
GLOBAL EQUITY FUNDS
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Henderson Target: 10% 10% 5%
Emerging Markets Growth Range: 8%-12% 8%-12% 4%-6%
Fund
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Henderson Global Target: 25% 17% 8%
Smaller Companies Fund Range: 21%-29% 14%-20% 6%-10%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Henderson Global Target: 5%
Growth Opportunities Fund Range: 4%-6%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman Henderson Target: 5% 10% 10% 12%
International Fund Range: 4%-6% 8%-12% 8%-12% 10%-14%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
FIXED-INCOME FUNDS
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman High-Yield Bond Target: 15% 30%
Series Range: 12%-18% 25%-35%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Seligman U.S. Government Target: 5% 10%
Securities Series/Seligman Range: 4%-6% 8%-12%
Cash Management Fund
</TABLE>
3
<PAGE>
Principal Risks of an Investment in the Funds
An investment in any of the Funds, like an investment in any mutual fund,
involves risks. An investment in a "fund of funds" involves other risks as
well. The principal risks of an investment in the Funds follow, and you should
consider them carefully before investing in any of the Funds.
The value of each Fund will fluctuate, and you could lose money.
Because the assets of each Fund will be invested primarily in the Underlying
Funds, each Fund's investment performance is directly related to the investment
performance of the Underlying Funds in which it invests. The ability of a Fund
to realize its investment objective(s) will depend, in part, on the extent to
which the Underlying Funds realize their investment objectives.
Each Fund is exposed to the same risks as the Underlying Funds in direct
proportion to the allocation of its assets among the Underlying Funds. These
risks, summarized below, are described more fully under "Principal Risks of the
Underlying Funds":
. Small-Cap Companies -- Investments in small-capitalization companies are
subject to additional risks. For example, small-capitalization companies
typically have less financial and managerial resources and more limited
product lines than large-capitalization companies.
. Foreign Investments -- Investments in foreign issuers expose investors to
currency fluctuations, foreign taxation, settlement and custody risk, and
changes in political conditions. Foreign investments may also include
securities of issuers located in emerging countries. These countries may
have relatively unstable governments and less diversified industrial bases.
. ""Junk Bonds" -- Each Fund may also invest in Underlying Funds that in turn
invest in non-investment-grade, fixed-income securities, which are subject
to a greater risk of loss than higher-rated, fixed-income securities and
are considered to be predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal.
. Sector Volatility and Concentrated Portfolios -- Certain Underlying Funds
are subject to sector volatility or hold a relatively small number of
securities in their portfolios, thus creating additional risks.
. Additional Risks -- In addition, certain Underlying Funds may purchase
derivative securities; enter into forward currency transactions; lend their
portfolio securities; enter into options transactions; purchase zero-coupon
bonds and payment-in-kind bonds; purchase restricted and illiquid
securities; purchase securities on a when-issued basis; enter into
repurchase agreements; borrow money; and engage in various other investment
practices that involve substantial risk of loss.
In addition to the Fund's operating expenses, you will indirectly bear a
portion of the operating expenses of the Underlying Funds. Thus, the expenses
you bear as an investor in a Fund will be higher than if you invested directly
in the Underlying Funds.
4
<PAGE>
Past Performance of the Funds
Each Fund offers four classes of shares: Class A shares, Class B shares, Class
C shares and Class D shares. Each Fund's classes of shares are new, so
performance information is not available.
Fees and Expenses of the Funds
The tables below summarize the fees and expenses that you may pay as a
shareholder of each Fund. Shareholder fees are charged directly to you. Annual
fund operating expenses are deducted from a Fund's assets and are therefore
paid indirectly by you and other investors of the Fund.
Shareholder Fees for Each Fund:
<TABLE>
<CAPTION>
Shareholder Fees Class A Class B Class C Class D
- ---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) on
Purchases
(as a % of offering price).......... 4.75%(/1/)(/2/) None 1% None
Maximum Contingent Deferred Sales
Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price
or current net asset value,
whichever is less).................. None(/1/) 5% 1% 1%
</TABLE>
(/1/)If you buy Class A shares for $1,000,000 or more you will not pay an
initial sales charge, but your shares will be subject to a 1% CDSC if sold
within 18 months.
(/2/)Eligible employee benefit plans which have at least $500,000 invested in
the Seligman Group of mutual funds or 50 eligible employees may purchase
Class A shares at net asset value.
Time Horizon 30 Fund Annual Operating Expenses for Fiscal Year 2000:
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Fees and Expenses Class A Class B Class C Class D
- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Management fees................................ 0.10% 0.10% 0.10% 0.10%
Distribution and/or service (12b-1) fees(/1/).. 0.00 0.75 0.75 0.75
Other expenses(/2/)............................ 0.73 0.73 0.73 0.73
----- ----- ----- -----
Total gross operating expenses(/3/)............ 0.83 1.58 1.58 1.58
Less: Fee waiver and/or expense
reimbursement(/4/)........................... (0.33) (0.33) (0.33) (0.33)
----- ----- ----- -----
Total net operating expenses (after fee waiver
and/or reimbursement)......................... 0.50% 1.25% 1.25% 1.25%
===== ===== ===== =====
</TABLE>
5
<PAGE>
Time Horizon 20 Fund Annual Operating Expenses for Fiscal Year 2000:
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Fees and Expenses Class A Class B Class C Class D
- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Management fees................................ 0.10% 0.10% 0.10% 0.10%
Distribution and/or service (12b-1) fees(/1/).. 0.00 0.75 0.75 0.75
Other expenses(/2/)............................ 0.73 0.73 0.73 0.73
----- ----- ----- -----
Total gross operating expenses(/3/)............ 0.83 1.58 1.58 1.58
Less: Fee waiver and/or expense
reimbursement(/4/)........................... (0.33) (0.33) (0.33) (0.33)
----- ----- ----- -----
Total net operating expenses (after fee waiver
and/or reimbursement)......................... 0.50% 1.25% 1.25% 1.25%
===== ===== ===== =====
</TABLE>
Time Horizon 10 Fund Annual Operating Expenses for Fiscal Year 2000:
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Fees and Expenses Class A Class B Class C Class D
- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Management fees................................ 0.10% 0.10% 0.10% 0.10%
Distribution and/or service (12b-1) fees(/1/).. 0.00 0.75 0.75 0.75
Other expenses(/2/)............................ 0.73 0.73 0.73 0.73
----- ----- ----- -----
Total gross operating expenses(/3/)............ 0.83 1.58 1.58 1.58
Less: Fee waiver and/or expense
reimbursement(/4/)........................... (0.33) (0.33) (0.33) (0.33)
----- ----- ----- -----
Total net operating expenses (after fee waiver
and/or reimbursement)......................... 0.50% 1.25% 1.25% 1.25%
===== ===== ===== =====
</TABLE>
Harvester Fund Annual Operating Expenses for Fiscal Year 2000:
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Fees and Expenses Class A Class B Class C Class D
- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Management fees................................ 0.10% 0.10% 0.10% 0.10%
Distribution and/or service (12b-1) fees(/1/).. 0.00 0.75 0.75 0.75
Other expenses(/2/)............................ 0.73 0.73 0.73 0.73
----- ----- ----- -----
Total gross operating expenses(/3/)............ 0.83 1.58 1.58 1.58
Less: Fee waiver and/or expense
reimbursement(/4/)........................... (0.33) (0.33) (0.33) (0.33)
----- ----- ----- -----
Total net operating expenses (after fee waiver
and/or reimbursement)......................... 0.50% 1.25% 1.25% 1.25%
===== ===== ===== =====
</TABLE>
(/1/)Under each Fund's 12b-1 Plan, each Fund is authorized to pay 12b-1 fees
equal to 0.25% for Class A shares and 1.00% for Class B shares, Class C
shares and Class D shares. In addition, the Class A shares of the
Underlying Funds in which each Fund will invest impose a 12b-1 fee of
0.25%. To avoid any duplication of the 12b-1 fees, the 12b-1 fees payable
by each class of shares of a Fund will be reduced by an amount equal to
the 12b-1 fees paid by the Class A shares of the Underlying Funds. The net
amount is shown in the table above.
(/2/)Based on estimated expenses of the Fund for the current fiscal year.
Certain expenses, including custodian expenses, registrar and transfer
agent expenses, Directors' fees, legal and audit fees, and the cost of
shareholder reports and registration fees will be incurred at both the
Fund level and by the Underlying Funds. An investor can avoid these
expenses at the Fund level by investing directly in the Underlying Funds.
(/3/)The Fund expenses shown in this table do not include the pro rata expenses
of the Underlying Funds, which are shown in the next two tables. The Fund
expenses shown in this table would be higher if they were included.
(/4/)The Manager has contractually undertaken to waive its management fee
and/or to reimburse each Fund's expenses to the extent that the sum of the
"management fee" plus "other expenses" (but not any 12b-1 fees) exceeds
0.50% per annum of average daily net assets. This undertaking will remain
in effect at least until December 31, 2002.
6
<PAGE>
Shareholders in a Fund will bear indirectly the proportionate expenses of the
Underlying Funds in which the Fund invests, including a 12b-1 fee of up to
0.25% incurred as a result of the Fund's investment in Class A shares of the
Underlying Fund. The following table provides the expense ratios for each
Underlying Fund (based on the expense ratios reflected in each Underlying
Fund's current annual report), including the 12b-1 fee:
<TABLE>
<CAPTION>
Total Operating
Underlying Fund Class A Shares Expense Ratios
- ------------------------------ ---------------
<S> <C>
Seligman Capital Fund........................................... 0.99%
Seligman Cash Management Fund................................... 0.71%
Seligman Common Stock Fund...................................... 1.11%
Seligman Communications and Information Fund.................... 1.44%
Seligman Frontier Fund.......................................... 1.63%
Seligman Growth Fund............................................ 1.14%
Seligman Henderson International Fund........................... 1.88%
Seligman Henderson Emerging Markets Growth Fund................. 2.57%
Seligman Henderson Global Growth Opportunities Fund............. 1.68%
Seligman Henderson Global Smaller Companies Fund................ 1.72%
Seligman High-Yield Bond Series................................. 1.10%
Seligman Large-Cap Value Fund................................... 1.50%
Seligman Small-Cap Value Fund................................... 1.69%
Seligman U.S. Government Securities Series...................... 1.05%
</TABLE>
After combining the total net operating expenses of the Fund with those of the
Underlying Funds, the estimated weighted average expense ratios of each class
of shares of each Fund (calculated as a percentage of average net assets) are
as follows:
<TABLE>
<CAPTION>
Class A Class B Class C Class D
------- ------- ------- -------
<S> <C> <C> <C> <C>
Seligman Time Horizon 30 Fund................... 2.08% 2.83% 2.83% 2.83%
Seligman Time Horizon 20 Fund................... 2.07% 2.82% 2.82% 2.82%
Seligman Time Horizon 10 Fund................... 1.90% 2.65% 2.65% 2.65%
Seligman Harvester Fund......................... 1.75% 2.50% 2.50% 2.50%
</TABLE>
7
<PAGE>
Examples of Each Fund's Expenses
These examples are intended to help you compare the expenses of investing in
each Fund with the expenses of investing in other mutual funds. They assume
that (1) you invest $10,000 in each Fund for each period and then sell all of
your shares at the end of the period; (2) your investment in each Fund has a 5%
return each year; and (3) each Fund's operating expenses, which include the
indirect expenses of the Underlying Funds, remain the same. Although your actual
expenses may be higher or lower, based on these assumptions your expenses would
be:
<TABLE>
<CAPTION>
Fund and Class 1 Year 3 Years
- -------------- ------ -------
<S> <C> <C>
Time Horizon 30 Fund
Class A........................................................ $676 $1,096
Class B........................................................ 786 1,177
Class B, if you do not sell your shares at the end of the
period........................................................ 286 877
Class C........................................................ 483 968
Class C, if you do not sell your shares at the end of the
period........................................................ 383 968
Class D........................................................ 386 877
Class D, if you do not sell your shares at the end of the
period........................................................ 286 877
Time Horizon 20 Fund
Class A........................................................ 675 1,093
Class B........................................................ 785 1,174
Class B, if you do not sell your shares at the end of the
period........................................................ 285 874
Class C........................................................ 482 965
Class C, if you do not sell your shares at the end of the
period........................................................ 382 965
Class D........................................................ 385 874
Class D, if you do not sell your shares at the end of the
period........................................................ 285 874
</TABLE>
<TABLE>
<CAPTION>
Fund and Class 1 Year 3 Years
- -------------- ------ -------
<S> <C> <C>
Time Horizon 10 Fund
Class A........................................................ 659 1,044
Class B........................................................ 768 1,123
Class B, if you do not sell your shares at the end of the
period........................................................ 268 823
Class C........................................................ 465 915
Class C, if you do not sell your shares at the end of the
period........................................................ 365 915
Class D........................................................ 368 823
Class D, if you do not sell your shares at the end of the
period........................................................ 268 823
Harvester Fund
Class A........................................................ 644 1,000
Class B........................................................ 753 1,079
Class B, if you do not sell your shares at the end of the
period........................................................ 253 779
Class C........................................................ 451 871
Class C, if you do not sell your shares at the end of the
period........................................................ 351 871
Class D........................................................ 353 779
Class D, if you do not sell your shares at the end of the
period........................................................ 253 779
</TABLE>
8
<PAGE>
Questions and Answers About the Funds
Each Fund invests a percentage of its assets in the Underlying Funds based on
two asset allocation strategies developed by the Manager, Seligman Time Horizon
Matrix and Seligman Harvester. The following series of questions and answers is
designed to explain these strategies, as well as how an investor may invest in
the Funds to take advantage of them.
Q: What is Seligman Time Horizon Matrix?
A: Seligman Time Horizon Matrix is an asset allocation strategy designed for
investors seeking to manage market risk and build wealth over time. It is
based on historical performance of various asset classes from 1950 through
1998 and is updated annually. Through its systematic investment approach
that seeks to meet financial goals, Seligman Time Horizon Matrix seeks to
manage the impact of market fluctuations. A basic premise of Seligman Time
Horizon Matrix is to stay invested throughout market fluctuations rather
than trying to time the market and avoid volatility by jumping in and out of
various investments. As investment history has shown, it has been nearly
impossible to time the markets successfully.
Q: What is Seligman Harvester?
A: Seligman Harvester (which is incorporated in Seligman Time Horizon Matrix)
is an income-withdrawal and asset allocation strategy designed for investors
who seek current income as well as growth of income and capital. This
strategy is for investors who need to withdraw income from accumulated
assets, and who, therefore, may be more sensitive to the volatility of their
investments. For example, if you withdraw a fixed amount of an investment in
a down market you deplete more capital than you would in an up market
because you have to sell more of your investment to produce the desired
withdrawal. Further, when the market rebounds, fewer assets will be left to
take part in the upswing. The Seligman Harvester strategy seeks to adjust
your withdrawals and asset allocation to reduce such risks. The purchase of
Seligman Harvester Fund, however, will not automatically implement the
withdrawal component of the strategy, which is based on an analysis that
includes an individual investor's spending needs, sources of income and tax
considerations. The Manager recommends that an investor interested in
developing a Seligman Harvester withdrawal strategy consult a financial
advisor.
Q: How was Seligman Time Horizon Matrix developed?
A: Seligman Time Horizon Matrix is the result of extensive proprietary research
by the Manager that examines the performance of different asset classes over
various time periods. Although past performance of asset classes is not a
guarantee of future results, the Manager believes that an analysis of
historical performance can provide guidelines that help make prudent long-
term investment decisions. The Manager's research shows that, historically,
as time frames lengthen, market volatility and the relative risk among
various asset classes have changed.
For example, small-company stocks have been relatively volatile when
compared with Treasury bills over a number of different one-year holding
periods. However, when holding periods have been extended, the relative risk
between small-company stocks and Treasury bills has been more closely
aligned. In fact, this research demonstrates that in any 20-year holding
period from 1950 to 1998 the worst performance of small-company stocks
surpassed the best performance of Treasury bills. Seligman Time Horizon
Matrix is the result of similar comparisons among all the asset classes
described in Appendix A over one-, five-, 10- and 20-year holding periods
since 1950. Of course, past performance is not a guarantee of future
results. Appendix B includes a chart that illustrates how the relative risk
of the major asset classes historically has changed over different holding
periods since 1950.
Q: How was Seligman Harvester developed?
A: Seligman Harvester also was developed through proprietary research conducted
by the Manager. Using a sophisticated statistical technique to analyze asset
class returns since 1950, this research tested different combinations of
withdrawal strategies and asset allocations to assess the probability of
conserving
9
<PAGE>
capital while realizing current income. Like Seligman Time Horizon Matrix,
Seligman Harvester is updated annually. One of the key design parameters for
a Harvester portfolio was to develop an allocation that would have had no
negative investment results over any five-year period since 1950. The
Manager's research demonstrated that an asset allocation of 60% equity, 30%
corporate bonds and 10% cash or US government bonds was particularly
effective in conserving capital over long time periods when used with certain
withdrawal strategies. Under normal market conditions, the Seligman Harvester
Fund intends to maintain such an asset allocation (within the ranges
specified above).
Q: How does Seligman Time Horizon Matrix work?
A: Seligman Time Horizon Matrix provides specific annual portfolio
recommendations for investors seeking to achieve investment goals over time
frames ranging from 30 years to one year. Each annual portfolio represents
investments in a different combination of certain Seligman mutual funds,
which the Manager believes will correlate with the historical performance of
the asset classes studied in its research. Annual research updates provide
additional data that the Manager factors into its analysis, which is aimed
solely at determining a prudent asset allocation, given the latest
historical performance, for seeking a specific investment goal over a
specific time frame. Based on an analysis of this research, the Manager may
make changes to the specific portfolio recommendations of Seligman Time
Horizon Matrix and also to the allocation targets and ranges for each Fund's
investments in the Underlying Funds. Because this continual analysis creates
an ever-increasing collection of historical data, the Manager expects annual
adjustments to the portfolio recommendations to be modest. However, the
possibility does exist that extreme market volatility in any single year
could significantly change the implications of long-term historical
performance patterns in one or more asset classes. This could cause the
Manager, in its judgment, to significantly revise a Fund's allocations among
the Underlying Funds.
Seligman Harvester Fund, which is intended for investors who need to
withdraw money from accumulated assets, serves as the end point of the
Seligman Time Horizon Matrix. As a result, the Matrix recommends 31 distinct
portfolios -- one for each year starting at Year 30 plus the Harvester
portfolio. For a complete description of these annual portfolio
recommendations, please see Appendix C.
Seligman Time Horizon Matrix seeks to reduce an investor's portfolio
volatility on an annual basis through "migration." Migration involves
reallocating portfolio investments each year as you get closer to your
investment goal from a more volatile to less volatile portfolio. For
example, if your investment goal is 20 years away, you could allocate your
investment among the nine individual Seligman mutual funds in the Seligman
Time Horizon Matrix for the recommended 20-year portfolio. After one year,
the Matrix suggests that you "migrate" the portfolio by shifting the
relative weighting of each Seligman mutual fund to the recommended
allocation of the Seligman Time Horizon Matrix 19-year portfolio. This
process would continue each year in accordance with the recommendations in
Seligman Time Horizon Matrix, until your portfolio matches the asset
allocation recommended by Seligman Harvester. Using Seligman Time Horizon
Matrix, an investor would not buy and hold the same portfolio from year to
year. As discussed below, the Funds offer a simplified way to implement this
strategy.
Q: How does each Fund benefit from the Manager's research?
A: Each Fund seeks to replicate a specific time horizon represented in Seligman
Time Horizon Matrix by investing a specified percentage of its assets in
various Underlying Funds.
. Seligman Time Horizon 30 Fund: Under normal market conditions, this Fund
invests in Underlying Funds to produce a portfolio that invests primarily
in equity securities issued by both US and international companies. The
100% weighting to equities is based on the Manager's research findings
that show equities have been essential to overcome the effect of inflation
and to benefit from compounding returns over long time frames. The
specific equity allocations are weighted toward small- and medium-company
stocks, as well as emerging markets, because these asset classes have
historically provided higher returns
10
<PAGE>
over longer time frames than large-company stocks. Emerging markets
securities are recommended to take advantage of the Manager's belief that
the developing world will experience increasing economic freedom and price
stability, with their associated economic benefits.
. Seligman Time Horizon 20 Fund: Like the Seligman Time Horizon 30 Fund,
under normal market conditions this Fund invests in Underlying Funds to
produce a portfolio that invests primarily in US and international
equities. However, the allocations are more evenly weighted among small-,
medium- and large-company stocks, as well as emerging markets, to reflect
the need for somewhat less volatility as the long-term investment goal
draws relatively closer. The shift in favor of large-company stocks
includes established international companies that operate in developed
economies. An investment in the equity securities of such companies offers
the opportunity for growth of capital and diversification of risk without
the volatility experienced by smaller companies in less-developed regions.
Although international equity markets have lagged the US market in recent
years, the Manager believes that long-term economic indicators are
pointing toward lower tax rates, stable prices and free trade -- signs
that international equities have the potential to provide competitive
returns as well as diversification.
. Seligman Time Horizon 10 Fund: Under normal market conditions, this Fund
invests 80% of its assets in Underlying Funds that invest primarily in
domestic and international equities and 20% of its assets in Underlying
Funds that invest primarily in fixed-income securities. The change in
allocations results from reducing the exposure to small-company and
emerging market securities found in Seligman Time Horizon 20 Fund and
introducing high-yield bonds as well as US Government securities and cash
or cash equivalents. The Manager's research demonstrates that the
reduction in small-company and emerging markets securities has reduced
volatility over 10-year holding periods. Portfolio stability is sought by
adding the fixed-income and cash allocations.
. Seligman Harvester Fund: Under normal market conditions, this Fund invests
60% of its assets in Underlying Funds that invest primarily in domestic
and international equities, 30% of its assets in Underlying Funds that
invest primarily in fixed income and 10% of its assets in Underlying Funds
that invest primarily in cash, cash equivalents or US Government
securities. Key differences between Seligman Harvester Fund and Seligman
Time Horizon 10 Fund include the elimination of US and international
small-company stocks and emerging markets securities. This change reflects
the Manager's opinion that these asset classes are too volatile and
speculative for investors who wish to conserve their capital and generate
an income stream. The allocation to high-yield bonds is increased because,
in the Manager's opinion, a prudently managed high-yield bond fund -- not
individual high-yield bonds -- can provide relative diversification,
stability and protection against significant loss of principal due to a
single default. A 10% allocation to Underlying Funds that invest in cash,
cash equivalents or US Government securities is intended to help protect
against sudden market downturns that could erode capital, especially if
they occur when income is withdrawn. Investments such as money market
funds or Treasury bills also provide for more certainty of principal.
Q: Can I take full advantage of Seligman Time Horizon Matrix by simply
investing in the Funds?
A: Yes. As noted, each Fund within the Series is designed to replicate a
portfolio recommended by Seligman Time Horizon Matrix at a specific point
in time. As a result, you may implement a Seligman Time Horizon Matrix
asset allocation strategy by investing directly in the Funds rather than
investing separately in each of the Underlying Funds. However, the Funds
will not automatically "migrate" their investments under the process
described above. Nevertheless, the Series is flexibly designed so that each
Fund may be combined with another Fund to take full advantage of Seligman
Time Horizon Matrix. You can begin at any point in Seligman Time Horizon
Matrix by buying a combination of two Funds. For example, if your
investment goal is 15 years away, you could invest 50% of your total
investment in the Seligman Time Horizon 20 Fund and 50% of your investment
in the Seligman Time Horizon 10 Fund (subject to the required minimum
investment in each Fund).
11
<PAGE>
Similarly, migration can be accomplished by exchanging between each Fund
within the Series or making additional investments in one or more of the
Funds (subject to the required minimum investment in each Fund). In the year
following your initial investment described in the previous example, you
could, through an exchange, allocate 40% of your investment to the Seligman
Time Horizon 20 Fund and 60% to the Seligman Time Horizon 10 Fund. After
following this process for five years, 100% of your assets would be invested
in the Seligman Time Horizon 10 Fund. You could use a similar process to
migrate from each of the other Funds (or combinations of the Funds) until
you reach the Seligman Harvester Fund. You should be aware, however, that
following a migration strategy by making exchanges between or among the
Funds could result in short-term or long-term capital gains for federal
income tax purposes that may not result if you did not follow this strategy.
Q: Can I hold each Fund within the Series for as long as I want?
A: Yes. You may choose not to migrate and simply hold a Fund for an extended
period of time. To illustrate, an investor with an investment goal 20 years
away may choose to invest in the Time Horizon 20 Fund and hold the Fund for
20 years. A "buy and hold" use of the Funds would provide an investor with
a simple way to own one or more strategically diversified portfolios
designed to achieve specific investment objectives. For example, Seligman
Time Horizon 30 Fund and Seligman Time Horizon 20 Fund each can serve as a
diversified growth portfolio for an investor seeking long-term capital
appreciation. Similarly, Seligman Time Horizon 10 Fund can be used by an
investor seeking capital appreciation with less volatility. Seligman
Harvester Fund can be used by an investor seeking a growth and income
portfolio. However, based on the Manager's research, buying and holding the
Time Horizon Funds would subject your investment to greater portfolio
volatility on an annual basis than if a migration strategy were followed.
For example, the volatility of the asset allocation in the Time Horizon 20
Fund historically has been far greater than the asset allocation in the
Harvester Fund, especially over holding periods of five years or less. Such
a potential exposure to increased portfolio volatility may be particularly
detrimental for an investor who is close to, or ready to realize, an
investment goal.
Q: Why shouldn't I just invest in the Underlying Funds directly?
A: Investing in the Time Horizon or Harvester Funds offers you the choice of
turnkey convenience and simplicity. For example, your statements will
detail only one or two Funds rather than nine or more individual Underlying
Funds. Moreover, by using cash flows and periodic adjustments, the Manager
will maintain an investment in each of the Underlying Funds that is within
the targeted allocations. By contrast, if you choose to invest in the
Underlying Funds and do not elect to have the Manager automatically
rebalance or migrate your investment, you would have to make these
adjustments yourself or risk having your actual allocations among the
Underlying Funds deviate from the recommended allocation due to the
different investment results over time of the Underlying Funds. You should
note, however, that certain retirement programs sponsored by the Manager
offer automatic migration for investors who directly purchase shares of the
Underlying Funds.
12
<PAGE>
Additional Information About the Funds' Investment Strategies and Risks
As mentioned above, each Fund pursues its investment objective by investing a
certain percentage of its assets in the Underlying Funds. Each Fund may also
invest a portion of its net assets in US Government securities or high-quality,
short-term instruments. However, in order to maintain liquidity, to meet
shareholder redemptions, or to respond to adverse market, economic, political
or other conditions, each Fund may invest up to 100% of its assets in cash or
cash equivalents. When a Fund's assets are invested in such investments, the
Fund may not be achieving its investment objective(s).
A Fund may purchase or sell shares of the Underlying Funds, US Government
securities and high-quality, short-term instruments to: (a) accommodate
purchases and sales of its shares; (b) adjust the percentages of its assets
invested in each of the Underlying Funds, US Government securities and high-
quality, short-term instruments in response to economic or market conditions
and changes in Seligman Time Horizon Matrix; and (c) modify the allocation of
its assets among the Underlying Funds, US Government securities and high-
quality, short-term instruments to the asset allocation targets specified
above.
As mentioned above, under normal conditions, the Manager intends periodically
to reallocate its investments in the Underlying Funds if the Fund's actual
allocation is outside its current asset allocation ranges on the reallocation
date. This process may generate net capital gains (including short-term capital
gains that are generally taxed to investors at ordinary income tax rates) to
investors in the Funds. The Manager will seek to minimize the realization of
net capital gains by allocating both positive and negative cash flows (realized
from purchases and sales of Fund shares) in a manner that continuously moves
the actual positions in the Underlying Funds toward the asset allocation ranges
and targets described above. However, the reallocation process may generate net
capital gains for investors that are higher than the net capital gains
ordinarily incurred by an investor through an asset allocation strategy that
has broader investment ranges or an asset allocation strategy designed by the
investor.
The Funds will indirectly bear the expenses associated with portfolio turnover
of the Underlying Funds, a number of which have fairly high portfolio turnover
rates (i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestments in other securities. Investors in the Funds may
also bear expenses directly or indirectly through sales of securities held by
the Funds and the Underlying Funds that result in realization of ordinary
income or taxable gains (including short-term capital gains, which are
generally taxed to shareholders at ordinary income tax rates).
Except for its fundamental policy, each Fund may change its principal
strategies if the Series' Board of Directors believes doing so is consistent
with that Fund's objective(s). In addition, the Underlying Funds, US Government
securities and short-term instruments in which each Fund may invest, the
equity/fixed-income allocations and ranges, and the investments in each
Underlying Fund may be changed from time to time without shareholder approval.
However, each Fund's objective(s) and its fundamental policy may be changed
only with shareholder approval.
Each Fund is subject to the risk that the asset allocation strategy used by the
Manager may fail to produce the intended results. The historical data on which
Seligman Time Horizon Matrix and Seligman Harvester are based involve
performance of various asset classes. (See Appendix A.) Past performance,
however, is not a guarantee of future performance. Moreover, the investments of
the Underlying Funds may differ significantly from the securities that comprise
those asset classes, and there is a risk that the performance of the Underlying
Funds will not be the same as the performance of those asset classes.
