<PAGE>
File No. 2-10836
811-229
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 72 [X]
--
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 22 [X]
--
SELIGMAN GROWTH FUND, INC.
(Exact name of registrant as specified in charter)
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or
Toll Free: 800-221-2450
THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to [ ] on (date) pursuant to paragraph
paragraph (b) of rule 485 (a)(i) of rule 485
[X] on April 22, 1996 pursuant to [ ] 75 days after filing pursuant to
paragraph (b) of rule 485 paragraph (a)(ii) of rule 485
[ ] 60 days after filing pursuant to [ ] on (date) pursuant to paragraph
paragraph (a)(i) of rule 485 (a)(ii) 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.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on February
20, 1996.
<PAGE>
File No. 2-10836
811-229
SELIGMAN GROWTH FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 72
Pursuant to Rule 481 (a)
------------------------
<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
- ----------------------------- ----------------------
<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Organization and
Capitalization
5. Management of the Fund Management Services
5a. Manager's Discussion of Fund
Performance Management Services
6. Capital Stock and Other
Securities Organization and Capitalization
7. Purchase of Securities Being
Offered Alternative Distribution System;
Purchase of Shares; Administration,
Shareholder Services and Distribution
Plan
8. Redemption or Repurchase Telephone Transactions;
Redemption of Shares; Exchange Privilege
9. Pending Legal Proceedings Not Applicable
<CAPTION>
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- -----------------------------------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information; Organization and Capitalization
(Prospectus); Appendix
13. Investment Objectives and Policies Investment Objective, Policies And Risks; Investment
Limitations
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers
Holders of Securities
16. Investment Advisory and Other Services Management and Expenses; Distribution Services
17. Brokerage Allocation Portfolio Transactions; Administration, Shareholder Services
and Distribution Plan
18. Capital Stock and Other Securities General Information; Organization and Capitalization
(Prospectus)
19. Purchase, Redemption and Pricing Purchase And Redemptions of Fund Shares;
of Securities being Offered Redemptions; Valuation
20. Tax Status Federal Income Taxes (Prospectus)
21. Underwriters Distribution Services
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
SELIGMAN GROWTH FUND, INC.
100 Park Avenue
New York, NY 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450 all continental United States
For Retirement Plan Information--Toll-Free Telephone: (800) 445-1777
April 22, 1996
Seligman Growth Fund, Inc. (the "Fund") is a mutual fund which invests to
produce longer-term growth of capital value and an increase in future income.
Investment advisory and management services are provided to the Fund by J. &
W. Seligman & Co. Incorporated (the "Manager") and, to the extent requested by
the Manager in respect of foreign assets, Seligman Henderson Co. (the
"Subadviser"). The Fund's distributor is Seligman Financial Services, Inc., an
affiliate of the Manager. For a description of the Fund's investment objec-
tives and policies, including the risk factors associated with an investment
in the Fund, see "Investment Objectives, Policies And Risks." There can be no
assurance that the Fund's investment objectives will be achieved.
The Fund offers three classes of shares. Class A shares are sold subject to
an initial sales load of up to 4.75% and an annual service fee currently
charged at a rate of up to .25% of the average daily net asset value of the
Class A shares. Class B shares are sold without an initial sales load but are
subject to a contingent deferred sales load ("CDSL"), if applicable, of 5% on
redemptions in the first year after purchase of such shares, declining to 1%
in the sixth year and 0% thereafter, an annual distribution fee of up to .75%
and an annual service fee of up to .25% of the average daily net asset value
of the Class B shares. Class B shares will automatically convert to Class A
shares on the last day of the month that precedes the eighth anniversary of
their date of purchase. Class D shares are sold without an initial sales load
but are subject to a CDSL of 1% imposed on certain redemptions within one year
of purchase, an annual distribution fee of up to .75% and an annual service
fee of up to .25% of the average daily net asset value of the Class D shares.
Any CDSL payable upon redemption of Class B or Class D shares will be assessed
on the lesser of the current net asset value or the original purchase price of
the shares redeemed. See "Alternative Distribution System." Shares of the Fund
may be purchased through any authorized investment dealer.
This Prospectus sets forth concisely the information a prospective investor
should know about the Fund before investing. Please read it carefully before
you invest and keep it for future reference. Additional information about the
Fund, including a Statement of Additional Information, has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
available upon request and without charge by calling or writing the Fund at
the telephone numbers or the address set forth above. The Statement of
Additional Information is dated the same date as this Prospectus and is
incorporated herein by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Summary Of Fund Expenses............. 2
Financial Highlights................. 3
Alternative Distribution System...... 4
Investment Objectives, Policies And
Risks............................... 6
Management Services.................. 7
Purchase Of Shares................... 9
Telephone Transactions............... 15
Redemption Of Shares................. 16
</TABLE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Administration, Shareholder Services And Distribution Plan............ 18
Exchange Privilege.................................................... 19
Further Information About Transactions In The Fund.................... 20
Dividends And Distributions........................................... 21
Federal Income Taxes.................................................. 21
Shareholder Information............................................... 23
Advertising The Fund's Performance.................................... 24
Organization And Capitalization....................................... 25
</TABLE>
<PAGE>
SUMMARY OF FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
-------------- --------------- ---------------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
LOAD LOAD LOAD
ALTERNATIVE) ALTERNATIVE) ALTERNATIVE)
<S> <C> <C> <C>
Maximum Sales Load Imposed on
Purchases (as a percentage
of offering price).......... 4.75% None None
Sales Load on Reinvested
Dividends................... None None None
Deferred Sales Load (as a
percentage of original None 5% in 1st year 1% in 1st year
purchase 4% in 2nd year None thereafter
price or redemption 3% in 3rd and
proceeds, whichever is 4th years
lower)...................... 2% in 5th year
1% in 6th year
None thereafter
Redemption Fees.............. None None None
Exchange Fees................ None None None
ANNUAL FUND OPERATING EXPENSES CLASS A CLASS B* CLASS D
FOR 1995 -------------- --------------- ---------------
(as a percentage of average net
assets)
<CAPTION>
Management Fee............... .70% .70% .70%
12b-1 Fees................... .21% 1.00%** 1.00%**
Other Expenses............... .25% .25% .25%
----- ----- -----
Total Fund Operating 1.16% 1.95% 1.95%
Expenses.................... ===== ===== =====
</TABLE>
The purpose of this table is to assist investors in understanding the vari-
ous costs and expenses which shareholders of the Fund bear directly or indi-
rectly. The sales load on Class A shares is a one-time charge paid at the time
of purchase of shares. Reductions in sales loads are available in certain cir-
cumstances. The contingent deferred sales loads on Class B and Class D shares
are one-time charges paid only if shares are redeemed within six years or one
year of purchase, respectively. The Management fees for Class A and Class D
shares have been restated to reflect the increase in the management fee rate
payable by the Fund, which was approved by shareholders on December 12, 1995
and became effective on January 1, 1996. The "Other Expenses" disclosed for
Class D shares have been restated to reflect the expense allocation methodol-
ogy currently being used by the Fund. For more information concerning reduc-
tions in sales loads and for a more complete description of the various costs
and expenses, see "Purchase Of Shares," "Redemption Of Shares" and "Management
Services" herein. The Fund's Administration, Shareholder Services and Distri-
bution Plan to which the caption "12b-1 Fees" relates, is discussed under "Ad-
ministration, Shareholder Services and Distribution Plan" herein.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual re-
turn and (2) redemption at the end of each time
period..................................Class A $59 $83 $108 $182
Class B $70 $91 $125 $207
Class D $30++ $61 $105 $227
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5% AN-
NUAL RETURN USED IN THIS EXAMPLE IS A HYPOTHETICAL RATE.
* Expenses for Class B shares are estimated because no shares of that class
were outstanding in the year ended December 31, 1995.
** Includes an annual distribution fee of .75% and an annual service fee of
.25%. Pursuant to the Rules of the National Association of Securities Deal-
ers, Inc., the aggregate deferred sales loads and annual distribution fees
on Class B and Class D shares of the Fund may not exceed 6.25% of total
gross sales, subject to certain exclusions. The maximum sales charge rule
is applied separately to each class. The 6.25% limitation is imposed on the
Fund rather than on a per shareholder basis. Therefore, a long-term Class B
or Class D shareholder of the Fund may pay more in total sales loads (in-
cluding distribution fees) than the economic equivalent of 6.25% of such
shareholder's investment in such shares.
+ Assuming (1) 5% annual return and (2) no redemption at the end of the peri-
od, the expenses on a $1,000 investment would be $20 for 1 year, $61 for 3
years and $105 for 5 years. The expenses shown for the ten-year period re-
flect the conversion of Class B shares to Class A shares after 8 years.
++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be $20.
2
<PAGE>
FINANCIAL HIGHLIGHTS
Financial highlights for the Fund's Class A and Class D shares for the peri-
ods presented below have been audited by Deloitte & Touche LLP, independent
auditors. This information, which is derived from the financial and accounting
records of the Fund, should be read in conjunction with the financial state-
ments and notes contained in the Fund's 1995 Annual Report, which is incorpo-
rated by reference in the Fund's Statement of Additional Information, copies
of which may be obtained free of charge by calling or writing the Fund at the
telephone numbers or address provided on the cover page of this Prospectus.
Financial highlights are not presented for the Class B shares because no
shares of that Class were outstanding during the periods set forth below.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from the Fund's begin-
ning net asset value to its ending net asset value so that they may understand
what effect the individual items have on their investment, assuming it was
held throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in
the financial statements, to their equivalent per share amount. The total re-
turn based on net asset value measures the Fund's performance assuming invest-
ors purchased Fund shares at net asset value as of the beginning of the peri-
od, invested dividends and capital gains paid at net asset value and then sold
their shares at the net asset value per share on the last day of the period.
The total return computations do not reflect any sales loads investors may in-
cur in purchasing or selling shares of the Fund. Total returns for periods of
less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------------------------
1995O 1994O 1993 1992 1991 1990 1989 1988 1987
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning of
period......... $4.54 $5.26 $6.04 $5.95 $4.57 $5.10 $4.38 $4.23 $5.25
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment
income (loss).. .01 .01 .01 .03 .04 .10 .06 .11 .09
Net realized and
unrealized
investment gain
(loss)......... 1.27 (.22) .35 .64 1.70 (.36) 1.40 .20 .09
Net realized and
unrealized gain
on foreign
currency
transactions... .01 -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Increase
(decrease) from
investment
operations..... 1.29 (.21) .36 .67 1.74 (.26) 1.46 .31 .18
Dividends paid.. (.01) (.01) (.01) (.03) (.04) (.10) (.07) (.11) (.10)
Distributions
from net gain
realized....... (.60) ( .50) (1.13) (.55) (.32) (.17) (.67) (.05) (1.10)**
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase
(decrease) in
net asset
value.......... .68 ( .72) (.78) .09 1.38 (.53) .72 .15 (1.02)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period.. $5.22 $4.54 $5.26 $6.04 $5.95 $4.57 $5.10 $4.38 $4.23
======== ======== ======== ======== ======== ======== ======== ======== ========
Total return
based on net
asset value.... 28.47% (3.84)% 6.20% 11.30% 38.45% (5.16)% 33.74% 7.34% 3.45%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to
average net
assets......... .94% .90% .89% .77% .76% .71% .65% .70% .62%
Net investment
income (loss)
to average net
assets......... .17% .14% .18% .49% .77% 2.04% 1.40% 2.52% 1.57%
Portfolio
turnover....... 102.30% 93.59% 105.64% 46.96% 12.60% 26.39% 60.34% 66.39% 89.52%
Net assets, end
of period
(000's
omitted)....... $597,510 $513,328 $591,491 $614,860 $598,423 $478,063 $554,364 $498,035 $530,841
<CAPTION>
CLASS D
----------------------------------------
YEAR ENDED 5/3/93*
DECEMBER 31 TO
1986 1995/o/ 1994/o/ 12/31/93
-------- -------- ------- ----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning of
period......... $6.11 $4.38 $ 5.23 $5.67
-------- -------- ------- ----------
Net investment
income (loss).. .10 (.04) (.12) (.03)
Net realized and
unrealized
investment gain
(loss)......... .84 1.21 (.23) .72
Net realized and
unrealized gain
on foreign
currency
transactions... -- .01 -- --
-------- -------- ------- ----------
Increase
(decrease) from
investment
operations..... .94 1.18 (.35) .69
Dividends paid.. (.10) -- -- --
Distributions
from net gain
realized....... * (1.70) (.60) (.50) (1.13)
-------- -------- ------- ----------
Net increase
(decrease) in
net asset
value.......... (.86) .58 (.85) (.44)
-------- -------- ------- ----------
Net asset value,
end of period.. $5.25 $4.96 $ 4.38 $5.23
======== ======== ======= ==========
Total return
based on net
asset value.... 16.25% 27.01 % (6.56)% 12.40 %
RATIOS/SUPPLEMENTAL
DATA:
Expenses to
average net
assets......... .57% 1.91 % 2.93 % 2.17 %+
Net investment
income (loss)
to average net
assets......... 1.56% (.83)% (2.34)% (1.03)%+
Portfolio
turnover....... 64.30% 102.30 % 93.59 % 105.64 %++
Net assets, end
of period
(000's
omitted)....... $596,451 $ 6,412 $11,742 $1,197
</TABLE>
- --------------
o Per share amounts for the years ended December 31, 1995 and 1994 are calcu-
lated based on average shares outstanding.