Additionally, the allocation of each Fund's assets among the Underlying Funds
is based on portfolios recommended by Seligman Time Horizon Matrix and Seligman
Harvester at a specific point in time. The Funds will not migrate their
investments among the Underlying Funds in accordance with Seligman Time Horizon
Matrix. As a result, an investment in one or more of the Funds may not produce
the same results as an investment directly in the Underlying Funds according to
Seligman Time Horizon Matrix and the migration process described above. An
attempt by an investor to replicate Seligman Time Horizon Matrix may be
unsuccessful and may result in
13
<PAGE>
expenses and taxes greater than other types of investments, including
investments in other mutual funds.
A Fund may not be able to pay redemption proceeds within the period stated in
the Prospectus because of unusual market conditions or an unusually high volume
of redemption requests.
There is no guarantee that investors will realize their investment goals by
investing in one or more of the Funds. Investors should carefully consider the
risks and tax consequences involved with an investment in one or more of the
Funds.
A more complete description of the risks associated with the investment
practices of the Underlying Funds is provided under "Principal Risks of the
Underlying Funds" in this Prospectus, "Investment Strategies and Risks" in the
Statement of Additional Information (SAI) to this Prospectus and "Principal
Risks" in each Underlying Fund's Prospectus. The SAI and the Prospectuses for
the Underlying Funds are incorporated into this Prospectus by reference and are
available free of charge by telephoning 1-800-221-2450.
For more information about the investment strategies of the Funds, Seligman
Time Horizon Matrix or Seligman Harvester, please contact your financial
advisor.
14
<PAGE>
Management of the Funds
The Board of Directors of the Series provides broad supervision over the
affairs of each Fund.
J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New York, New York 10017,
is the manager of each Fund. The Manager is responsible for each Fund's
investments and administers each Fund's business and other affairs.
Established in 1864, the Manager currently serves as manager to 20 US
registered investment companies, which offer more than 50 investment portfolios
with approximately $25.0 billion in assets as of November 30, 1999. Seligman
also provides investment management or advice to institutional or other
accounts having an aggregate value at November 30, 1999, of approximately
$10.6 billion.
In managing the Funds, the Manager will have the authority to select and
substitute Underlying Funds, subject to each Fund's investment objectives and
policies. This will subject the Manager to conflicts of interest in allocating
each Fund's assets among the various Underlying Funds because the fees payable
to the Manager and/or its affiliates by some Underlying Funds are higher than
those payable by other Underlying Funds and because the Manager and its
affiliates are also responsible for managing, and receiving fees from, the
Underlying Funds. The Manager is also subject to a conflict because it will not
receive a fee for assets of the Funds invested directly in US Government
securities and short-term instruments.
Each Fund pays the Manager a management fee for its advisory services. This fee
is equal to an annual rate of .10% of each Fund's average daily net assets. In
addition to the management fees assessed by each of the Funds, investors will
bear a pro-rata portion of the management fees charged by the Underlying Funds.
However, no management fees, other than the management fee paid by the Funds,
will be charged on each Fund's investment directly in individual US Government
securities and short-term instruments. This will result in an investor paying
higher overall fees than if the investor purchased the Underlying Funds
directly. For a description of the management fees charged by each of the
Underlying Funds, please see "Management" in each Underlying Fund's Prospectus,
each of which is incorporated in this Prospectus by reference and is available
free of charge by telephoning 1-800-221-2450.
Affiliates of the Manager:
Seligman Advisors, Inc.:
Each Fund's general
distributor; responsible
for accepting orders for
purchases and sales of Fund
shares.
Seligman Services, Inc.:
A limited purpose
broker/dealer; acts as the
broker/dealer of record for
shareholder accounts that
do not have a designated
broker or financial
advisor.
Seligman Data Corp. (SDC):
Each Fund's shareholder
service agent; provides
shareholder account
services to the Fund at
cost.
Each Fund is managed by Charles W. Kadlec. Mr. Kadlec has been a Managing
Director of the Manager since January 1992 and Chief Investment Strategist for
Seligman Advisors since April 1997. Before January 1992, he held the positions
of Senior Portfolio Manager, Director, Equity Research and Industry Strategist
at the Manager, which he joined in December 1985. Mr. Kadlec is the architect
of several investment strategies, chief among them Seligman Time Horizon Matrix
and Seligman Harvester.
15
<PAGE>
The Underlying Funds
Investment Objectives and Principal Strategies of the Underlying Funds
Each Fund invests a substantial portion of its assets in the Underlying Funds.
Accordingly, each Fund's performance depends upon a favorable allocation among
the Underlying Funds as well as the ability of the Underlying Funds to meet
their objective(s). There can be no assurance that the investment objective(s)
of any Underlying Fund will be achieved. Shares of the Underlying Funds are not
offered by this Prospectus.
Each Underlying Fund has its own investment objective(s) and principal
strategies. In addition, each Underlying 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 a Fund from achieving its
objective(s).
Except for each Underlying Fund's fundamental policies, each Underlying Fund
may change its principal strategies if that Underlying Fund's Board of
Directors or Trustees believes doing so is consistent with the Underlying
Fund's objective(s). Each Underlying Fund's investment objective(s) and its
fundamental policies may be changed only with shareholder approval.
Each Underlying Fund may actively and frequently trade securities in its
portfolio to carry out its principal strategies. A high portfolio turnover rate
increases transaction costs, which may increase each Underlying Fund's expenses
and, therefore, each Fund's expenses. There may also be adverse tax
consequences for investors in each Underlying Fund and, therefore, for
investors in each Fund, due to an increase in net short-term capital gains.
The table below summarizes the investment objective(s) and primary investments
of the Underlying Funds. For a description of the principal strategies of the
Underlying Funds, please see "Investment Strategies and Risks" in the SAI to
this Prospectus and "Investment Objectives/Principal Strategies" in each
Underlying Fund's Prospectus, each of which is incorporated in this Prospectus
by reference and is available free of charge by telephoning 1-800-221-2450.
<TABLE>
<CAPTION>
INVESTMENT
UNDERLYING FUND OBJECTIVE(S) PRIMARY INVESTMENTS
--------------- ------------ -------------------
<S> <C> <C>
Seligman Capital Fund Capital appreciation Common stock of medium-sized US
companies
- ---------------------------------------------------------------------------------------
Seligman Cash Management Preservation of US dollar-denominated high-quality
Fund capital and Money Market instruments, including
maximization of obligations of the US Treasury, its
liquidity and current agencies or instrumentalities,
income obligations of domestic and foreign
banks (such as certificates of deposit
and fixed time deposits), commercial
paper and short-term corporate debt
securities, and repurchase agreements
with respect to these types of
instruments
- ---------------------------------------------------------------------------------------
Seligman Common Stock Produce favorable, Common stock of larger companies
Fund but not the highest, diversified among a number of
current income and industries
long-term growth of
both income and
capital value,
without exposing
capital to undue risk
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT
UNDERLYING FUND OBJECTIVE(S) PRIMARY INVESTMENTS
--------------- ------------ -------------------
<S> <C> <C>
Seligman Communications Capital gain Common stock of companies operating in
and Information Fund the communications, information and
related industries
- ---------------------------------------------------------------------------------------
Seligman Frontier Fund Growth of capital. Common stock of small US companies
Income may be
considered but is
incidental to the
Fund's investment
objective
- ---------------------------------------------------------------------------------------
Seligman Growth Fund Longer-term growth in Common stock of large US companies,
capital value and an selected for their growth prospects
increase in future
income
- ---------------------------------------------------------------------------------------
Seligman Henderson Long-term capital Common stock of companies that conduct
Emerging Markets Growth appreciation their principal business activities in
Fund emerging markets
- ---------------------------------------------------------------------------------------
Seligman Henderson Long-term capital Common stock of non-US and US growth
Global Growth appreciation companies that have the potential to
Opportunities Fund benefit from global economic or social
trends
- ---------------------------------------------------------------------------------------
Seligman Henderson Long-term capital Common stock of smaller US and non-US
Global Smaller Companies appreciation companies
Fund
- ---------------------------------------------------------------------------------------
Seligman Henderson Long-term capital Common stock of medium to large
International Fund appreciation companies in the principal
international markets
- ---------------------------------------------------------------------------------------
Seligman High-Yield Bond Maximum current High-yielding, income-producing
Series income corporate bonds and notes, commonly
known as "junk bonds"
- ---------------------------------------------------------------------------------------
Seligman Large-Cap Value Long-term capital Common stock of "value" companies
Fund appreciation (i.e., those companies believed by the
Manager to be undervalued either
historically, by the market, or by
their peers) with large market
capitalization at the time of purchase
- ---------------------------------------------------------------------------------------
Seligman Small-Cap Value Long-term capital Common stock of "value" companies with
Fund appreciation small market capitalization at the
time of purchase
- ---------------------------------------------------------------------------------------
Seligman U.S. Government High current income Direct obligations of the US Treasury,
Securities Series such as Treasury bills, Treasury notes
and Treasury bonds, and debt
securities issued or guaranteed by the
US Government, its agencies or
instrumentalities which are backed by
the full faith and credit of the US
Government and have maturities greater
than one year at the date of purchase
by the Fund
</TABLE>
17
<PAGE>
Principal Risks of the Underlying Funds
The following summarizes the principal risks associated with investments in the
Underlying Funds. The summary is not intended to be exhaustive.
There can be no assurance that the investment objective(s) of any of the
Underlying Funds will be achieved. Each Underlying Fund's investments (both
equity and fixed-income) may be affected by the broad investment environment in
the US or international securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
You may experience a decline in the value of your investment, and you could
lose money if you sell your shares at a price lower than you paid for them.
An investment in the Underlying Funds (including the Seligman Cash Management
Fund) is not a deposit in a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. The US
Government does not guarantee the market value or the current yield of
government securities. Each Underlying Fund's net asset value, yield (if
applicable) and total return will fluctuate and are not guaranteed by the US
Government. Although the Seligman Cash Management Fund seeks to preserve the
value of an investment at $1.00 per share, it is possible that a Fund will lose
money by investing in this Underlying Fund.
If an Underlying Fund is not mentioned within a risk described below, it does
not mean that the Underlying Fund is not subject to that risk. However, it does
mean that the Underlying Fund's net asset value, yield (if applicable) and
total return are less likely to be affected by such risk. For a more complete
description of such risks, please refer to the SAI to this Prospectus and
"Principal Risks" section in each Underlying Fund's Prospectus, each of which
is incorporated herein by reference and is available free of charge by
telephoning 1-800-221-2450.
Equity-Related Risks
The following risks relate to investments in equity securities, including
common stocks, securities convertible into common stocks, options and warrants.
The Time Horizon 30 Fund and the Time Horizon 20 Fund will invest most or all
of their assets in Underlying Funds investing primarily in equity securities.
The Time Horizon 10 Fund and the Harvester Fund will invest a substantial
portion of their assets in Underlying Funds investing primarily in equity
securities.
Securities of Larger US Companies -- Seligman Common Stock Fund, Seligman
Growth Fund, Seligman Large-Cap Value Fund and Seligman Communications and
Information Fund invest a substantial portion of their assets in the stocks of
large US companies. Stocks of large US companies are experiencing an extended
period of strong performance. However, if investor sentiment changes, the value
of large company stocks may decline. This could adversely affect these
Underlying Funds' performance.
Securities of Smaller Companies -- Seligman Henderson Global Smaller Companies
Fund, Seligman Frontier Fund and Seligman Small-Cap Value Fund invest
substantially in the stocks of smaller companies. Investments in smaller
companies typically involve greater risks than investments in larger companies.
Small companies, as a whole, may have shorter operating histories, less
experienced management and limited product lines, markets, and financial or
managerial resources.
Sector Volatility -- Seligman Common Stock Fund, Seligman Capital Fund,
Seligman Growth Fund, Seligman Small-Cap Value Fund, Seligman Large-Cap Value
Fund and Seligman Frontier Fund may invest more heavily in certain industries
believed to offer good investment opportunities. If any of these industries
fall out of favor, performance may be negatively affected.
Seligman Communications and Information Fund concentrates its investments in
companies in the communications, information and related industries. Therefore,
it may be susceptible to factors affecting these industries and its net assets
may fluctuate more than a fund that invests in a wider range of industries. In
addition, the rapid pace of change within many of these industries tends to
create a more volatile operating environment than in other industries.
Concentrated Portfolios -- The Seligman Small-Cap Value Fund and Seligman
Large-Cap Value Fund hold securities of a small number of issuers.
Consequently, if one or more of the securities held in each of their portfolios
declines in value or underperforms relative to the market, it may have a
greater impact on that Underlying Fund's performance than if the Underlying
Fund held securities of a larger number of issuers. Each of these Underlying
Funds may
18
<PAGE>
experience more volatility, especially over the short-term, than a fund with a
greater number of holdings.
Illiquid Securities and Options -- Each Underlying Fund (other than Seligman
Cash Management Fund and Seligman U.S. Government Securities Series) may invest
in illiquid securities. Each Underlying Fund (other than Seligman Cash
Management Fund and Seligman High-Yield Bond Series) may invest in options.
These investments involve higher risk and subject the Underlying Funds to
higher price volatility.
Foreign Securities -- Each Underlying Fund (other than Seligman U.S. Government
Securities Series) may invest in securities of foreign issuers. These
securities involve risks not associated with US investments, including
settlement risks, currency fluctuation, local withholding and other taxes,
different financial reporting practices and regulatory standards, high costs of
trading, changes in political conditions, expropriation, investment and
repatriation restrictions and settlement and custody risks.
The Seligman Henderson International Fund and Seligman Henderson Global Growth
Opportunities Fund seek to limit the risk of investing in foreign securities by
diversifying each of their respective investments among different regions,
countries and, with respect to Seligman Henderson Global Growth Opportunities
Fund, investment themes, such as the expansion of technology as an increasingly
important influence on society. Diversification reduces the effect events that
any one country will have on each respective Underlying Fund's entire
portfolio. However, a decline in the value of an Underlying Fund's investments
in one country may offset potential gains from investments in another country.
Emerging Markets Securities -- The Seligman Henderson Emerging Markets Growth
Fund invests in securities of issuers located in emerging countries. Emerging
countries may have relatively unstable governments, economies based on less
diversified industrial bases and securities markets that trade a smaller number
of securities. Companies in emerging markets are often smaller, less seasoned
and more recently organized than many US companies.
Fixed-Income-Related Risks
The following risks relate to investments in fixed-income securities, including
bonds, notes and mortgage-backed securities. The Time Horizon 10 Fund and the
Harvester Fund will invest a significant portion of their assets in Underlying
Funds that invest primarily in fixed-income securities.
Interest-Rate Risk -- The Seligman High-Yield Bond Series, Seligman Cash
Management Fund and Seligman U.S. Government Securities Series each invest in
fixed-income securities. Generally, as interest rates rise, the value of these
securities will decline. Conversely, if interest rates decline, the value of
these securities will increase. This effect of interest rates is usually
greater for longer-term securities. Longer-term securities generally tend to
produce higher yields but are subject to greater market fluctuations as a
result of changes in interest rates than fixed-income securities with shorter
maturities.
Additionally, when interest rates are falling, the inflow of new money into
each of these Underlying Funds from their sale of shares will likely be
invested in securities producing lower yields than the balance of these
Underlying Fund's assets, reducing the current yield of each Underlying Fund.
In periods of rising interest rates, the opposite may be true.
The securities in which the Seligman U.S. Government Securities Series invests
are considered among the safest of fixed-income investments. However, their
market values, like those of other debt securities, will fluctuate with
changes, real or anticipated, in the level of interest rates and cause its net
asset value to fluctuate. Additionally, its yield will vary based on the yield
of its portfolio securities.
Illiquid Securities and Options -- Each Underlying Fund (other than Seligman
Cash Management Fund and Seligman U.S. Government Securities Series) may invest
in illiquid securities. Each Underlying Fund (other than Seligman Cash
Management Fund and Seligman High-Yield Bond Series) may invest in options.
These investments involve higher risk and subject the Underlying Funds to
higher price volatility.
High-Yield Bonds ("Junk Bonds") -- The Seligman High-Yield Bond Series
purchases higher-yielding, higher-risk, medium- and lower-quality corporate
bonds and notes that are subject to greater risk of loss of principal and
income than higher-rated bonds and notes and are considered to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. These securities can be and have been subject to higher volatility
in yield and market value than securities of higher quality. The net asset
value, yield and total return of this Underlying Fund will fluctuate with
fluctuations in these individual securities.
19
<PAGE>
An economic downturn could adversely impact issuers' ability to pay interest
and repay principal and could result in issuers defaulting on such payments.
The value of these bonds and notes will be affected by market conditions
relating to changes in prevailing interest rates. However, the value of lower-
rated or unrated corporate bonds and notes is also affected by investors'
perceptions. When economic conditions appear to be deteriorating, lower-rated
or unrated corporate bonds and notes may decline in market value due to
investors' heightened concerns and perceptions over credit quality.
Lower-rated and unrated corporate bonds and notes are traded principally by
dealers in the over-the-counter market. The market for these securities may be
less active and less liquid than for higher-rated securities. Under adverse
market or economic conditions, the secondary market for these bonds and notes
could contract further, causing this Underlying Fund difficulties in valuing
and selling its securities.
Mortgage-Backed Securities -- Seligman U.S. Government Securities Series may
invest in mortgage-backed securities. These securities may benefit less than
other fixed-income securities from declining interest rates because of the risk
of prepayment. Mortgage prepayments generally increase during a period of
declining interest rates. Prepayments increase the cash amounts available to
this Underlying Fund for investment and these amounts would have to be
reinvested at lower interest rates. In addition, prepayments on underlying
mortgages result in a loss of anticipated interest, and, therefore, the actual
yield to this Underlying Fund may be different from the quoted yield on the
securities. As a result, when interest rates are declining, mortgage-backed
securities may not increase as much as other fixed-income securities of
comparable maturities, although they may have a similar risk of decline when
interest rates rise.
Foreign Securities -- Each Underlying Fund (other than Seligman U.S. Government
Securities Series) may invest in securities of foreign issuers. These
securities involve risks not associated with US investments, including
settlement risks, currency fluctuation, local withholding and other taxes,
different financial reporting practices and regulatory standards, high costs of
trading, changes in political conditions, expropriation, investment and
repatriation restrictions and settlement and custody risks.
Repurchase Agreements -- The Underlying Funds may invest in repurchase
agreements. Repurchase agreements could involve certain risks in the event of
default by the seller, including possible delays and expenses in liquidating
the securities underlying the agreement, decline in the value of the underlying
securities and loss of interest.
"Zero-Coupon" and "Pay-in-Kind" Securities -- The Seligman High-Yield Bond
Series may purchase "zero-coupon" and "pay-in-kind" securities. These
securities may be subject to greater fluctuations in value because they tend to
be more speculative than income-bearing securities. Fluctuations in the market
prices of these securities will result in corresponding fluctuations and
volatility in the net asset value of the shares of this Underlying Fund.
Additionally, because they do not pay current income, they will detract from
this Underlying Fund's objective of producing maximum current income.
When-issued or Forward Commitment Securities -- Seligman U.S. Government
Securities Series may invest in securities on a when-issued or forward
commitment basis, in which case delivery and payment take place after the date
of the commitment to purchase the securities. Because the price to be paid and
the interest rate that will be received on the securities are each fixed at the
time this Underlying Fund enters into the commitment, there is a risk that
yields available in the market when delivery takes place may be higher than the
yields obtained on the securities. This would tend to reduce the value of these
securities. In addition, the market value of these securities may fluctuate
between the time this Underlying Fund commits to purchase the securities and
the time of delivery of the securities.
20
<PAGE>
Year 2000
References to the Funds in this section include the Underlying Funds in which
they each invest.
With the turn of the millennium, investment companies, financial and business
organizations and individuals could be adversely affected if the computer
systems they rely on do not properly process and calculate date-related
information and data on and after January 1, 2000. Like other investment
companies, the Funds rely upon service providers and their computer systems for
their day-to-day operations. Many of the Funds' service providers in turn
depend upon computer systems of their vendors. The year 2000 project team
established by the Manager and SDC has spent considerable time and resources in
assessing the state of readiness of the Manager, SDC and the Funds' other
service providers and vendors. The team is comprised of several information
technology and business professionals as well as outside consultants. The
project manager of the team reports directly to the administrative committee of
the Manager. The project manager and other members of the team also report to
the Board of Directors of the Series and its audit committee.
The team has identified the service providers and vendors who furnish critical
services or software systems to the Funds, including securities firms that
execute portfolio transactions for the Funds and firms responsible for
shareholder account recordkeeping. The team has worked with these critical
service providers and vendors to evaluate the impact year 2000 issues may have
on their ability to provide uninterrupted services to the Funds. The project
team continues to assess the year 2000 compliance of the systems on which the
Manager and the Funds rely. The team is ready to activate its contingency
plans -- recovery efforts if the year 2000 issues adversely affect the Funds.
The team has confirmed that it has completed all significant components of its
year 2000 plans, including appropriate testing of critical systems and receipt
of satisfactory assurances from critical service providers and vendors
regarding their year 2000 compliance. The Funds believe that the critical
systems on which they rely will function properly during and after the year
2000, but this is not guaranteed. If these systems do not function properly, or
the Funds' critical service providers have not been successful in implementing
their year 2000 plans, the Funds' operations may be adversely affected,
including pricing and securities trading and settlement, and the provision of
shareholder services.
In addition, the Underlying Funds and the Funds may hold securities of issuers
whose underlying business leaves them susceptible to year 2000 issues. The
Underlying Funds and the Funds may also hold securities issued by governmental
or quasi-governmental issuers, which, like other organizations, remain
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 Funds or the Underlying Funds hold these securities, the Funds' or the
Underlying Funds' performance could be negatively affected. The Manager has
sought to identify an issuer's state of year 2000 readiness as part of the
research it employs. However, the perception of an issuer's year 2000
preparedness is only one of the many factors considered in determining whether
to buy, sell, or continue to hold a security. Information provided by issuers
concerning their state of readiness may or may not be accurate or readily
available. Further, the Funds or the Underlying Funds may be adversely affected
if the exchanges, markets, depositories, clearing agencies, or governments or
third parties responsible for infrastructure needs have not adequately
addressed their year 2000 issues. Certain Underlying Funds may invest in
securities of non-US issuers. In some cases there has been less information
available about non-US issuers' systems and about procedures they have followed
to address technical problems. Consequently, it has been more difficult to
assess the preparedness of those non-US issuers for year 2000 issues than for
most US issuers. In addition, non-US issuers may be dependent upon foreign
governments and governmental agencies for essential services that may be
disrupted if those governments and agencies have not themselves prepared for
year 2000. Such disruptions could have an adverse effect on the business of
non-US issuers and thus on the value of their securities.
SDC has informed the Funds that the cost of its services will not increase
materially as a result of the modifications to its computer systems that were
necessary to prepare for the year 2000. The Funds will not pay to remediate the
systems of the Manager or directly bear the costs to remediate the systems of
any other service provider or vendor, other than SDC.
21
<PAGE>
Shareholder Information
Deciding Which Class of Shares to Buy
Each of the Fund's Classes represents an interest in the same portfolio of
investments. However, each Class has its own sales charge schedule, and its
ongoing 12b-1 fees may differ from other Classes. When deciding which Class of
shares to buy, you should consider, among other things:
. The amount you plan to invest.
. How long you intend to remain invested in each Fund, or another Seligman
mutual fund.
. If you would prefer to pay an initial sales charge and lower ongoing 12b-1
fees, or be subject to a CDSC and pay higher ongoing 12b-1 fees.
. Whether you may be eligible for reduced or no sales charges when you buy
or sell shares.
Your financial advisor will be able to help you decide which Class of shares
best meets your needs.
Class A
. Initial sales charge on Fund purchases, as set forth below:
<TABLE>
<CAPTION>
Sales Charge Regular Dealer
Sales Charge as a % Discount
as a % of Net as a % of
Amount of your Investment of Offering Price(/1/) Amount Invested Offering Price
------------------------- ---------------------- --------------- --------------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.25%
$50,000 - $ 99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and
over(/2/) 0.00 0.00 0.00
</TABLE>
(/1/)"Offering Price" is the amount that you actually pay for each Fund's
shares; it includes the initial sales charge.
(/2/)You will not pay a sales charge on purchases of $1 million or more,
but you will be subject to a 1% CDSC if you sell your shares within 18
months.
. Annual 12b-1 fee (for shareholder services) of up to 0.25%, paid directly
as an investor in the Fund or indirectly through the Fund's investment in
the Underlying Funds.
. No sales charge on reinvested dividends or capital gain distributions.
. Eligible employee benefit plans which have at least $500,000 invested in
the Seligman Group of mutual funds or 50 or more eligible employees may
purchase Class A shares at net asset value. Eligible employee benefit
distributions are not subject to the 1% CDSC.
Class B
. No initial sales charge on purchases.
. A declining CDSC on shares sold within 6 years of purchase:
<TABLE>
<CAPTION>
Years Since Purchase CDSC
-------------------- ----
<S> <C>
Less than 1 year 5%
1 year or more but less than 2 years 4
2 years or more but less than 3
years 3
3 years or more but less than 4
years 3
4 years or more but less than 5
years 2
5 years or more but less than 6
years 1
6 years or more 0
</TABLE>
Your purchase of Class B
shares must be for less
than $250,000, because if
you invest $250,000 or
more, you will pay less in
fees and charges if you
buy another Class of
shares.
. Annual 12b-1 fee (for distribution and shareholder services) of up to
1.00%, paid directly as an investor in the Fund or indirectly through the
Fund's investment in the Underlying Funds.
. Automatic conversion to Class A shares after eight years, resulting in
lower ongoing 12b-1 fees.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
22
<PAGE>
Class C
. Initial sales charge on Fund purchases, as set forth below:
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Discount
Amount of your as a % as a % of Net as a % of
Investment of Offering Price(/1/) Amount Invested Offering Price
-------------- ---------------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 - $1,000,000 0.00 0.00 0.00
</TABLE>
(/1/)"Offering Price" is the amount that you actually pay for each
Fund's shares; it includes the initial sales charge.
Your purchase of Class C shares must be for less than $1,000,000
because if you invest $1,000,000 or more you will pay less in fees and
charges if you buy Class A shares.
. A 1% CDSC on shares sold within eighteen months of purchase.
. Annual 12b-1 fee (for distribution and shareholder services) of up to
1.00%, paid directly as an investor in the Fund or indirectly through the
Fund's investment in the Underlying Funds.
. No automatic conversion to Class A shares, so you will be subject to
higher ongoing 12b-1 fees indefinitely.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
Class D*
. No initial sales charge on purchases.
. A 1% CDSC on shares sold within one year of purchase.
. Annual 12b-1 fee (for distribution and shareholder services) of up to
1.00%, paid directly as an investor in the Fund or indirectly through the
Fund's investment in the Underlying Funds.
. No automatic conversion to Class A shares, so you will be subject to
higher ongoing 12b-1 fees indefinitely.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
*Class D shares are not available to all investors. You may purchase Class
D shares only (1) if you already own Class D shares of another Seligman
mutual fund; (2) if your financial advisor of record maintains an omnibus
account at SDC; or (3) pursuant to a 401(k) or other retirement plan
program for which Class D shares are already available or for which the
sponsor requests Class D shares because the sales charge structure of Class
D shares is comparable to the sales charge structure of the other funds
offered under the program.
Because each Fund's 12b-1 fees are paid out of each Class's assets on an
ongoing basis, or are borne indirectly by shareholders of each Class as a
result of the Fund's ownership of Class A shares of the Underlying Funds, over
time these fees will increase your investment expenses and may cost you more
than other types of sales charges.
The Fund's Board of Directors believes that no conflict of interest currently
exists between the Fund's various classes of shares. On an ongoing basis, the
Directors, in the exercise of their fiduciary duties under the Investment
Company Act of 1940 and Maryland law, will seek to ensure that no such
conflict arises.
How CDSCs Are Calculated
To minimize the amount of the CDSC you may pay when you sell your shares,
each Fund assumes that shares acquired through reinvested dividends and
capital gain distributions (which are not subject to a CDSC) are sold first.
Shares that have been in your account long enough so they are not subject to
a CDSC are sold next. After these shares are exhausted, shares will be sold
in the order they were purchased (oldest to newest). The amount of any CDSC
that you pay will be based on the shares' original purchase price or current
net asset value, whichever is less.
You will not pay a CDSC when you exchange shares of any Fund to buy the same
class of shares of any other Seligman mutual fund. For the purpose of
calculating the CDSC when you sell shares that you acquired by exchanging
shares of any Fund, it will be assumed that you held the shares since the
date you purchased the shares of that Fund.
23
<PAGE>
Pricing of Fund Shares
When you buy or sell shares, you do so at the Class's net asset value (NAV)
next calculated after Seligman Advisors accepts your request. Any applicable
sales charge will be added to the purchase price for Class A and Class C
shares. Purchase or sale orders received by an authorized dealer or financial
advisor by the close of regular trading on the New York Stock Exchange (NYSE)
(generally 4:00 p.m. Eastern time) and accepted by Seligman Advisors before the
close of business (5:00 p.m. Eastern time) on the same day will be executed at
the Class's NAV calculated as of the close of regular trading on the NYSE on
that day. Your broker/dealer or financial advisor is responsible for forwarding
your order to Seligman Advisors before the close of business.