* Commencement of offering of Class D shares.
** Includes excess of taxable gain distribution over realized capital gain
charged to paid-in capital of $.01.
+ Annualized.
++ For the year ended December 31, 1993.
The data provided above reflects historical information and therefore through
April 10, 1991 has not been adjusted to reflect the effect of the increased
management fee which was approved by shareholders on April 10, 1991; through
December 31, 1992 has not been adjusted to reflect the effect of the Adminis-
tration, Shareholder Services and Distribution Plan which was approved on No-
vember 23, 1992 and effective January 1, 1993; and through December 31, 1995,
has not been adjusted to reflect the effect of the increase in the management
fee rate payable by the Fund which was approved by shareholders on December
12, 1995 and became effective on January 1, 1996.
3
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers three classes of shares. Class A shares are sold to investors
who have concluded that they would prefer to pay an initial sales load and have
the benefit of lower continuing fees. Class B shares are sold to investors
choosing to pay no initial sales load, a higher distribution fee and a CDSL
with respect to redemptions within six years of purchase and who desire shares
to convert automatically to Class A shares after eight years. Class D shares
are sold to investors choosing to pay no initial sales load, a higher distribu-
tion fee and, with respect to redemptions within one year of purchase, a CDSL.
The Alternative Distribution System allows investors to choose the method of
purchasing shares that is most beneficial in light of the amount of the pur-
chase, the length of time the shares are expected to be held and other relevant
circumstances. Investors should determine whether under their particular cir-
cumstances it is more advantageous to incur an initial sales load and be sub-
ject to lower ongoing fees, as discussed below, or to have the entire initial
purchase price invested in the Fund with the investment thereafter being sub-
ject to higher ongoing fees and either a CDSL for a six-year period with auto-
matic conversion to Class A shares after eight years or a CDSL for a one-year
period with no automatic conversion to Class A shares.
Investors who qualify for reduced sales loads, as described under "Purchase
Of Shares" below, might choose to purchase Class A shares because Class A
shares would be subject to lower ongoing fees. The amount invested in the Fund,
however, is reduced by the initial sales load deducted at the time of purchase.
Investors who do not qualify for reduced initial sales loads but expect to
maintain their investment for an extended period of time might also choose to
purchase Class A shares because over time the accumulated continuing distribu-
tion fees of Class B and Class D shares may exceed the initial sales load and
lower distribution fee of Class A shares. This consideration must be weighed
against the fact that the amount in vested in the Fund will be reduced by the
initial sales load on Class A shares deducted at the time of pur- chase. Fur-
thermore, the higher distribution fees on Class B and Class D shares will be
offset to the extent any return is realized on the additional funds initially
invested therein that would have been equal to the amount of the initial sales
load on Class A shares. In addition, Class B shares will be converted automati-
cally to Class A shares after a period of approximately eight years, and there-
after investors will be subject to lower ongoing fees. 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.
Alternatively, some investors might choose to have all of their funds in-
vested initially in Class B or Class D shares, although remaining subject to a
higher continuing distribution fee and, for a six-year or one-year period, a
CDSL as described below. For example, an investor who does not qualify for re-
duced sales loads would have to hold Class A shares for more than 6.33 years
for the Class B or Class D distribution fee to exceed the initial sales load
plus the distribution fee on Class A shares. This example does not take into
account the time value of money, which further reduces the impact of the Class
B and Class D shares' 1% distribution fee, other expenses charged to each
class, fluctuations in net asset value or the effect of the return on the in-
vestment over this period of time.
Investors should bear in mind that total asset based sales charges (i.e., the
higher continuing distribution fee plus the CDSL) on Class B shares that are
redeemed may exceed the total asset based sales charges that would be payable
on a purchase of the same amount of Class A or Class D shares, particularly if
the Class B shares are redeemed shortly after purchase or if the investor qual-
ifies for a reduced sales load on the Class A shares.
Investors should understand that the purpose and function of the initial
sales loads with respect to Class A shares is the same as those of the deferred
sales loads and higher distribution fees with respect to Class B and Class D
shares in that the sales loads and dis
4
<PAGE>
tribution fees applicable to each class provide for the financing of the dis-
tribution of the shares of the Fund.
Class B and Class D shares are subject to the same ongoing distribution fees
but Class D shares are subject to a CDSL for a shorter period of time (one
year as opposed to six years) than Class B shares. However, unlike Class D
shares, Class B shares automatically convert to Class A shares after eight
years, which are subject to lower ongoing distribution fees.
The three classes of shares represent interests in the same portfolio of in-
vestments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and, potentially, cer-
tain class expenses and has exclusive voting rights with respect to any matter
to which a separate vote of any class is required by the Investment Company
Act of 1940, as amended (the "1940 Act"), or Maryland law. The net income at-
tributable to each class and dividends payable on the shares of each class
will be reduced by the amount of distribution and other expenses of each
class. Class B and Class D shares bear higher distribution fees, which will
cause the Class B and Class D shares to pay lower dividends than the Class A
shares. The three classes also have separate exchange privileges.
The Directors of the Fund believe that no conflict of interest currently ex-
ists between the Class A, Class B and Class D shares. On an ongoing basis, the
Directors, in the exercise of their fiduciary duties under the 1940 Act and
Maryland law, will seek to ensure that no such conflict arises. For this pur-
pose, the Directors will monitor the Fund for the existence of any material
conflict among the classes and will take such action as is reasonably neces-
sary to eliminate any such conflicts that may develop.
DIFFERENCES BETWEEN CLASSES. The primary differences between Class A, Class
B and Class D shares are their sales load structures and ongoing ex- penses as
set forth below. The primary differences between Class B and Class D shares
are that Class D shares are subject to a shorter CDSL period but Class B
shares automatically convert to Class A shares after eight years, resulting in
a reduction in ongoing fees. Investors in Class B shares should take into ac-
count whether they intend to redeem their shares within the CDSL period and,
if not, whether they intend to remain invested until the end of the conversion
period and thereby take advantage of the reduction in ongoing fees resulting
from the conversion to Class A shares. Other investors, however, may elect to
purchase Class D shares if they determine that it is advantageous to have all
their assets invested initially and they are uncertain as to the length of
time they intend to hold their assets in the Fund or another mutual fund in
the Seligman Group for which the exchange privilege is available. Although
Class D shareholders are subject to a shorter CDSL period at a lower rate,
they forgo the Class B automatic conversion feature, making their investment
subject to a higher distribution fee for an indefinite period of time. Each
class has advantages and disadvantages for different investors, and investors
should choose the class that best suits their circumstances and their objec-
tives.
<TABLE>
<CAPTION>
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE OTHER
SALES LOAD DAILY NET ASSETS) INFORMATION
---------- ------------------ -----------
<S> <C> <C> <C>
CLASS A Maximum Service fee Initial
initial of .25%. sales load
sales load waived or
of 4.75% of reduced for
the public certain
offering purchases.
price.
CLASS B None Service fee CDSL of:
of .25%; 5% in 1st
Distribution year
fee of .75% 4% in 2nd
until year
conversion.* 3% in 3rd
and 4th
years
2% in 5th
year
1% in 6th
year
0% after 6th
year.
CLASS D None Service fee CDSL of 1%
of .25%; on
Distribution redemptions
fee of .75%. within one
year of
purchase.
</TABLE>
- -------
* Conversion occurs at the end of the month which proceeds the 8th anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to
the Class B shares acquired in the exchange will apply and the holding period
of the shares exchanged will be tacked onto the holding period of the shares
acquired.
5
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RISKS
The Fund is an open-end diversified management investment company, as defined
in the 1940 Act, or mutual fund, incorporated in Maryland in 1937. The Fund
seeks two investment objectives: longer-term growth in capital value and an in-
crease in future income. The Fund in 1939 became the first mutual fund to em-
phasize investments in common stocks of companies selected for their growth
prospects. Assets have been invested primarily in common stocks since opera-
tions started. Risks are tempered by diversifying investments. When considered
appropriate, assets may be shifted to stocks of companies less sensitive to
changes in economic or market conditions, or may be held in cash or invested in
senior securities. Securities owned may be changed whenever considered advis-
able. Portfolio turnover may vary and there can be no assurance that the Fund's
investment objectives will be attained.
BORROWING. The Fund may borrow money for temporary or emergency purposes in
an amount not to exceed 15% of the value of its total assets. The Fund may
pledge its assets to the extent necessary to effect permitted borrowings on a
secured basis.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
brokers or dealers, banks or other institutional borrowers of securities. The
borrower must maintain with the Fund cash or equivalent collateral equal to at
least 100% of the market value of the securities loaned. During the time port-
folio securities are on loan, the borrower pays the Fund an amount equivalent
to any dividends or interest paid on the securities and the Fund may invest the
cash collateral and earn additional income or may receive an agreed upon amount
of interest income from the borrower.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in il-
liquid securities, including restricted securities (i.e., securities not read-
ily marketable without registration under the Securities Act of 1933 (the "1933
Act")) and other securities that are not readily marketable. The Fund may pur-
chase re-
stricted securities that can be offered and sold to "qualified institutional
buyers" under Rule 144A of the 1933 Act, and the Manager, acting pursuant to
procedures approved by the Fund's Board of Directors, may determine, when ap-
propriate, that specific Rule 144A securities are liquid and not subject to the
15% limitation on illiquid securities. Should this determination be made, the
Manager, acting pursuant to such procedures, will carefully monitor the secu-
rity (focusing on such factors, among others, as trading activity and avail-
ability 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 restricted securities offered and sold under Rule 144A will develop. This
investment practice could have the effect of increasing the level of illiquid-
ity in the Fund to the extent that qualified institutional buyers become for a
time uninterested in purchasing Rule 144A securities.
FOREIGN SECURITIES. The Fund may invest in commercial paper and certificates
of deposit issued by foreign banks and may invest in other securities of for-
eign issuers directly or through American Depositary Receipts ("ADRs"), Euro-
pean Depositary Receipts ("EDRs") or Global Depositary Receipts ("GDRs") (col-
lectively, "Depositary Receipts"). Foreign investments may be affected favor-
ably or unfavorably by changes in currency rates and exchange control regula-
tions. There may be less information available about a foreign company than
about a U.S. company and foreign companies may not be subject to reporting
standards and requirements comparable to those applicable to U.S. companies.
Foreign securities may not be as liquid as U.S. securities. Securities of for-
eign companies may involve greater market risk than securities of U.S. compa-
nies, and foreign brokerage commissions and custody fees are generally higher
than in the United States. Investments in foreign securities may also be sub-
ject to local economic or political risks, political instability and possible
nationalization of issuers. Depositary Receipts are instruments generally is-
sued by domestic banks or trust companies that represent the deposits of a se-
curity of
6
<PAGE>
a foreign issuer. ADRs may be publicly traded on exchanges or over-the-counter
in the United States and are quoted and settled in dollars at a price that
generally reflects the dollar equivalent of the home country share price. EDRs
and GDRs are typically traded in Europe and in both Europe and the United
States, respectively. Depositary Receipts may be issued under sponsored or
unsponsored programs. In sponsored programs, the issuer has made arrangements
to have its securities traded in the form of a Depositary Receipt. In
unsponsored programs, the issuers may not be directly involved in the creation
of the program. Although regulatory requirements with respect to sponsored and
unsponsored Depositary Receipt programs are generally similar, the issuers of
securities represented by unsponsored Depositary Receipts are not obligated to
disclose material information in the United States, and therefore, the import
of such information may not be reflected in the market value of such receipts.
The Fund may invest up to 10% of its total assets in foreign securities that
it holds directly, but this 10% limit does not apply to foreign securities
held through Depositary Receipts which are traded in the United States or to
commercial paper and certificates of deposit issued by foreign banks.
GENERAL. Except as noted above, the foregoing investment policies are not
fundamental and the Board of Directors of the Fund may change them without the
vote of a majority of the Fund's outstanding voting securities. As a matter of
policy, the Board would not change the Fund's investment objectives of seeking
to produce longer-term growth in capital value and an increase in future in-
come without such a vote. A more detailed description of the Fund's investment
policies, including a list of those restrictions on the Fund's investment ac-
tivities which cannot be changed without such a vote, appears in the Statement
of Additional Information. Under the 1940 Act, a "vote of a majority of the
outstanding voting securities" of the Fund means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67%
or more of the shares present at a shareholders' meeting if more than 50% of
the outstanding shares are represented at the meeting in person or by proxy.
MANAGEMENT SERVICES
THE MANAGER. The Board of Directors provides broad supervision over the af-
fairs of the Fund. Pursuant to a Management Agreement approved by the Board
and the shareholders of the Fund, the Manager manages the investments of the
Fund and administers the business and other affairs of the Fund. The address
of the Manager is 100 Park Avenue, New York, NY 10017.
The Manager also serves as manager of sixteen other investment companies
which, together with the Fund, comprise the "Seligman Group." The companies
are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc., Selig-
man Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Henderson Global Fund Series,
Inc., Seligman High Income Fund Series, Seligman Income Fund, Inc., Seligman
New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt Fund Se-
ries, Seligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Selig-
man Select Municipal Fund, Inc., Seligman Tax-Exempt Fund Series, Inc., Selig-
man Tax-Exempt Series Trust and Tri-Continental Corporation. The aggregate as-
sets of the Seligman Group were approximately $11.9 billion at February 29,
1996. The Manager also provides investment management or advice to institu-
tional accounts having an aggregate value at February 29, 1996 of approxi-
mately $3.9 billion.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Fund. Mr. Morris owns a major-
ity of the outstanding voting securities of the Manager.
The Manager provides senior management for Seligman Data Corp., a wholly-
owned subsidiary of the Fund and certain other investment companies in the Se-
ligman Group, which performs, at cost, certain recordkeeping functions for the
Fund, maintains the rec-
7
<PAGE>
ords of shareholder accounts and furnishes dividend paying, redemption and re-
lated services.
The Manager is entitled to receive a management fee, calculated daily and
payable monthly. The management fee, which became effective on January 1, 1996,
is equal to an annual rate of .70% of the Fund's average daily net assets on
the first $1 billion of net assets, .65% of the Fund's average daily net assets
on the next $1 billion of net assets and .60% of the Fund's average daily net
assets in excess of $2 billion. In 1995, the management fee paid by the Fund
was equal to an annual rate of .48% of the average daily net assets of the
Fund.
The Fund pays all of its expenses other than those assumed by the Manager.
Total expenses of the Fund's Class A and Class D shares, respectively, for the
year ended December 31, 1995 amounted to .94% and 1.91%, respectively, of the
average daily net assets of each class. No Class B shares were outstanding dur-
ing this period.
THE SUBADVISER. The Subadviser provides investment management services to the
Fund with respect to all or a portion of the Fund's foreign investments, as
designated by the Manager ("Qualifying Assets"). The Fund has a non-fundamental
policy under which it may invest up to 10% of its total assets in foreign secu-
rities that are held directly. The 10% limit does not apply to foreign securi-
ties held through Depositary Receipts which are traded in the United States or
to commercial paper and certificates of deposit issued by foreign banks. The
Subadviser serves the Fund pursuant to a Subadvisory Agreement with the Manager
(the "Subadvisory Agreement"), dated June 1, 1994. Pursuant to the Subadvisory
Agreement, the Subadviser, with respect to the Qualifying Assets, provides in-
vestment management services including investment research, advice and supervi-
sion, determines which securities will be purchased or sold, makes purchases
and sales on behalf of the Fund and determines how voting and other rights with
respect to securities held by the Fund shall be exercised, subject in each case
to the control of the Board of Directors and in accordance with the Fund's in-
vestment objectives, policies and principles. For this service, the Subadviser
receives a fee from the Manager payable monthly. The subadvisory fee rate,
which is applied to the average monthly net Qualifying Assets of the Fund
(i.e., the Qualifying Assets less any liabilities as designated by the Manag-
er), is the same as the overall rate paid to the Manager by the Fund. For the
year ended December 31, 1995, the Subadviser was paid a fee of $240,843.
The Subadviser was founded in 1991 as a joint venture between the Manager and
Henderson International, Inc., a controlled affiliate of Henderson Administra-
tion Group plc. The Subadviser, headquartered in New York, was created to pro-
vide international and global investment advice to institutional and individual
investors and investment companies in the United States. The Subadviser cur-
rently serves as subadviser to Seligman Capital Fund, Inc., Seligman Common
Stock Fund, Inc., Seligman Communications and Information Find, Inc., Seligman
Frontier Fund, Inc., Seligman Henderson Global Fund Series, Inc., Seligman In-
come Fund, Inc., the Global Portfolio and Global Smaller Companies Portfolio of
Seligman Portfolios, Inc., and Tri-Continental Corporation. The address of the
Subadviser is 100 Park Avenue, New York, NY 10017.
PORTFOLIO MANAGER. Loris D. Muzzatti, who heads the Seligman Growth Team, has
been sole Portfolio Manager of the Fund since February 1, 1996. Mr. Muzzatti
joined the Manager in 1985 and has been a Managing Director of the Manager
since January, 1991. Mr. Muzzatti is also Portfolio Manager of the Seligman
Henderson Global Growth Opportunities Fund, Vice President and Portfolio Man-
ager of Seligman Capital Fund, Inc. and Vice President of Seligman Portfolios,
Inc. ("SPI") and Portfolio Manager of SPI's Seligman Capital Portfolio.
The Subadviser's Global Policy Group has overall responsibility for directing
and overseeing all aspects
8
<PAGE>
of foreign investment activity for the Fund and provides global investment pol-
icy, including country weightings, asset allocations and industry sector guide-
lines, as appropriate. Mr. Iain C. Clark, a Managing Director and Chief Invest-
ment Officer of the Subadviser, is responsible for the day-to-day foreign in-
vestment activity of the Fund. Mr. Clark, who joined the Subadviser in 1992,
has been a Director of Henderson Administration Group plc since 1985.
The Manager's discussion of the Fund's performance as well as a line graph
illustrating comparative performance information between the Fund, the Standard
& Poor's 500 Composite Stock Price Index, and the Lipper Growth Fund Average is
included in the Fund's 1995 Annual Report to Shareholders. Copies of the 1995
Annual Report may be obtained, without charge, by calling or writing the Fund
at the telephone numbers or address listed on the cover page of this Prospec-
tus.
PORTFOLIO TRANSACTIONS. The Management Agreement and Subadvisory Agreement
each recognize that in the purchase and sale of portfolio securities the Man-
ager and Subadviser will seek the most favorable price and execution, and, con-
sistent with that policy, may give consideration to the research, statistical
and other services furnished by brokers or dealers to the Manager and
Subadviser. The use of brokers who provide investment and market research and
securities and economic analysis may result in higher brokerage charges than
the use of brokers se-lected on the basis of the most favorable brokerage com-
mission rates, and research and analysis received may be useful to the Manager
and Subadviser in connection with its services to other clients as well as to
the Fund. In over-the-counter markets, orders are placed with responsible pri-
mary market makers unless a more favorable execution or price is believed to be
obtainable.
Consistent with the Rules of the National Association of Securities Dealers,
Inc., and subject to seeking the most favorable price and execution available
and such other policies as the Directors of the Fund may determine, the Manager
and Subadviser may consider sales of shares of the Fund and, if permitted under
applicable laws, may consider sales of shares of the other mutual funds in the
Seligman Group as a factor in the selection of brokers or dealers to execute
portfolio transactions for the Fund.
PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" which may result in the payment by the Fund of dealer
spreads or underwriting commissions and other transactions costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
Although it is the policy of the Fund to hold securities for investment,
changes in the securities held by the Fund will be made from time to time when
the Manager and Subadviser believe such changes will strengthen the Fund's
portfolio. The portfolio turnover of the Fund is not expected to exceed 100%.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager, acts
as general distributor of the Fund's shares. Its address is 100 Park Avenue,
New York, NY 10017.
The Fund issues three classes of shares: Class A shares are sold to investors
choosing the initial sales load alternative; Class B shares are sold to invest-
ors choosing to pay no initial sales load, a higher distribution fee and a CDSL
with respect to redemptions with in six years of purchase and who desire shares
to con-vert automatically to Class A shares after eight years; and Class D
shares are sold to investors choosing no initial sales load, a higher distribu-
tion fee and a CDSL on redemptions within one year of purchase. See "Alterna-
tive Distribution System" above.
Shares of the Fund may be purchased through any authorized investment dealer.
All orders will be executed at the net asset value per share next computed af-
ter receipt of the purchase order plus, in the case of Class A shares, a sales
load which, except for
9
<PAGE>
shares purchased under one of the reduced sales load plans, will vary with the
size of the purchase as shown in the schedule under "Class A Shares--Initial
Sales Load" below.
THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE FUND IS $1,000; SUBSEQUENT
INVESTMENTS MUST BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR INVESTMENT OF
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE RIGHT TO RE-
TURN INVESTMENTS WHICH DO NOT MEET THESE MINIMUMS. EXCEPTIONS TO THESE MINIMUMS
ARE AVAILABLE FOR ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-
CHECK (R) SERVICE OR THE SELIGMAN TIME HORIZON MATRIXSM.
No purchase order may be placed for Class B shares for an amount for $250,000
or more; or for Class D shares for an amount of $4,000,000 or more.
Orders received by an authorized dealer before the close of business on the
New York Stock Exchange ("NYSE") (normally, 4:00 p.m. Eastern time) and ac-
cepted by SFSI before the close of business (5:00 p.m. Eastern time) on the
same day will be executed at the Fund's net asset value determined as of the
close of the NYSE on that day plus, in the case of Class A shares, the applica-
ble sales load. Orders accepted by dealers after the close of the NYSE, or re-
ceived by SFSI after the close of business, will be executed at the Fund's net
asset value as next determined plus, in the case of Class A shares, the appli-
cable sales load. The authorized dealer through which a shareholder purchases
shares is responsible for forwarding the order to SFSI promptly.
Payment for dealer purchases may be made by check or by wire. To wire pay-
ment, dealer orders must first be placed through SFSI's order desk and assigned
a purchase confirmation number. Funds in pay ment of the purchase may then be
wired to Mellon Bank, N.A., ABA #043000261, A/C Seligman Growth Fund, Inc. (A,
B or D), A/C #107-1011. WIRE TRANSFERS MUST INCLUDE THE PURCHASE CONFIRMATION
NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT NUMBER. Persons other than
dealers who wish to wire payment should contact Seligman Data Corp. for spe-
cific wire instructions. Although the Fund makes no charge for this service,
the transmitting bank may impose a wire service fee.
Current shareholders may purchase additional shares at any time through any
authorized dealer or by sending a check payable to the "Seligman Group of
Funds" directly to P.O. BOX 3936, NEW YORK, NY 10008-3936. Checks for invest-
ment must be in U.S. dollars drawn on a domestic bank. The check should be ac-
companied by an investment slip (provided at the bottom of shareholder account
statements) and include the shareholder's name, address, account number, name
of Fund and class of shares (A, B or D). If a shareholder does not indicate the
required information, Seligman Data Corp. will seek further clarification and
be forced to return the check to the shareholder. Orders sent directly to Se-
ligman Data Corp. will be executed at the Fund's net asset value next deter-
mined after the order is accepted plus, in the case of Class A shares, the ap-
plicable sales load.
Seligman Data Corp. will charge a $10.00 service fee for checks returned to
it as uncollectable. This charge may be deducted from the shareholder's ac-
count. For the protection of the Fund and its shareholders, no redemption pro-
ceeds will be remitted to a shareholder with respect to shares purchased by
check (unless certified) until Seligman Data Corp. receives notice that the
check has cleared, which may be up to 15 days from the credit of the shares to
the shareholder's account.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Fri-
day, as of the close of trading on the NYSE (normally, 4:00 p.m. Eastern time)
on each day that the NYSE is open for business. Net asset value is calculated
sepa-rately for each class. Securities traded on a U.S. or foreign exchange or
over-the-counter market are valued at the last sales price on the primary ex-
change or market on which they are traded. United Kingdom securities and secu-
rities 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
10
<PAGE>
not readily available are valued at fair value determined in accordance with
procedures approved by the Fund's Board of Directors. Short-term holdings ma-
turing in 60 days or less are generally valued at amortized cost if their orig-
inal maturity was 60 days or less. Short-term holdings with more than 60 days
remaining to maturity will be valued at current market value until the 61st day
prior to maturity, and will then be valued on an amortized cost basis based on
the value as of such date unless the Board determines that amortized cost value
does not represent fair market value.
Although the legal rights of Class A, Class B and Class D shares are substan-
tially identical, the different expenses borne by each class will result in
different net asset values and dividends. The net asset value of Class B and
Class D shares will generally be lower than the net asset value of Class A
shares as a result of the higher distribution fee charged to Class B and Class
D shares. In addition, net asset value per share of, the three classes will be
affected to the extent any other class expenses differ among classes.
CLASS A SHARES--INITIAL SALES LOAD. Class A shares are subject to an initial
sales load which varies with the size of the purchase as shown in the following
schedule, and an annual service fee of up to .25% of the average daily net as-
set value of Class A shares. See "Administration, Shareholder Services and Dis-
tribution Plan" below.
CLASS A SHARES--SALES LOAD SCHEDULE
<TABLE>
<CAPTION>
SALES LOAD AS A
PERCENTAGE OF REGULAR
---------------------------------------- DEALER
NET AMOUNT DISCOUNT
INVESTED AS A % OF
AMOUNT OF OFFERING (NET ASSET OFFERING
PURCHASE PRICE VALUE) 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- 3,999,999 1.00 1.01 .90
4,000,000- or more* 0 0 0
</TABLE>
-------
* Dealers may receive a fee of .15% on sales of $4,000,000 or more.
SFSI shall pay broker/dealers, from its own resources, an additional fee in
respect of certain investments in Class A shares of the Seligman Mutual Funds
by an "eligible employee benefit plan" (as defined below under "Special Pro-
grams") which are attributable to the particular broker/dealer. The shares eli-
gible for the fee are those on which an initial front-end sales load was not
paid because either (i) the participating eligible employee benefit plan has at
least $1 million invested in the Seligman Mutual Funds or (ii) the participat-
ing employer has at least 50 eligible employees to whom such plan is made
available. The fee, which is paid monthly, is a percentage of the average daily
net asset value of eligible shares based on the length of time the shares have
been invested in a Seligman Mutual Fund, as follows: for shares held up to 1
year, .50% per annum; for shares held more than 1 year up to 2 years, .25% per
annum; for shares held from 2 years to 5 years, .10% per annum; and nothing
thereafter.