If your buy or sell order is received by your
broker/dealer or financial advisor after the close of
NAV: regular trading on the NYSE, or is accepted by Seligman
Computed Advisors after the close of business, the order will be
separately for executed at the Class's NAV calculated as of the close
each Class by of regular trading on the next NYSE trading day. When
dividing that you sell shares, you receive the Class's per share NAV,
Class's share of less any applicable CDSC.
the net assets of
the Fund (i.e., The NAV of each Fund's shares is determined each day,
its assets less Monday through Friday, on days that the NYSE is open for
liabilities) by trading. Because certain of the Funds invest in
the total number Underlying Funds holding portfolio securities that are
of outstanding primarily listed on foreign exchanges that may trade on
shares of the weekends or other days when the Underlying Funds do not
Class. price their shares, the value of a Fund's portfolio
securities (i.e., Underlying Funds that invest in
securities that are primarily listed on foreign
exchanges) may change on days when you may not be able
to buy or sell Fund shares.
The Underlying Funds owned by the Funds are valued at their respective net
asset values. For information on the valuation of the securities held in each
Underlying Fund's portfolio, including the valuation of individual US
Government securities and short-term instruments held by the Funds, please see
"Pricing of Fund Shares" in each Underlying Fund's Prospectus (Seligman U.S.
Government Securities Series' Prospectus and Seligman Cash Management Fund's
Prospectus for individual US Government securities and short-term instruments)
each of which is incorporated into this Prospectus by reference and is
available free of charge by telephoning 1-800-221-2450.
Opening Your Account
The Funds' shares are sold through authorized broker/dealers or financial
advisors who have sales agreements with Seligman Advisors. There are several
programs under which you may be eligible for reduced sales charges or lower
minimum investments. Ask your financial advisor if any of these programs apply
to you.
To make your initial investment in a Fund, contact your financial advisor or
complete an account application and send it with your check directly to SDC at
the address provided on the account application.
The required minimum initial investments You may buy shares of any
are: Fund for all types of tax-
deferred retirement plans.
. Regular (non-retirement) accounts:$1,000 Contact Retirement Plan
Services at the address or
. For accounts opened concurrently with phone number listed on the
Invest-A-Check(R): inside back cover of this
$100 to open if you will be making prospectus for information
monthly investments and to receive the proper
$250 to open if you will be making forms.
quarterly investments
If you buy shares by check and
subsequently sell the shares, SDC will
not send your proceeds until your check
clears, which could take up to 15
calendar days from the date of your
purchase.
You will be sent a statement confirming your purchase, and any subsequent
transactions in your account. You will also be sent quarterly and annual
statements detailing your transactions in that Fund and the other Seligman
mutual funds you own under the same account number. Duplicate account
statements will be sent to you free of charge for the current year and most
recent prior year. Copies of year-end statements for prior years are available
for a fee of $10 per year, per account, with a maximum charge of $150 per
account. Send your request and a check for the fee to SDC.
If you want to be able to buy, sell, or exchange shares by telephone,
you should complete an application when you open your account. This
will prevent you from having to complete a supplemental election form
(which may require a signature guarantee) at a later date.
24
<PAGE>
How to Buy Additional Shares
After you have made your initial investment, there are many options available
to make additional purchases of Fund shares. Subsequent investments must be for
$100 or more.
Shares may be purchased through your authorized financial advisor, or you may
send a check directly to SDC. Please provide either an investment slip or a
note that provides your name(s), Fund name, and account number. Unless you
indicate otherwise, your investment will be made in the Class you already own.
Send investment checks to:
Seligman Data Corp.
P.O. Box 9766
Providence, RI 02940-9766
Your check must be in US dollars and be drawn on a US bank. You may not use
third party or credit card convenience checks for investment.
You may also use the following account services to make additional investments:
Invest-a-Check(R). You may buy Fund shares electronically from a savings or
checking account of an Automated Clearing House (ACH) member bank. If your bank
is not a member of ACH, the Fund will debit your checking account by
preauthorized checks. You may buy Fund shares at regular monthly intervals in
fixed amounts of $100 or more, or regular quarterly intervals in fixed amounts
of $250 or more. If you use Invest-A-Check(R), you must continue to make
automatic investments until the Fund's minimum initial investment of $1,000 is
met or your account may be closed.
Automatic Dollar-Cost-Averaging. If you have at least $5,000 in the Seligman
Cash Management Fund, you may exchange uncertificated shares of that fund to
buy shares of the same class of another Seligman mutual fund at regular monthly
intervals in fixed amounts of $100 or more or regular quarterly intervals in
fixed amounts of $250 or more. If you exchange Class A shares or Class C
shares, you may pay an initial sales charge to buy Fund shares.
Automatic CD Transfer. You may instruct your bank to invest the proceeds of a
maturing bank certificate of deposit (CD) in shares of a Fund. If you wish to
use this service, contact SDC or your financial advisor to obtain the necessary
forms. Because your bank may charge you a penalty, it is not normally advisable
to withdraw CD assets before maturity.
Dividends From Other Investments. You may have your dividends from other
companies paid to the Fund. (Dividend checks must include your name, account
number, Fund name, and Class of shares.)
Direct Deposit. You may buy Fund shares electronically with funds from your
employer, the IRS, or any other institution that provides direct deposit. Call
SDC for more information.
25
<PAGE>
How to Exchange Shares Among the Seligman Mutual Funds
You may sell Fund shares to buy shares of the same Class of another Seligman
mutual fund, or you may sell shares of another Seligman mutual fund to buy
shares of any Fund. Exchanges will be made at each fund's respective NAV. You
will not pay an initial sales charge when you exchange, unless you exchange
Class A shares or Class C Shares of Seligman Cash Management Fund to buy shares
of the same class of a Fund or another Seligman mutual fund.
Only your dividend and capital gain distribution options and telephone services
will be automatically carried over to any new fund account. If you wish to
carry over any other account options (for example, Invest-A-Check(R) or
Systematic Withdrawals) to a new fund, you must specifically request so at the
time of your exchange.
If you exchange into a new fund you must exchange enough to meet the new fund's
minimum initial investment. See "The Seligman Mutual Funds" for a list of the
funds available for exchange. Before making an exchange, contact your financial
advisor or SDC to obtain the applicable fund prospectus(es). You should read
and understand a fund's prospectus before investing. Some funds may not offer
all classes of shares.
How to Sell Shares
The easiest way to sell Fund shares is by phone. If you have telephone
services, you may be able to use this service to sell Fund shares. Restrictions
apply to certain types of accounts. Please see "Important Policies That May
Affect Your Account."
When you sell Fund shares by phone, a check for the proceeds is sent to your
address of record. If you have current ACH bank information on file, you may
have the proceeds of the sale of your Fund shares directly deposited into your
bank account (typically, 3-4 business days after your shares are sold).
You may sell shares to the Fund through a broker/dealer or your financial
advisor. The Fund does not charge any fees or expenses, other than any
applicable CDSC, for this transaction; however the dealer or financial advisor
may charge a service fee. Contact your financial advisor for more information.
You may always send a written request to sell Fund shares. It may take longer
to get your money if you send your request by mail.
As an additional measure to protect you and the Fund, SDC may confirm written
redemption requests that are (1) for $25,000 or more, or (2) directed to be
paid to an alternate payee or sent to an address other than the address of
record, with you or your financial advisor by telephone before sending you your
money. This will not affect the date on which your redemption request is
actually processed.
You will need to guarantee your signature(s) if the proceeds are:
(1)$50,000 or more;
(2)to be paid to someone other than all account owners; or
(3)mailed to other than your address of record.
Signature Guarantee:
Protects you and the
Funds from fraud.
It guarantees that a
signature is genuine. A
guarantee must be
obtained from an eligible
financial institution.
Notarization by a notary
public is not an
acceptable guarantee.
You may need to provide additional documents to sell Fund shares if you are:
.a corporation;
.an executor or administrator;
.a trustee or custodian; or
.in a retirement plan.
If your Fund shares are represented by certificates, you will need to surrender
the certificates to SDC before you sell your shares.
Contact your financial advisor or SDC's Shareholder Services Department for
information on selling your shares under any of the above circumstances.
You may also use the following account service to sell Fund shares:
Systematic Withdrawal Plan. If you have at least $5,000 in a Fund, you may
withdraw (sell) a fixed dollar amount (minimum of $50) of uncertificated shares
at regular intervals. A check will be sent to you at your address of record or,
if you have current ACH bank information on file, you may have your payments
directly deposited to your predesignated bank account in 3-4 business days
after your shares are sold. If you bought $1,000,000 or more of Class A shares
without an initial sales charge, your withdrawals may be subject to a 1% CDSC
if they occur within 18 months of purchase. If you own Class B, Class C, or
Class D shares and reinvest your dividends and capital gain distributions, you
may withdraw 12%, 10%, or 10%, respectively, of the value of your Fund account
(at the time of election) annually without a CDSC.
26
<PAGE>
Important Policies That May Affect Your Account
To protect you and other shareholders, each Fund reserves the right to:
. Refuse an exchange request if:
1. you have exchanged twice from the same fund in any three-month period;
2. the amount you wish to exchange equals the lesser of $1,000,000 or 1%
of the Fund's net assets; or
3. you or your financial advisor have been advised that previous patterns
of purchases and sales or exchanges have been considered excessive.
. Refuse any request to buy Fund shares.
. Reject any request received by telephone.
. Suspend or terminate telephone services.
. Reject a signature guarantee that SDC believes may be fraudulent.
. Close your fund account if its value falls below $500.
. Close your account if it does not have a certified taxpayer identification
number.
Telephone Services
You and your broker/dealer or financial advisor will be able to place the
following requests by telephone, unless you indicate on your account
application that you do not want telephone services:
. Sell uncertificated shares (up to $50,000 per day, payable to account
owner(s) and mailed to address of record).
. Exchange shares between funds.
. Change dividend and/or capital gain distribution options.
. Change your address.
. Establish systematic withdrawals to address of record.
If you do not complete an account application when you open your account,
telephone services must be elected on a supplemental election form (which may
require a signature guarantee).
Restrictions apply to certain types of accounts:
. Trust accounts on which the current trustee is not listed may not sell Fund
shares by phone.
. Corporations may not sell Fund shares by phone.
. IRAs may only exchange Fund shares or request address changes by phone.
. Group retirement plans may not sell Fund shares by phone; plans that allow
participants to exchange by phone must provide a letter of authorization
signed by the plan custodian or trustee and provide a supplemental election
form signed by all plan participants.
Unless you have current ACH bank information on file, you will not be able to
sell Fund shares by phone within 30 days following an address change.
Your request must be communicated to an SDC representative. You may not request
any phone transactions via the automated access line.
You may cancel telephone services at any time by sending a written request to
SDC. Each account owner, by accepting or adding telephone services, authorizes
each of the other owners to make requests by phone. Your broker/dealer or
financial advisor representative may not establish telephone services without
your written authorization. SDC will send written confirmation to the address
of record when telephone services are added or terminated.
During times of heavy call volume, you may not be able to get through to SDC by
phone to request a sale or exchange of Fund shares. In this case, you may need
to write, and it may take longer for your request to be processed. A Fund's NAV
may fluctuate during this time.
The Funds and SDC will not be liable for processing requests received by phone
as long as it was reasonable to believe that the request was genuine. The Funds
and SDC will adopt reasonable procedures to determine whether a request appears
to be genuine.
Reinstatement Privilege
If you sell Fund shares, you may, within 120 calendar days, use part or all of
the proceeds to buy shares of the same Fund or any other Seligman mutual fund
(reinstate your investment) without paying an initial sales charge or, if you
paid a CDSC when you sold your shares, you may receive a credit for the
applicable CDSC paid. This privilege is available only once each calendar year.
Contact your financial advisor for more information. You should consult your
tax advisor concerning possible tax consequences of exercising this privilege.
27
<PAGE>
Dividends and Capital Gain Distributions
Each Fund generally will pay any dividends from its net investment income and
distributes net capital gains realized on investments at least annually (the
Harvester Fund generally will pay dividends from its net investment income on a
monthly basis). Because each Fund may purchase or sell the Underlying Funds, US
Government securities and short-term instruments to: (a) accommodate sales of
its shares; (b) adjust the percentages of its assets invested in each of the
Underlying Funds, US Government securities and short-term instruments in
response to economic or market conditions and changes in Seligman Time Horizon
Matrix; and (c) modify the allocation of its assets among the Underlying Funds,
US Government securities and short-term instruments to the asset allocation
targets specified herein, each Fund may generate net capital gains (including
short-term capital gains that are generally taxed to shareholders at ordinary
income tax rates) for investors that may be higher than the net capital gains
ordinarily incurred by an investor through an investment in another asset
allocation fund that has broader investment ranges or an asset allocation
strategy designed by the investor. In addition, due to federal income tax laws,
each Fund may not fully realize capital losses (to offset capital gains) from
the sale of the Underlying Funds at a loss.
You may elect to:
(1) reinvest both dividends and capital gain
Dividend: distributions;
(2) receive dividends in cash and reinvest capital
A payment by a gain distributions; or
mutual fund,
usually derived (3) receive both dividends and capital gain
from the Fund's distributions in cash.
net investment
income Your dividends and capital gain distributions will be
(dividends and reinvested if you do not instruct otherwise or if you
interest earned own Fund shares in a Seligman tax-deferred retirement
on portfolio plan.
securities less
expenses).
If you want to change your election, you may write SDC
at the address listed on the back cover of this
Prospectus, or, if you have telephone services, you or
your financial advisor may call SDC. Your request must
be received by SDC before the record date to be
Capital Gain effective for that dividend or capital gain
Distribution: distribution.
A payment to Cash dividends or capital gain distributions will be
mutual fund sent by check to your address of record or, if you
shareholders have current ACH bank information on file, directly
which deposited into your predesignated bank account within
represents 3-4 business days from the payable date.
profits
realized on the Dividends and capital gain distributions are
sale of reinvested to buy additional Fund shares on the
securities in a payable date using the NAV of the ex-dividend date.
Fund's
portfolio.
Dividends on Class B, Class C, and Class D shares of a
Ex-dividend Fund will be lower than the dividends on Class A
Date: shares of that Fund as a result of their higher 12b-1
The day on fees. Capital gain distributions will be paid in the
which any same amount for each Class of a Fund.
declared
distributions
(dividends or
capital gains)
are deducted
from a Fund's
assets before
it calculates
its NAV.
28
<PAGE>
Taxes
The tax treatment of dividends and capital gain distributions is the same
whether you take them in cash or reinvest them to buy additional Fund shares.
To the extent a Fund receives certain tax benefits on dividends that it
receives, these pass-through benefits may not be realized by an investor in the
Fund. Other pass-through tax benefits realized by the Funds will not pass
through to investors. Tax-deferred retirement plans are not taxed currently on
dividends or capital gain distributions or on exchanges.
Dividends paid by the Fund are taxable to you as ordinary income. You may be
taxed at different rates on capital gains distributed by the Fund depending on
the length of time the Fund holds its assets.
When you sell Fund shares, any gain or loss you realize will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year, or as a short-term capital gain or loss if you held your shares
for one year or less. However, if you sell Fund shares on which a long-term
capital gain distribution has been received and you held the shares for six
months or less, any loss you realize will be treated as a long-term capital
loss to the extent that it offsets the long-term capital gain distribution.
An exchange of Fund shares is a sale and may result in a gain or loss for
federal income tax purposes.
Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each
shareholder's situation is unique, you should always consult your tax advisor
concerning the effect income taxes may have on your individual investment.
29
<PAGE>
Appendix A
Asset Class Descriptions
Seligman Time Horizon Matrix is the result of extensive proprietary research by
the Manager that examined the historical performance of different asset classes
over different time periods. The Manager compared the performance of these
various asset classes over a number of one-, five-, 10- and 20-year holding
periods from 1950 to 1998 to assess the relative volatility of the asset
classes over time. The asset classes are listed below. In performing its
research, the Manager selected certain unmanaged indices as approximations for
the respective asset classes. The unmanaged indices (in which investors cannot
directly invest) used in the research are identified next to their respective
asset classes.
US Small-Company Stocks: 1979-1998: Russell 2000; 1950-1978: NYSE Fifth
Quintile Returns
US Medium-Company Stocks: 1979-1998: Russell Midcap Index; 1950-1978: Estimated
as the midpoint between the total return for the Ibbotson Small Stock Index and
the Standard & Poor's 500 Composite Stock Price Index
US Large-Company Stocks: Standard & Poor's 500 Composite Stock Index (S&P 500)
International Small-Company Stocks: 1990-1998: Salomon Smith Barney EMI World
Ex. US; 1986-1989: NatWest Securities Ltd. (NWSL) global ex. U.S. Smaller
Companies Index; 1970-1985: Estimated as the difference between the Morgan
Stanley Capital International (MSCI) Europe Australasia and Far East (EAFE)
Index and the S&P 500, added to the Ibbotson Small Stock Index; 1950-1969:
Estimated as the Ibbotson Small Stock Index
Emerging Markets: 1989-1998: IFC Investables Composite; 1985-1988: IFC Global
Emerging Composite; 1970-1984: Estimated as the difference between the MSCI
EAFE Index and the S&P 500, added to the Ibbotson Small Stock Index; 1950-1969:
Estimated as the Ibbotson Small Stock Index
International Large-Company Stocks: 1970-1998: MSCI EAFE Index; 1950-1969:
Estimated as the Standard & Poor's 500 Composite Stock Price Index
US Corporate Bonds: Salomon Brothers Long-Term High Grade Corporate Bond Total
Return Index
US Government Bonds: 1950-1998: Ibbotson "One Bond" Portfolio. To the greatest
extent possible, each year, a one-bond portfolio with a term of approximately
20 years and a reasonably current coupon, and whose returns did not reflect
potential tax benefits, impaired negotiability, or special redemption or call
privileges, was used
Inflation: 1978-1998: Consumer Price Index for All Urban Consumers; 1950-1977:
Consumer Price Index
30
<PAGE>
Appendix B
The chart below shows the High and Low average annual returns from 1950-1998
for US Small-Company Stocks, US Large-Company Stocks, US Corporate Bonds, US
Government Bonds, and US Treasury Bills.
Different Time Horizons - Different Risks
[BAR CHART]
Small-Company Large-Company Corporate Gov't Treasury
Stocks Stocks Bonds Bonds Bills
High Low High Low High Low High Low High Low
1 Year 83.57 -30.90 52.62 -26.47 42.56 -8.09 40.36 -9.18 14.71 0.86
5 Years 39.80 -12.25 24.06 -2.36 22.51 -2.22 21.62 -2.14 11.12 1.41
10 Years 30.38 3.20 19.35 1.24 16.32 1.0 15.56 -0.07 9.17 1.87
20 Years 20.33 8.21 17.75 6.53 10.86 1.34 11.14 0.69 7.72 2.87
Source: Figures derived from (C) Stocks, Bonds, Bills and Inflation 1999
Yearbook(TM), Ibbotson Associates, Chicago (annual update work by Roger G.
Ibbotson and Rex A. Sinquefield). Used with permission all rights reserved.
The indices are comprised of the following: US Small-Company Stocks: 1982-1998:
Russell 2000; 1950-1981: NYSE Fifth Quintile Returns; US Large-Company Stocks:
Standard & Poor's 500 Composite Stock Index (S&P 500); US Corporate Bonds:
Salomon Brothers Long-Term High Grade Corporate Bond Total Return Index; US
Government Bonds: Ibbotson One Bond Portfolio; Treasury Bills: Ibbotson One
Bill Portfolio.
The returns of these unmanaged Indices, in which individuals cannot directly
invest, reflect past performance and do not reflect the performance of any
mutual fund, nor are they any representation of the future performance of
mutual funds or common stocks. Also, keep in mind that the securities
represented by the Indices involve widely varying degrees of income and growth
potential and risk to investors. Rates on Treasury bills and Government bonds
are fixed, and principal, if held to maturity, is guaranteed. Although common
stocks have produced higher historical returns, they may be subject to greater
risk than other types of investments. The stocks of smaller companies are
subject to greater price fluctuation than the stocks of larger companies.
31
<PAGE>
Appendix C
Seligman Time Horizon Matrix
<TABLE>
<CAPTION>
Fund/Horizon 30 29 28 27 26 25 24 23 22 21 20 19 18
- ------------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Seligman Frontier Fund.. 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Seligman Small-Cap Value
Fund................... 13.0% 12.9% 12.8% 12.7% 12.6% 12.5% 12.4% 12.3% 12.2% 12.1% 12.0% 11.4% 10.8%
Seligman Communications
and Information Fund... 16.0% 15.4% 14.8% 14.2% 13.6% 13.0% 12.4% 11.8% 11.2% 10.6% 10.0% 10.0% 10.0%
Seligman Capital Fund... 22.0% 21.8% 21.6% 21.4% 21.2% 21.0% 20.8% 20.6% 20.4% 20.2% 20.0% 20.0% 20.0%
Seligman Growth Fund.... 3.0% 3.6% 4.2% 4.8% 5.4% 6.0% 6.6% 7.2% 7.8% 8.4% 9.0% 9.0% 9.0%
Seligman Large-Cap Value
Fund................... 3.0% 3.6% 4.2% 4.8% 5.4% 6.0% 6.6% 7.2% 7.8% 8.4% 9.0% 9.0% 9.0%
Seligman Common Stock
Fund................... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Seligman Henderson
Emerging Markets Growth
Fund................... 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 9.5% 9.0%
Seligman Henderson
Global Smaller
Companies Fund......... 25.0% 24.2% 23.4% 22.6% 21.8% 21.0% 20.2% 19.4% 18.6% 17.8% 17.0% 16.1% 15.2%
Seligman Henderson
Global Growth
Opportunities Fund..... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Seligman Henderson
International Fund..... 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.0% 10.0%
Seligman High-Yield Bond
Series................. 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.5% 3.0%
Seligman U.S. Government
Securities Series...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 1.0%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total.................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
Seligman Time Horizon MatrixSM is an asset allocation framework, developed to
help investors seek their specific financial goals. The Matrix is designed for
investors seeking to create an asset class mix based on their time frame for
achieving specific goals.
Seligman HarvesterSM PATENT PENDING is a process designed to help investors
maximize their income stream while seeking to conserve capital. The program
involves determining "needs" and "wants" as a percentage of total investable
assets, and guides investors through a strategy of income withdrawal and asset
allocation specifically designed to seek to lower the risk of depleting their
accumulated wealth too quickly.
32
<PAGE>
<TABLE>
<CAPTION>
17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Harvester
- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 2.7% 2.4% 2.1% 1.8% 1.5% 1.2% 0.9% 0.6% 0.3% 0.0%
10.2% 9.6% 9.0% 8.4% 7.8% 7.2% 6.6% 6.0% 5.4% 4.8% 4.2% 3.6% 3.0% 2.4% 1.8% 1.2% 0.6% 0.0%
10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 19.0% 18.0% 17.0% 16.0% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0%
9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0%
9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.5% 3.0% 4.5% 6.0% 7.5% 9.0% 10.5% 12.0% 13.5% 15.0%
8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
14.3% 13.4% 12.5% 11.6% 10.7% 9.8% 8.9% 8.0% 7.2% 6.4% 5.6% 4.8% 4.0% 3.2% 2.4% 1.6% 0.8% 0.0%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.2% 10.4% 10.6% 10.8% 11.0% 11.2% 11.4% 11.6% 11.8% 12.0%
4.5% 6.0% 7.5% 9.0% 10.5% 12.0% 13.5% 15.0% 16.5% 18.0% 19.5% 21.0% 22.5% 24.0% 25.5% 27.0% 28.5% 30.0%
1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0%
- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
Seligman Time Horizon MatrixSM and Seligman HarvesterSM PATENT PENDING are
prepared using past performance of asset classes to construct model portfolios.
Those model portfolios have inherent limitations in that they assume the future
performance of the asset classes will, over the relevant periods, correlate to
their past performance, and of course, past performance is no guarantee of
future results. Furthermore, with regard to using the Funds, the Seligman Group
of Funds or other funds of any other investment manager in seeking to follow
Seligman Time Horizon MatrixSM and Seligman HarvesterSM PATENT PENDING, there
is no assurance that the funds selected will actually correlate to the asset
allocations that the investor is seeking to track and the performance of the
funds selected may differ from the performance of those asset classes.
Shares of the Funds and Underlying Funds are not deposits or obligations of, or
guaranteed or endorsed by, any bank.
Shares are not insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board,
or any other government agency. In addition, an investment in the Funds and
Underlying Funds involves investment risks,
including the possible loss of principal.
33
<PAGE>
For More Information
The following information is available without charge upon request: call toll-
free (800) 221-2450 in the US or (212) 682-7600 outside the US or access the
internet site of J. & W. Seligman & Co. Incorporated, www.seligman.com.
The Statement of Additional Information (SAI) contains additional information
about the Funds and the prospectus for each Underlying Fund contains information
about that Fund. The SAI and each prospectus for the Underlying Funds are on
file with the Securities and Exchange Commission (SEC) and are incorporated by
reference into (and are legally part of) this prospectus.
SELIGMAN ADVISORS, Inc.
an affiliate of
[LOGO]
J. & W. SELIGMAN & Co.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
Information about the Funds, including the SAI, can be viewed and copied at the
SECs public reference room in Washington D.C. For information about the
operation of the public reference room, call (202) 942-8090. The SAI and other
information about the Funds are also available on the SEC's internet site:
http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by writing: public reference section of the SEC, Washington, DC 20549-0102, or
by electronic request to the following e-mail address: [email protected].
INVESTMENT COMPANY ACT FILE NUMBER: 811-09545
<PAGE>
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
Seligman Time Horizon 30 Fund
Seligman Time Horizon 20 Fund
Seligman Time Horizon 10 Fund
Seligman Harvester Fund
Statement of Additional Information
January 3, 2000
100 Park Avenue
New York, New York 10017
(212) 850-1864
Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information (SAI) expands upon and supplements the
information contained in the current Prospectus, dated January 3, 2000, which
covers the Seligman Time Horizon/Harvester Series (the "Series"), an asset
allocation Series containing four funds: Seligman Time Horizon 30 Fund,
Seligman Time Horizon 20 Fund, Seligman Time Horizon 10 Fund and Seligman
Harvester Fund (collectively, the "Funds"). This SAI, although not in itself a
prospectus, is incorporated by reference into the Prospectus in its entirety.
It should be read in conjunction with the Prospectus, which you may obtain by
writing or calling the Series at the above address or telephone numbers.
Table of Contents
Series History........................................... 2
Description of the Series and its Investments and Risks.. 2
Management of the Series................................. 15
Control Persons and Principal Holders of Securities...... 20
Investment Advisory and Other Services................... 20
Brokerage Allocation and Other Practices................. 26
Capital Stock and Other Securities....................... 27
Purchase, Redemption, and Pricing of Shares.............. 27
Taxation of the Series................................... 33
Underwriters............................................. 35
Calculation of Performance Data.......................... 36
Financial Statements..................................... 37
General Information...................................... 38
Appendix A............................................... 39
Appendix B............................................... 42
<PAGE>
Series History
Seligman Time Horizon/Harvester Series, Inc. was incorporated under the laws of
the state of Maryland on August 4, 1999.
Description of the Series and its Investments and Risks
Classification
Seligman Time Horizon/Harvester Series, Inc. is a diversified open-end
management investment company, or mutual fund. It consists of four separate and
distinct funds: Seligman Time Horizon 30 Fund, Seligman Time Horizon 20 Fund,
Seligman Time Horizon 10 Fund and Seligman Harvester Fund.
Investment Strategies and Risks
Each Fund seeks to achieve its objectives by investing in a combination of
mutual funds for which J. & W. Seligman & Co. Incorporated (the "Manager")
either now acts or in the future will act as investment manager (the "Underlying
Funds"). The Funds may also invest directly in US Government securities and
short-term instruments. Because each Fund will invest a substantial portion of
its assets in the Underlying Funds, each Fund's investment performance is
directly related to the investment performance of the Underlying Funds in which
it invests. The ability of a Fund to realize its investment objective(s) will
depend upon the extent to which the Underlying Funds realize their objectives.
The investment objective(s) and policies of the Funds are similar to the
investment objective(s) and policies of certain other mutual funds managed by
the Manager. Although the investment objective(s) and policies may be similar,
the investment results of the Funds may be higher or lower than the results of
these other mutual funds.
Investment Strategies and Risks of the Underlying Funds
- -------------------------------------------------------
Each Underlying Fund has its own investment strategies and risks. The
information provided below describes the types of instruments that one or more
Underlying Funds may utilize in order to carry out its investment strategies,
along with a summary of the risks presented by such instruments. Please note,
however, that not every Underlying Fund is authorized under its investment
objectives, strategies and policies to invest its assets in each of the
instruments described below. Additionally, to the extent an Underlying Fund is
authorized to invest in a particular instrument, the amount of the Underlying
Fund's assets that may be so invested or the circumstances under which the
investment in the instrument may be made may be restricted by the Underlying
Fund's investment policies. References to an Underlying Fund below with respect
to each type of instrument apply only to the extent that the particular
Underlying Fund is authorized to invest in the instrument, subject to any such
limitations or restrictions. A complete description of the types of instruments
and related risks in which each Underlying Fund is permitted to invest is
provided in each Underlying Fund's Prospectus and Statement of Additional
Information, which are incorporated herein by reference and are available free
of charge by telephoning 1-800-221-2450.
Convertible Bonds
Each Underlying Fund, other than Seligman Cash Management Fund and the Seligman
U.S. Government Securities Series, may purchase convertible bonds. Convertible
bonds are convertible at a stated exchange rate or price into common stock.