REDUCED SALES LOADS. Reductions in sales loads 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 purchasing securities for their own
account, or a trustee or other fiduciary purchasing for a single fiduciary ac-
count or single trust. Purchases made by a trustee or other fiduciary for a fi-
duciary account may not be aggregated with purchases made on behalf of any
other fiduciary or individual account.
. VOLUME DISCOUNTS are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other Seligman
Mutual Funds that are sold with a front-end sales load reaches levels indicated
in the above sales load schedule.
. THE RIGHT OF ACCUMULATION allows an investor to combine the amount being in-
vested in shares of the other Seligman Mutual Funds sold with a front-end sales
load with the total net asset value of shares of those Seligman Mutual Funds
already owned that
11
<PAGE>
were sold with a front-end sales load and the total net asset value of shares
of Seligman Cash Management Fund that were acquired by the investor through an
exchange of shares of another Seligman Mutual Fund on which there was a front-
end sales load to determine reduced sales loads in accordance with the sales
load schedule. An investor or a dealer purchasing shares on behalf of an in-
vestor must indicate that the investor has existing accounts when making in-
vestments or opening new accounts.
. A LETTER OF INTENT allows an investor to purchase Class A shares over a 13-
month period at reduced sales loads, based upon the total amount the investor
intends to purchase, plus the total net asset value of shares of the other Se-
ligman Mutual Funds already owned that were sold with a front-end sales load
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 a front-end sales load. An investor or a dealer purchasing
shares on behalf of an investor must indicate that the investor has existing
accounts when making investments or opening new accounts. For more information
concerning terms of Letters of Intent, see "Terms and Conditions" on page 26.
SPECIAL PROGRAMS. The Fund may sell Class A shares at net asset value to
present and retired directors, trustees, officers, and employees and their
spouses (and family members of the foregoing) of the Fund, the other investment
companies in the Seligman Group, the Manager and other companies affiliated
with the Manager. 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 also may be made to
employee benefit and thrift plans for such persons and to any investment advi-
sory, custodial, trust or other fiduciary account managed or advised by the
Manager or any affiliate.
Class A shares also may be issued without a sales load in connection with the
acquisition of cash and securities owned by other investment companies and per-
sonal holding companies; to any registered unit investment trust which is the
issuer of periodic payment plan certificates, the net proceeds of which are in-
vested in Fund shares; to separate accounts established and maintained by an
insurance company which are exempt from registration under Section 3(c)(11) of
the 1940 Act; to registered representatives and employees (and their spouses
and minor children) of any dealer that has a sales agreement with SFSI; to
shareholders of mutual funds with objectives and policies similar to the Fund
who purchase shares with redemption proceeds of such funds; to financial insti-
tution trust departments; to registered investment advisers exercising discre-
tionary investment authority with respect to the purchase of Fund shares; to
accounts of financial institutions or broker/dealers that charge account man-
agement fees, provided the Manager or one of its affiliates has entered into an
agreement with respect to such accounts pursuant to sponsored arrangements with
organizations which make recommendations to or permit group solicitations of,
its employees, members or participants in connection with the purchase of
shares of the Fund; and to "eligible employee benefit plans" (i) which have at
least $1 million invested in the Seligman Group of Mutual Funds or (ii) of em-
ployers who have at least 50 eligible employees to whom such plan is made
available and, regardless of the number of employees, if such plan is estab-
lished and maintained by any dealer that has a sales agreement with SFSI. "Eli-
gible employee benefit plan" means any plan or arrangement, whether or not tax
qualified, which provides for the purchase of Fund shares. Sales of shares to
such plans must be made in connection with a payroll deduction system of plan
funding or other system acceptable to Seligman Data Corp.
Section 403(b) plans sponsored by public educational institutions are not el-
igible for net asset value purchases based on the aggregate investment made by
the plan or number of eligible employees. Participations in such plans are eli-
gible for reduced sales loads based solely on their individual investments.
12
<PAGE>
CLASS B SHARES. Class B shares are sold without an initial sales load but are
subject to a CDSL if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original purchase price, whichever is less.
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSL
- -------------------- ----
<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>
Class B shares are also subject to an annual distribution fee of up to .75%
and an annual service fee of up to .25% of the average daily net asset value of
the Class B shares. SFSI will make a 4% payment to dealers in respect of pur-
chases of Class B shares. Approximately eight years after purchase, Class B
shares will convert automatically to Class A shares of the Fund, which are sub-
ject to an annual service fee of up to .25% but no distribution fee. Shares
purchased through reinvestment of dividends and distributions on Class B shares
also will convert automatically to Class A shares along with the underlying
shares on which they are earned. Conversion occurs at the end of the month
which precedes the eighth anniversary of the purchase date. If Class B shares
of the Fund are exchanged for Class B shares of another Seligman Mutual Fund,
the conversion period applicable to the Class B shares acquired in the exchange
will
apply, and the holding period of the shares exchanged will be tacked onto the
holding period of the shares acquired. Class B shareholders of the Fund exer-
cising the exchange privilege will continue to be subject to the Fund's CDSL
schedule if such schedule is higher or longer than the CDSL schedule relating
to the new Class B shares. In addition, Class B shares of the Fund acquired by
exchange will be subject to the Fund's CDSL schedule if such schedule is higher
or longer than the CDSL schedule relating to the Class B shares of the Seligman
Mutual Fund from which the exchange has been made.
CLASS D SHARES. Class D shares are sold without an initial sales load but are
subject to a CDSL if the shares are redeemed within one year, an annual distri-
bution fee of up to .75% and an annual service fee of up to .25% of the average
daily net asset value of the Class D shares. SFSI will make a 1% payment to
dealers in respect of purchases of Class D shares. Unlike Class B shares, Class
D shares do not automatically convert to Class A shares after eight years.
CONTINGENT DEFERRED SALES LOAD. A CDSL will be imposed on any redemption of
Class B or Class D shares which were purchased during the preceding six years
(for Class B shares) or twelve months (for Class D shares); however, no CDSL
will be imposed on shares acquired through the investment of dividends or dis-
tributions from any Class B or Class D shares of mutual funds within the Selig-
man Group. The amount of any CDSL will initially be used by SFSI to defray the
expense of the payment of 4% (in the case of Class B shares) or 1% (in the case
of Class D shares) made by it to Service Organizations (as defined under "Ad-
ministration, Shareholder Services And Distribution Plan") at the time of sale.
To minimize the application of a CDSL to a redemption, shares acquired pursu-
ant to the investment of dividends and distributions (which are not subject to
a CDSL) will be redeemed first; followed by shares purchased at least six years
prior to redemption (in the case of Class B shares) or one year prior to re-
demption (in the case of Class D shares). Shares held for the longest period of
time within the applicable period will then be redeemed. Additionally, for
those shares determined to be subject to a CDSL, the application of the CDSL
will be made to the current net asset value or original purchase price, which-
ever is less.
For example, assume an investor purchased 100 Class D shares in January at a
price of $10.00 per share. During the first year, 5 additional Class D shares
were acquired through investment of dividends and
13
<PAGE>
distributions. In January of the following year, an additional 50 Class D
shares were purchased at a price of $12.00 per share. In March of that year,
the investor chooses to redeem $1,500.00 from the account which now holds 155
shares with a total value of $1,898.75 ($12.25 per share). The CDSL for this
transaction would be calculated as follows:
<TABLE>
<S> <C>
Total shares to be redeemed (122.449 @ $12.25) as follows:........... $1,500.00
=========
Dividend/Distribution shares (5 @ $12.25)............................ $ 61.25
Shares held more than 1 year (100 @ $12.25).......................... 1,225.00
Shares held less than 1 year subject to CDSL (17.449 @ $12.25)....... 213.75
---------
Gross proceeds of redemption........................................ $1,500.00
Less CDSL (17.449 shares @
$12.00 = $209.39 X 1% = $2.09)..................................... 2.09
---------
Net proceeds of redemption.......................................... $1,497.91
=========
</TABLE>
For Federal income tax purposes, the amount of the CDSL will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the re-
demption of shares.
The CDSL will be waived or reduced in the following instances:
(a) on redemptions following the death or disability of a shareholder, as de-
fined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended (the
"Code"); (b) in connection with (i) distributions from retirement plans quali-
fied under section 401(a) of the 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), (ii) dis-
tributions from a custodial account under section 403 (b)(7) of the Code or an
individual retirement account ("IRA") due to death, disability, or attainment
of age 59 1/2, and (iii) a tax-free return of an excess contribution to an IRA;
(c) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund; (d) 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 shares of any reg-
istered investment management company; (e) pursuant to an automatic cash with-
drawal service; and (f) in connection with the redemption of Class B or Class D
shares of the Fund if the Fund is combined with another mutual fund in the Se-
ligman Group, or another similar reorganization transaction.
If, with respect to a redemption of any Class B or Class D shares sold by a
dealer, the CDSL is waived because the redemption qualifies for a waiver as set
forth above, the dealer shall remit to SFSI promptly upon notice, an amount
equal to the payment or a portion of the payment made by SFSI at the time of
sale of such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales in-
centive programs which may require the sale of minimum dollar amounts of shares
of the mutual funds in the Seligman Group. SFSI may from time to time pay a bo-
nus or other incentive to dealers that sell shares of the Seligman Mutual
Funds. In some instances, these bonuses or incentives may be offered only to
certain dealers which employ registered representatives who have sold or may
sell a significant amount of shares of the Fund and/or certain other mutual
funds managed by the Manager during a specified period of time. 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 rep-
resentatives and members of their families to places within or outside the
United States. The cost to SFSI of such promotional activities and payments
shall be consistent with the Rules of the National Association of Securities
Dealers, Inc., as then in effect.
14
<PAGE>
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER/DEALER REPRESENTATIVE, will have the ability to effect the following
transactions via telephone: (i) redemption of Fund shares, (ii) exchange of
Fund shares for shares of the same class of another Seligman Mutual Fund, (iii)
change of a dividend and/or capital gain distribution option, and (iv) change
of address. All telephone transactions are effected through Seligman Data Corp.
at (800) 221-2450.
For investors who purchase shares by completing and submitting an Account Ap-
plication (except those accounts registered as trusts (unless the trustee and
sole beneficiary are the same person), corporations or group retirement plans):
Unless an election is made otherwise on the Account Application, a shareholder
and the shareholder's broker/dealer of record, as designated on the Account Ap-
plication, will automatically receive telephone services.
For investors who purchase shares through a broker/dealer: Telephone services
for a shareholder and the shareholder's representative may be elected by com-
pleting a supplemental election application available from the broker/dealer of
record.
For accounts registered as IRAs: Telephone services will include only ex-
changes or address changes.
For accounts registered as trusts (unless the trustee and sole beneficiary
are the same person), corporations or group retirement plans: Telephone redemp-
tions are not permitted. Additionally, group retirement plans are not permitted
to change a dividend or gain distribution option.
All Seligman Mutual Funds with the same account number (i.e., registered ex-
actly the same) as an existing account, including any new Seligman Mutual Fund
in which the shareholder invests in the future, will automatically include tel-
ephone services if the existing account has telephone services. Telephone serv-
ices may also be elected at any time on a supplemental election application.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone services, authorizes each of the other owners to effect telephone
transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares via telephone. In
these circumstances, the shareholder or the shareholder's representative should
consider using other redemption or exchange procedures. (See "Redemption Of
Shares" below.) Use of these other redemption or exchange procedures will re-
sult in the request being processed at a later time than if a telephone trans-
action had been used, and the Fund's net asset value may fluctuate during such
periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. These will include:
recording all telephone calls requesting account activity, requiring that the
caller provide certain requested personal and/or account information at the
time of the call for the purpose of establishing the caller's identity, and
sending a written confirmation of redemptions, exchanges or address changes to
the address of record each time activity is initiated by telephone. As long as
the Fund and Seligman Data Corp. follow instructions communicated by telephone
that were reasonably believed to be genuine at the time of their receipt, nei-
ther they nor any of their affiliates will be liable for any loss to the share-
holder caused by an unauthorized transaction. In any instance where the Fund or
Seligman Data Corp. is not reasonably satisfied that instructions received by
telephone are genuine, the requested transaction will not be executed, and nei-
ther they nor any of their affiliates will be liable
15
<PAGE>
for any losses which may occur due to a delay in implementing the transaction.
If the Fund or Seligman Data Corp. does not follow the procedures described
above, the Fund or Seligman Data Corp. may be liable for any losses due to un-
authorized or fraudulent instructions. Telephone transactions must be effected
through a representative of Seligman Data Corp., i.e., requests may not be com-
municated via Seligman Data Corp.'s automated telephone answering system.
Shareholders, of course, may refuse or cancel telephone services. Telephone
services may be terminated by a shareholder at any time by sending a written
request to Seligman Data Corp. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A
SHAREHOLDER'S BROKER/DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHAREHOLD-
ER. Written acknowledgment of termination of telephone services will be sent to
the shareholder at the address of record.