Before conversion, convertible securities are similar to non-convertible debt
securities in that they provide a steady stream of income with generally higher
yields than an issuer's equity securities. The market value of all debt
securities, including convertible securities, tends to decline as interest rates
increase and to increase as interest rates decline. In general, convertible
securities may provide lower interest or dividend yields than non-convertible
debt securities of similar quality, but they may also allow investors to benefit
from increases in the market price of the
2
<PAGE>
underlying common stock. When the market price of the underlying common stock
increases, the price of the convertible security tends to reflect the increase.
When the market price of the underlying common stock declines, the convertible
security tends to trade on the basis of yield, and may not depreciate to the
same extent as the underlying common stock. In an issuer's capital structure,
convertible securities are senior to common stocks. They are therefore of higher
quality and involve less risk than the issuer's common stock, but the extent to
which risk is reduced depends largely on the extent to which the convertible
security sells above its value as a fixed-income security. In selecting
convertible securities for an Underlying Fund, the Manager evaluates such
factors as economic and business conditions involving the issuer, future
earnings growth potential of the issuer, potential for price appreciation of the
underlying equity, the value of individual securities relative to other
investment alternatives, trends in the determinants of corporate profits, and
capability of management. In evaluating a convertible security, the Manager
gives emphasis to the attractiveness of the underlying common stock and the
capital appreciation opportunities that the convertible security presents.
Convertible securities can be callable or redeemable at the issuer's discretion,
in which case the Manager would be forced to seek alternative investments.
Debt securities convertible into equity securities may be rated as low as CC by
Standard & Poor's Rating Service (S&P) or Ca by Moody's Investors Service, Inc.
(Moody's). Debt securities rated below investment grade (frequently referred to
as "junk bonds") often have speculative characteristics and will be subject to
greater market fluctuations and risk of loss of income and principal than
higher-rated securities. A description of credit ratings and risks associated
with lower-rated debt securities is set forth in Appendix A to this Statement of
Additional Information. The Manager does not rely on the ratings of these
securities in making investment decisions but performs its own analysis, based
on the factors described above, in light of the Underlying Fund's investment
objectives.
Derivatives
Each Underlying Fund, other than Seligman Cash Management Fund, may invest in
derivatives only for hedging or investment purposes. An Underlying Fund will
not invest in derivatives for speculative purposes, i.e., where the derivative
investment exposes the Underlying Fund to undue risk of loss, such as where the
risk of loss is greater than the cost of the investment.
A derivative is generally defined as an instrument whose value is derived from,
or based upon, some underlying index, reference rate (e.g., interest rates or
currency exchange rates), security, commodity or other asset. An Underlying
Fund will not invest in a specific type of derivative without prior approval
from its Board of Directors, after consideration of, among other things, how the
derivative instrument serves the Underlying Fund's investment objective, and the
risk associated with the investment. The only types of derivatives in which the
Underlying Funds are currently permitted to invest, as described more fully
below, are forward foreign currency exchange contracts, put options, and rights
and warrants.
Forward Foreign Currency Exchange Contracts
- -------------------------------------------
Each Underlying Fund, other than Seligman Cash Management Fund and Seligman U.S.
Government Securities Series, will generally enter into forward foreign currency
exchange contracts to fix the US 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 US dollar value of
securities it owns. 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.
An Underlying 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 US dollar. In this case the contract would approximate the value of some or
all of the Underlying Fund's securities denominated in such foreign currency.
Under normal circumstances, the Manager will limit forward currency contracts to
not greater than 75% of an Underlying Fund's position in any one country as of
the date the contract is entered into.
3
<PAGE>
This limitation will be measured at the point the hedging transaction is entered
into by the Underlying Fund. Under extraordinary circumstances, the Underlying
Fund's Manager may enter into forward currency contracts in excess of 75% of an
Underlying Fund's 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 generally be possible since the future value of
such securities in foreign currencies will change as a consequence of market
movement 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, an
Underlying Fund may commit a substantial portion or the entire value of its
assets to the consummation of these contracts. The Underlying Fund's Manager
will consider the effect a substantial commitment of its assets to forward
contracts would have on the investment program of an Underlying Fund and its
ability to purchase additional securities.
Except as set forth above and immediately below, an Underlying Fund will not
enter into forward contracts or maintain a net exposure to such contracts where
the consummation of the contracts would oblige the Underlying Fund to deliver an
amount of foreign currency in excess of the value of the Underlying Fund's
securities or other assets denominated in that currency. An Underlying 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
Underlying Fund's securities or other assets denominated in that currency
provided the excess amount is "covered" by cash and/or liquid, high-grade debt
securities, denominated in any currency, having a value 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, the Manager believes that it is important to have the flexibility to
enter into such forward contracts when it determines that the best interests of
the Underlying Fund will be served.
At the maturity of a forward contract, an Underlying Fund may either sell the
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 the Underlying Fund's securities at the expiration of the
forward contract. Accordingly, it may be necessary for an Underlying 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 Underlying 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 Underlying Fund's security if its market
value exceeds the amount of foreign currency an Underlying Fund is obligated to
deliver. However, an underlying 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 an Underlying Fund retains the security and engages in offsetting
transactions, the Underlying 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 Underlying 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 Underlying 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 Underlying
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 Underlying 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.
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Each Underlying Fund's dealing in forward foreign currency exchange contracts
will be limited to the transactions described above. An Underlying 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 the
Underlying Fund's Manager. 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.
Shareholders 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 an Underlying Fund at one rate, while offering a lesser rate
of exchange should the Underlying Fund desire to resell that currency to the
dealer.
Put Options
- -----------
Each Underlying Fund, other than Seligman Cash Management Fund and Seligman
High-Yield Bond Fund, may purchase put options in an attempt to provide a hedge
against a decrease in the market price of an underlying security held by an
Underlying Fund. An Underlying Fund will not purchase options for speculative
purposes. Purchasing a put option gives an Underlying 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 an Underlying 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, an Underlying Fund will
reduce any profit it might otherwise have realized in the underlying security by
the premium paid for the put option and by transaction costs.
Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, an Underlying Fund would let the option
expire resulting in a reduced profit on the underlying security equal to the
cost of the put option premium and transaction costs.
When an Underlying 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 Underlying 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. An Underlying Fund's
maximum financial exposure will be limited to these costs.
An Underlying Fund may purchase both listed and over-the-counter put options.
An Underlying Fund will be exposed to the risk of counterparty nonperformance in
the case of over-the-counter put options.
An Underlying Fund's ability to engage in option transactions may be limited by
tax considerations.
Rights and Warrants
- -------------------
Each Underlying Fund, other than Seligman Cash Management Fund, Seligman U.S.
Government Securities Series and Seligman High-Yield Bond Fund, may invest in
common stock rights and warrants believed by the Manager to provide capital
appreciation opportunities. Common stock rights and warrants received as part
of a unit or attached to securities purchased (i.e., not separately purchased)
are not included in each Underlying Fund's investment restrictions regarding
such securities.
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Foreign Securities
Each Underlying Fund, other than Seligman U.S. Government Securities Series, may
invest in foreign securities. Foreign investments may be affected favorably or
unfavorably by changes in currency rates and exchange control regulations.
There may be less information available about a foreign company than about a US
company, and foreign companies may not be subject to reporting standards and
requirements comparable to those applicable to US companies. Foreign securities
may not be as liquid as US securities. Securities of foreign companies may
involve greater market risk than securities of US companies, and foreign
brokerage commissions and custody fees are generally higher than in the US.
Investments in foreign securities may also be subject to local economic or
political risks, political instability and possible nationalization of issuers.
By investing in foreign securities, an Underlying Fund will attempt to take
advantage of differences among economic trends and the performance of securities
markets in various countries. To date, the market values of securities of
issuers located in different countries have moved relatively independently of
each other. During certain periods, the return on equity investments in some
countries has exceeded the return on similar investments in the US. The Manager
believes that, in comparison with investment companies investing solely in
domestic securities, it may be possible to obtain significant appreciation from
a portfolio of foreign investments and securities from various markets that
offer different investment opportunities and are affected by different economic
trends. Global diversification reduces the effect that events in any one
country will have on the entire investment portfolio. Of course, a decline in
the value of an Underlying Fund's investments in one country may offset
potential gains from investments in another country.
Investments in securities of foreign issuers may involve risks that are not
associated with domestic investments, and there can be no assurance that the
Underlying Fund's foreign investments will present less risk than a portfolio of
domestic securities. Foreign issuers may lack uniform accounting, auditing and
financial reporting standards, practices and requirements, and there is
generally less publicly available information about foreign issuers than there
is about US issuers. Governmental regulation and supervision of foreign stock
exchanges, brokers and listed companies may be less pervasive than is customary
in the US. Securities of some foreign issuers are less liquid and their prices
are more volatile than securities of comparable domestic issuers. Foreign
securities settlements may in some instances be subject to delays and related
administrative uncertainties which could result in temporary periods when assets
of an Underlying fund are uninvested and no return is earned thereon and may
involve a risk of loss to an Underlying Fund. Foreign securities markets may
have substantially less volume than US markets and far fewer traded issues.
Fixed brokerage commissions on foreign securities exchanges are generally higher
than in the United States, and transaction costs with respect to smaller
capitalization companies may be higher than those of larger capitalization
companies. Income from foreign securities may be reduced by a withholding tax
at the source or other foreign taxes. In some countries, there may also be the
possibility of nationalization, expropriation or confiscatory taxation, (in
which case an Underlying Fund could lose its entire investment in a certain
market), limitations on the removal of monies or other assets of an Underlying
Fund, higher rates of inflation, political or social instability or revolution,
or diplomatic developments that could affect investments in those countries. In
addition, it may be difficult to obtain and enforce a judgement in a court
outside the United States.
Some of the risks described in the preceding paragraph may be more severe for
investments in emerging or developing countries. By comparison with the United
States and other developed countries, emerging or developing countries may have
relatively unstable governments, economies based on a less diversified
industrial base and securities markets that trade a smaller number of
securities. Companies in emerging markets may generally be smaller, less
experienced and more recently organized than many domestic companies. Prices of
securities traded in the securities markets of emerging or developing countries
tend to be volatile. Furthermore, foreign investors are subject to many
restrictions in emerging or developing countries. These restrictions may
require, among other things, governmental approval prior to making
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<PAGE>
investments or repatriating income or capital, or may impose limits on the
amount or type of securities held by foreigners or on the companies in which the
foreigners may invest.
The economies of individual emerging countries may differ favorably or
unfavorably from the US economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payment position and may be based on a
substantially less diversified industrial base. Further, the economies of
developing countries generally are heavily dependent upon international trade
and, accordingly, have been, and may continue to be, adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which
they trade. These economies also have been, and may continue to be, adversely
affected by economic conditions in the countries with which they trade.
Investments in foreign securities will usually be denominated in foreign
currencies, and an Underlying Fund may temporarily hold cash in foreign
currencies. The value of an Underlying Fund's investments denominated in
foreign currencies may be affected, favorably or unfavorably, by the relative
strength of the US dollar, changes in foreign currency and US dollar exchange
rates and exchange control regulations. The Underlying Fund may incur costs in
connection with conversions between various currencies. An Underlying Fund's
net asset value per share will be affected by changes in currency exchange
rates. Changes in foreign currency exchange rates may also affect the value of
dividends and interest earned, and gains and losses realized on the sale of
securities and the resulting amount, if any, to be distributed to shareholders
by the Underlying Fund. The rate of exchange between the US dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets (which in turn are affected by interest rates, trade flows and
numerous other factors, including, in some countries, local governmental
intervention).
Depositary Receipts
- -------------------
Depositary Receipts are instruments generally issued by domestic banks or trust
companies that represent the deposits of a security of a foreign issuer.
American Depositary Receipts (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. European Depositary Receipts (EDRs)
are typically traded in Europe. Global Depositary Receipts (GDRs) are typically
traded in both Europe and the United States. Depositary Receipts may be issued
as sponsored or unsponsored programs. In sponsored programs, the issuer has
made arrangements to have its securities trade in the form of Depositary
Receipts. In unsponsored programs, the issuer may not be directly involved in
the creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, the issuers of
unsponsored Depositary Receipts are not obligated to disclose material
information in the US, and therefore, the import of such information may not be
reflected in the market value of such instruments.
IIliquid Securities
Each Underlying Fund, other than Seligman Cash Management Fund and Seligman U.S.
Government Securities Series, may invest in illiquid securities, including
restricted securities (i.e., securities not readily marketable without
registration under the Securities Act of 1933 (1933 Act)) and other securities
that are not readily marketable. Certain restricted securities can be offered
and sold to "qualified institutional buyers" under Rule 144A of the 1933 Act,
and the Underlying Fund's Board of Directors, or Trustees, may determine, when
appropriate, that specific Rule 144A securities are liquid and not subject to an
Underlying Fund's limitation on illiquid securities. Should the Board of
Directors or Trustees make this determination, it will carefully monitor the
security (focusing on such factors, among others, as trading activity and
availability of information) to determine that the Rule 144A security continues
to be liquid. It is not possible to predict with assurance exactly how the
market for Rule 144A securities will further evolve. This investment practice
could have the effect of increasing the level of illiquidity in an
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Underlying Fund, if and to the extent that qualified institutional buyers become
for a time uninterested in purchasing Rule 144A securities.
Money Market Instruments
Each of the Underlying Funds, other than Seligman Cash Management Fund, which
intends to invest primarily in the money market instruments described below and
the U.S. Government Securities Series, which intends to invest substantially all
of its assets in US Government Obligations, may invest a portion of their assets
in the following money market instruments:
US Government Obligations
- -------------------------
US Government Obligations are obligations issued or guaranteed as to both
principal and interest by the US Government or backed by the full faith and
credit of the US, such as US Treasury Bills, securities issued or guaranteed by
a US Government agency or instrumentality, and securities supported by the right
of the issuer to borrow from the US Treasury.
Bank Obligations
- -----------------
Bank obligations include US dollar-denominated certificates of deposit, banker's
acceptances, fixed time deposits and commercial paper of domestic banks,
including their branches located outside the US, and of domestic branches of
foreign banks. 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 US.
Commercial Paper and Short-Term Corporate Debt Securities
- ---------------------------------------------------------
Commercial paper and short-term debt securities include short-term unsecured
promissory notes with maturities not exceeding nine months issued in bearer form
by bank holding companies, corporations and finance companies. Investments in
commercial paper issued by bank holding companies will be limited at the time of
investment to the 100 largest US bank holding companies in terms of assets.
Mortgage-Related Securities
Mortgage Pass-Through Securities. Each Underlying Fund may invest in mortgage
- ---------------------------------
pass-through securities. Mortgage pass-through securities include securities
that represent interests in pools of mortgage loans made by lenders such as
savings and loan institutions, mortgage bankers, and commercial banks. Such
securities provide a "pass-through" of monthly payments of interest and
principal made by the borrowers on their residential mortgage loans (net of any
fees paid to the issuer or guarantor of such securities). Although the
residential mortgages underlying a pool may have maturities of up to 30 years, a
pool's effective maturity may be reduced by prepayments of principal on the
underlying mortgage obligations. Factors affecting mortgage prepayments
include, among other things, the level of interest rates, general economic and
social conditions and the location and age of the mortgages. High interest rate
mortgages are more likely to be prepaid than lower-rate mortgages; consequently,
the effective maturities of mortgage-related obligations that pass-through
payments of higher-rate mortgages are likely to be shorter than those of
obligations that pass-through payments of lower-rate mortgages. If such
prepayment of mortgage-related securities in which an Underlying Fund invests
occurs, the Underlying Fund may have to invest the proceeds in securities with
lower yields.
The Government National Mortgage Association (GNMA) is a US Government
corporation within the Department of Housing and Urban Development, authorized
to guarantee, with the full faith and credit of the US Government, the timely
payment of principal and interest on securities issued by institutions approved
by GNMA (such as savings and loan institutions, commercial banks and mortgage
bankers) and
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<PAGE>
backed by pools of Federal Housing Administration insured or Veterans
Administration guaranteed residential mortgages. These securities entitle the
holder to receive all interest and principal payments owed on the mortgages in
the pool, net of certain fees, regardless of whether or not the mortgagors
actually make the payments. Other government-related issuers of mortgage-related
securities include the Federal National Mortgage Association (FNMA), a
government-sponsored corporation subject to general regulation by the Secretary
of Housing and Urban Development but owned entirely by private stockholders, and
the Federal Home Loan Mortgage Corporation (FHLMC), a corporate instrumentality
of the US Government created for the purpose of increasing the availability of
mortgage credit for residential housing that is owned by the twelve Federal Home
Loan Banks. FHLMC issues Participation Certificates (PCs), which represent
interests in mortgages from FHLMC's national portfolio. FHLMC guarantees the
timely payment of interest and ultimate collection of principal, but PCs are not
backed by the full faith and credit of the US Government. Pass-through
securities issued by FNMA are backed by residential mortgages purchased from a
list of approved seller/servicers and are guaranteed as to timely payment of
principal and interest by FNMA, but are not backed by the full faith and credit
of the US Government.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create pass-
through securities based on pools of conventional residential mortgage loans.
Securities created by such non-governmental issuers may offer a higher rate of
interest than government-related securities; however, timely payment of interest
and principal may or may not be supported by insurance or guarantee
arrangements, and there can be no assurance that the private issuers can meet
their obligations.
Collateralized Mortgage Obligations. Seligman U.S. Government Securities Series
- ------------------------------------
may invest in Collateralized Mortgage Obligations (CMOs), which may include
certain CMOs that have elected to be treated as Real Estate Mortgage Investment
Conduits (REMICs). CMOs are fixed-income securities collateralized by pooled
mortgages and separated into short-, medium-, and long-term positions (called
tranches). Tranches pay different rates of interest depending upon their
maturity. CMOs may be collateralized by (a) pass-through securities issued or
guaranteed by GNMA, FNMA or FHLMC, (b) unsecuritized mortgage loans insured by
the Federal Housing Administration or guaranteed by the Department of Veteran's
Affairs, (c) unsecuritized conventional Mortgages, (d) other mortgage related
securities or (e) any combination thereof.
Each tranche of a CMO is issued at a specific coupon rate and has a stated
maturity. As the payments on the underlying mortgage loans are collected, the
CMO issuer generally pays the coupon rate of interest to the holders of each
tranche. In a common structure referred to as a "Pay" CMO, all scheduled and
unscheduled principal payments generated by the collateral, as loans are repaid
or prepaid, go initially to investors in the first tranches. Investors in later
tranches do not start receiving principal payments until the prior tranches are
paid in full. Sometimes, CMOs are structured so that the prepayment and/or
market risks are transferred from one tranche to another.
Most CMOs are issued by Federal agencies. However, the only CMOs backed by the
full faith and credit of the US Government are CMOs collateralized by pass-
through securities guaranteed by GNMA. All CMOs are subject to reinvestment
risk; that is, as prepayments on the underlying pool of mortgages increase, the
maturity of the tranches in the CMO will decrease. As a result, an Underlying
Fund may have to invest the proceeds that were invested in such CMOs in
securities with lower yields. Factors affecting reinvestment risk include the
level of interest rates, general economic and social conditions and the location
and age of the mortgages.
Repurchase Agreements
Each Underlying Fund may hold cash or cash equivalents and may enter into
repurchase agreements with respect to securities; normally repurchase agreements
relate to money market obligations backed by the full faith and credit of the US
Government. Repurchase agreements are transactions in which an investor
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<PAGE>
(e.g., an Underlying Fund) purchases a security from a bank, recognized
securities dealer, or other financial institution and simultaneously commits to
resell that security to such institution at an agreed upon price, date and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement thus involves the obligation of the
bank or securities dealer to pay the agreed upon price on the date agreed to,
which obligation is in effect secured by the value of the underlying security
held by the Underlying Fund. Repurchase agreements could involve certain risks
in the event of bankruptcy or other default by the seller, including possible
delays and expenses in liquidating the securities underlying the agreement,
decline in value of the underlying securities and loss of interest. Although
repurchase agreements carry certain risks not associated with direct investments
in securities, each Underlying Fund intends to enter into repurchase agreements
only with financial institutions believed to present minimum credit risks in
accordance with guidelines established by the J. & W. Seligman & Co.
Incorporated, the investment manager of each Underlying Fund. The
creditworthiness of such institutions will be reviewed and monitored under the
general supervision of the Board of Directors. An Underlying Fund will invest
only in repurchase agreements collateralized in an amount at least equal at all
times to the purchase price plus accrued interest. Repurchase agreements usually
are for short periods, such as one week or less, but may be for longer periods.
When-Issued and Forward Commitment Securities
Seligman U.S. Government Securities Series and Seligman High-Yield Bond Fund may
purchase securities on a when-issued or forward commitment basis. Settlement of
such securities transactions (i.e., delivery of securities and payment of
purchase price) normally takes place within 45 days after the date of the
commitment to purchase.
At the time an Underlying Fund enters into such a commitment both payment and
interest terms will be established prior to settlement; there is a risk that
prevailing interest rates on the settlement date will be greater than the
interest rate terms established at the time the commitment was entered into.
When-issued and forward commitment securities are subject to changes in market
value prior to settlement based upon changes, real or anticipated, in the level
of interest rates or creditworthiness of the issuer. If an Underlying Fund
remains substantially fully invested at the same time that it has purchased
securities on a when-issued or forward commitment basis, the market value of
that Underlying Fund's assets may fluctuate more than otherwise would be the
case. For this reason, accounts for each Underlying Fund will be established
with the Underlying Fund's custodian consisting of cash and/or liquid high-grade
debt securities equal to the amount of each Underlying Fund's when-issued or
forward commitment obligations; these accounts will be valued each day and
additional cash and/or liquid high-grade debt securities will be added to an
account in the event that the current value of the when-issued or forward
commitment obligations increases. When the time comes to pay for when-issued or
forward commitment securities, an Underlying Fund will meet its respective
obligations from then available cash flow, sale of securities held in the
separate account, sale of other securities, or from the sale of the when-issued
or forward commitment securities themselves (which may have a value greater or
less than an Underlying Fund's payment obligations). Sale of securities to meet
when-issued and forward commitment obligations carries with it a greater
potential for the realization of capital gain or loss.
Short Sales
Each of Seligman Henderson Emerging Markets Growth Fund, Seligman Henderson
Global Growth Opportunities Fund, Seligman Henderson Global Smaller Companies
Fund and Seligman Henderson International Fund may sell securities short
"against the box." A short sale "against-the-box" is a short sale in which the
Underlying Fund owns an equal amount of the securities sold short or securities
convertible into or exchangeable without payment of further consideration for
securities of the same issue as, and equal in amount to, the securities sold
short. To effect a short sale, the Underlying Fund will borrow a security from
a brokerage firm to make delivery to the buyer. The Underlying Fund will be
obligated to replace the borrowed security. The Underlying Fund will realize a
gain if the borrowed security declines in price between the date of the short
sale and the date on which the Underlying Fund replaces the
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security. The Underlying Fund will incur a loss if the price of the borrowed
security increases between those dates. Additionally, the Underlying Fund will
incur transaction costs, including interest expenses, in connection with
opening, maintaining and closing short sales against-the-box. Short selling
involves a risk of losses to the Underlying Fund and may exaggerate the
volatility of the Underlying Fund's investment portfolio.
Lending of Portfolio Securities
Each of the Underlying Funds may lend portfolio securities to broker/dealers,
banks or other institutional borrowers, provided that securities loaned by each
of the Underlying Funds may not exceed 33 1/3% of each Underlying Fund's total
assets taken at market value. The Underlying Funds will not lend portfolio
securities to any institutions affiliated with the Underlying Fund. The
borrower must maintain with the Underlying Fund's custodian bank cash or
equivalent collateral equal to at least 100% of the market value of the
securities loaned. During the time portfolio securities are on loan, the
borrower pays the lending Underlying Fund an amount equal to any dividends or
interest paid on the securities. The lending Underlying 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 Underlying Funds will
generally be short-term. Loans are subject to termination at the option of the
lending Underlying Fund or the borrower. The lending Underlying Fund may pay
reasonable administrative and custodial fees in connection with a loan and may
pay a negotiated portion of the interest earned on the collateral to the
borrower or placing broker. The lending Underlying 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
lending of portfolio securities may involve certain risks such as: 1) an
increase in the market value of the borrowed securities without a corresponding
increase in the value of the posted collateral might result in an imbalance in
value between the borrowed securities and the collateral; 2) in the event the
borrower sought protection under the Federal bankruptcy laws, repayment of the
borrowed securities to an Underlying Fund might be delayed; and 3) the borrower
might refuse to repay the borrowed securities. The Underlying Fund may lose
money if a borrower defaults on its obligation to return securities and the
value of the collateral held by the lending Underlying Fund is insufficient to
replace the loaned securities. Each Underlying Fund may lend portfolio
securities to the extent that the Manager deems appropriate in seeking to
achieve an Underlying Fund's investment objective and with only a prudent degree
of risk.
Seligman Cash Management Fund will not lend more than 25% of the value of its
total assets, and it is not intended that payments received on account of
interest paid on securities loaned will exceed 10% of the annual gross income of
this Underlying Fund without offset for realized short-term capital losses, if
any. This Underlying Fund has not loaned any portfolio securities to date.
Borrowing
Except as noted below, the Underlying Funds may borrow money only from banks for
temporary or emergency purposes (but not for the purpose of purchasing portfolio
securities) in an amount not to exceed the following percentages of the value of
the Underlying Fund's total assets: 5% for the Seligman Henderson International
Fund, Seligman Henderson Global Growth Opportunities Fund, Seligman Henderson
Global Smaller Companies Fund and Seligman Cash Management Fund; 10% for
Seligman Frontier Fund and Seligman Henderson Emerging Markets Growth Fund; and
15% for the Seligman U.S. Government Securities Series and Seligman High-Yield
Bond Fund. In addition, the Seligman Frontier Fund, Seligman High-Yield Bond
Series, Seligman U.S. Government Securities Series, Seligman Large-Cap Value
Fund, Seligman Small-Cap Value Fund and Seligman Emerging Markets Growth Fund
will not purchase additional portfolio securities if such Underlying Funds have
outstanding borrowings in excess of 5% of the value of their total assets.
Seligman Common Stock Fund, Seligman Growth Fund, Seligman Large-Cap Value Fund,
and Seligman Small-Cap Value Fund may from time to time borrow money for
temporary or emergency purposes, and
11
<PAGE>
may invest such funds in additional securities. Seligman Capital Fund and
Seligman Communications and Information Fund may from time to time borrow money
in order to purchase securities. Borrowings may be made only from banks and each
of these Underlying Funds may not borrow in excess of one-third of the market
value of its assets, less liabilities other than such borrowing, or pledge more
than 10% (15% for the Seligman Growth Fund, Seligman Large-Cap Value Fund, and
Seligman Small-Cap Value Fund) of its total assets, taken at cost, to secure the
borrowing.
Current asset value coverage of three times any amount borrowed by the
respective Underlying Fund is required at all times. Borrowed money creates an
opportunity for greater capital appreciation, but at the same time increases
exposure to capital risk. The net cost of any money borrowed would be an
expense that otherwise would not be incurred, and this expense will reduce the
Underlying Fund's net investment income in any given period. Any gain in the
value of securities purchased with money borrowed to an amount in excess of
amounts borrowed plus interest would cause the net asset value of the Underlying
Fund's shares to increase more than otherwise would be the case. Conversely,
any decline in the value of securities purchased to an amount below the amount
borrowed plus interest would cause the net asset value to decrease more than
would otherwise be the case.
Except as otherwise specifically noted above, the investment strategies of each
Underlying Fund are not fundamental and an Underlying Fund, with the approval of
its Board of Directors, may change such strategies without the vote of a
majority of the Underlying Fund's outstanding voting securities.
Fund Policies
Each Fund is subject to fundamental policies that place restrictions on certain
types of investments. Each Fund's policies cannot be changed except by vote of
a majority of its outstanding voting securities. Under these policies, each
Fund may not:
- - Make any investment inconsistent with the Fund's classification as a
diversified company under the Investment Company Act of 1940, as amended and
supplemented;
- - Invest more than 25% of its assets, taken at market value, in the securities
of issuers in any particular industry (excluding the US Government and its
agencies and instrumentalities);
- - Make investments for the purpose of exercising control or management;
- - Purchase or sell real estate, except that a Fund may invest in securities
directly or indirectly secured by real estate or interests therein or issued
by companies which invest in real estate or interests therein;
- - Make loans, except that the acquisition of bonds, debentures or other
corporate debt securities and investment in government obligations,
commercial paper, pass-through instruments, certificates of deposit, bankers
acceptances, repurchase agreements or any similar instruments shall not be
deemed to be the making of a loan, and except further that the Fund may lend
its portfolio securities, provided that the lending of portfolio securities
may be made only in accordance with applicable law and the guidelines set
forth in the Prospectus and this Statement of Additional Information, as they
may be amended from time to time; and except that a Fund may lend cash to any
other mutual fund (or series thereof) in the Seligman Group to the extent
permitted by any order that may be obtained from the SEC relating to
borrowing and lending among mutual funds in the Seligman Group;
- - Issue senior securities to the extent such issuance would violate applicable
law;
- - Borrow money, except that a Fund may (i) borrow from banks (as defined in the
Investment Company Act) in amounts up to 33 1/3% of its total assets
(including the amount borrowed), (ii) borrow up to an additional 5% of its
total assets for temporary purposes (iii) obtain such short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities, (iv) purchase securities on
12
<PAGE>
margin to the extent permitted by applicable law and (v) borrow cash from any
other mutual fund (or series thereof) in the Seligman Group to the extent
permitted by any order that may be obtained from the SEC relating to
borrowing and lending among mutual funds in the Seligman Group. A Fund may
not pledge its assets other than to secure such borrowings or, to the extent
permitted by the Fund's investment policies as set forth in the Prospectus
and this Statement of Additional Information, as they may be amended from
time to time, in connection with hedging transactions, short sales, when-
issued and forward commitment transactions and similar investment strategies;
- - Underwrite securities of other issuers except insofar as the Fund technically
may be deemed an underwriter under the Securities Act of 1933 in selling
portfolio securities;
- - Purchase or sell commodities or contracts on commodities, except to the
extent a Fund may do so in accordance with applicable law and the Prospectus
and this Statement of Additional Information, as they may be amended from
time to time, and without registering as a commodity pool operator under the
Commodity Exchange Act.