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit form without charge (ex-
cept a CDSL, if applicable) at any time by SENDING A WRITTEN REQUEST to Selig-
man Data Corp., 100 Park Avenue, New York, NY 10017. The redemption request
must be signed by all persons in whose name the shares are registered. A share-
holder may redeem shares that are not in book credit form by surrendering cer-
tificates in proper form to the same address. Certificates should be sent by
registered mail. Share certificates must be endorsed for transfer or accompa-
nied by an endorsed stock power signed by all share owners exactly as their
name(s) appear(s) on the account registration. The shareholder's letter of in-
struction or endorsed stock power should specify the Fund name, account number,
class of shares (A, B or D) and the number of shares or dollar amount to be re-
deemed. The Fund cannot accept conditional redemption requests. If the redemp-
tion proceeds are (i) $50,000 or more, (ii) to be paid to someone other than
the shareholder of record (regardless of the amount) or (iii) to be mailed to
other than the address of record (regardless of the amount), the signature(s)
of the shareholder(s) must be guaranteed by an eligible financial institution
including, but not limited to, the following: banks, trust companies, credit
unions, securities brokers and dealers, savings and loan associations and par-
ticipants in the Securities Transfer Association Medallion Program (STAMP), the
Stock Exchanges Medallion Program (SEMP) or the New York Stock Exchange Medal-
lion Signature Program (MSP). The Fund reserves the right to reject a signature
guarantee where it is believed that the Fund will be placed at risk by ac-
cepting such guarantee. A signature guarantee is also necessary in order to
change the account registration. Notarization by a notary public is not an ac-
ceptable signature guarantee. ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED BY
SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY CORPORATIONS, EXECUTORS,
ADMINISTRATORS, TRUSTEES, CUSTODIANS OR RETIREMENT PLANS. FOR FURTHER INFORMA-
TION WITH RESPECT TO REDEMPTION REQUIREMENTS, PLEASE CONTACT THE SHAREHOLDER
SERVICES DEPARTMENT OF SELIGMAN DATA CORP. FOR ASSISTANCE. In the case of Class
A shares, and in the case of Class B shares redeemed after six years and Class
D shares redeemed after one year, a shareholder will receive the net asset
value per share next determined after receipt of a request in good order. If
Class B shares are redeemed within six years of purchase, a shareholder will
receive the net asset value per share next determined after receipt of a re-
quest in good order, less the applicable sales load as described under "Pur-
chase Of Shares--Class B Shares" above. If Class D shares are redeemed within
one year of purchase, a shareholder will receive the net asset value per share
next determined after receipt of a request in good order, less a CDSL of 1% as
described under "Purchase Of Shares--Class D Shares" above.
A shareholder also may "sell" shares to the Fund through an investment dealer
and, in that way, be certain, providing the order is timely, of receiving the
net asset value established at the end of the day on which the dealer is given
the repurchase order (less any applicable CDSL). The Fund makes no charge for
this transaction, but the dealer may charge a service fee. "Sell" or repurchase
orders received from an autho
16
<PAGE>
rized dealer before the close of the NYSE and received by SFSI, the repurchase
agent, before the close of business on the same day will be executed at the net
asset value per share determined as of the close of the NYSE on that day, less
any applicable CDSL. Repurchase orders received from authorized dealers after
the close of the NYSE or not received by SFSI prior to the close of business,
will be executed at the net asset value determined as of the close of the NYSE
on the next trading day, less any applicable CDSL. Shares held in a "street
name" account with a broker/dealer may be sold to the Fund only through a
broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares may be
made, once per day, in an amount of up to $50,000 per account. Telephone re-
demption requests received by Seligman Data Corp. at (800) 221-2450 between
8:30 a.m. and 4:00 p.m. Eastern time, on any business day will be processed as
of the close of business on that day. Redemption requests by telephone will not
be accepted within 30 days following an address change. Keogh Plans, IRAs or
other retirement plans are not eligible for telephone redemptions. The Fund re-
serves the right to suspend or terminate its telephone redemption service at
any time without notice.
For more information about telephone redemptions and the circumstances under
which shareholders may bear the risk of loss for a fraudulent transaction, see
"Telephone Transactions" above.
GENERAL. With respect to shares redeemed, a check for the proceeds will be
sent to the address of record within seven calendar days after acceptance of
the redemption order and will be made payable to all of the registered owners
on the account. With respect to shares repurchased by the Fund, a check for the
proceeds will be sent to the investment dealer within seven calendar days after
acceptance of the repurchase order and will be made payable to the investment
dealer. The Fund will not permit redemptions of shares purchased by check (un-
less certified) until Seligman Data Corp. receives notice that the check has
cleared, which may be up to 15 days from the credit of the shares to the share-
holder's account. The proceeds of a redemption or repurchase may be more or
less than the shareholder's cost.
The Fund reserves the right to redeem shares owned by a shareholder whose in-
vestment in the Fund has a value of less than a minimum amount specified by the
Fund's Board of Directors, which is presently $500. Shareholders would be sent
a notice before the redemption is processed stating that the value of their in-
vestment in the Fund is less than the specified minimum and that they have
sixty days to make an additional investment.
REINSTATEMENT PRIVILEGE. If a shareholder redeems Class A shares and then de-
cides to reinvest them, or to shift the investment to one of the other Seligman
Mutual Funds, the shareholder may, within 120 calendar days of the date of re-
demption, use all or any part of the proceeds of the redemption to reinstate,
free of sales load, all or any part of the investment in shares of the Fund or
in shares of any of the other Seligman Mutual Funds. If a shareholder redeems
Class B or Class D shares and the redemption was subject to a CDSL, the share-
holder may reinstate the investment in shares of the same class of the Fund or
in any of the other Seligman Mutual Funds within 120 calendar days of the date
of redemption and receive a credit for the CDSL paid. Such investment will be
reinstated at the net asset value per share established as of the close of the
NYSE on the day the request is received. Seligman Data Corp. must be informed
that the purchase represents a reinstated investment. REINSTATED SHARES MUST BE
REGISTERED EXACTLY AND BE OF THE SAME CLASS AS THE SHARES PREVIOUSLY REDEEMED.
Generally, exercise of the Reinstatement Privilege does not alter the Federal
income tax status of any capital gain realized on a sale of Fund shares, but to
the extent that any shares are sold at a loss and the proceeds are reinvested
in shares of the same Fund. some or all of the loss will not be allowed as a
deduction, depending upon the percentage of the proceeds reinvested.
17
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
Under the Fund's Administration, Shareholder Services and Distribution Plan
(the "Plan"), the Fund may pay to SFSI an administration, shareholder services
and distribution fee in respect of the Fund's Class A, Class B and Class D
shares. Payments under the Plan may include, but are not limited to: (i) com-
pensation to securities dealers and other organizations ("Service Organiza-
tions") for providing distribution assistance with respect to assets invested
in the Fund, (ii) compensation to Service Organizations for providing adminis-
tration, accounting and other shareholder services with respect to Fund share-
holders, and (iii) otherwise promoting the sale of shares of the Fund, includ-
ing 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 SFSI's costs incurred in connection with
its marketing efforts with respect to shares of the Fund. The Manager, in its
sole discretion, may also make similar payments to SFSI from its own resources,
which may include the management fee that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in re-
spect of Class A shares will be used primarily to compensate Service Organiza-
tions which enter into agreements with SFSI. Such Service Organizations will
receive from SFSI a continuing fee of up to .25% on an annual basis, payable
quarterly, of the Fund's average daily net assets of Class A shares attribut-
able to the particular Service Organization for providing personal service
and/or the maintenance of shareholder accounts. The fee payable from time to
time is, within such limit, determined by the Directors of the Fund.
The Plan, as it relates to Class A shares, was approved by shareholders on
November 23, 1992 and became effective on January 1, 1993. The Plan is reviewed
by the Directors annually. The total amount paid for the year ended December
31, 1995 in respect of the Fund's Class A shares pursuant to the Plan was equal
to .21% of the Class A shares' average daily net assets.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class B and Class D shares at an annual rate of up to 1% of the respective av-
erage daily net asset value of the Class B and Class D shares. Proceeds from
the Class B and Class D distribution fees are used primarily to compensate
Service Organizations for administration, shareholder services and distribution
assistance (including a continuing fee of up to .25% on an annual basis of the
average daily net asset value of Class B and Class D shares attributable to
particular Service Organizations for providing personal service and/or the
maintenance of shareholder accounts) and will initially be used by SFSI to de-
fray the expense of the payment of 4% (in the case of Class B shares) or 1% (in
the case of Class D shares) made by it to Service Organizations at the time of
the sale of Class B and Class D shares. The amounts expended by SFSI in any one
year upon the initial purchase of Class B and Class D shares may exceed the
amounts received by it from Plan payments retained. Expenses of administration,
shareholder services and distribution of Class B and Class D shares of the Fund
in one fiscal year of the Fund may be paid from Class B and Class D Plan fees,
respectively, received from the Fund in any other fiscal year.
The Plan, as it relates to Class B shares was approved by the Directors of
the Fund on March 21, 1996. The Plan, as it relates to Class D shares, was ap-
proved by the Directors on March 18, 1993 and became effective May 1, 1993. The
total amount paid for the year ended December 31, 1995 by the Fund's Class D
shares pursuant to the Plan was 1% per annum of the average daily net assets of
Class D shares. The Plan is reviewed by the Directors annually.
Seligman Services, Inc. ("SSI"), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts
18
<PAGE>
as broker/dealer of record for most shareholder accounts that do not have a
designated broker/dealer of record including all such shareholder accounts es-
tablished after April 1, 1995 and receives compensation for providing personal
service and account maintenance to such accounts of record.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any part or all of an investment in the Fund for shares of any of the other mu-
tual funds in the Seligman Group. Exchanges may be made by mail, or by tele-
phone, if the shareholder has telephone services.
Class A, Class B and Class D shares may be exchanged only for Class A, Class
B and Class D shares, respectively, of another Seligman Mutual Fund on the ba-
sis of relative net asset value.
If Class B or Class D shares that are subject to a CDSL are exchanged for
Class B or Class D shares of another Seligman Mutual Fund, for purposes of as-
sessing the CDSL payable upon disposition of the exchanged Class B or Class D
shares, the applicable holding period shall be reduced by the holding period of
the original Class B or Class D shares.
Class B shareholders of the Fund exercising the exchange privilege will con-
tinue to be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL schedule of the new Class B shares. In addition, Class B
shares of the Fund acquired by exchange will be subject to the Fund's CDSL
schedule if such schedule is higher or longer than the CDSL schedule relating
to the Class B shares of the fund from which such shares were exchanged.
The Seligman Mutual Funds available under the Exchange Privilege are:
. SELIGMAN CAPITAL FUND, INC. seeks aggressive capital appreciation. Current
income is not an objective.
. SELIGMAN CASH MANAGEMENT FUND, INC. invests in high quality money market
instruments. Shares are sold at net asset value.
. SELIGMAN COMMON STOCK FUND, INC. seeks favorable current income and long-
term growth of both income and capital value without exposing capital to undue
risk.
. SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC. invests in shares of
companies in the communications, information and related industries to produce
capital gain. Income is not an objective.
. SELIGMAN FRONTIER FUND, INC. seeks to produce growth in capital value, in-
come may be considered but will only be incidental to the Fund's investment ob-
jective.
. SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. consists of the Seligman Hen-
derson International Fund, the Seligman Henderson Global Growth Opportunities
Fund, the Seligman Henderson Global Smaller Companies Fund and the Seligman
Henderson Global Technology Fund, which seek long-term capital appreciation
primarily by investing in companies either globally or internationally.
. SELIGMAN HIGH INCOME FUND SERIES seeks high current income by investing in
debt securities. The Fund consists of the U.S. Government Securities Series
(which does not currently offer Class B shares) and the High-Yield Bond Series.
. SELIGMAN INCOME FUND, INC. seeks high current income and the possibility of
improvement of future income and capital value.
. SELIGMAN NEW JERSEY TAX-EXEMPT FUND, INC. invests in investment grade New
Jersey tax-exempt securities. (Does not currently offer Class B shares.)
. SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES invests in investment grade
Pennsylvania tax-exempt securities. (Does not currently offer Class B shares.)
19
<PAGE>
. SELIGMAN TAX-EXEMPT FUND SERIES, INC. consists of several State Series and
a National Series. The National Tax-Exempt Series seeks to provide maximum in-
come exempt from Federal income taxes; individual state series, each seeking
to maximize income exempt from Federal income taxes and from personal income
taxes in designated states, are available for Colorado, Georgia, Louisiana,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon
and South Carolina. (Does not currently offer Class B shares.)
. SELIGMAN TAX-EXEMPT SERIES TRUST: includes the California Tax-Exempt Qual-
ity Series, the California Tax-Exempt High-Yield Series, the Florida Tax-Ex-
empt Series and the North Carolina Tax-Exempt Series, each of which invests in
tax-exempt securities of its designated state. (Does not currently offer Class
B shares.)
All permitted exchanges will be based on the net asset values of the respec-
tive funds determined at the close of the NYSE on that day. Telephone requests
for exchanges received between 8:30 a.m. and 4:00 p.m. Eastern time, on any
business day, by Seligman Data Corp. at (800) 221-2450, will be processed as
of the close of business on that day. The registration of an account into
which an exchange is made must be identical to the registration of the account
from which shares are exchanged. When establishing a new account by an ex-
change of shares, the shares being exchanged must have a value of at least the
minimum initial investment required by the mutual fund into which the exchange
is being made. The method of receiving distributions, unless otherwise indi-
cated, will be carried over to the new fund account, as will telephone servic-
es. Account services, such as Invest-A-Check (R) Service, Directed Dividends
and Automatic Cash Withdrawal Service will not be carried over to the new fund
account unless specifically requested and permitted by the new fund. Exchange
orders may be placed to effect an exchange of a specific number of shares, an
exchange of shares equal to a specific dollar amount or an exchange of all
shares held. Shares for which certificates have been issued may not be ex-
changed via telephone and may be exchanged only upon receipt of a written ex-
change request together with certificates representing shares to be exchanged
in proper form.
The Exchange Privilege via mail is generally applicable to investments in
group retirement plans, although some restrictions may apply. The terms of the
exchange offer described herein may be modified at any time; and not all of
the mutual funds in the Seligman Group are available to residents of all
states. Before making any exchange, a shareholder should contact an authorized
investment dealer or Seligman Data Corp. to obtain prospectuses of any of the
Seligman Mutual Funds.
A broker/dealer of record will be able to effect exchanges on behalf of a
shareholder only if the shareholder has telephone services or if the
broker/dealer has entered into a Telephone Exchange Agreement with SFSI
wherein the broker/dealer must agree to indemnify SFSI and the Seligman Mutual
Funds from any loss or liability incurred as a result of the acceptance of
telephone exchange orders.
Written confirmation of all exchanges will be forwarded to the shareholder
to whom the exchanged shares are registered and a duplicate confirmation will
be sent to the dealer of record. SFSI reserves the right to reject any tele-
phone exchange request. Any rejected telephone exchange order may be processed
by mail. For more information about telephone exchanges privileges, which, un-
less objected to, are assigned to most shareholders automatically, and the
circumstances under which shareholders may bear the risk of loss for a fraudu-
lent transaction, see "Telephone Transactions" above.
Exchanges of shares are sales, and may result in a gain or loss for Federal
income tax purposes.
FURTHER INFORMATION ABOUT TRANSACTIONS IN THE FUND
Because excessive trading (including short-term, "market timing" trading)
can hurt the Fund's performance, the Fund may refuse any exchange (1) from
20
<PAGE>
any shareholder account from which there have been two exchanges in the preced-
ing three month period, or (2) where the exchanged shares equal in value the
lesser of $1,000,000 or 1% of the Fund's net assets. The Fund may also refuse
any exchange or purchase order from any shareholder account if the shareholder
or the shareholder's broker/dealer has been advised that pervious patterns of
purchases and redemptions or exchanges have been considered excessive. Accounts
under common ownership or control, including those with the same taxpayer ID
number and those administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered one account for
this purpose. Additionally, the Fund reserves the right to refuse any order for
the purchase of shares.
DIVIDENDS AND DISTRIBUTIONS
The Fund's net investment income, if any, is paid to shareholders in divi-
dends twice each year, usually in June and December. Payments vary in amount
depending on income received from portfolio securities and the costs of opera-
tions. The Fund distributes substantially all of any taxable net long-term and
short-term gain realized on investments to shareholders at least annually; such
distributions will generally be taxable to shareholders in the year in which
they are declared by the Fund if paid before February 1 of the following year.
Shareholders may elect: (1) to receive both dividends and gain distributions
in shares; (2) to receive dividends in cash and gain distributions in shares;
(3) to receive both dividends and gain distributions in cash. Cash dividends
and gain distributions are paid by check. If the payment option you prefer is
not listed, contact Seligman Data Corp. at (800) 221-2450 to request informa-
tion on other available options. In the case of prototype retirement plans,
dividends and gain distributions are reinvested in additional shares. Unless
another election is made, dividends and capital gain distributions will be
credited to shareholder accounts in additional shares. Shares acquired through
a dividend or gain distribution and credited to a shareholder's account are not
subject to an initial sales load or a CDSL. Dividends and gain distributions
paid in shares are invested on the payable date using the net asset value of
the ex-dividend date. Shareholders may elect to change their dividend and gain
distribution options by writing Seligman Data Corp. at the address listed be-
low. If the shareholder has telephone services, changes may also be telephoned
to Seligman Data Corp. between 8:30 a.m. and 6:00 p.m. Eastern time, by either
the shareholder or the broker/dealer of record on the account. For information
about telephone services, see "Telephone Transactions." These elections must be
received by Seligman Data Corp. before the record date for the dividend or dis-
tribution in order to be effective for such dividend or distribution.
The per share dividends from net investment income on Class B and Class D
shares will be lower than the per share dividends on Class A shares as a result
of the higher distribution fees applicable with respect to Class B and Class D
shares. Per share dividends of the three classes may also differ as a result of
differing class expenses. Distributions of net capital gains, if any, will be
paid in the same amount for Class A, Class B and Class D shares. See "Purchase
Of Shares--Valuation."
Shareholders exchanging shares of one mutual fund for shares of another mu-
tual fund in the Seligman Group will continue to receive dividends and gains as
elected prior to such exchange unless otherwise specified. In the event that a
shareholder redeems all shares in an account between the record date and the
payable date, the value of dividends or gain distributions declared will be
paid in cash regardless of the existing election.
FEDERAL INCOME TAXES
The Fund intends to continue to qualify as a regulated investment company un-
der the Code. For each year so qualified, the Fund will not be subject to Fed-
eral income taxes on its net investment income and capital gains, if any, real-
ized during any taxable year,
21
<PAGE>
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 share-
holders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to the shareholders, whether re-
ceived in cash or reinvested in additional shares, and, to the extent desig-
nated as derived from the Fund's dividend income that would be eligible for the
dividends received deduction if the Fund were not a regulated investment compa-
ny, they are eligible, subject to certain restrictions, for the 70% dividends
received deduction for corporations.
Distributions of net capital gain, 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 shares have been held by the shareholders; such distributions are not eli-
gible for the dividends received deduction allowed to corporate shareholders.
Any gain or loss realized upon a sale or redemption of shares in the 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. 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 the Fund if, within a pe-
riod beginning 30 days before the date of such sale or disposition and ending
30 days after such date, the holder acquires (such as through dividend rein-
vestment) securities that are substantially identical to the shares of the
Fund.
In determining gain or loss on shares of the 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 load incurred
in acquiring such shares to the extent of any subsequent reduction of the sales
load by reason of the Exchange or Reinstatement Privilege offered by the Fund.
Any sales load not taken into account in determining the tax basis of shares
sold or exchanged within 90 days after acquisition will be added to the share-
holder's tax basis in the shares acquired pursuant to the Exchange or Rein-
statement Privilege.
The Fund will generally be subject to an excise tax of 4% on the amount of
any income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to share-
holders in the calendar year in which it was earned. Furthermore, dividends de-
clared 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 De-
cember. 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 advisers concerning the effect of
the Federal income taxes in their individual circumstances.
UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION NUMBER (SO-
CIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND CERTIFIES
THAT THE SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING, THE FUND IS REQUIRED
TO WITHHOLD AND REMIT TO THE U.S. 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 INTER-
NAL REVENUE SERVICE, THE FUND MAY BE FINED $50 ANNUALLY FOR EACH ACCOUNT FOR
WHICH A CERTIFIED TAXPAYER IDENTIFICATION NUMBER IS NOT PROVIDED. IN THE EVENT
THAT SUCH A FINE IS IMPOSED, THE FUND MAY CHARGE A
22
<PAGE>
SERVICE FEE OF UP TO $50 THAT MAY BE DEDUCTED FROM THE SHAREHOLDER'S ACCOUNT
AND OFFSET AGAINST ANY UNDISTRIBUTED DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.
THE FUND ALSO RESERVES THE RIGHT TO CLOSE ANY ACCOUNT WHICH DOES NOT HAVE A
CERTIFIED TAXPAYER IDENTIFICATION NUMBER.
SHAREHOLDER INFORMATION
Shareholders will be sent reports quarterly regarding the Fund. General in-
formation about the Fund may be requested by writing the Corporate Com-
munications/Investor Relations Department J. & W. Seligman & Co. Incorporated,
100 Park Avenue, New York, NY 10017 or by telephoning the Corporate
Communications/Investor Relations Department toll-free at (800) 221-7844 from
all continental United States, except New York, or (212) 850-1864 in New York
State and the Greater New York City area. Information about shareholder ac-
counts may be requested by writing Shareholder Services, Seligman Data Corp. at
the same address or by toll-free telephone by dialing (800) 221-2450 from all
continental United States. Seligman Data Corp. may be telephoned Monday through
Friday (except holidays), between the hours of 8:30 a.m. and 6:00 p.m. Eastern
time, and calls will be answered by a service representative.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BAL-
ANCE, MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT
STATEMENTS, FORM 1099-DIVS AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DE-
LIVERY OF DISTRIBUTION CHECKS, ACCOUNT STATEMENTS AND OTHER INFORMATION, SELIG-
MAN DATA CORP. SHOULD BE NOTIFIED IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGE.
ADDRESS CHANGES MAY BE TELEPHONED TO SELIGMAN DATA CORP. IF THE SHAREHOLDER HAS
TELEPHONE SERVICES. FOR MORE INFORMATION ABOUT TELEPHONE SERVICES, SEE "TELE-
PHONE TRANSACTIONS" ABOVE.
ACCOUNT SERVICES. Shareholders are sent confirmation of financial transac-
tions in their account.
Other investor services are available. These include:
. INVEST-A-CHECK(R) SERVICE enables a shareholder to authorize additional
purchases of shares automatically by electronic funds transfer from a savings
or checking account, if the bank that maintains the account is a member of the
Automated Clearing House ("ACH"), or by preauthorized checks to be drawn on the
shareholder's checking account at regular monthly intervals in fixed amounts of
$100 or more per fund, or regular quarterly intervals in fixed amounts of $250
or more per fund, to purchase shares. Accounts may be established concurrently
with the Invest-A-Check (R) Service only if accompanied by a $100 minimum in
conjunction with the monthly investment option or a $250 minimum in conjunction
with the quarterly investment option. (See "Terms and Conditions" on page 26.)
. AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder of Seligman
Cash Management Fund to exchange a specified amount, at regular monthly inter-
vals in fixed amounts of $100 or more per fund, or regular quarterly intervals
in fixed amounts of $250 or more per fund, from shares of any class of the Cash
Management Fund into shares of the same class of any other Seligman Mutual Fund
registered in the same name. The shareholder's Cash Management Fund account
must have a value of at least $5,000 at the initiation of the service. Ex-
changes will be made at the public offering price.
. DIVIDENDS FROM OTHER INVESTMENTS permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in additional
shares of the Fund. (Dividend checks must meet or exceed the required minimum
purchase amount and include the shareholder's name, account number, the name of
the Fund and the class of shares in which the investment is to be made.)
. AUTOMATIC CD TRANSFER SERVICE permits a shareholder to instruct a bank to
invest the proceeds of a maturing bank certificate of deposit ("CD") in shares
of any designated Seligman Mutual Fund.
23
<PAGE>
Shareholders who wish to use this service should contact Seligman Data Corp. or
a broker to obtain the necessary documentation. Banks may charge a penalty on
CD assets withdrawn prior to maturity. Accordingly, it will not normally be ad-
visable to liquidate a CD before its maturity.
. AUTOMATED CASH WITHDRAWAL SERVICE permits payments at regular intervals to
be made to a shareholder who owns or purchases worth $5,000 or more held as
book credits. Holders of Class B shares may elect to use this service immedi-
ately, although certain withdrawals may be subject to a CDSL. Please contact
Seligman Data Corp. at (800) 221-2450 for more information. Holders of Class D
shares may elect to use this service with respect to shares that have been held
for at least one year. (See "Terms and Conditions" on page 26).
. DIRECTED DIVIDENDS allows a shareholder to pay dividends to another person
or to direct the payment of such dividends to another Seligman Mutual Fund for
purchase at net asset value. Dividends on Class A, Class B and Class D shares
may only be directed to shares of the same class of another Seligman Mutual
Fund.
. OVERNIGHT DELIVERY to service shareholder requests is available for a
$15.00 fee which may be deducted from a shareholder's account, if requested.
. COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of
charge for the current year and most recent prior year. Copies of year-end
statements for prior years back to 1970 are available for a fee of $10.00 per
year, per account, with a maximum charge of $150 per account. Statement re-
quests should be forwarded, along with a check, to Seligman Data Corp.
TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for all
types of tax-deferred retirement plans. SFSI makes available plans, plan forms
and custody agreements for:
--Individual Retirement Accounts (IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and certain
non-profit organizations who wish to make deferred compensation arrangements;
and
--Pension and Profit Sharing Plans for sole proprietorships, corporations and
partnerships.
These types of plans may be established only upon receipt of a written appli-
cation form.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, NY 10017 or telephone toll-free (800) 445-1777 from
all continental United States. You also may receive information through an au-
thorized dealer.