For a description of the fundamental investment restrictions of the Underlying
Funds, please see "Fund Policies" in each Underlying Fund's Statement of
Additional Information, which are incorporated herein by reference and are
available free of charge by telephoning 1-800-221-2450.
Each Fund may not change its investment objective without shareholder approval.
Under the Investment Company Act of 1940 (1940 Act), a "vote of a majority of
the outstanding voting securities" of a Fund means the affirmative vote of the
lesser of (l) more than 50% of the outstanding shares of the Fund; or (2) 67% or
more of the shares present at a shareholders' meeting if more than 50% of the
outstanding shares of the Fund are represented at the meeting in person or by
proxy.
Temporary Defensive Position
In an attempt to respond to adverse market, economic, political, or other
conditions, each Fund may invest up to 100% of its assets either directly (or
through the Seligman Cash Management Fund or the Seligman U.S. Government
Securities Series) in cash or cash equivalents, including, but not limited to,
prime commercial paper, bank certificates of deposit, bankers' acceptances, or
repurchase agreements for such securities, and securities of the US Government
and its agencies and instrumentalities, as well as cash and cash equivalents
denominated in foreign currencies. Each Fund's investments in foreign cash
equivalents will be limited to those that, in the opinion of the Manager, equate
generally to the standards established for US cash equivalents. Investments in
bank obligations will be limited at the time of investment to the obligations of
the 100 largest domestic banks in terms of assets which are subject to
regulatory supervision by the US Government or state governments, and the
obligations of the 100 largest foreign banks in terms of assets with branches or
agencies in the United States.
Portfolio Turnover
Each Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities (i.e., the Underlying Funds and
individual US Government securities) for the year by the monthly average of the
value of the portfolio securities owned during the year. Securities whose
maturity or expiration dates at the time of acquisition were one year or less
are excluded from the calculation.
Each Fund's portfolio turnover rate is not expected to exceed 100% annually.
Because the Manager expects to reallocate each Fund's assets among the
Underlying Funds, US Government securities and short-term instruments on a semi-
annual basis (if a Fund's allocation with respect to a particular Underlying
Fund is outside the allocation range for such Underlying Fund on the semi-annual
reallocation date), the portfolio turnover rates for the Funds may be high in
comparison to other mutual
13
<PAGE>
funds. In addition, the Funds indirectly bear the
expenses associated with portfolio turnover of the Underlying Funds, a number of
which have fairly high portfolio turnover rates (i.e., in excess of 100%). High
portfolio turnover involves correspondingly greater expenses to an Underlying
Fund, including brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other securities.
Shareholders in the Funds may also bear expenses directly or indirectly through
sales of securities held by the Funds and the Underlying Funds which result in
realization of ordinary income or taxable gains (including short-term capital
gains which are generally taxed to shareholders at ordinary income tax rates).
14
<PAGE>
Management of the Series
Board of Directors
The Board of Directors provides broad supervision over the affairs of the
Series.
Management Information
Directors and officers of the Series, together with information as to their
principal business occupations during the past five years, are shown below.
Each Director who is an "interested person", as defined in the 1940 Act, is
indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
William C. Morris* Director, Chairman of the Chairman, J. & W. Seligman & Co. Incorporated,
(61) Board, Chief Executive Officer Chairman and Chief Executive Officer, the Seligman
and Chairman of the Executive Group of investment companies; Chairman, Seligman
Committee Advisors, Inc., Seligman Services, Inc., and Carbo
Ceramics Inc., ceramic proppants for oil and gas
industry; and Director, Seligman Data Corp.,
Kerr-McGee Corporation, diversified energy company.
Formerly, Director, Daniel Industries Inc.,
manufacturer of oil and gas metering equipment.
Brian T. Zino* Director, President and Member Director and President, J. & W. Seligman & Co.
(47) of the Executive Committee 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 of the Investment Company Institute;
and Director, ICI Mutual Insurance Company, Seligman
Advisors, Inc., and Seligman Services, Inc.
Richard R. Schmaltz* Director and Member of the Director and Managing Director, Director of
(59) Executive Committee 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.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
John R. Galvin Director Dean, Fletcher School of Law and Diplomacy at Tufts
(70) University; Director or Trustee, the Seligman Group
Tufts University of investment companies; Chairman Emeritus, American
Packard Avenue, Council on Germany; Governor of the Center for
Medford, MA 02155 Creative Leadership; Director; Raytheon Co.,
electronics; National Defense University; and the
Institute for Defense Analyses. Formerly, Director,
USLIFE Corporation, life insurance; Ambassador, U.S.
State Department for negotiations in Bosnia;
Distinguished Policy Analyst at Ohio State
University and Olin Distinguished Professor of
National Security Studies at the United States
Military Academy. From June 1987 to June 1992, he
was the Supreme Allied Commander, Europe and the
Commander-in-Chief, United States European Command.
Alice S. Ilchman Director Retired President, Sarah Lawrence College; Director
(64) or Trustee, the Seligman Group of investment
18 Highland Circle, companies; Trustee, the Committee for Economic
Bronxville, NY 10708 Development; and Chairman, The Rockefeller
Foundation, charitable foundation. Formerly,
Trustee, The Markle Foundation, philanthropic
organization; and Director, New York Telephone
Company; and International Research and Exchange
Board, intellectual exchanges.
Frank A. McPherson Director Retired Chairman and Chief Executive Officer of
(66) Kerr-McGee Corporation; Director or Trustee, the
2601 Northwest Expressway, Seligman Group of investment companies; Director,
Suite 805E Kimberly-Clark Corporation, consumer products; Bank
Oklahoma City, OK 73112 of Oklahoma Holding Company; Baptist Medical Center;
Oklahoma Chapter of the Nature Conservancy; Oklahoma
Medical Research Foundation; and National Boys and
Girls Clubs of America; and Member of the Business
Roundtable and National Petroleum Council.
Formerly, Chairman, Oklahoma City Public Schools
Foundation; and Director, Federal Reserve System's
Kansas City Reserve Bank and the Oklahoma City
Chamber of Commerce.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
John E. Merow Director Retired Chairman and Senior Partner, Sullivan &
(70) Cromwell, law firm; Director or Trustee, the
125 Broad Street, Seligman Group of investment companies; Director,
New York, NY 10004 Commonwealth Industries, Inc., manufacturers of
aluminum sheet products; the Foreign Policy
Association; Municipal Art Society of New York; the
U.S. Council for International Business; and New
York-Presbyterian Hospital; Chairman, New
York-Presbyterian Healthcare Network, Inc.;
Vice-Chairman, the U.S.-New Zealand Council; and
Member of the American Law Institute and Council on
Foreign Relations.
Betsy S. Michel Director Attorney; Director or Trustee, the Seligman Group of
(57) investment companies; Trustee, The Geraldine R.
P.O. Box 449, Dodge Foundation, charitable foundation. Formerly,
Gladstone, NJ 07934 Director, the National Association of Independent
Schools (Washington, DC).
James C. Pitney Director Retired Partner, Pitney, Hardin, Kipp & Szuch, law
(73) firm; Director or Trustee, the Seligman Group of
Park Avenue at Morris investment companies. Formerly, Director, Public
County, P.O. Box 1945, Service Enterprise Group, public utility.
Morristown, NJ 07962
James Q. Riordan Director Director or Trustee, the Seligman Group of
(72) investment companies; Director, The Houston
675 Third Avenue, Exploration Company; The Brooklyn Museum, KeySpan
Suite 3004 Energy Corporation; and Public Broadcasting Service;
New York, NY 10017 and Trustee, the Committee for Economic Development.
Formerly, Co-Chairman of the Policy Council of the
Tax Foundation; Director, Tesoro Petroleum
Companies, Inc. and Dow Jones & Company, Inc.;
Director and President, Bekaert Corporation; and
Co-Chairman, Mobil Corporation.
Robert L. Shafer Director Retired Vice President, Pfizer Inc.; Director or
(67) Trustee, the Seligman Group of investment companies.
96 Evergreen Avenue, Formerly, Director, USLIFE Corporation.
Rye, NY 10580
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
James N. Whitson Director Director and Consultant, Sammons Enterprises, Inc.;
(64) Director or Trustee, the Seligman Group of
6606 Forestshire Drive, investment companies; Director, C-SPAN and
Dallas, TX 75230 CommScope, Inc., manufacturer of coaxial cables.
Formerly, Executive Vice President, Chief Operating
Officer, Sammons Enterprises, Inc.; and Director,
Red Man Pipe and Supply Company, piping and other
materials.
Charles W. Kadlec Vice President and Portfolio Mr. Kadlec is a Managing Director of the Manager and
(53) Manager Chief Investment Strategist for Seligman Advisors.
Mr. Kadlec is the architect of several investment
strategies, chief among them Seligman Time Horizon
Matrix, which is based on an investor's time horizon
to reaching goals, and Harvesting a Lifetime of
Savings, a strategy addressing the unique concerns
facing retirees.
Lawrence P. Vogel Vice President Senior Vice President, Finance, J. & W. Seligman &
(43) 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 General Counsel, Senior Vice President, Law and
(35) Regulation and Corporate Secretary, J. & W. Seligman
& Co. Incorporated; Secretary, the Seligman Group of
investment companies, Seligman Advisors, Inc.,
Seligman Henderson Co., Seligman Services, Inc.,
Seligman International, Inc. and Seligman Data Corp.
Thomas G. Rose Treasurer Treasurer, the Seligman Group of investment
(42) companies and Seligman Data Corp.
</TABLE>
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Series for
which no market valuation is available, and to elect or appoint officers of the
Series to serve until the next meeting of the Board.
Directors and officers of the Series are also directors, trustees and officers
of some or all of the other investment companies in the Seligman Group
(including the Underlying Funds).
18
<PAGE>
<TABLE>
<CAPTION>
Compensation
Pension or Total Compensation
Aggregate Retirement Benefits from Fund and
Name and Compensation Accrued as Part of Fund Complex Paid
Position with Fund from Fund (1) Fund Expenses to Directors (1)(2)
- ------------------------------------------ ------------ ------------------- ------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director N/A N/A N/A
John R. Galvin, Director $1,774 N/A $72,000
Alice S. Ilchman, Director $1,774 N/A 72,000
Frank A. McPherson, Director $1,774 N/A 72,000
John E. Merow, Director $1,774 N/A 72,000
Betsy S. Michel, Director $1,774 N/A 72,000
James C. Pitney, Director $1,774 N/A 72,000
James Q. Riordan, Director $1,774 N/A 72,000
Robert L. Shafer, Director $1,774 N/A 72,000
James N. Whitson, Director $1,774 N/A 72,000(d)
</TABLE>
- ------------------------------
(1) For the year ending December 31, 2000. The per meeting fee for Directors is
$2,000, which is allocated among all Funds in the Fund Complex.
(2) The Seligman Group of investment companies consists of twenty investment
companies.
The Series has a compensation arrangement under which outside directors may
elect to defer receiving their fees. The Series has adopted a Deferred
Compensation Plan under which a director who has elected deferral of his or her
fees may choose a rate of return equal to either (1) the interest rate on short-
term Treasury Bills, or (2) the rate of return on the shares of any of the
investment companies advised by the Manager, as designated by the director. The
cost of such fees and earnings is included in directors' fees and expenses, and
the accumulated balance thereof is included in other liabilities in each Fund's
financial statements.
The Series may, but is not obligated to, purchase shares of the Seligman Group
of investment companies to hedge its obligations in connection with the Deferred
Compensation Plan.
Sales Charges
Class A shares of each Fund may be issued without a sales charge to present and
retired directors, trustees, officers, employees (and their family members) of
the Series, the other investment companies in the Seligman Group, and the
Manager and its affiliates. Family members are defined to include lineal
descendants and lineal ancestors, siblings (and their spouses and children) and
any company or organization controlled by any of the foregoing. Such sales may
also be made to employee benefit plans and thrift plans for such persons and to
any investment advisory, custodial, trust or other fiduciary account managed or
advised by the Manager or any affiliate. The sales may be made for investment
purposes only, and shares may be resold only to the Series.
Class A shares may be sold at net asset value to these persons since such sales
require less sales effort and lower sales related expenses as compared with
sales to the general public.
Code of Ethics
J. & W. Seligman & Co. Incorporated ("Seligman"), Seligman Advisors, and their
subsidiaries and affiliates, and the Seligman Group of Investments Companies
have adopted a Code of Ethics that sets forth the circumstances under which
officers, directors and employees (collectively "Employees") are permitted
19
<PAGE>
to engage in personal securities transactions. The Code of Ethics proscribes
certain practices with regard to personal securities transactions and personal
dealings, provides a framework for the reporting and monitoring of personal
securities transactions by Seligman's Director of Compliance, and sets forth a
procedure of identifying, for disciplinary action, those individuals who violate
the Code of Ethics. The Code of Ethics prohibits Employees (including all
investment team members) from purchasing or selling any security or an
equivalent security that is being purchased or sold by any client, or where the
Employee intends, or knows of another's intention, to purchase or sell the
security on behalf of a client. The Code also prohibits all Employees from
acquiring securities in a private placement or in an initial or secondary public
offering, unless prior approval has been obtained from Seligman's Director of
Compliance. The Code of Ethics also imposes a strict standard of confidentiality
and requires investment team members to disclose any interest they may have in
the securities or issuers that they recommend for purchase by any client.
The Code of Ethics also prohibits (1) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) that the portfolio manager or investment team
manages; (2) each Employee from engaging in short-term trading (a purchase and
sale or vice-versa within 60 days) and (3) each member of an investment team
from engaging in short sales of a security if, at that time, any client managed
by that team has a long position in that security. Any profit realized pursuant
to any of these prohibitions must be disgorged.
Employees are required, except under very limited circumstances, to engage in
personal securities transactions through Seligman's order desk. The order desk
maintains a list of securities that may not be purchased due to a possible
conflict with clients. All Employees are also required to disclose all
securities beneficially owned by them upon commencement of employment and at the
end of each calendar year.
A copy of the Code of Ethics is on public file with, and is available upon
request from, the Securities and Exchange Commission (SEC). You can access it
through the SEC's Internet site, http://www.sec.gov.
Control Persons and Principal Holders of Securities
Control Persons
Each Fund's classes of shares are new, so such information is not available.
Principal Holders
Each Fund's classes of shares are new, so such information is not available.
Management Ownership
Each Fund's classes of shares are new, so such information is not available.
Investment Advisory and Other Services
Investment Manager
Seligman manages each Fund of the Series. Seligman is a successor firm to an
investment banking business founded in 1864 which has thereafter provided
investment services to individuals, families, institutions, and corporations.
On December 29, 1988, a majority of the outstanding voting securities of
Seligman was purchased by Mr. William C. Morris and a simultaneous
recapitalization of Seligman occurred. See Appendix B for further history of
Seligman.
20
<PAGE>
All of the officers of the Series listed above are officers or employees of
Seligman. Their affiliations with the Series and with Seligman are provided
under their principal business occupations.
Each Fund pays Seligman a management fee for its services, calculated daily and
payable monthly. The fee is equal to .10% per annum of the Fund's average daily
net asset value. In addition, each investor in a Fund will indirectly bear the
management fee charged to the Fund by the Underlying Funds in which the Fund
invests.
Each Fund pays all of its expenses other than those assumed by Seligman,
including brokerage commissions, administration, shareholder services and
distribution fees, fees and expenses of independent attorneys and auditors,
taxes and governmental fees, including fees and expenses of qualifying their
respective shares under Federal and State securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder record keeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees and expenses of
directors of the Series not employed by or serving as a director of Seligman or
its affiliates, insurance premiums and extraordinary expenses such as litigation
expenses. Certain expenses are allocated between each Fund in a manner
determined by the Board of Directors to be fair and equitable.
The Manager has contractually undertaken to reimburse each Fund's expenses or to
waive its fee to the extent that the sum of the "management fee" plus "other
expenses" (but not any 12b-1 fees) exceeds 0.50% per annum of the Fund's average
daily net assets. The undertaking will remain in effect at least until December
31, 2002.
The Management Agreement also provides that Seligman will not be liable to the
Series for any error of judgment or mistake of law, or for any loss arising out
of any investment, or for any act or omission in performing its duties under the
Management Agreement, except for willful misfeasance, bad faith, gross
negligence, or reckless disregard of its obligations and duties under the
Management Agreement.
Principal Underwriter
Seligman Advisors, Inc. (Seligman Advisors), an affiliate of Seligman, 100 Park
Avenue, New York, New York 10017, acts as general distributor of the shares of
each Fund of the Series and of the other mutual funds in the Seligman Group.
Seligman Advisors is an "affiliated person" (as defined in the 1940 Act) of
Seligman, which is itself an affiliated person of the Series. Those individuals
identified above under "Management Information" as directors or officers of the
Series and Seligman Advisors are affiliated persons of both entities.
Services Provided by the Investment Manager
Under the Management Agreement dated January 3, 2000, subject to the control of
the Board of Directors, Seligman manages the investment of the assets of each
Fund, including making purchases and sales of portfolio securities (i.e., the
Underlying Funds, US Government Securities and short-term instruments)
consistent with each Fund's investment objectives and policies, and administers
its business and other affairs. Seligman provides the Series with such office
space, administrative and other services and executive and other personnel as
are necessary for Series operations. Seligman pays all of the compensation of
directors of the Series who are employees or consultants of Seligman and of the
officers and employees of the Series. Seligman also provides senior management
for Seligman Data Corp., the Series' shareholder service agent.
21
<PAGE>
Service Agreements
There are no other management-related service contracts under which services are
provided to the Series.
Other Investment Advice
No person or persons, other than directors, officers, or employees of Seligman,
regularly advise the Series with respect to its investments.
Dealer Reallowances
Dealers and financial advisors receive a percentage of the initial sales charge
on sales of Class A shares and Class C shares of each Fund, as set forth below:
Class A shares:
- ---------------
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
as a % of as a % of Net as a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- --------------------------- -------------------------- ----------------------- --------------------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 - $99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and over(2) 0 0 0
</TABLE>
- -----------------------------
(1) "Offering Price" is the amount that you actually pay for each Fund's
shares; it includes the initial sales charge.
(2) You will not pay a sales charge on purchases of $1 million or more, but you
will be subject to a 1% CDSC if you sell your shares within eighteen
months.
Class C shares:
- ---------------
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
as a % of as a % of Net as a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- -------------------- ----------------- --------------- --------------------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 - $1,000,000(2) 0 0 0
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
(2) Your purchase of Class C shares must be for less than $1,000,000 because if
you invest $1,000,000 or more, you will pay less in fees and charges if you
buy Class A shares.
Seligman Services, Inc. (Seligman Services) an affiliate of Seligman, is a
limited purpose broker/dealer. Seligman Services is eligible to receive
commissions from certain sales of Fund shares.
Rule 12b-1 Plan
Each Fund has adopted an Administration, Shareholder Services and Distribution
Plan (12b-1 Plan) in accordance with Section 12(b) of the 1940 Act and Rule 12b-
1 thereunder.
22
<PAGE>
Under the 12b-1 Plan, each Fund may pay to Seligman Advisors an administration,
shareholder services and distribution fee in respect of such Fund's Class A,
Class B, Class C and Class D shares, respectively. Payments by each Fund under
its 12b-1 Plan may include, but are not limited to: (1) compensation to
securities dealers and other organizations (Service Organizations) for providing
distribution assistance with respect to assets invested in the Fund; (2)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to the Fund's shareholders; and (3)
otherwise promoting the sale of shares of the Fund, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying Seligman Advisors' costs incurred in connection with its
marketing efforts with respect to shares of the Fund. Seligman, in its sole
discretion, may also make similar payments to Seligman Advisors from its own
resources, which may include the management fee that Seligman receives from each
Fund, respectively. Payments made by each Fund under its 12b-1 Plan are
intended to be used to encourage sales of each Fund, as well as to discourage
redemptions.
Fees paid by each Fund under its 12b-1 Plan with respect to any class of shares
of the Fund may not be used to pay expenses incurred solely in respect of any
other class of the Fund, or any other Seligman mutual fund. Expenses
attributable to more than one class of a Fund are allocated between the classes
of the Fund in accordance with a methodology approved by the Series' Board of
Directors. Expenses of distribution activities that benefit both a Fund and
other Seligman mutual funds will be allocated among the applicable funds based
on relative gross sales during the quarter in which such expenses are incurred,
in accordance with a methodology approved by the Board.
Class A
- --------
Under the 12b-1 Plan, each Fund, with respect to its Class A shares, is
authorized to pay quarterly to Seligman Advisors a service fee at an annual rate
of up to .25% of the average daily net asset value of such Fund's Class A
shares. These fees are used by Seligman Advisors exclusively to make payments
to Service Organizations which have entered into agreements with Seligman
Advisors. Such Service Organizations receive from Seligman Advisors a
continuing fee of up to .25% on an annual basis, payable quarterly, of the
average daily net assets of Class A shares attributable to the particular
Service Organization for providing personal service and/or maintenance of
shareholder accounts. The fee payable to Service Organizations from time to
time shall, within such limits, be determined by the Board of Directors. Each
Fund is not obligated to pay Seligman Advisors for any such costs it incurs in
excess of the fee described above. No expense incurred in one year by Seligman
Advisors with respect to Class A shares of a Fund may be paid from Class A 12b-1
fees received from the Fund in any other year. If a Fund's 12b-1 Plan is
terminated in respect of its Class A shares, no amounts (other than amounts
accrued but not yet paid) would be owed by the Fund to Seligman Advisors with
respect to its Class A shares. To avoid any duplication of 12b-1 fees, the 12b-
1 fees to be paid by each class of a Fund will be reduced by an amount equal to
the dollar amount of any 12b-1 fees paid by Underlying Funds in respect of
shares owned by the Fund.
Class B
- --------
Under the 12b-1 Plan, each Fund, with respect to its Class B shares, is
authorized to pay monthly a 12b-1 fee at an annual rate of up to 1% of the
average daily net asset value of such Fund's Class B shares. The fee is
comprised of (1) a distribution fee equal to .75% per annum, which is paid
directly to a third party, FEP Capital, L.P., to compensate it for having
funded, at the time of sale of Class B shares of each Fund (i) a 4% sales
commission to Service Organizations and (ii) a payment of up to .25% of sales to
Seligman Advisors to help defray its costs of distributing Class B shares; and
(2) a service fee of up to .25% per annum which is paid to Seligman Advisors.
The service fee is used by Seligman Advisors exclusively to make payments to
Service Organizations which have entered into agreements with Seligman Advisors.
Such Service Organizations receive from Seligman Advisors a continuing service
fee of up to .25% on an annual basis, payable quarterly, of the average daily
net assets of Class B shares
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attributable to the particular Service Organization for providing personal
service and/or maintenance of shareholder accounts. The amounts expended by
Seligman Advisors or FEP Capital, L.P. in any one year upon the initial purchase
of Class B shares of each Fund may exceed the 12b-1 fees paid by the Fund in
that year. Each Fund's 12b-1 Plan permits expenses incurred in respect of Class
B shares in one year to be paid from Class B 12b-1 fees received from the Fund
in any other year; however, in any year each Fund is not obligated to pay any
12b-1 fees in excess of the fees described above. Seligman Advisors and FEP
Capital, L.P. are not reimbursed for expenses which exceed such fees. If a
Fund's 12b-1 Plan is terminated in respect of its Class B shares, no amounts
(other than amounts accrued but not yet paid) would be owed by the Fund to
Seligman Advisors or FEP Capital, L.P. with respect to its Class B shares. To
avoid any duplication of 12b-1 fees, the 12b-1 fees to be paid by each class of
a Fund will be reduced by an amount equal to the dollar amount of any 12b-1 fees
paid by Underlying Funds in respect of shares owned by the Fund.
Class C
- --------
Under the 12b-1 Plan, the Fund, with respect to Class C shares, is authorized to
pay monthly to Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of
the average daily net asset value of the Class C shares. The fee is used by
Seligman Advisors as follows: During the first year following the sale of Class
C shares, a distribution fee of .75% of the average daily net assets
attributable to Class C shares is used, along with any CDSC proceeds during the
first eighteen months, to (1) reimburse Seligman Advisors for its payment at the
time of sale of Class C shares of a 1.25% sales commission to Service
Organizations, and (2) pay for other distribution expenses, including paying for
the preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and other marketing costs of Seligman Advisors. In addition, during
the first year following the sale of Class C shares, a service fee of up to .25%
of the average daily net assets attributable to such Class C shares is used to
reimburse Seligman Advisors for its prepayment to Service Organizations at the
time of sale of Class C shares of a service fee of .25% of the net asset value
of the Class C share sold (for shareholder services to be provided to Class C
shareholders over the course of the one year immediately following the sale).
The payment of service fees to Seligman Advisors is limited to amounts Seligman
Advisors actually paid to Service Organizations at the time of sale as service
fees. After the initial one-year period following a sale of Class C shares, the
entire 12b-1 fee attributable to such Class C shares is paid to Service
Organizations for providing continuing shareholder services and distribution
assistance in respect of the Fund. To avoid any duplication of 12b-1 fees, the
12b-1 fees to be paid by each class of a Fund will be reduced by an amount equal
to the dollar amount of any 12b-1 fees paid by Underlying Funds in respect of
shares owned by the Fund.
The amounts expended by Seligman Advisors in any one year with respect to Class
C shares of each Fund may exceed the 12b-1 fees paid by the Fund in that year.
Each Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in respect
of Class C shares in one year to be paid from Class C 12b-1 fees in any other
year; however, in any year each Fund is not obligated to pay any 12b-1 fees in
excess of the fees described above.
If the 12b-1 Plan is terminated in respect of Class C shares of a Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to its Class C shares.
Class D
- -------
Under the 12b-1 Plan, each Fund, with respect to its Class D shares, is
authorized to pay monthly to Seligman Advisors a 12b-1 fee at an annual rate of
up to 1% of the average daily net asset value of such Fund's Class D shares.
The fee is used by Seligman Advisors as follows: During the first year following
the sale of Class D shares, a distribution fee of .75% of the average daily net
assets attributable to such Class D shares is used, along with any CDSC
proceeds, to (1) reimburse Seligman Advisors for its payment at the time of sale
of Class D shares of a .75% sales commission to Service Organizations, and
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<PAGE>
(2) pay for other distribution expenses, including paying for the preparation of
advertising and sales literature and the printing and distribution of such
promotional materials and prospectuses to prospective investors and other
marketing costs of Seligman Advisors. In addition, during the first year
following the sale of Class D shares, a service fee of up to .25% of the average
daily net assets attributable to such Class D shares is used to reimburse
Seligman Advisors for its prepayment to Service Organizations at the time of
sale of Class D shares of a service fee of .25% of the net asset value of the
Class D shares sold (for shareholder services to be provided to Class D
shareholders of the Fund over the course of the one year immediately following
the sale). The payment of service fees to Seligman Advisors is limited to
amounts Seligman Advisors actually paid to Service Organizations at the time of
sale as service fees. After the initial one-year period following a sale of
Class D shares, the entire 12b-1 fee attributable to such Class D shares is paid
to Service Organizations for providing continuing shareholder services and
distribution assistance in respect of a Fund. To avoid any duplication of 12b-1
fees, the 12b-1 fees to be paid by each class of a Fund will be reduced by an
amount equal to the dollar amount of any 12b-1 fee paid by the Underlying Fund
in respect of shares owned by the Fund.
The amounts expended by Seligman Advisors in any one year with respect to Class
D shares of each Fund may exceed the 12b-1 fees paid by the Fund in that year.
Each Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in respect
of Class D shares in one year to be paid from Class D 12b-1 fees in any other
year; however, in any year each Fund is not obligated to pay any 12b-1 fees in
excess of the fees described above.
If the 12b-1 Plan is terminated in respect of Class D shares of a Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to its Class D shares.
The 12b-1 Plans were approved on November 18, 1999 by the Board of Directors of
the Series, including a majority of the Directors who are not "interested
persons" (as defined in the 1940 Act) of the Series and who have no direct or
indirect financial interest in the operation of the 12b-1 Plans or in any
agreement related to the 12b-1 Plans (the "Qualified Directors") and by the sole
shareholder of each Fund on December 15, 1999. The 12b-1 Plans will continue in
effect through December 31 of each year so long as such continuance is approved
annually by a majority vote of both the Directors and the Qualified Directors of
the Series, cast in person at a meeting called for the purpose of voting on such
approval. The 12b-1 Plans may not be amended to increase materially the amounts
payable to Service Organizations with respect to a Class without the approval of
a majority of the outstanding voting securities of the Class. If the amount
payable in respect of Class A shares under the 12b-1 Plans is proposed to be
increased materially, the Fund will either (1) permit holders of Class B shares
to vote as a separate class on the proposed increase or (2) establish a new
class of shares subject to the same payment under the 12b-1 Plans as existing
Class A shares, in which case the Class B shares will thereafter convert into
the new class instead of into Class A shares. No material amendment to the 12b-
1 Plans may be made except by a majority of both the Directors and Qualified
Directors.
The 12b-1 Plans require that the Treasurer of the Series shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the 12b-1 Plans. Rule
12b-1 also requires that the selection and nomination of Directors who are not
"interested persons" of the Series be made by such disinterested Directors.
Seligman Services acts as the broker/dealer of record for shareholder accounts
of the Series that do not have a designated financial advisor and receives
compensation from each Fund pursuant to its 12b-1 Plan for providing personal
services and account maintenance to such accounts and other distribution
services.
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Brokerage Allocation and Other Practices
Brokerage Transactions
To the extent that any Fund invests directly in US Government Securities or
short-term instruments, Seligman will seek the most favorable price and
execution in the purchase and sale of such securities. When two or more of the
investment companies in the Seligman Group or other investment advisory clients
of Seligman desire to buy or sell these same securities at the same time, the
securities purchased or sold are allocated by Seligman in a manner believed to
be equitable to each. There may be possible advantages or disadvantages of such
transactions with respect to price or the size of positions readily obtainable
or saleable.
Fixed-income securities are generally traded on the over-the-counter market on a
"net" basis without a stated commission, through dealers acting for their own
account and not as brokers. To the extent the Funds invest directly in US
Government Securities or short-term instruments, the Funds will engage in
transactions with these dealers or deal directly with the issuers. Prices paid
to dealers generally include a "spread," i.e., the difference between the prices
at which a dealer is willing to purchase or to sell the security at that time.
The Management Agreement recognizes that in the purchase and sale of such
securities, Seligman will seek the most favorable price and execution and,
consistent with that policy, may give consideration for research, statistical
and other services furnished by dealers to Seligman for its use in connection
with its services to the Funds as well as to other clients.
In over-the-counter markets, the Series deals with responsible primary market
makers unless a more favorable execution or price is believed to be obtainable.
Each Fund may buy securities from or sell securities to dealers acting as
principal, except dealers with which the Series' directors and/or officers are
affiliated.
Commissions
To the extent that the Funds invest their assets in Underlying Funds, the Funds
will not pay any commission for purchases and sales. Each Fund, however, will
bear a portion of the commissions paid by the Underlying Funds in which it
invests in connection with the purchase and sale of portfolio securities.
Brokerage Selection
Consistent with seeking the most favorable price and execution when buying or
selling US Government securities and short-term instruments, Seligman may give
consideration to the research, statistical, and other services furnished by
brokers or dealers to Seligman for its use, as well as the general attitude
toward and support of investment companies demonstrated by such brokers or
dealers. Such services include supplemental investment research, analysis, and
reports concerning issuers, industries, and securities deemed by Seligman to be
beneficial to a Fund. In addition, Seligman is authorized to place orders with
brokers who provide supplemental investment and market research and security and
economic analysis although the use of such brokers may result in a higher
brokerage charge to the Series than the use of brokers selected solely on the
basis of seeking the most favorable price and execution and although such
research and analysis may be useful to Seligman in connection with its services
to clients other than the Series.
Directed Brokerage
Each Fund's classes of shares are new, so no directed brokerage information is
available.
Regular Broker-Dealers
Each Fund's classes of shares are new, so this information is not available.
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Capital Stock and Other Securities
Capital Stock
The Directors of the Series are authorized to issue, create and classify shares
of capital stock in separate funds without further action by shareholders.
Shares of capital stock of each Fund have a par value of $.001 and are divided
into four classes, designated as Class A common stock, Class B common stock,
Class C common stock and Class D common stock. Each share of a Fund's Class A,
Class B, Class C and Class D common stock is equal as to earnings, assets and
voting privileges, except that each class bears its own separate distribution
and, potentially, certain other class expenses and has exclusive voting rights
with respect to any matter to which a separate vote of any class is required by
the 1940 Act or Maryland law. The Series has adopted a Plan (Multiclass Plan)
pursuant to Rule 18f-3 under the 1940 Act permitting the issuance and sale of
multiple classes of common stock. In accordance with the Articles of
Incorporation, the Board of Directors may authorize the creation of additional
classes of common stock with such characteristics as are permitted by the
Multiclass Plan and Rule 18f-3. The 1940 Act requires that where more than one
class exists, each class must be preferred over all other classes in respect of
assets specifically allocated to such class. Shares have non-cumulative voting
rights for the election of directors. Each outstanding share will be fully paid
and non-assessable, and freely transferable. There are no preferential
liquidation, conversion or prescriptive rights.
Other Securities
The Series has no authorized securities other than the above-mentioned common
stock.
Purchase, Redemption, and Pricing of Shares
Purchase of Shares
Class A
Class A shares of each Fund of the Series may be purchased at a price equal to
the next determined net asset value per share, plus an initial sales charge.
Purchases of Class A shares by a "single person" (as defined below under
"Persons Entitled to Reductions") may be eligible for the following reductions
in initial sales charges:
Volume Discounts are provided if the total amount being invested in Class A
shares of a Fund alone, or in any combination of shares of the other mutual
funds in the Seligman Group which are sold with an initial sales charge, reaches
levels indicated in the sales charge schedule set forth in the Prospectus.
The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of a Fund and shares of the other Seligman mutual
funds sold with an initial sales charge with the total net asset value of shares
of those mutual funds already owned that were sold with an initial sales charge
and the total net asset value of shares of Seligman Cash Management Fund which
were acquired through an exchange of shares of another Seligman mutual fund on
which there was an initial sales charge at the time of purchase to determine
reduced sales charges in accordance with the schedule in the Prospectus. The
value of the shares owned, including the value of shares of Seligman Cash
Management Fund acquired in an exchange of shares of another Seligman mutual
fund on which there was an initial sales charge at the time of purchase will be
taken into account in orders placed through a dealer, however,
27
<PAGE>
only if Seligman Advisors is notified by an investor or a dealer of the amount
owned by the investor at the time the purchase is made and is furnished
sufficient information to permit confirmation.
A Letter of Intent allows an investor to purchase Class A shares over a 13-month
period at reduced initial sales charges in accordance with the schedule in the
Prospectus, based on the total amount of Class A shares of a Fund that the
letter states the investor intends to purchase plus the total net asset value of
shares that were sold with an initial sales charge of the other Seligman mutual
funds already owned and the total net asset value of shares of Seligman Cash
Management Fund which were acquired through an exchange of shares of another
Seligman mutual fund on which there was an initial sales charge at the time of
purchase. Reduced sales charges also may apply to purchases made within a 13-
month period starting up to 90 days before the date of execution of a letter of
intent.
Persons Entitled to Reductions. Reductions in initial sales charges apply to
purchases of Class A shares by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
director or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code of 1986,
as amended, organizations tax exempt under Section 501(c)(3) or (13) of the
Internal Revenue Code, and non-qualified employee benefit plans that satisfy
uniform criteria are considered "single persons" for this purpose. The uniform
criteria are as follows:
1. Employees must authorize the employer, if requested by the Series, to
receive in bulk and to distribute to each participant on a timely basis the
Series prospectus, reports, and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Series 12 months
and 30 days after the last regular investment in his account. In such event,
the dropped participant would lose the discount on share purchases to which the
plan might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
Eligible Employee Benefit Plans. The table of sales charges in the Prospectus
applies to sales to "eligible employee benefit plans," except that the Series
may sell shares at net asset value to "eligible employee benefit plans" which
have at least (1) $500,000 invested in the Seligman Group of mutual funds or (2)
50 eligible employees to whom such plan is made available. Such sales must be
made in connection with a payroll deduction system of plan funding or other
systems acceptable to Seligman Data Corp., the Series' shareholder service
agent. "Eligible employee benefit plan" means any plan or arrangement, whether
or not tax qualified, which provides for the purchase of Series' shares. Sales
of shares to such plans must be made in connection with a payroll deduction
system of plan funding or other system acceptable to Seligman Data Corp.
Section 403(b) plans sponsored by public educational institutions are not
eligible for net asset value purchases based on the aggregate investment made by
the plan or number of eligible employees.
Such sales are believed to require limited sales effort and sales-related
expenses and therefore are made at net asset value. Contributions or account
information for plan participation also should be transmitted to Seligman Data
Corp. by methods which it accepts. Additional information about "eligible
employee benefit plans" is available from financial advisors or Seligman
Advisors.
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Further Types of Reductions. Class A shares may also be issued without an
initial sales charge in the following instances:
(1) to any registered unit investment trust which is the issuer of periodic
payment plan certificates, the net proceeds of which are invested in
Series' shares;
(2) to separate accounts established and maintained by an insurance company
which are exempt from registration under Section 3(c)(11) of the 1940 Act;
(3) to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with Seligman Advisors;
(4) to financial institution trust departments;
(5) to registered investment advisers exercising discretionary investment
authority with respect to the purchase of Series' shares;
(6) to accounts of financial institutions or broker/dealers that charge account
management fees, provided Seligman or one of its affiliates has entered
into an agreement with respect to such accounts;
(7) pursuant to sponsored arrangements with organizations which make
recommendations to, or permit group solicitations of, its employees,
members or participants in connection with the purchase of shares of the
Series;
(8) to other investment companies in the Seligman Group in connection with a
deferred fee arrangement for outside directors;
(9) to certain "eligible employee benefit plans" as discussed above;
(10) to those partners and employees of outside counsel to the Fund or its
directors or trustees who regularly provide advice and services to the
Fund, to other funds managed by Seligman, or to their directors or
trustees; and
(11) in connection with sales pursuant to a 401(k) alliance program which has an
agreement with Seligman Advisors.
CDSC Applicable to Class A Shares. Class A shares purchased without an initial
sales charge due to a purchase of $1,000,000 or more either alone or through a
Volume Discount, Right of Accumulation, or Letter of Intent are subject to a
CDSC of 1% on redemptions of such shares within eighteen months of purchase.
Employee benefit plans eligible for net asset value sales may be subject to a
CDSC of 1% for terminations at the plan level only, on redemptions of shares
purchased within eighteen months prior to plan termination. The 1% CDSC will be
waived on shares that were purchased through Morgan Stanley Dean Witter & Co. by
certain Chilean institutional investors (i.e., pension plans, insurance
companies, and mutual funds). Upon redemption of such shares within an
eighteen-month period, Morgan Stanley Dean Witter will reimburse Seligman
Advisors a pro rata portion of the fee it received from Seligman Advisors at the
time of sale of such shares.
See "CDSC Waivers" below for other waivers which may be applicable to Class A
shares.
Class B
Class B shares of each Fund of the Series may be purchased at a price equal to
the next determined net asset value, without an initial sales charge. However,
Class B shares are subject to a CDSC if the shares
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are redeemed within six years of purchase at rates set forth in the table below,
charged as a percentage of the current net asset value or the original purchase
price, whichever is less.
Years Since Purchase CDSC
- -------------------- ----
Less than 1 year......................... 5%
1 year or more but less than 2 years..... 4%
2 years or more but less than 3 years.... 3%
3 years or more but less than 4 years.... 3%
4 years or more but less than 5 years.... 2%
5 years or more but less than 6 years.... 1%
6 years or more.......................... 0%
Approximately eight years after purchase, Class B shares will convert
automatically to Class A shares. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert automatically to
Class A shares along with the underlying shares on which they were earned.
Conversion occurs at the end of the month which precedes the eighth anniversary
of the purchase date. If Class B shares of a Fund are exchanged for Class B
shares of another Seligman mutual fund, the conversion period applicable to the
Class B shares acquired in the exchange will apply, and the holding period of
the shares exchanged will be tacked onto the holding period of the shares
acquired. Class B shareholders of each Fund exercising the exchange privilege
will continue to be subject to such Fund's CDSC schedule if such schedule is
higher or longer than the CDSC schedule relating to the new Class B shares. In
addition, Class B shares of each Fund acquired by exchange will be subject to
such Fund's CDSC schedule if such schedule is higher or longer than the CDSC
schedule relating to the Class B shares of the Seligman mutual fund from which
the exchange has been made.
Class C
Class C shares may be purchased at a price equal to the next determined net
asset value, plus an initial sales charge. Purchases of Class C shares by a
"single person" may be eligible for the reductions in initial sales charges
described above for Class A shares. Class C shares are subject to a CDSC of 1%
if the shares are redeemed within eighteen months of purchase, charged as a
percentage of the current net asset value or the original purchase price,
whichever is less. Unlike Class B shares, Class C shares do not automatically
convert to Class A shares after eight years.
Class D
Class D shares of each Fund of the Series may be purchased at a price equal to
the next determined net asset value, without an initial sales charge. However,
Class D shares are subject to a CDSC of 1% if the shares are redeemed within one
year of purchase, charged as a percentage of the current net asset value or the
original purchase price, whichever is less. Unlike Class B shares, Class D
shares do not automatically convert to Class A shares after eight years.
Systematic Withdrawals. Class B, Class C and Class D shareholders of each Fund
who reinvest both their dividends and capital gain distributions to purchase
additional shares of each Fund, respectively, may use the Fund's Systematic
Withdrawal Plan to withdraw up to 12%, 10% and 10%, respectively, of the value
of their accounts per year without the imposition of a CDSC. Account value is
determined as of the date the systematic withdrawals begin.
CDSC Waivers. The CDSC on Class B, Class C and Class D shares of each Fund of
the Series (and certain Class A shares, as discussed above) will be waived or
reduced in the following instances:
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(1) on redemptions following the death or disability (as defined in Section
72(m)(7) of the Internal Revenue Code) of a shareholder or beneficial
owner;
(2) in connection with (1) distributions from retirement plans qualified under
Section 401(a) of the Internal Revenue Code when such redemptions are
necessary to make distributions to plan participants (such payments
include, but are not limited to, death, disability, retirement, or
separation of service), (2) distributions from a custodial account under
Section 403(b)(7) of the Internal Revenue Code or an IRA due to death,
disability, minimum distribution requirements after attainment of age 70
1/2 or, for accounts established prior to January 1, 1998, attainment of
age 59 1/2, and (3) a tax-free return of an excess contribution to an IRA;
(3) in whole or in part, in connection with shares sold to current and retired
Directors of the Series;
(4) in whole or in part, in connection with shares sold to any state, county,
or city or any instrumentality, department, authority, or agency thereof,
which is prohibited by applicable investment laws from paying a sales load
or commission in connection with the purchase of any registered investment
management company;
(5) in whole or in part, in connection with systematic withdrawals; and
(6) in connection with participation in the Merrill Lynch Small Market 401(k)
Program.
If, with respect to a redemption of any Class A, Class B, Class C or Class D
shares sold by a dealer, the CDSC is waived because the redemption qualifies for
a waiver as set forth above, the dealer shall remit to Seligman Advisors
promptly upon notice, an amount equal to the payment or a portion of the payment
made by Seligman Advisors at the time of sale of such shares.
Payment in Securities. In addition to cash, the Series may accept securities in
payment for Series' shares sold at the applicable public offering price (net
asset value and, if applicable, any sales charge), although the Series does not
presently intend to accept securities in payment for its shares. Generally, the
Series will only consider accepting securities (l) to increase its holdings in a
portfolio security, or (2) if Seligman determines that the offered securities
are a suitable investment for the Series and in a sufficient amount for
efficient management. Although no minimum has been established, it is expected
that the Series would not accept securities with a value of less than $100,000
per issue in payment for shares. The Series may reject in whole or in part
offers to pay for Series' shares with securities, may require partial payment in
cash for applicable sales charges, and may discontinue accepting securities as
payment for Series' shares at any time without notice. The Series will not
accept restricted securities in payment for shares. The Series will value
accepted securities in the manner provided for valuing portfolio securities of
the Series. Any securities accepted by the Series in payment for Series' shares
will have an active and substantial market and have a value which is readily
ascertainable.
Offering Price
When you buy or sell shares of each Fund, you do so at the Class's net asset
value (NAV) next calculated after Seligman Advisors accepts your request. Any
applicable sales charge will be added to the purchase price for Class A shares
and Class C shares.
NAV per share of each class of a Fund (including the Underlying Funds (Class A
shares only)) is determined as of the close of regular trading on the New York
Stock Exchange (normally, 4:00 p.m. Eastern time), on each day that the NYSE is
open for business. The NYSE is currently closed on New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. The Series will also
determine NAV for each class of a Fund and Underlying Fund on each day in which
there is a sufficient degree of trading in a Fund's and/or Underlying Fund's
portfolio securities that the NAV of Fund shares might be materially
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affected. NAV per share for a class of a Fund and Underlying Fund is computed by
dividing such class's share of the value of the net assets of the Fund or
Underlying Fund (i.e., the value of its assets less liabilities) by the total
number of outstanding shares of such class. All expenses of a Fund and
Underlying Fund, including the management fee paid by the Funds or the
Underlying Funds, are accrued daily and taken into account for the purpose of
determining their respective NAVs. The NAV of Class B, Class C and Class D
shares of the Funds will generally be lower than the NAV of Class A shares as a
result of the higher 12b-1 fees with respect to such shares.
The Underlying Funds owned by the Funds are valued at their respective net asset
values. Each Underlying Fund's portfolio securities, including open short
positions and options written, are valued at the last sale price on the
securities exchange or securities market on which such securities primarily are
traded. Securities traded on a foreign exchange or over-the-counter market are
valued at the last sales price on the primary exchange or market on which they
are traded. United Kingdom securities and securities for which there are no
recent sales transactions are valued based on quotations provided by primary
market makers in such securities. Any securities for which recent market
quotations are not readily available, including restricted securities, are
valued at fair value as determined in accordance with procedures approved by the
Board of Directors. Premiums received on the sale of call options will be
included in the net asset value, and the current market value of the options
sold by each Underlying Fund will be subtracted from its net asset value.
Short-term obligations of the Funds and Underlying Funds with less than 60 days
remaining to maturity are generally valued at amortized cost. Short-term
obligations with more than 60 days remaining to maturity will be valued on an
amortized cost basis based on the value on such date unless the Board determines
that this amortized cost value does not represent fair market value.
Generally, trading in foreign securities, as well as US Government securities,
money market instruments and repurchase agreements, is substantially completed
each day at various times prior to the close of regular trading on the NYSE.
The values of such securities used in computing the net asset value of the
shares of each Fund and Underlying Fund are determined as of such times.
Foreign currency exchange rates are also generally determined prior to the close
of regular trading on the NYSE. Occasionally, events affecting the value of
such securities and such exchange rates may occur between the times at which
they are determined and the close of regular trading on the NYSE, which will not
be reflected in the computation of net asset value. If during such periods
events occur which materially affect the value of such securities, the
securities will be valued at their fair market value as determined in accordance
with procedures approved by the Board of Directors.
For purposes of determining the net asset value per share of each Underlying
Fund, all assets and liabilities initially expressed in foreign currencies will
be converted into US dollars at the mean between the bid and offer prices of
such currencies against US dollars quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a pricing service
that takes into account the quotes provided by a number of such major banks.
For more information on the valuation of the securities held in each Underlying
Fund's portfolio, including the valuation of individual US Government securities
and short-term instruments held by the Funds, please see "Pricing of Fund
Shares" in each Underlying Fund's Prospectus (Seligman U.S. Government
Securities Series' Prospectus and Seligman Cash Management Fund's Prospectus for
individual US Government securities and short-term instruments) which are
incorporated herein by reference and are available free of charge by telephoning
1-800-221-2450.
Specimen Price Make-Up
Under the current distribution arrangements between the Series and Seligman
Advisors, Class A shares and Class C shares are sold with a maximum initial
sales charge of 4.75% and 1.00%(1), respectively, and Class
32
<PAGE>
B and Class D shares are sold at NAV(2). Using each Class's NAV at December 15,
1999, the maximum offering price of the Fund's shares is as follows:
Class A
Net asset value and offering price per share....... $7.14
=====
Maximum sales charge (4.75% of offering price)..... 0.36
-----
Offering price to public....................... $7.50
=====
Class B
- -------
Net asset value and offering price per share(2).... $7.14
Class C
Net asset value and offering price per share....... $7.14
=====
Maximum sales charge (1.00% of offering price(1)).. 0.07
-----
Offering price to public........................... $7.21
=====
Class D
Net asset value and offering price per share(2).... $7.14
=====
- --------------
(1) In addition to the 1.00% front-end sales charge, Class C shares are subject
to a 1% CDSC if you redeem your shares within eighteen months of purchase.
(2) Class B shares are subject to a CDSC declining from 5% in the first year
after purchase to 0% after six years. Class D shares are also subject to a 1%
CDSC if you redeem your shares within one year of purchase.
Redemption in Kind
The procedures for selling Series' shares under ordinary circumstances are set
forth in the Prospectus. In unusual circumstances, payment may be postponed, or
the right of redemption postponed for more than seven days, if the orderly
liquidation of portfolio securities of the Funds and/or the Underlying Funds is
prevented by the closing of, or restricted trading on, the NYSE during periods
of emergency, or such other periods as ordered by the Securities and Exchange
Commission. Under these circumstances, redemption proceeds may be made in
securities. If payment is made in securities, a shareholder may incur brokerage
expenses in converting these securities to cash.
Taxation of the Series
Each Fund intends to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code. For each year so qualified, each Fund will not
be subject to federal income taxes on its net investment income and capital
gains, if any, realized during any taxable year, which it distributes to its
shareholders, provided that at least 90% of its net investment income and net
short-term capital gains are distributed to shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to shareholders, whether received
in cash or reinvested in additional shares. To the extent designated as derived
from a Fund's dividend income that would be eligible for the dividends
33
<PAGE>
received deduction if the Fund were not a regulated investment company, they are
eligible, subject to certain restrictions, for the 70% dividends received
deduction for corporations.
Distributions of net capital gains (i.e., the excess of net long-term capital
gains over any net short-term losses) are taxable as long-term capital gain,
whether received in cash or invested in additional shares, regardless of how
long the shares have been held by a shareholder. Such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Shareholders receiving distributions in the form of additional shares issued by
the Series will be treated for federal income tax purposes as having received a
distribution in an amount equal to the fair market value on the date of
distribution of the shares received. Individual shareholders generally will be
subject to federal tax on distributions of net capital gains at a maximum rate
of 20% if designated as derived from the Series' capital gains from property
held for more than one year.
Any gain or loss realized upon a sale or redemption of shares in each Fund by a
shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. Individual
shareholders will be subject to federal income tax on net capital gains at a
maximum rate of 20% in respect of shares held for more than one year. Net
capital gain of a corporate shareholder is taxed at the same rate as ordinary
income. However, if shares on which a long-term capital gain distribution has
been received are subsequently sold or redeemed and such shares have been held
for six months or less, any loss realized will be treated as long-term capital
loss to the extent that it offsets the long-term capital gain distribution. In
addition, no loss will be allowed on the sale or other disposition of shares of
each Fund if, within a period beginning 30 days before the date of such sale or
disposition and ending 30 days after such date, the holder acquires (including
shares acquired through dividend reinvestment) securities that are substantially
identical to the shares of such Fund.
In determining gain or loss on shares of each Fund that are sold or exchanged
within 90 days after acquisition, a shareholder generally will not be permitted
to include in the tax basis attributable to such shares the sales charge
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales charge by reason of the Exchange or Reinstatement Privilege offered by
the Series. Any sales charge not taken into account in determining the tax
basis of shares sold or exchanged within 90 days after acquisition will be added
to the shareholder's tax basis in the shares acquired pursuant to the Exchange
or Reinstatement Privilege.
Each Fund will generally be subject to an excise tax of 4% on the amount of any
income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned. However, based on its
distribution policy, each Fund reasonably expects to avoid this excise tax.
Furthermore, dividends declared in October, November or December, payable to
shareholders of record on a specified date in such a month and paid in the
following January will be treated as having been paid by the Fund and received
by each shareholder in December. Under this rule, therefore, shareholders may
be taxed in one year on dividends or distributions actually received in January
of the following year.
Shareholders are urged to consult their tax advisors concerning the effect of
federal income taxes in their individual circumstances.
Unless a shareholder includes a certified taxpayer identification number (social
security number for individuals) on the account application and certifies that
the shareholder is not subject to backup withholding, the Series is required to
withhold and remit to the US Treasury a portion of distributions and other
reportable payments to the shareholder. The rate of backup withholding is 31%.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Series may be fined $50 annually for each account for which
a certified taxpayer identification number is not provided. In the event that
such a fine is imposed, the Series may charge a service fee of up to $50 that
may be deducted from the shareholder's account and offset against any of its
undistributed dividends and capital
34
<PAGE>
gain distributions. The Series also reserves the right to close any account
which does not have a certified taxpayer identification number.
Underwriters
Distribution of Securities
The Series and Seligman Advisors are parties to a Distributing Agreement dated
January 3, 2000 under which Seligman Advisors acts as the exclusive agent for
distribution of shares of the Series. Seligman Advisors accepts orders for the
purchase of the Series' shares, which are offered continuously. As general
distributor of the Series' shares, Seligman Advisors allows reallowances to all
dealers on sales of Class A shares, as set forth above under "Dealer
Reallowances." Seligman Advisors retains the balance of sales charges and any
CDSCs paid by investors.
Compensation
Each Fund's classes of shares are new, so compensation information is not
available.
Other Payments
Seligman Advisors shall pay broker/dealers, from its own resources, a fee on
purchases of Class A shares of $1,000,000 or more (NAV sales), calculated as
follows: 1.00% of NAV sales up to but not including $2 million; .80% of NAV
sales from $2 million up to but not including $3 million; .50% of NAV sales from
$3 million up to but not including $5 million; and .25% of NAV sales from $5
million and above. The calculation of the fee will be based on assets held by a
"single person," including an individual, members of a family unit comprising
husband, wife and minor children purchasing securities for their own account, or
a trustee or other fiduciary purchasing for a single fiduciary account or single
trust. Purchases made by a trustee or other fiduciary for a fiduciary account
may not be aggregated purchases made on behalf of any other fiduciary or
individual account.
Seligman Advisors shall also pay broker/dealers, from its own resources, a fee
on assets of certain investments in Class A shares of the Seligman mutual funds
participating in an "eligible employee benefit plan" that are attributable to
the particular broker/dealer. The shares eligible for the fee are those on
which an initial sales charge was not paid because either the participating
eligible employee benefit plan has at least (1) $500,000 invested in the
Seligman mutual funds or (2) 50 eligible employees to whom such plan is made
available. Class A shares representing only an initial purchase of Seligman
Cash Management Fund are not eligible for the fee. Such shares will become
eligible for the fee once they are exchanged for shares of another Seligman
mutual fund. The payment is based on cumulative sales for each Plan during a
single calendar year, or portion thereof. The payment schedule, for each
calendar year, is as follows: 1.00% of sales up to but not including $2 million;
.80% of sales from $2 million up to but not including $3 million; .50% of sales
from $3 million up to but not including $5 million; and .25% of sales from $5
million and above.
Seligman Advisors may from time to time assist dealers by, among other things,
providing sales literature to, and holding informational programs for the
benefit of, dealers' registered representatives. Seligman Advisors may from
time to time pay a bonus or other incentive to dealers that sell shares of the
Seligman mutual funds. Such bonus or other incentive may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and members of their
families to places within or outside the United States. The cost to Seligman
Advisors of such promotional activities and payments shall be consistent with
the rules of the National Association of Securities Dealers, Inc., as then in
effect.
35
<PAGE>
Calculation of Performance Data
Each Fund's Class A shares, Class B shares, Class C and Class D shares are new,
so no performance data are presented.
Each Fund may, from time to time, make reference in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Services, Inc., an independent reporting service which
monitors the performance of mutual funds. In calculating the total return of
each Fund's Class A, Class B, Class C and Class D shares, respectively, the
Lipper analysis assumes investment of all dividends and distributions paid but
does not take into account applicable sales charges. Each Fund may also refer
in advertisements in other promotional material to articles, comments, listings
and columns in the financial press pertaining to such Fund's performance.
Examples of such financial and other press publications include BARRON'S,
BUSINESS WEEK, CDA/WIESENBERGER MUTUAL FUNDS INVESTMENT REPORT, CHRISTIAN
SCIENCE MONITOR, FINANCIAL PLANNING, FINANCIAL TIMES, FINANCIAL WORLD, FORBES,
FORTUNE, INDIVIDUAL INVESTOR, INVESTMENT ADVISOR, INVESTORS BUSINESS DAILY,
KIPLINGER'S, LOS ANGELES TIMES, MONEY MAGAZINE, MORNINGSTAR, INC., PENSION AND
INVESTMENTS, SMART MONEY, THE NEW YORK TIMES, THE WALL STREET JOURNAL, USA
TODAY, U.S. NEWS AND WORLD REPORT, WORTH MAGAZINE, WASHINGTON POST AND YOUR
MONEY.
Each Fund's advertising or promotional material may make reference to such
Fund's "Beta," "Standard Deviation," or "Alpha." Beta measures the volatility
of a Fund, as compared to that of the overall market. Standard deviation
measures how widely a Fund's performance has varied from its average
performance, and is an indicator of a Fund's potential for volatility. Alpha
measures the difference between the returns of a Fund and the returns of the
market, adjusted for volatility.
36
<PAGE>
Financial Statements
The Funds' statements of assets and liabilities presented below have been
audited by Deloitte & Touche LLP, independent auditors.