ADVERTISING THE FUND'S PERFORMANCE
From time to time the Fund advertises its "total return" and "average annual
total return," each of which are calculated separately for Class A, Class B and
Class D shares. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT IN-
TENDED TO INDICATE FUTURE PERFORMANCE. The "total return" shows what an invest-
ment in shares of Class A, Class B and Class D of the Fund would have earned
over a specified period of time (for example, one, five and ten-year periods or
since inception) assuming the payment of the maximum sales load, if any, when
the investment was made (or CDSL upon redemption, if applicable) and that all
distributions and dividends paid by the Fund were reinvested on the reinvest-
ment dates during the period. The "average annual total return" is the annual
rate required for the initial payment to grow to the amount which would be re-
ceived at the end of the specified period (one, five and ten-year periods or
since inception); i.e., the average annual compound rate of return. The total
return and average annual total return of Class A shares quoted from time to
time through December 31, 1992 have not been adjusted to reflect the deduction
of the administration, share
24
<PAGE>
holder services and distribution fee and through April 10, 1991 also have not
been adjusted to reflect the increase in the management fee approved by share-
holders on April 10, 1991, which fees if reflected would reduce the performance
quoted. The total return and average total return for the Class A, Class B and
Class D shares for periods prior to January 1, 1996 do not reflect the increase
in the Management fee payable by the Fund, effective on such date, which if re-
flected would reduce the performance quoted. Total return and average annual
total return may also be presented without the effect of the initial sales load
or CDSL, as applicable.
From time to time, reference may be made in advertising or promotional mate-
rial to performance information, including mutual fund rankings, prepared by
Lipper Analytical Service, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's Class A and Class D shares, the Lipper analysis assumes invest-
ment of all dividends and distributions paid but does not take into account
applicable sales loads. The Fund may also refer in advertisements or in other
promotional material to articles, comments, listings and columns in the finan-
cial press pertaining to the Fund's performance. Examples of such financial and
other press publications include Barron's, Business Week, CDA/Weisenberger Mu-
tual Funds Investment Report, Christian Science Monitor, Financial Planning,
Financial Times, Financial World, Forbes, Fortune, Individual Investor, Invest-
ment Advisor, Investors Business Daily, Kiplinger's, Los Angeles Times, MONEY
Magazine, Morningstar, Inc., Pensions and Investments, Smart Money, The New
York Times, USA Today, U.S. News and World Report, The Wall Street Journal,
Washington Post, Worth Magazine and Your Money.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end diversified management investment company incorpo-
rated under the laws of the state of Maryland in 1937. The Fund is authorized
to issue 500,000,000 shares of common stock, each with a par value of $1.00,
divided into three classes. Each share of the Fund's Class A, Class B and Class
D common stock is equal as to earnings, assets and voting privileges, except
that each class bears its own separate distribution and, potentially, certain
other class expenses and has exclusive voting rights with respect to any matter
to which a separate vote of any class is required by the 1940 Act or Maryland
law. The Fund has adopted a plan (the "Multiclass Plan") pursuant to Rule 18f-3
under the 1940 Act permitting the issuance and sale of multiple classes of com-
mon stock. In accordance with the Articles of Incorporation, the Board of Di-
rectors 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, do not have preemptive or
subscription rights and are transferable.
25
<PAGE>
TERMS AND CONDITIONS
GENERAL ACCOUNT INFORMATION
Investments will be made in as many shares, including fractions to the third
decimal place, as can be purchased at the net asset value plus a sales load,
if applicable, at the close of business on the day payment is received. If a
check in payment of a purchase of Fund shares is dishonored for any reason,
Seligman Data Corp. will cancel the purchase and may redeem additional shares,
if any, held in a shareholder's account in an amount sufficient to reimburse
the Fund for any loss it may have incurred and charge a $10.00 return check
fee. Shareholders will receive dividends from investment income and any dis-
tributions from gain realized on investments in shares or in cash according to
the option elected. Dividend and gain options may be changed by notifying Se-
ligman Data Corp. These option changes must be received by Seligman Data Corp.
before the record date for the dividend or distribution in order to be effec-
tive for that dividend or distribution. Stock certificates will not be issued,
unless requested. Replacement stock certificates will be subject to a surety
fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The applica-
tion is subject to acceptance by the shareholder's bank and Seligman Data
Corp. The electronic fund transfer ("ACH debit") or preauthorized check in the
amount specified will be drawn automatically on the shareholder's bank on the
fifth day (unless otherwise specified) of each month (or on the prior business
day if such day of the month falls on a weekend or holiday) in which an in-
vestment is scheduled and invested at the public offering price at the close
of business on the same date. After the initial investment, the value of
shares held in the shareholder's account must equal not less than two regu-
larly scheduled investments. If an ACH debit or preauthorized check is not
honored by the shareholder's bank, or if the value of shares held falls below
the required minimum, the Invest-A-Check(R) Service may be suspended. In the
event that a check or ACH debit is returned as uncollectable, Seligman Data
Corp. will cancel the purchase, redeem shares held in the shareholder's ac-
count for an amount sufficient to reimburse the Fund for any loss it may have
incurred as a result, and charge a $10.00 return check fee. This fee may be
deducted from the shareholder's account. The Invest-A-Check(R) Service may be
reinstated upon written request indicating that the cause of interruption has
been corrected. The Invest-A-Check(R) Service may be terminated by the share-
holder or Seligman Data Corp. at any time by written notice. The shareholder
agrees to hold the Fund and its agents free from all liability which may re-
sult from acts done in good faith and pursuant to these terms. Instructions
for establishing Invest-A-Check(R) Service are given on the Account Applica-
tion. In the event a shareholder exchanges all of the shares from one mutual
fund in the Seligman Group to another, the Invest-A-Check(R) Service will be
terminated in the Seligman Mutual Fund that was closed as a result of the ex-
change of all shares and the shareholder must re-apply for the Invest-A-
Check(R) Service in the Seligman Mutual Fund into which the exchange was made.
In the event of a partial exchange, the Invest-A-Check(R) Service will be con-
tinued, subject to the above conditions, in the Seligman Mutual Fund from
which the exchange was made. Accounts established in conjunction with the In-
vest-A-Check(R) service must be accompanied by a minimum initial investment of
at least $100 in connection with the monthly investment option or $250 in con-
nection with the quarterly investment option. If a shareholder uses the In-
vest-A-Check(R) Service to make an IRA investment, the purchase will be cred-
ited as a current year contribution. If a shareholder uses the Invest-A-
Check(R) Service to make an investment in a pension or profit sharing plan,
the purchase will be credited as a current year employer contribution.
AUTOMATIC CASH WITHDRAWAL SERVICE
The Automatic Cash Withdrawal Service is available to Class A shareholders,
to Class B shareholders and to Class D shareholders with respect to Class D
shares held for one year or more. A sufficient number of full and fractional
shares will be redeemed to provide the amount required for a scheduled pay-
ment. Redemptions will be made at the asset value at the close of business on
the specific day designated by the shareholder of each month (or on the prior
business day if the day specified falls on a weekend or holiday), less, in the
case of Class B shares, any applicable CDSL. A shareholder may change the
amount of scheduled payments or may suspend payments by written notice to Se-
ligman Data Corp. at least ten days prior to the effective date of such a
change or suspension. The Service may be terminated by the shareholder or Se-
ligman Data Corp. at any time by written notice. It will be terminated upon
proper notification of the death or legal incapacity of the shareholder. This
Service is considered terminated in the event a withdrawal of shares, other
than to make scheduled withdrawal payments, reduces the value of shares re-
maining on deposit to less than $5,000. Continued payments in excess of divi-
dend income invested will reduce and ultimately exhaust capital. Withdrawals,
concurrent with purchases of shares of this or any other investment company,
will be disadvantageous because of the payment of duplicative sales loads, if
applicable. For this reason, additional purchases of Fund shares are discour-
aged when the Withdrawal Service is in effect.
LETTER OF INTENT--CLASS A SHARES ONLY
Seligman Financial Services, Inc. will hold in escrow shares equal to 5% of
the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid to the shareholder or credited to their account.
Upon completion of the specified minimum purchase within the thirteen-month
period, all shares held in escrow will be deposited to the shareholder's ac-
count or delivered to the shareholder. A shareholder may include toward the
completion of a Letter of Intent the total asset value of shares of the Selig-
man Mutual Funds on which a front-end sales load was paid as of the date of
the Letter. If the total amount invested within the thirteen-month period does
not equal or exceed the specified minimum purchase, a shareholder will be re-
quested to pay the difference between the amount of the sales load paid and
the amount of the sales load applicable to the total purchase made. If, within
20 days following the mailing of a written request, a shareholder has not paid
this additional sales load to Seligman Financial Services, Inc. sufficient
escrowed shares will be redeemed for payment of the additional sales load.
Shares remaining in escrow after this payment will be released to the account.
The intended purchase amount may be increased at any time during the thirteen-
month period by filing a revised Agreement for the same period, provided that
a Dealer furnishes evidence that an amount representing the reduction in sales
load under the new Agreement, which becomes applicable on purchases already
made under the original Agreement, will be refunded to the Fund and that the
required additional escrowed shares will be purchased by the shareholder.
Shares of Seligman Cash Management Fund which have been acquired by an ex-
change of shares of another Seligman Mutual Fund on which there is a front-end
sales load may be taken into account in completing a Letter of Intent, or for
Right of Accumulation. However, shares of Seligman Cash Management Fund which
have been purchased directly may not be used for purposes of determining re-
duced sales loads on additional purchases of the other mutual funds in the Se-
ligman Group.
4/96
26
<PAGE>
SELIGMAN
GROWTH
FUND, INC.
- ----------------------------
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, New York 10017
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York, 10004
EQGR1 4/96
- ----------------------------
PROSPECTUS
SELIGMAN
GROWTH
FUND, INC.
APRIL 15, 1996
[LOGO]
- ----------------------------
A Growth Stock Fund
In its 60th year
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
April 22,1996
SELIGMAN GROWTH FUND, INC.
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone (800) 221-2450 all continental United States
For Retirement Plan Information - Toll-Free Telephone (800) 445-1777
This Statement of Additional Information expands upon and supplements
the information contained in the current Prospectus of Seligman Growth Fund,
Inc., (the "Fund") dated April 22, 1996. It should be read in conjunction with
the Prospectus, which may be obtained by writing or calling the Fund at the
above address or telephone numbers. This Statement of Additional Information,
although not in itself a Prospectus, is incorporated by reference into the
Prospectus in its entirety.
The Fund offers three classes of shares. Class A shares may be
purchased at net asset value plus a sales load of up to 4.75%. Class B shares
may be purchased at net asset value and are subject to a contingent deferred
sales load ("CDSL"), if applicable, in the following amount (as a percentage of
the current net asset value or the original purchase price, whichever is less),
if redemption occurs within the indicated number of years of purchase of such
shares: 5% (less than 1 year), 4% (1 but less than 2 years), 3% (2 but less
than 4 years), 2% (4 but less than 5 years), 1% (5 but less than 6 years) and 0%
(6 or more years). Class B shares automatically convert to Class A shares after
approximately eight years resulting in lower ongoing fees. 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. Class D shares may be purchased at net asset value and
are subject to a CDSL of 1% (of the current net asset value or the original
purchase proce, whichever is less) if redeemed within one year of purchase.
Each Class A, Class B and Class D share represents an identical legal
interest in the investment portfolio of the Fund and has the same rights except
for certain class expenses and except that Class B and Class D shares bear a
higher distribution fee generally that will cause the Class B and Class D shares
to have a higher expense ratio and pay lower dividends than Class A shares.
Each Class has exclusive voting rights with respect to its distribution plan.
Although holders of Class A, Class B and Class D shares have identical legal
rights, the different expenses borne by each Class will result in different net
asset values and dividends. The three classes also have different exchange
privileges.
TABLE OF CONTENTS
Page
Investment Objectives, Policies
And Risks............................... 2
Investment Limitations.................... 4
Directors And Officers.................... 5
Management And Expenses................... 9
Administration, Shareholder Services And
Distribution Plan....................... 10
Portfolio Transactions.................... 11
EQGR1A
Page
Purchase And Redemption Of Fund Shares.... 12
Distribution Services..................... 14
Valuation................................. 14
Performance............................... 15
General Information....................... 16
Financial Statements...................... 16
Appendix.................................. 18
-1-
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RISKS
As stated in the Prospectus, the Fund seeks to produce longer-term growth in
capital value and an increase in future income. The following information
regarding the Fund's investment policies supplements the information contained
in the Prospectus.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash collateral
and obtain additional income or receive an agreed upon amount of interest from
the borrower. Loans are subject to termination at the option of the Fund or the
borrower. The Fund may pay reasonable administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest earned
on the cash or equivalent collateral to the borrower or placing broker. The
Fund 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.
RIGHTS AND WARRANTS. The 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 the Fund's
investment restrictions regarding such securities.
The Fund may not invest in rights and warrants if, at the time of acquisition,
the investment in rights and warrants would exceed 5% of the Fund's net assets,
valued at the lower of cost or market. In addition, no more than 2% of net
assets may be invested in warrants not listed on the New York or American Stock
Exchanges. For purposes of this restriction, rights and warrants acquired by
the Fund in units or attached to securities may be deemed to have been purchased
without cost.
FOREIGN CURRENCY TRANSACTIONS. A forward foreign currency exchange contract is
an agreement to purchase or sell a specific currency at a future date and at a
price set at the time the contract is entered into. The Fund will generally
enter into forward foreign currency exchange contracts to fix the 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.