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
STATEMENTS OF ASSETS AND LIABILITIES
December 14, 1999
ASSETS
<TABLE>
<CAPTION>
Time Time Time
Horizon Horizon Horizon Harvester
30 Fund 30 Fund 30 Fund Fund
<S> <C> <C> <C> <C>
Cash $25,004 $25,004 $25,004 $25,004
Prepaid expenses 40,000 40,000 40,000 40,000
------- ------- ------- -------
Total assets 65,004 65,004 65,004 65,004
LIABILITIES
Accrued expenses payable
Commitments and contingencies
(Notes 1 and 2) 40,000 40,000 40,000 40,000
------ ------ ------ ------
Net assets equivalent to $7.14 per share
(applicable to 3,502 Class A shares of
capital stock, $.001 Par value, of each
Series; 4,000,000,000 shares authorized) $25,004 $25,004 $25,004 $25,004
======= ======= ======= =======
</TABLE>
Notes to Financial Statements
Note 1. Organization
- ---------------------
Seligman Time Horizon/Harvester Series, Inc. (the "Series") was
incorporated in the State of Maryland on August 4, 1999 as an open-end,
diversified management investment company. The Series consists of four separate
Funds: the Seligman Time Horizon 30 Fund; the Seligman Time Horizon 20 Fund;
the Seligman Time Horizon 10 Fund, and; the Seligman Harvester Fund (the
"Funds"). Each Fund offers four classes of shares - Class A shares, Class B
shares, Class C shares and Class D shares. The Series has had no operations
other than those related to organizational matters and for each Fund, the sale
and issuance to Seligman Advisors, Inc. (the "Distributor") of 3,502 Class A
shares of capital stock for $25,004 on December 14, 1999.
Prepaid expenses include the costs incurred in connection with the
initial offering of the Series' shares. Prepaid expenses will be amortized to
expense over twelve months on a straight-line basis starting with the
commencement of operations.
The costs incurred, and to be incurred, in connection with the
organization of the Series will be paid by J. & W. Seligman & Co. Incorporated
(the "Manager") or the Distributor. Such costs are estimated to be $36,000.
37
<PAGE>
Note 2. Management Agreement
- -----------------------------
The Management Agreement provides the Manager with a monthly management fee
at the annual rate of .10% of each Series' average daily net assets. Until
December 31, 2002, the Manager has voluntarily agreed to waive its fee and/or
reimburse expenses of a Fund to the extent that total expenses of the Fund,
excluding fees payable pursuant to the Administration, Shareholder Services and
Distribution Plan adopted by the Series on behalf of each Fund, exceed an annual
rate of .50% of average net assets of such Fund.
Note 3. Income Taxes
- ---------------------
The Series intends to meet the requirements of the Internal Revenue Code of
1986 applicable to regulated investment companies and as such will not be
subject to federal income taxes.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Seligman Time Horizon/Harvester Series, Inc.:
We have audited the accompanying statements of assets and liabilities of
Seligman Time Horizon 30 Fund, Seligman Time Horizon 20 Fund, Seligman Time
Horizon 10 Fund and Seligman Harvester Fund of Seligman Time Horizon/Harvester
Series, Inc. as of December 14, 1999. These financial statements are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly,
in all material respects, the financial position of each series of the Seligman
Time Horizon/Harvester Series, Inc. as of December 14, 1999, in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
December 16, 1999
General Information
Custodian. Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
Missouri 64105, serves as custodian of the Series. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for each Fund of the Series.
Auditors. Deloitte & Touche, LLP, independent auditors, have been selected as
auditors of the Series. Their address is Two World Financial Center, New York,
New York 10281.
38
<PAGE>
Appendix A
MOODY'S INVESTORS SERVICE, INC. (MOODY'S)
DEBT SECURITIES
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk. Interest payments are protected
by a large or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than Aaa bonds because margins of protection may
not be as large or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be characteristically lacking or may be unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact may have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.
39
<PAGE>
COMMERCIAL PAPER
Moody's Commercial Paper Ratings are opinions of the ability of issuers to repay
punctually promissory senior debt obligations not having an original maturity in
excess of one year. Issuers rated "Prime-1" or "P-1" indicates the highest
quality repayment ability of the rated issue.
The designation "Prime-2" or "P-2" indicates that the issuer has a strong
ability for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
The designation "Prime-3" or "P-3" indicates that the issuer has an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
Issuers rated "Not Prime" do not fall within any of the Prime rating categories.
STANDARD & POOR'S RATING SERVICE (S&P)
DEBT SECURITIES
AAA: Debt issues rated AAA are highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Debt issues rated A are regarded as upper medium grade. They have a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB: Debt issues rated BBB are regarded as having an adequate capacity to pay
interest and re-pay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and re-pay principal
for bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC: Debt issues rated BB, B, CCC and CC are regarded on balance, as
predominantly speculative with respect to capacity to pay interest and pre-pay
principal in accordance with the terms of the bond. BB indicates the lowest
degree of speculation and CC the highest degree of speculation. While such
bonds will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposure to adverse conditions.
C: The rating C is reserved for income bonds on which no interest is being
paid.
D: Debt issues rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.
40
<PAGE>
COMMERCIAL PAPER
S&P Commercial Paper ratings are current assessments of the likelihood of timely
payment of debts having an original maturity of no more than 365 days.
A-1: The A-1 designation indicates that the degree of safety regarding timely
payment is very strong.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3: Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes
in circumstances than obligations carrying the higher designations.
B: Issues rated "B" are regarded as having only a speculative capacity for
timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful
capacity of payment.
D: Debt rated "D" is in payment default.
The ratings assigned by S&P may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within its major rating categories.
41
<PAGE>
Appendix B
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of J. & W.
Seligman & Co. Incorporated. In the years that followed, the Seligman Complex
played a major role in the geographical expansion and industrial development of
the United States.
The Seligman Complex:
...Prior to 1900
. Helps finance America's fledgling railroads through underwritings.
. Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
. Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
. Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
. Is appointed U.S. Navy fiscal agent by President Grant.
. Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
. Helps Congress finance the building of the Panama Canal.
...1910s
. Participates in raising billions for Great Britain, France and Italy, helping
to finance World War I.
...1920s
. Participates in hundreds of successful underwritings including those for some
of the country's largest companies: Briggs Manufacturing, Dodge Brothers,
General Motors, Minneapolis-Honeywell Regulatory Company, Maytag Company,
United Artists Theater Circuit and Victor Talking Machine Company.
. Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion in
assets, and one of its oldest.
...1930s
. Assumes management of Broad Street Investing Co. Inc., its first mutual fund,
today known as Seligman Common Stock Fund, Inc.
. Establishes Investment Advisory Service.
42
<PAGE>
...1940s
. Helps shape the Investment Company Act of 1940.
. Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the investment
banking industry.
. Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
. Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
. Develops new open-end investment companies. Today, manages more than 50
mutual fund portfolios.
. Helps pioneer state-specific municipal bond funds, today managing a national
and 18 state-specific municipal funds.
. Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
. Establishes Seligman Portfolios, Inc., an investment vehicle offered through
variable annuity products.
...1990s
. Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc., two closed-end funds that invest in high quality
municipal bonds.
. In 1991 establishes a joint venture with Henderson plc, of London, known as
Seligman Henderson Co., to offer global investment products.
. Introduces to the public Seligman Frontier Fund, Inc., a small capitalization
mutual fund.
. Launches Seligman Henderson Global Fund Series, Inc., which today offers five
separate series: Seligman Henderson International Fund, Seligman Henderson
Global Smaller Companies Fund, Seligman Henderson Global Technology Fund,
Seligman Henderson Global Growth Opportunities Fund and Seligman Henderson
Emerging Markets Growth Fund.
. Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
. Launches innovative Seligman New Technologies Fund, Inc., a closed-end
"interval" fund seeking long-term capital appreciation by investing in
technology companies, including venture-capital investing.
Saivfb1299
43
<PAGE>
PART C. OTHER INFORMATION
- ------ -----------------
Item 23. Exhibits.
- ------- --------
The Exhibits listed below marked with an asterisk (*) were filed
previously. Other Exhibits listed below are filed herewith.
(a) *Articles of Incorporation.
(b) *By-laws.
(c) *Specimen Stock Certificate.
(d) *Management Agreement between Registrant and J. & W. Seligman & Co.
Incorporated.
(e) *Distributing Agreement between Registrant and Seligman Advisors, Inc.
(e)(1) *Sales Agreement between Seligman Advisors, Inc. and Dealers.
(f) *Deferred Compensation Plan for Directors of Seligman Time
Horizon/Harvester Series, Inc.
(g) *Form of Custody and Investment Accounting Agreement between
Registrant and Investors Fiduciary Trust Company
(h) Not applicable.
(i) Opinion and Consent of Counsel.
(j) Consent of Independent Auditors.
(k) Balance Sheet.
(l) Purchase Agreement (Investment Letter) between Registrant and J. & W.
Seligman & Co. Incorporated.
(m)(a)(1) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Time Horizon 30 Fund.
(m)(a)(2) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Time Horizon 20 Fund.
(m)(a)(3) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Time Horizon 10 Fund.
(m)(a)(4) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Harvester Fund.
(m)(b) *Form of Administration, Shareholder Services and Distribution
Agreement between Seligman Advisors, Inc. and Dealers.
(n) *Plan of Multiple Classes of Shares (Four Classes) pursuant to Rule
18f-3 under the Investment Company Act of 1940, as amended.
(p) Code of Ethics.
Other Exhibits: *Powers of Attorney.
- --------------
Item 24. Persons Controlled by or Under Common Control with Registrant. - None.
- -------- --------------------------------------------------------------
C-1
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------- -----------------
Item 25. Indemnification. Reference is made to the provisions of Article
- -------- ----------------
Twelfth of Registrant's Articles of Incorporation filed as Exhibit
23(a) to Registrant's Registration Statement, filed on Form N-1A on
August 13, 1999, and Article VII of Registrant's By-laws, filed as
Exhibit 24(b) to Registrant's Pre-Effective Amendment No. 1 to the
Registration Statement, filed on November 19, 1999.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing
provisions, or otherwise, Registrant has been advised by the
Securities and Exchange Commission that 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of
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, Registrant
will, unless in the opinion of counsel the matter has be settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser. J. & W.
- -------- -----------------------------------------------------
Seligman & Co. Incorporated, a Delaware corporation (the "Manager"),
is the Registrant's investment adviser. The Manager also serves as
investment adviser to several associated investment companies. They
are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and
Information Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth
Fund, Inc., Seligman Henderson Global Fund Series, Inc., Seligman High
Income Fund Series, Seligman Income Fund, Inc., Seligman Municipal
Fund Series, Inc., Seligman Municipal Series Trust, Seligman New
Jersey Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund
Series, Seligman Portfolios, Inc., Seligman Quality Municipal Fund,
Inc. Seligman Select Municipal Fund, Inc., Seligman Value Fund Series,
Inc. Tri-Continental Corporation and Seligman New Technologies Fund,
Inc.
The Manager has an investment advisory service division which provides
investment management or advice to private clients. The list required
by this Item 26 of officers and directors of the Manager, together
with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Forms ADV, filed by the Manager pursuant to the
Investment Advisers Act of 1940 (SEC File Nos. 801-15798), which was
filed on March 31, 1999.
Item 27. Principal Underwriters.
- -------- -----------------------
(a) The names of each investment company (other than the Registrant) for
which Registrant's principal underwriter is currently distributing
securities of the Registrant and also acts as a principal underwriter,
depositor or investment adviser are as follows:
Seligman Capital Fund, Inc.
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.
C-2
<PAGE>
Seligman Value Fund Series, Inc.
C-3
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------- -----------------
(b) Name of each director, officer or partner of Registrant's principal
underwriter named in response to Item 20:
Seligman Advisors, Inc.
-----------------------
As of July 31, 1999
-------------------
<TABLE>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
William C. Morris* Director Chairman of the Board and Chief Executive Officer
Brian T. Zino* Director President and Director
Ronald T. Schroeder* Director None
Fred E. Brown* Director Director Emeritus
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
Stephen J. Hodgdon* President and Director None
Charles W. Kadlec* Chief Investment Strategist None
Lawrence P. Vogel* Senior Vice President, Finance Vice President
Edward F. Lynch* Senior Vice President, National None
Sales Director
James R. Besher Senior Vice President, Division None
14000 Margaux Lane Sales Director
Town & Country, MO 63017
Gerald I. Cetrulo, III Senior Vice President, Sales None
140 West Parkway
Pompton Plains, NJ 07444
Matthew A. Digan* Senior Vice President, None
Domestic Funds
Jonathan G. Evans Senior Vice President, Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
T. Wayne Knowles Senior Vice President, Division None
104 Morninghills Court Sales Director
Cary, NC 27511
Joseph Lam Senior Vice President, Regional None
Seligman International Inc. Director, Asia
Suite 1133, Central Building
One Pedder Street
Central Hong Kong
Bradley W. Larson Senior Vice President, Sales None
367 Bryan Drive
Alamo, CA 94526
Michelle L. McCann-Rappa* Senior Vice President, None
Retirement Plans
Scott H. Novak* Senior Vice President, Insurance None
Richard M. Potocki Senior Vice President, Regional None
Seligman International UK Limited Director, Europe and the Middle East
Berkeley Square House 2nd Floor
Berkeley Square
London, United Kingdom W1X 6EA
Bruce M. Tuckey Senior Vice President, Sales None
41644 Chattman Drive
Novi, MI 48375
Andrew S. Veasey Senior Vice President, Sales None
14 Woodside Drive
</TABLE>
C-4
<PAGE>
Rumson, NJ 07760
C-5
<PAGE>
PART C. OTHER INFORMATION (continued)
- --------------------------------------
Seligman Advisors, Inc.
-----------------------
As of July 31, 1999
-------------------
<TABLE>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
Charles L. von Breitenbach, II* Senior Vice President, None
Managed Money
J. Brereton Young* Senior Vice President, Director None
of Sales Development
Jeffrey S. Dean* Vice President, Business Analysis None
Mason S. Flinn Vice President, Regional Retirement None
159 Varennes Plans Manager
San Francisco, CA 94133
Marsha E. Jacoby* Vice President, Offshore Business None
Manager
William W. Johnson* Vice President, Order Desk None
Jo Ellen Kemp Vice President, Regional Retirement None
17011 E. Monterey Drive Plan Manager
Fountain Hills, AZ 85268
Ronald W. Pond* Vice President, Portfolio Advisor None
Jeffery C. Pleet* Vice President, Regional Retirement None
Plans Manager
Tracy A. Salomon* Vice President, Retirement Marketing None
Helen Simon* Vice President, Sales Administration None
Gary A. Terpening* Vice President, Director of Business None
Development
Charles E. Wenzel Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
Jeff Botwinick Regional Vice President None
11508 Foster Road
Overland Park, KS 66210
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Kevin Casey Regional Vice President None
19 Bayview Avenue
Babylon, NY 11702
Bradford C. Davis Regional Vice President None
241 110th Avenue SE
Bellevue, WA 98004
Christopher J. Derry Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
Kenneth Dougherty Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
Kelli A. Wirth Dumser Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
Edward S. Finocchiaro Regional Vice President None
120 Screenhouse Lane
Duxbury, MA 02332
</TABLE>
C-6
<PAGE>
PART C. OTHER INFORMATION (continued)
- --------------------------------------
Seligman Advisors, Inc.
-----------------------
As of July 31, 1999
-------------------
<TABLE>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
Michael C. Forgea Regional Vice President None
32 W. Anapamu Street # 186
Santa Barbara, CA 93101
Carla A. Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Cathy Des Jardins Regional Vice President None
PMB 152
1705 14th Street
Boulder, CO 80302
Michael K. Lewallen Regional Vice President None
908 Tulip Poplar Lane
Birmingham, AL 35244
Judith L. Lyon Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
Leslie A. Mudd Regional Vice President None
5243 East Calle Redonda
Phoenix, AZ 85018
Tim O'Connell Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
George M. Palmer, Jr. Regional Vice President None
1805 Richardson Place
Tampa, FL 33606
Thomas Parnell Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
Craig Prichard Regional Vice President None
9207 Cross Oaks Court
Fairfax Station, VA 22039
Nicholas Roberts Regional Vice President None
200 Broad Street, Apt. 2225
Stamford, CT 06901
Diane H. Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
James Taylor Regional Vice President None
290 Bellington Lane
Creve Couer, MO 63141
Steve Wilson Regional Vice President None
83 Kaydeross Park Road
Saratoga Springs, NY 12866
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
Gail S. Cushing* Assistant Vice President, National None
Accounts Manager
Sandra G. Floris* Assistant Vice President, Order Desk None
</TABLE>
C-7
<PAGE>
PART C. OTHER INFORMATION (continued)
- --------------------------------------
Seligman Advisors, Inc.
-----------------------
As of July 31, 1999
-------------------
<TABLE>
<CAPTION>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
Keith Landry* Assistant Vice President, Order Desk None
Albert A. Pisano* Assistant Vice President and None
Compliance Officer
Joyce Peress* Assistant Secretary Assistant Secretary
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, NY 10017.
(c) Not applicable.
Item 28. Location of Accounts and Records. The accounts, books and documents
- -------- ---------------------------------
required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder are kept in the
possession of J.& W. Seligman & Co. Incorporated at its offices at 100
Park Avenue, New York, NY 10017 or at the following locations:
(1) Investors Fiduciary Trust Company (IFTC), 801 Pennsylvania, Kansas
City, Missouri 64105 is custodian of the Registrant's cash and
securities. IFTC is also agent and performs certain accounting and
record-keeping functions relating to portfolio transactions and
calculates the net asset value of the Registrant.
(2) Seligman Data Corp., 100 Park Avenue, New York, NY 10017, as
shareholder servicing agent, maintains shareholder records for the
Registrant.
Item 29. Management Services. Seligman Data Corp. (SDC), the Registrant's
- -------- --------------------
shareholder service agent, has an agreement with First Data Investors
Services Group (FDISG) pursuant to which FDISG provides a data
processing system for certain shareholder accounting and record-
keeping functions performed by SDC.
Item 30. Undertakings. Not applicable.
- -------- -------------
C-8
<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 Pre-Effective Amendment
No. 2 to its Registration Statement on Form N-1A (File Nos. 811-9545 and 333-
85111) to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of New York, State of New York, on the 20th day of December, 1999.
SELIGMAN TIME HORIZON/HARVESTER
SERIES, INC.
By: /s/ William C. Morris
----------------------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Pre-Effective Amendment No. 2 to the Registration
Statement has been signed below by the following persons in the capacities
indicated on November 18, 1999.
Signature Title
--------- -----
/s/ William C. Morris Chairman of the Board
- ----------------------------- (Principal executive officer)
William C. Morris and Director
/s/ Brian T. Zino Director and President
- ------------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- -------------------------
Thomas G. Rose
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
James C. Pitney, Director ) ------------------------------------
James Q. Riordan, Director ) *Brian T. Zino, Attorney-in-Fact
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
Registration Statement on Form N-1A
EXHIBIT INDEX
The Exhibits listed below marked with an asterisk (*) were filed
previously. Other Exhibits are filed herewith.
(a) *Articles of Incorporation.
(b) *By-laws.
(c) *Specimen Stock Certificate.
(d) *Management Agreement between Registrant and J. & W. Seligman & Co.
Incorporated.
(e) *Distributing Agreement between Registrant and Seligman Advisors,
Inc.
(e)(1) *Sales Agreement between Seligman Advisors, Inc. and Dealers.
(f) *Deferred Compensation Plan for Directors of Seligman Time
Horizon/Harvester Series, Inc.
(g) *Form of Custody and Investment Accounting Agreement between
Registrant and Investors Fiduciary Trust Company.
(h) Not applicable.
(i) Opinion and Consent of Counsel.
(j) Consent of Independent Auditors.
(k) Balance Sheet.
(l) Purchase Agreement (Investment Letter) between Registrant and J. & W.
Seligman & Co. Incorporated.
(m)(a)(1) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Time Horizon 30 Fund.
(m)(a)(2) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Time Horizon 20 Fund.
(m)(a)(3) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Time Horizon 10 Fund.
(m)(a)(4) *Form of Administration, Shareholder Services and Distribution Plan,
re Seligman Harvester Fund.
(m)(b) *Form of Administration, Shareholder Services and Distribution
Agreement between Seligman Advisors, Inc. and Dealers.
<PAGE>
(n) *Plan of Multiple Classes of Shares (Four Classes) pursuant to Rule
18f-3 under the Investment Company Act of 1940, as amended.
(p) Code of Ethics.
Other Exhibits: *Powers of Attorney.
- --------------
<PAGE>
Exhibit I
[SULLIVAN & CROMWELL LETTERHEAD]
December 20, 1999
Seligman Time Horizon/Harvester Series, Inc.,
100 Park Avenue,
New York, New York 10017.
Dear Sirs:
In connection with Pre-Effective Amendment No. 2 to the Registration
Statement (the "Registration Statement") on Form N-1A (File Nos. 333-85111 and
811-9545) of Seligman Time Horizon/Harvester Series, Inc., a Maryland
corporation (the "Company"), which you expect to file on December 21, 1999 under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
an indefinite number of shares of Common Stock, par value $0.001 per share (the
"Shares"), of the Seligman Time Horizon 30 Fund, Seligman Time Horizon 20 Fund,
Seligman Time Horizon 10 Fund and Seligman Harvester Fund (each a "Fund"), we,
as your counsel, have examined such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion, the Shares have been duly authorized to the extent of an aggregate of
4,000,000,000 Shares and, when the Registration Statement has become effective
under the Securities Act and the Shares of each Fund have been issued and sold
(a) for at least the par value thereof, (b) so as not to exceed the then-
authorized number of Shares of each Fund, (c) as contemplated by the
Registration Statement and (d) in accordance with the Company's Articles of
Incorporation, and as authorized by the Board of Directors of the Company, the
Shares of each Fund will be validly issued, fully paid and nonassessable.
<PAGE>
The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Maryland, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
Also, we have relied as to certain matters on information obtained
from public officials, officers of the Company and other sources believed by us
to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act.
Very truly yours,
/s/ Sullivan & Cromwell
<PAGE>
EXHIBIT J
CONSENT OF INDEPENDENT AUDITORS
Seligman Time Horizon/Harvester Series, Inc.:
We consent to the use in Pre-Effective Amendment No. 2 to Registration Statement
No. 333-85111 of our report dated December 16, 1999 and to the reference to us
under the caption "General Information", both of which appear in the Statement
of Additional Information, which is part of such registration statement.
Deloitte & Touche LLP
New York, New York
December 16, 1999
<PAGE>
Exhibit K
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
STATEMENTS OF ASSETS AND LIABILITIES
December 14, 1999
ASSETS
- ------
<TABLE>
<CAPTION>
Time Time Time
Horizon Horizon Horizon Harvester
30 Fund 30 Fund 30 Fund Fund
------- ------- ------- ----
<S> <C> <C> <C> <C>
Cash $25,004 $25,004 $25,004 $25,004
Prepaid expenses 40,000 40,000 40,000 40,000
------- ------- ------- -------
Total assets 65,004 65,004 65,004 65,004
LIABILITIES
Accrued expenses payable
Commitments and contingencies
(Notes 1 and 2) 40,000 40,000 40,000 40,000
------ ------ ------ ------
Net assets equivalent to $7.14 per share
(applicable to 3,502 Class A shares of
capital stock, $.001 Par value, of each
Series; 4,000,000,000 shares authorized) $25,004 $25,004 $25,004 $25,004
======= ======= ======= =======
</TABLE>
Notes to Financial Statements
Note 1. Organization
Seligman Time Horizon/Harvester Series, Inc. (the "Series") was incorporated
in the State of Maryland on August 4, 1999 as an open-end, diversified
management investment company. The Series consists of four separate funds: the
Seligman Time Horizon 30 Fund; the Seligman Time Horizon 20 Fund; the Seligman
Time Horizon 10 Fund, and; the Seligman Harvester Fund (the "Funds"). Each Fund
offers four classes of shares - Class A shares, Class B shares, Class C shares
and Class D shares. The Series has had no operations other than those related to
organizational matters and for each Fund, the sale and issuance to Seligman
Advisors, Inc. (the "Distributor") of 3,502 Class A shares of capital stock for
$25,004 on December 14, 1999.
Prepaid expenses include the costs incurred in connection with the initial
offering of the Series' shares. Prepaid expenses will be amortized to expense
over twelve months on a straight-line basis starting with the commencement of
operations.
The costs incurred, and to be incurred, in connection with the organization
of the Series will be paid by J. & W. Seligman & Co. Incorporated (the
"Manager") or the Distributor. Such costs are estimated to be $36,000.
<PAGE>
Note 2. Management Agreement
The Management Agreement provides the Manager with a monthly management fee
at the annual rate of .10% of each Fund's average daily net assets. Until
December 31, 2002, the Manager has voluntarily agreed to waive its fee and/or
reimburse expenses of a Fund to the extent that total expenses of the Fund,
excluding fees payable pursuant to the Administration, Shareholder Services and
Distribution Plan adopted by the Series on behalf of each Fund, exceed an annual
rate of .50% of average net assets of such Fund.
Note 3. Income Taxes
The Series intends to meet the requirements of the Internal Revenue Code of
1986 applicable to regulated investment companies and as such will not be
subject to federal income taxes.
<PAGE>
Exhibit L
INVESTMENT LETTER
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
Seligman Time Horizon/Harvester Series, Inc. (the "Series"), an open-end
diversified management investment company, and the undersigned ("Purchaser"),
intending to be legally bound, hereby agree as follows:
1. In order to provide the Series with its initial capital, the Series hereby
sells to Purchaser and Purchaser purchases 3,502 shares of Class A Capital
Stock (par value $.001) of Seligman Time Horizon 30 Fund, 3,502 shares of
Class A Capital Stock (par value $.001) of Seligman Time Horizon 20 Fund,
3,502 shares of Class A Capital Stock (par value $.001) of Seligman Time
Horizon 10 Fund and 3,502 shares of Class A Capital Stock (par value $.001)
of Seligman Harvester Fund, in each case at a price of $7.14 per share (the
"Shares") as of the close of business on December 14, 1999. The Series
hereby acknowledges receipt from Purchaser of funds in the amount of
$100,017.12 in full payment for the Shares.
2. Purchaser represents and warrants to the Series that the Shares are being
acquired for investment and not with a view to distribution thereof, and
that Purchaser has no present intention to redeem or dispose of the Shares.
IN WITNESS WHEREOF, the parties have executed this agreement as of the 14th day
of December, 1999 ("Purchase Date").
SELIGMAN TIME HORIZON/HARVESTER SERIES, INC.
By: /s/ Lawrence P. Vogel
-------------------------------------
Name: Lawrence P. Vogel
Title: Vice President
SELIGMAN ADVISORS, INC.
By: /s/ Stephen J. Hodgdon
-------------------------------------
Name: Stephen J. Hodgdon
Title: President
<PAGE>
Exhibit P
CODE OF ETHICS
J. & W. Seligman & Co. Incorporated
-----------------------------------
Seligman Advisors, Inc.
Seligman Services, Inc.
Seligman Data Corp.
Seligman International, Inc.
Seligman International UK Limited
The Seligman Group of Investment Companies
I. Introduction
A primary duty of all directors, officers and employees (collectively
"Employees") of J. & W. Seligman & Co. Incorporated, its subsidiaries and
affiliates (collectively, "Seligman") is to be faithful to the interest of the
various Seligman advisory clients, including the registered and unregistered
companies advised by Seligman (collectively, "Clients"). Directors of the
Seligman Registered Investment Companies also have a duty to the Seligman
Registered Investment Companies and their shareholders. Persons who are
Disinterested Directors are "Employees" for purposes of this Code of Ethics.
Through the years, Seligman and its predecessor organizations have had a
reputation of maintaining the highest business and ethical standards and have
been favored with the confidence of investors and the financial community. Such
a reputation and confidence are not easily gained and are among the most
precious assets of Seligman. In large measure, they depend on the devotion and
integrity with which each Employee discharges his or her responsibilities.
Their preservation and development must be a main concern of each Employee, and
each Employee has a primary obligation to avoid any action or activity that
could produce conflict between the interest of the Clients and that Employee's
self-interest.
The purpose of this Code of Ethics ("Code") is to set forth the policies of
Seligman in the matter of conflicts of interest and to provide a formal record
for each Employee's reference and guidance. This Code is also designed to
prevent any act, practice or course of business prohibited by the rules and
regulations governing our industry.
Each Employee owes a fiduciary duty to each Client. Therefore, all Employees
must avoid activities, interests and relationships that might appear to
interfere with making decisions in the best interest of the Clients.
As an Employee, you must at all times:
1. Avoid serving your own personal interests ahead of the interests of
Clients. You may not cause a Client to take action, or not to take action,
for your personal benefit rather than the Client's benefit.
2. Avoid taking inappropriate advantage of your position. The receipt of
investment opportunities, perquisites or gifts from persons seeking
business with Clients or with Seligman could call into question the
exercise of your better judgment. Therefore, you must not give or receive
benefits that would compromise your ability to act in the best interest of
the Clients.
3. Conduct all personal Securities Transactions in full compliance with the
Code, including the pre-authorization and reporting requirements, and
comply fully with the Seligman Insider Trading Policies and Procedures (See
Appendix A).
While Seligman encourages you and your families to develop personal investment
programs, you must not take any action that could cause even the appearance that
an unfair or improper action has been taken. Accordingly, you must follow the
policies set forth below with respect to trading in your Account(s). This Code
places reliance on the good sense and judgment of you as an Employee; however,
if you are unclear as to the Code's meaning, you should seek the advice of the
Law and Regulation Department and assume the Code will be interpreted in the
most restrictive manner. Questionable situations should be resolved in favor of
Clients. Technical compliance with the Code's procedures will not insulate from
scrutiny any trades that indicate a violation of your fiduciary duties.
Application of the Code to Disinterested Directors
- --------------------------------------------------
<PAGE>
Disinterested Directors are only subject to the reporting requirements in
Section III.5(b) of the Code. Disinterested Directors are not subject to other
provisions of the Code but are subject to the requirements of the federal
securities laws and other applicable laws, such as the prohibition on trading in
securities of an issuer while in possession of material non-public information.
II. Definitions
(a) "Accounts" means all Employee Accounts and Employee Related Accounts.
(b) "Beneficial Interest" is broadly interpreted. The SEC has said that
the final determination of Beneficial Interest is a question to be
determined in the light of the facts of each particular case. The
terms Employee Account and Employee Related Account, as defined below,
generally define Beneficial Interest. However, the meaning of
"Beneficial Interest" may be broader than that described below. If
there are any questions as to Beneficial Interest, please contact the
Director of Compliance, General Counsel or Associate General Counsel.
(i) "Employee Account" means the following securities Accounts: (i)
any of your personal account(s); (ii) any joint or tenant-in-
common account in which you have an interest or are a participant;
(iii) any account for which you act as trustee, executor, or
custodian; (iv) any account over which you have investment
discretion or otherwise can exercise control, including the
accounts of entities controlled directly or indirectly by you; (v)
any account in which you have a direct or indirect interest
through a contract, arrangement or otherwise (e.g., economic,
voting power, power to buy or sell, or otherwise); (vi) any
account held by pledges, or for a partnership in which you are a
member, or by a corporation which you should regard as a personal
holding company; (vii) any account held in the name of another
person in which you do not have benefits of ownership, but which
you can vest or revest title in yourself at once or some future
time; (viii) any account of which you have benefit of ownership;
and (ix) accounts registered by custodians, brokers, executors or
other fiduciaries for your benefit.
(ii) "Employee Related Account" means any Account of (i) your spouse
and minor children and (ii) any account of relatives or any other
persons to whose support you materially contribute, directly or
indirectly.
(c) "Disinterested Director" means a director or trustee of a Seligman
Registered Investment Company who is not an "interested person" of such
investment company within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940.
(d) "Equivalent Security" includes, among other things, an option to
purchase or sell a Security or an instrument convertible or
exchangeable into a Security.
(e) "Investment Team" means one or more Investment Teams formed by the
Manager in various investment disciplines to review and approve
Securities for purchase and sale by Client Accounts. This includes a
team's leader, portfolio managers, research analysts, traders and
their direct supervisors.
(f) "Security" includes, among other things, stocks, notes, bonds,
debentures, and other evidences of indebtedness (including loan
participation and assignments), limited partnership interests,
investment contracts, and all derivative instruments (e.g., options
and warrants).
(g) "Securities Transaction" means a purchase or sale of a Security.
(h) "Seligman Registered Investment Company" means an investment company
registered under the Investment Company Act of 1940 for which Seligman
serves as investment manager or adviser.
III. Personal Securities Transactions
1. Prohibited Transactions
-----------------------
These apply to all of your Accounts.
<PAGE>
(a) Seven-Day Blackout: If you are a member of an Investment Team,
-------------------
Securities Transactions are prohibited within seven calendar days either
before or after the purchase or sale of the relevant security (or an
Equivalent Security) by a Client whose Account is managed by your
Investment Team.
(b) Intention to Buy or Sell for Clients: Securities Transactions are
-------------------------------------
prohibited at a time when you intend, or know of another's intention, to
purchase or sell that Security (or an Equivalent Security) on behalf of
a Client.
(c) Sixty-Day Holding Period: Profits on Securities Transactions made
-------------------------
within a sixty-day period are prohibited and must be disgorged. This is
a prohibition of short term trading. Specifically,
. Purchase of a Security within 60 days of your sale of the Security
(or an Equivalent Security), at a price that is less than the price
in the previous sale is prohibited.
. Sale of a Security within the 60 day period of your purchase of the
Security (or an Equivalent Security), at a price that is greater than
the price in the previous purchase is prohibited. Examples are as
follows:
1. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($15 a share) on February 15.
Employee must disgorge $500.
2. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee purchases 50 shares of XYZ ($12 a share) on January 30.
Employee sells 50 shares of XYZ ($15 a share) on March 15.
Employee must disgorge $150.
(The March 15 sale may not be matched to the January 1 purchase).
3. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($10 a share) on February 1.
Employee purchases 100 shares of XYZ ($9 a share) on March 1
Employee must disgorge $100.
(The February 1 sale is permissible because no profit was made.
However, the March 1 purchase is matched against the February 1
sale resulting in a $100 profit).
(d) Restricted Transactions: Transactions in a Security are prohibited (i)
------------------------
on the day of a purchase or sale of the Security by a Client, or (ii)
anytime a Client's order in the Security is open on the trading desk.
Other Securities may be restricted from time to time as deemed
appropriate by the Law and Regulation Department.
(e) Short Sales: If you are a member of an Investment Team, you may not
------------
engage in any short sale of a Security if, at the time of the
transaction, any Client managed by your Team has a long position in that
same Security. However, this prohibition does not prevent you from
engaging short sales against the box and covered call writing, as long
as these personal trades are in accordance with the sixty-day holding
period described above.
(f) Public Offerings: Acquisitions of Securities in initial and secondary
-----------------
public offerings are prohibited, unless granted an exemption by the
Director of Compliance. An exemption for an initial public offering
will only be granted in certain limited circumstances, for example, the
demutualization of a savings bank.
(g) Private Placements: Acquisition of Securities in a private placement is
-------------------
prohibited absent prior written approval by the Director of Compliance.
(h) Market Manipulation: Transactions intended to raise, lower, or maintain
--------------------
the price of any Security or to create a false appearance of active
trading are prohibited.
(i) Inside Information: You may not trade, either personally or on behalf
-------------------
of others, on material, non-public information or communicate material,
non-public information to another in violation of the law. This policy
extends to activities within and outside your duties at Seligman. (See
Appendix A).
2. Maintenance of Accounts
-----------------------
<PAGE>
All Accounts that have the ability to engage in Securities Transactions
must be maintained at Ernst & Company (Investec) and/or the specific
Merrill Lynch branch office located at 712 Fifth Avenue, New York, NY. You
are required to notify the Director of Compliance of any change to your
account status. This includes opening a new Account, converting,
transferring or closing an existing account or acquiring Beneficial
Interest in an Account through marriage or otherwise. You must place all
orders for Securities Transactions in these Account(s) with the Equity
Trading Desk or the appropriate Fixed Income Team as set forth in Section
III.3 ("Trade Pre-authorization Requirements").
The Director of Compliance may grant exceptions to the foregoing
requirements on a case by case basis. All requests for exceptions must be
applied for in writing and submitted for approval to the Director of
Compliance and will be subject to certain conditions.
3. Trade Pre-authorization Requirements
------------------------------------
All Securities Transactions in an Employee Account or Employee Related
Account must be pre-authorized, except for Securities Transactions set
forth in Section III.4 ("Exempt Transactions").
(a) Trade Authorization Request Form: Prior to entering an order for a
---------------------------------
Securities Transaction in an Employee Account or Employee Related
Account, which is subject to pre-authorization, you must complete a
Trade Authorization Request Form (set forth in Appendix B) and submit
the completed Form (faxed or hand delivered) to the Director of
Compliance (or designee).
(b) Review of the Form and Trade Execution: After receiving the
---------------------------------------
completed Trade Authorization Request Form, the Director of
Compliance (or designee) will review the information and, as soon as
practical, determine whether to authorize the proposed Securities
Transaction. The authorization, date and time of the authorization
must be reflected on the Form. Once approved the order may then be
executed by Equity Trading Desk or the appropriate Fixed Income Team,
except for accounts for which an exemption was granted under Section
III.2.
(c) Length of Trade Authorization Approval: Any authorization, if
---------------------------------------
granted, is effective until the earliest of (i) its revocation, (ii)
the close of business on the day from which authorization was granted
or (iii) your discovery that the information in the Trade
Authorization Request Form is no longer accurate. If the Securities
Transaction was not placed or executed within that period, a new
pre-authorization must be obtained. A new pre-authorization need not
be obtained for orders which cannot be filled in one day due to an
illiquid market, so long as such order was placed for execution on
the day the original pre-authorization was given.
No order for a Securities Transaction may be placed prior to the
Director of Compliance (or designee) receiving the completed Trade
Pre-authorization Form and approving the transaction. In some cases,
trades may be rejected for a reason that is confidential.
4. Exempt Transactions
-------------------
The prohibitions of this Code shall not apply to the following Securities
Transactions in your Account(s):
(a) Purchases or sales of Securities which are non-volitional (i.e., not
involving any investment decision or recommendation).
(b) Purchases of Securities through certain corporate actions (such as
stock dividends, dividend reinvestments, stock splits, mergers,
consolidations, spin-offs, or other similar corporate reorganizations
or distributions generally applicable to all holders of the same class
of Securities).
(c) Purchases of Securities effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of its Securities, to the
--------
extent such rights were acquired from the issuer.
(d) Purchases or sales of open-end registered investment companies, U.S.
Government Securities and money market instruments (e.g., U.S.
Treasury Securities, bankers acceptances, bank certificates of
deposit, commercial paper and repurchase agreements).
(e) Purchases of Securities which are part of an automatic dividend
reinvestment plan or stock accumulation plan; however, quarterly
account statement of such plans must be sent to the Director of
Compliance.
<PAGE>
(f) Securities Transactions that are granted a prior exemption by the
Director of Compliance, the General Counsel or the Associate General
Counsel.
5. Reporting
---------
(a) You must arrange for the Director of Compliance to receive from the
executing broker, dealer or bank duplicate copies of each confirmation
and account statement for each Securities Transaction in an Employee
Account or Employee Related Account.
(b) If you are a Disinterested Director you are required to report the
information specified below with respect to any Securities Transaction
in any Securities Account in which you have Beneficial Interest, if
you knew, or in the ordinary course of fulfilling your official duties
as a Disinterested Director, should have known, that during 15 days
immediately before or after the date of your transaction, the Security
(or Equivalent Security) was purchased or sold by a Seligman
Registered Investment Company or considered for purchase or sale by a
Seligman Registered Investment Company. Such report shall be made not
later than 10 days after the end of the calendar quarter in which the
Transaction was effected and shall contain the following information:
(i) The date of the transaction, the name of the company, the number
of shares, and the principal amount of each Security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(v) The date the report is submitted.
(c) You are required to disclose all Securities beneficially owned by you
within ten days of commencement of employment and at the end of each
calendar year within 10 days thereafter (See Appendix C).
(d) You are also required to disclose all Employee and Employee Related
Securities Accounts, Private Securities Transactions and Outside
Activities, Affiliations and Investments upon commencement of
employment and annually thereafter (See Appendix D).
(e) Any report may contain a statement that the report shall not be
construed as an admission by you, that you have any direct or indirect
beneficial ownership in the Security to which the report relates.
(f) The Director of Compliance or his designee will review all reports.
6. Dealings with the Clients
-------------------------
You should not have any direct or indirect investment interest in the
purchase or sale of any Security or property from or to Clients. This is
a prohibition against dealings between you and the Clients and is not
intended to preclude or limit investment transactions by you in Securities
or property, provided such transactions are not in conflict with the
provisions of this Code.
7. Preferential Treatment, Favors and Gifts
----------------------------------------
You are prohibited from giving and receiving gifts of significant value or
cost from any person or entity that does business with or on behalf of any
Client. You should also avoid preferential treatment, favors, gifts and
entertainment which might, or might appear to, influence adversely or
restrict the independent exercise of your best efforts and best judgments
on behalf of the Clients or which might tend in any way to impair
confidence in Seligman by Clients. Cash Gifts that do not exceed $100 in
value per person for a calendar year are permissible. Ordinary courtesies
of business life, or ordinary business entertainment, and gifts of
inconsequential value are also permissible. However, they should not be
so frequent nor so extensive as to raise any question of impropriety.
8. Outside Business Activities and Service as a Director, Trustee or in a
----------------------------------------------------------------------
Fiduciary Capacity of any Organization
--------------------------------------
<PAGE>
You may not engage in any outside business activities or serve as a Director,
Trustee or in a fiduciary capacity of any organization, without the prior
written consent of the Director of Compliance.
<PAGE>
9. Remedies of the Code
--------------------
Upon discovering a violation of this Code, sanctions may be imposed
against the person concerned as may be deemed appropriate, including,
among other things, a letter of censure, fines, suspension or termination
of personal trading rights and/or employment.
As part of any sanction, you may be required to absorb any loss from the
trade. Any profits realized, as a result of your personal transaction
that violates the Code must be disgorged to a charitable organization,
which you may designate.
10. Compliance Certification
------------------------
At least once a year, you will be required to certify on the Employee
Certification Form (set forth in Appendix E) that you have read and
understand this Code, that you have complied with the requirements of the
Code, and that you have disclosed or reported all personal Securities
Transactions pursuant to the provisions of the Code.
11. Inquiries Regarding the Code
----------------------------
If you have any questions regarding this Code or any other compliance-
related matter, please call the Director of Compliance, or in his absence,
the General Counsel or Associate General Counsel.
--------------------------------
William C. Morris
Chairman
December 22, 1966
Revised: March 8, 1968 December 7, 1990
January 14, 1970 November 18, 1991
March 21, 1975 April 1, 1993
May 1, 1981 November 1, 1994
May 1, 1982 February 28, 1995
April 1, 1985 November 19, 1999*
March 27, 1989
*Refers to the incorporation of the Code of Ethics of the Seligman Investment
Companies originally adopted June 12, 1962, as amended.
<PAGE>
Appendix A
Amended November 19, 1999
J. & W. Seligman & Co. Incorporated - Insider Trading Policies and Procedures
-----------------------------------------------------------------------------
SECTION I. BACKGROUND
Introduction
- ------------
United States law creates an affirmative duty on the part of broker-
dealers and investment advisers to establish, maintain and enforce written
policies and procedures that provide a reasonable and proper system of
supervision, surveillance and internal control to prevent the misuse of
material, non-public information by the broker-dealer, investment adviser or any
person associated with them. The purpose of these procedures is to meet those
requirements. The following procedures apply to J. & W. Seligman & Co.
Incorporated, its subsidiaries and affiliates (collectively, "Seligman") and all
officers, directors and employees (collectively, "Employees") thereof.
Statement of Policy
- -------------------
No Employee may trade, either personally or on behalf of others, on
material, non-public information or communicate material, non-public information
to another in violation of the law. This policy extends to activities within
and outside their duties at Seligman. Each Employee must read, acknowledge
receipt and retain a copy of these procedures.
Inside Information
- ------------------
The term "insider trading" is not defined in the federal securities
laws, but generally is used to refer to the use of material, non-public
information to trade in securities or to communicate material, non-public
information to others.
While the law concerning insider trading is not static, it is
understood that the law generally prohibits:
A. trading by an insider, while in possession of material, non-public
information, or
B. trading by a non-insider, while knowingly in possession of
material, non-public information, where the information either was
disclosed to the non-insider in violation of an insider's duty to
keep it confidential or was misappropriated, or
C. communicating material, non-public information to others.
The elements of insider trading and the penalties for such unlawful
conduct are discussed below. If you have any questions after reviewing these
procedures, you should consult the Director of Compliance, General Counsel or
Associate General Counsel.
1. Who Is An Insider?
------------------
The concept of "insider" is broad. It includes Employees of a company. In
addition, a person can be a "temporary insider" if he or she enters into a
special confidential relationship in the conduct of a company's affairs and
as a result is given access to information solely for the company's
purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the
Employees of such organizations. In addition, Seligman may become a
temporary insider of a company it advises or for which it performs other
services. According to the Supreme Court, the company must expect the
outsider to keep the disclosed non-public information confidential and the
relationship must at least imply such a duty before the outsider will be
considered an insider.
2. What Is Material Information?
-----------------------------
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment
decisions, or information that is reasonably certain to have a substantial
affect on the price of a company's securities. Information that Employees
should consider material includes, but is not limited to: dividend changes,
earnings estimates, changes in previously released earnings estimates,
significant merger or acquisition proposals or agreements, major litigation,
liquidation problems and extraordinary management
<PAGE>
developments. In addition, information about major contracts or new customers
could also qualify as material, depending upon the importance of such
developments to the company's financial condition or anticipated performance.
Material information does not have to relate to a company's business. For
example, in Carpenter v. U.S., 408 U.S. 316 (1987), the Supreme Court
-----------------
considered as material certain information about the contents of a
forthcoming newspaper column that was expected to affect the market price of
a Security. In that case, a Wall Street Journal reporter was found
-------------------
criminally liable for disclosing to others the dates that reports on various
companies would appear in the Journal and whether those reports would be
-------
favorable or not.
3. What Is Non-Public Information?
-------------------------------
Information is non-public until it has been effectively communicated to the
market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones, Reuters Economic Services, The
--------- ------------------------- ---
Wall Street Journal or other publications of general circulation would be
-------------------
considered public. However, see Section II, Paragraph 2.
4. Penalties for Insider Trading
-----------------------------
Penalties for trading on or communicating material, non-public information
are severe, both for individuals involved in such unlawful conduct and their
employers. A person can be subject to some or all of the penalties below even
if he or she does not personally benefit from the violation. Penalties
include:
- Civil injunctions
- Disgorgement of profits
- Jail sentences
- Fines for the person who committed the violation of up to three times
the profit gained or loss avoided, whether or not the person actually
benefited, and
- Fines for the employer or other controlling person of up to the greater
of $1,000,000 or three times the amount of the profit gained or loss
avoided.
In addition, any violation of policies and procedures set forth herein can be
expected to result in serious sanctions by Seligman, including dismissal of the
persons involved.
<PAGE>
SECTION II. PROCEDURES
Procedures to Implement Policy Against Insider Trading.
The following procedures have been established to assist the Employees of
Seligman in avoiding insider trading, and to aid Seligman in preventing,
detecting and imposing sanctions against insider trading. Every Employee of
Seligman must follow these procedures or risk serious sanctions, including
dismissal, substantial personal liability and criminal penalties. If you have
any questions about these procedures you should consult the Director of
Compliance, the General Counsel or Associate General Counsel.
1. Identifying Inside Information.
Before trading for yourself or others (including investment companies and
private Accounts managed by Seligman), in the securities of a company about
which you may have potential inside information, ask yourself the following
questions:
a. Is the information material? Is this information that an investor would
consider important in making his or her investment decisions? Is this
information that would substantially affect the market price of the
securities if generally disclosed?
b. Is the information non-public? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace in a publication of general circulation or does it fall
within the circumstances set forth in paragraph 2 below.
If, after consideration of the above, you believe that the information is
material and non-public, or if you have questions as to whether the information
is material and non-public, you should take the following steps:
c. Report the matter immediately to the Director of Compliance, General
Counsel or Associate General Counsel.
d. Do not purchase or sell the securities on behalf of yourself or others,
including investment companies or private Accounts managed by Seligman.
e. Do not communicate the information inside or outside Seligman other than
to the Director of Compliance, General Counsel or Associate General
Counsel.
f. After the Director of Compliance, General Counsel or Associate General
Counsel has reviewed the issue, you will be instructed to continue the
prohibitions against trading and communication, or you will be allowed
to trade and communicate the information.
2. Important Specific Examples
---------------------------
a. If you have a telephone or face-to-face conversation with a senior
executive of a publicly-traded company and are provided information
about the company that you have reason to believe has not yet been
disclosed in a widely-disseminated publication such as a press release,
quarterly report or other public filing, you have received non-public
information. This information is considered non-public even if you
believe that the company executive would provide the same information
to other analysts or portfolio managers who call the company. Until
information has been disclosed in a manner that makes it available to
(or capable of being accessed by) the investment community as a whole,
it is considered non-public. If the information is material, as
described above, you may not trade while in possession of this
information unless you first discuss the matter and obtain approval
from the Director of Compliance, General Counsel or Associate General
Counsel. Although it may be lawful for an analyst to act on the basis
of material information that the company's management has chosen to
disclose selectively to that analyst, where the information is provided
in a one-on-one context, regulators are likely to question such
conduct. Approval from the Law and Regulation Department will therefore
depend on the specific circumstances of the information and the
disclosure. Under the Supreme Court's important decision of Dirks v.
--------
SEC, 463 U.S. 646 (1983), securities analysts may be free to act on
---
selectively disclosed material information if it is provided by company
executives exclusively to achieve proper corporate purposes.
b. If you obtain material information in the course of an analysts'
conference call or meeting conducted by a publicly-traded company in
the ordinary course of its business in which representatives of several
other firms or investors are also present (as distinguished from the
one-on-one situation described in the preceding paragraph), you may
<PAGE>
act on the basis of that information without need to consult with the
Director of Compliance, General Counsel or Associate General Counsel,
even if the information has not yet been published by the news media.
You should be aware, however, that if there is something highly unusual
about the meeting or conference call that leads you to question whether
it has been authorized by the company or is otherwise suspect, you
should first consult with the Director of Compliance, General Counsel
or Associate General Counsel.
c. If you are provided material information by a company and are requested
to keep such information confidential, you may not trade while in
possession of that information before first obtaining the approval of
the Director of Compliance, General Counsel or the Associate General
Counsel.
As these examples illustrate, the legal requirements governing insider
trading are not always obvious. You should therefore always consult with the
Director of Compliance, General Counsel or Associate General Counsel if you have
any question at all about the appropriateness of your proposed conduct.
3. Restricting Access To Material, Non-Public Information
------------------------------------------------------
Information in your possession that you identify as material and non-public
may not be communicated to anyone, including persons within Seligman, except
as provided in paragraphs 1 and 2 above. In addition, care should be taken
so that such information is secure. For example, files containing material,
non-public information should be sealed; access to computer files containing
material, non-public information should be restricted.
4. Resolving Issues Concerning Insider Trading
-------------------------------------------
If, after consideration of the items set forth in paragraphs 1 and 2, doubt
remains as to whether information is material or non-public, or if there is
any unresolved question as to the applicability or interpretation of the
foregoing procedures, or as to the propriety of any action, it must be
discussed with the Director of Compliance, General Counsel and or the
Associate General Counsel before trading or communicating the information to
anyone.
5. Personal Securities Trading
---------------------------
All Employees shall follow with respect to personal Securities trading the
procedures set forth in the Code of Ethics. In addition, no Employee shall
establish a brokerage Account with a Firm other than those previously
approved without the prior consent of the Director of Compliance and every
Employee shall be subject to reporting requirements under Section III.5 of
the Code of Ethics. The Director of Compliance, or his designee, shall
monitor the personal Securities trading of all Employees.
<PAGE>
Appendix B
Amended November 19, 1999
J. & W. SELIGMAN & CO. INCORPORATED
TRADE AUTHORIZATION REQUEST FORM
<TABLE>
<CAPTION>
<S> <C> <C>
1. Name of Employee/Telephone Number: __________________________
2. If different than #1, name of the person in whose
account the trade will occur: __________________________
3. Relationship of (2) to (1): __________________________
4. Name the firm at which the account is held: __________________________
5. Name of Security: __________________________
6. Number of shares or units to be bought or
sold or amount of bond: __________________________
7. Approximate price per share, unit or bond: __________________________
8. Check those that are applicable: ______ Purchase ______ Sale
_____ Market Order ______ Limit Order (Price of Limit Order: _____)
9. Do you possess material non public information regarding
the Security or the issuer of the Security? ______ Yes ______ No
10. To your knowledge, are there any outstanding (purchase or
sell) orders for this Security or any Equivalent Security by
a Seligman Client? ______ Yes ______ No
11. To your knowledge, is this Security or Equivalent Security
being considered for purchase or sale for one or more
Seligman Clients? ______ Yes ______ No
12. Is this Security being acquired in an initial or secondary public
offering? ______ Yes ______ No
13. Is this Security being acquired in a private placement? ______ Yes ______ No
14. Have you or any Related Account covered by the pre-
authorization provisions of the Code purchased or sold
this Security within the past 60 days?______ Yes ______ No
</TABLE>
<PAGE>
- - - - - -
For Investment Team Members Only:
---------------------------------
15. Has any Client Account managed by your team purchased or sold this Security
or Equivalent Security within the past seven calendar days or do you expect
any such account to purchase or sell this Security or Equivalent Security
within seven calendar days of your purchase or sale? ______ Yes ______ No
16. Why is this Security Transaction appropriate for you and not for one or more
of your team's Clients?
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
- - - - - -
I have read the J. & W. Seligman & Co. Incorporated Code of Ethics, as revised
on November 19, 1999, within the prior 12 months and believe that the proposed
trade(s) fully complies with the requirements of the Code of Ethics and Insider
Trading policy.
____________________________
Employee Signature
____________________________
Date Submitted
Authorized by: ________________________
Date: ________________________
<PAGE>
Appendix C
----------
Amended November 19, 1999
REPORT OF SECURITIES BENEFICIALLY OWNED
AS OF DECEMBER 31, 1999
The following is a list of all Securities positions (except open-end
investment companies, U.S. Government Securities and money market instruments)
in which I have direct or indirect beneficial ownership, as defined in the Code
of Ethics. This includes Securities held at home, in safe deposit boxes or by
an issuer.
Description of Security No. of Shares Principal Amount Location of Security
________________________ _______________ _________________ ____________________
________________________ _______________ _________________ ____________________
________________________ _______________ _________________ ____________________
________________________ _______________ _________________ ____________________
________________________ _______________ _________________ ____________________
________________________ _______________ _________________ ____________________
_______ The list above (and any additional sheets I have attached) represents
all my Securities positions in which I have direct or indirect
beneficial ownership as defined in the Code of Ethics.
_______ I only have a beneficial ownership interest in open-end investment
companies, U.S. Government Securities and money market instruments,
and/or I do not beneficially own any Securities.
Date: ________________________ _____________________________
First Last, Company
<PAGE>
Appendix D
Amended November 19, 1999
EMPLOYEE REPORTING QUESTIONNAIRE
Employee Name: Ext: Department:
------------------------ ------ --------------
Please Print
- ----------------
Company/Affiliate: Supervisor:
------------------------- --------------------
1. Securities Accounts
-------------------
Do you have any Accounts in which Securities can be purchased or sold over
which you have control or in which you have a Beneficial Interest, as
defined in Seligman's Code of Ethics?
Yes No
------- --------
If yes, please list all such Accounts:
Account Account Type of
Institution Number Title Account
----------- ------ ------- -------
- ----------------------- ---------------- -------------------------- ---------
- ----------------------- ---------------- -------------------------- ---------
- ----------------------- ---------------- -------------------------- ---------
2. Financial Interests
-------------------
Do you have any private placements, restricted stock warrants, general or
limited partnerships, or other investment interests in any organization
(public, private or charitable) not held in the accounts listed above?
Please include Securities and certificates held in your custody.
Yes No
----- -----
If yes, please describe:
____________________________________________________________________
____________________________________________________________________________
3. Outside Activities/Affiliations
-------------------------------
a) Do you have any activities outside Seligman or its affiliates for which
you receive additional compensation:
Yes No
----- -----
If yes, please describe:
_______________________________________________________________________________
_______________________________________________________________________________
b) Do you serve in the capacity of officer, director, partner or employee
(or in any other fiduciary capacity) for any company or organization
(public, private or charitable) other than Seligman or its affiliates.
Yes No
----- -----
If yes, please describe:
_______________________________________________________________________________
_______________________________________________________________________________
I hereby certify that I have read and understand the foregoing statements
and that each of my responses thereto are true and complete. I agree to
immediately inform the Director of Compliance if there is any change in any of
the above answers. I also understand that any misrepresentation or omissions
of facts in response to this questionnaire and failure to immediately inform
the Director of Compliance of any changes to responses provided herein may
result in termination of my employment.
__________________________________ __________________________________
Employee's Signature Date
<PAGE>
__________________________________
Title
<PAGE>
Appendix E
Amended November 19, 1999
Annual Certification of Compliance with the Code of Ethics
----------------------------------------------------------
I acknowledge that I have received and read the Code of Ethics and Insider
Trading Policies and Procedures, as amended on November 19, 1999 and hereby
agree, in consideration of my continued employment by J. & W. Seligman & Co.
Incorporated, or one of its subsidiaries or affiliates, to comply with the Code
of Ethics and Insider Trading Policies and Procedures.
I hereby certify that during the past calendar year:
1. In accordance with the Code of Ethics, I have fully disclosed the Securities
holdings in my Employee Account(s) and Employee Related Account(s) (as
defined in the Code of Ethics).
2. In accordance with the Code of Ethics, I have maintained all Employee
Accounts and Employee Related Accounts at Ernst & Company (Investec) or
Merrill Lynch located at 712 Fifth Avenue, New York, NY except for Accounts
as to which the Director of Compliance has provided written permission to
maintain elsewhere.
3. In accordance with the Code of Ethics, except for transactions exempt from
reporting under the Code of Ethics, I have arranged for the Director of
Compliance to receive duplicate confirmations and statements for each
Securities Transaction of all Employee Accounts and Employee Related
Accounts, and I have reported all Securities Transactions in each of my
Employee Accounts and Employee Related Accounts.
4. I have complied with the Code of Ethics in all other respects.
________________________________
Employee Signature
________________________________
Date:____________ Print Name