The Fund may enter into a forward contract to sell or buy the amount of a
foreign currency it believes may experience a substantial movement against the
U.S. dollar. In this case the contract would approximate the value of some or
all of the Fund's portfolio securities denominated in such foreign currency.
Under normal circumstances, the portfolio manager will limit forward currency
contracts to not greater than 75% of the Fund's portfolio position in any one
country as of the date the contract is entered into. This limitation will be
measured at the point the hedging transaction is entered into by the Fund.
Under extraordinary circumstances, the Subadviser may enter into forward
currency contracts in excess of 75% of the Fund's portfolio position in any one
country as of the date the contract is entered into. The precise matching of
the forward contract amounts and the value of securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market involvement in the value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of short-term currency market movement is
extremely difficult, and the successful execution of a short-term hedging
strategy is highly uncertain. Under certain circumstances, the Fund may commit
up to the entire value of its assets which are denominated in foreign currencies
to the consummation of these contracts. The Subadviser will consider the effect
a substantial commitment of its assets to forward contracts would have on the
investment program of the Fund and its ability to purchase additional
securities.
Except as set forth above and immediately below, the Fund will also not enter
into such forward contracts or maintain a net exposure to such contracts where
the consummation of the contracts would oblige the Fund to deliver an amount of
foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency. The Fund, in order to avoid excess
transactions and transaction costs, may nonetheless maintain a net exposure to
forward contracts in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency provided the excess amount is
"covered" by cash or liquid, high-grade debt securities, denominated in any
currency, at least equal at all times to the amount of such excess. Under
normal circumstances, consideration of the prospect for currency parties will be
incorporated into the longer term investment decisions made with regard to
overall diversification strategies. However, the Subadviser believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of the Fund will be served.
At the maturity of a forward contract, the Fund may either sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
-2-
<PAGE>
As indicated above, it is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of the forward contract.
Accordingly, it may be necessary for the Fund to purchase additional foreign
currency on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver. However, the Fund may use liquid, high-grade
debt securities, denominated in any currency, to cover the amount by which the
value of a forward contract exceeds the value of the securities to which it
relates.
If the Fund retains the portfolio security and engages in offsetting
transactions, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. Of course, the Fund is not
required to enter into forward contracts with regard to its foreign currency-
denominated securities and will not do so unless deemed appropriate by the
Subadviser. 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 the Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to resell that currency to the dealer.
Investment income received by the Fund from sources within foreign countries
may be subject to foreign income taxes withheld at the source. The United
States has entered into tax treaties with many foreign countries which entitle
the Fund to a reduced rate of such taxes or exemption from taxes on such income.
It is impossible to determine the effective rate of foreign tax in advance since
the amounts of the Fund's assets to be invested within various countries is not
known.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term. A
repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation, subject to resale at
an agreed upon price and date. Such resale price reflects an agreed upon
interest rate effective for the period of time the instrument is held by the
Fund and is unrelated to the interest rate on the instrument. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default by the seller, including possible delays and expenses in liquidating the
securities underlying the agreement, decline in value of the underlying
securities and loss of interest. Repurchase agreements usually are for short
periods, such as one week or less, but may be for longer periods. However, as a
matter of fundamental policy, the Fund will not enter into repurchase agreements
of more than one week's duration if more than 10% of its net assets would be so
invested. The Fund to date has not entered into any repurchase agreements and
has no present intention of doing so in the future.
Except as described under "Investment Limitations" below, the foregoing
investment policies are not fundamental and the Board of Directors of the Fund
may change such policies without the vote of a majority of its outstanding
voting securities (as defined on page 5).
PORTFOLIO TURNOVER. The Fund's portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio securities for the fiscal
year by the monthly average value of the portfolio securities owned during the
fiscal year. Securities with remaining maturities of one year or less at the
date of acquisition are excluded from the calculation.
The Fund's portfolio turnover rates were 102.30% in 1995 and 93.59% in 1994.
-3-
<PAGE>
INVESTMENT LIMITATIONS
Under the Fund's fundamental policies, which cannot be changed except by vote
of a majority of its outstanding voting securities, the Fund may not:
. Borrow money, except for temporary or emergency purposes in an amount not to
exceed 15% of the value of its total assets;
. Mortgage or pledge any of its assets, except to the extent necessary to
effect permitted borrowings on a secured basis and except to enter into
escrow arrangements in connection with the sales of permitted call options.
The Fund has no present intention of investing in these types of securities,
and will not do so without the prior approval of the Fund's Board of
Directors;
. Purchase securities (other than closing call options) except for investment,
buy on "margin," or sell "short";
. Invest more than 5% of the value of its total assets, at market value, in
securities of any company which, with their predecessors, have been in
operation less than three continuous years, provided, however, that
securities guaranteed by a company that (including predecessors) has been in
operation at least three continuous years shall be excluded from this
calculation;
. Invest more than 5% of its total assets (taken at market) in securities of
any one issuer, other than the U.S. Government, its agencies or
instrumentalities, buy more than 10% of the outstanding voting securities or
more than 10% of all the securities of any issuer, or invest to control or
manage any company;
. Invest more than 25% of total assets at market value in any one industry;
. Invest in securities issued by other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
. Purchase or hold any real estate (including limited partnership interests in
real property), except the Fund may invest in securities secured by real
estate or interests therein or issued by persons (other than real estate
investment trusts) which deal in real estate or interests therein;
. Purchase or hold the securities of any issuer, if to its knowledge, directors
or officers of the Fund individually owning beneficially more than 0.5% of
the securities of that other company own in the aggregate more than 5% of
such securities;
. Deal with its directors or officers, or firms they are associated with, in
the purchase or sale of securities of other issuers, except as broker;
. Purchase or sell commodities and commodity contracts;
. Underwrite the securities of other issuers, except insofar as the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, in
disposing of a portfolio security;
. Make loans, except loans of portfolio securities and except to the extent the
purchase of notes, bonds or other evidences of indebtedness, the entry into
repurchase agreements or deposits with banks may be considered loans; or
. Write or purchase put, call, straddle or spread options except that the Fund
may sell covered call options listed on a national securities exchange or
quoted on NASDAQ and purchase closing call options so listed or quoted. The
Fund has no present intention of investing in these types of securities, and
will not do so without the prior approval of the Fund's Board of Directors.
Although not fundamental policies subject to shareholder vote, as long as the
Fund's shares are registered in certain states, it may not mortgage, pledge or
hypothecate its assets to the extent that the value of such encumbered assets
exceed 10% of the per share offering price of shares of the Fund, it may not
invest in interests in oil, gas, mineral leases or other mineral exploration or
development programs and it must limit to 5% of its gross assets at market value
its combined investments in securities of companies in operation for less than
three years.
-4-
<PAGE>
Under the Investment Company Act of 1940 (the "1940 Act"), a "vote of a
majority of the outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (l) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares present at a shareholders' meeting if more than
50% of the outstanding shares are represented at the meeting in person or by
proxy.
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years, are shown below.
Each Director who is an "interested person" of the Fund, as defined in the 1940
Act, is indicated by an asterisk. Unless otherwise indicated, their addresses
are 100 Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer and
(57) Chairman of the Executive Committee
Managing Director, Chairman and President, J. & W. Seligman &
Co. Incorporated, investment managers and advisers; and
Seligman Advisers, Inc., advisers; Chairman and Chief
Executive Officer, the Seligman Group of Investment
Companies; Chairman, Seligman Financial Services, Inc.,
broker/dealer; Seligman Holdings, Inc., holding company;
Seligman Services, Inc., broker/dealer; and Carbo Ceramics
Inc., ceramic proppants for oil and gas industry; Director or
Trustee, Seligman Data Corp., shareholder service agent;Kerr-
McGee Corporation, diversified energy company; and Sarah
Lawrence College; and a Member of the Board of Governors of
the Investment Company Institute; formerly, Chairman,
Seligman Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(43)
Director and Managing Director (formerly, Chief
Administrative and Financial Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisers; and Seligman
Advisers, Inc., advisers; Director or Trustee, the Seligman
Group of Investment Companies; President, the Seligman Group
of Investment Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund, Inc.;
Chairman, Seligman Data Corp., shareholder service agent;
Director, Seligman Financial Services, Inc., broker/dealer;
Seligman Services, Inc., broker/dealer; and Senior Vice
President, Seligman Henderson Co., advisers; formerly,
Director and Secretary, Chuo Trust - JWS Advisers, Inc.,
advisers; and Director, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust Company, trust
company.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and Seligman Advisers,
Inc., advisers; Director or Trustee, the Seligman Group of
Investment Companies; Seligman Financial Services, Inc.,
broker/dealer; Seligman Services Inc., broker/dealer;
Trudeau Institute, nonprofit biomedical research
organization; Lake Placid Center for the Arts, cultural
organization; and Lake Placid Education Foundation, education
foundation; formerly, Director, Seligman Securities, Inc.,
broker/dealer and J. & W. Seligman Trust Company,trust
company.
-5-
<PAGE>
JOHN R. GALVIN Director
(66)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman of the American Council on
Germany; a Governor of the Center for Creative Leadership;
Director of USLIFE, insurance; National Committee on U.S.-
China Relations, National Defense University; Raytheon Co.,
electronics and the Institute for Defense Analysis.
Formerly, Ambassador, U.S. State Department; 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.
Tufts University, Packard Avenue, Medford, MA 02105.
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or Trustee, the
Seligman Group of Investment Companies; Chairman, The
Rockefeller Foundation, charitable foundation; and Director,
NYNEX, telephone company; and the Committee for Economic
Development; formerly, Trustee, The Markle Foundation,
philanthropic organization; and Director, International
Research and Exchange Board, intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive Officer, Kerr-McGee
Corporation, energy and chemicals; Director or Trustee, the
Seligman Group of Investment Companies; Director, Kimberly-
Clark Corporation, consumer products, Bank of Oklahoma
Holding Company, American Petroleum Institute, Oklahoma
City Chamber of Commerce, Baptist Medical Center, Oklahoma
Chapter of the Nature Conservancy, Oklahoma Medical Research
Foundation and United Way Advisory Board; Chairman, Oklahoma
City Public Schools Foundation; and Member of the Business
Roundtable and National Petroleum Council.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan & Cromwell, law firm;
Director or Trustee, the Seligman Group of Investment
Companies; The Municipal Art Society of New York;
Commonwealth Aluminum Corporation; the U. S. Council for
International Business; and the U. S.-New Zealand Council;
Chairman, American Australian Association; Member of the
American Law Institute and Council on Foreign Relations; and
Member of the Board of Governors of the Foreign Policy
Association and New York Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(53)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; and Chairman of the Board of Trustees
of St. George's School (Newport, RI).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law firm; Director or
Trustee, the Seligman Group of Investment Companies; and
Public Service Enterprise Group, public utility.
Park Avenue at Morris County, P.O. Box 1945, Morristown, NJ
07962-1945
-6-
<PAGE>
JAMES Q. RIORDAN Director
(68)
Director, Various Corporations; Director or Trustee, the
Seligman Group of Investment Companies; The Brooklyn Museum;
The Brooklyn Union Gas Company; the Committee for Economic
Development; Dow Jones & Co., Inc.; and Public Broadcasting
Service; formerly, Co-Chairman of the Policy Council of the
Tax Foundation; Director and Vice Chairman, Mobil
Corporation; Director, Tesoro Petroleum Companies, Inc.; and
Director and President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief Investment Officer,
Institutional, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and Seligman Advisers,
Inc., advisers; Director or Trustee, the Seligman Group of
Investment Companies; Director, Seligman Holdings, Inc.,
holding company; Seligman Financial Services,
Inc.,broker/dealer; Seligman Henderson Co., advisers; and
Seligman Services, Inc., broker/dealer; formerly, President,
the Seligman Group of Investment Companies, except Seligman
Quality Municipal Fund, Inc. and Seligman Select Municipal
Fund, Inc.; and Director, J. & W. Seligman Trust Company,
trust company; Seligman Data Corp., shareholder service
agent; and Seligman Securities, Inc., broker/dealer.
ROBERT L. SHAFER Director
(63)
Vice President, Pfizer Inc., pharmaceuticals; Director or
Trustee, the Seligman Group of Investment Companies and
USLIFE Corporation, life insurance.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(61)
Executive Vice President, Chief Operating Officer and
Director, Sammons Enterprises, Inc.; Director or Trustee, the
Seligman Group of Investment Companies; Red Man Pipe and
Supply Company, piping and other materials; and C-SPAN.
300 Crescent Court, Suite 700, Dallas, TX 75201
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Seligman
Financial Services, Inc., broker/dealer; and Seligman
Advisers, Inc., advisers; Vice President, the Seligman Group
of Investment Companies; Senior Vice President, Finance
(formerly, Treasurer), Seligman Data Corp., shareholder
service agent; Treasurer, Seligman Holdings, Inc., holding
company; and Seligman Henderson Co., advisers; formerly,
Senior Vice President, Seligman Securities, Inc.,
broker/dealer; and Vice President, Finance, J. & W. Seligman
Trust Company, trust company.
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation, and Corporate
Secretary, J. & W. Seligman & Co. Incorporated, investment
managers and advisors; and Seligman Advisers, Inc., advisers;
Corporate Secretary, the Seligman Group of Investment
Companies; Seligman Financial Services, Inc., broker/dealer;
Seligman Henderson Co., advisors; Seligman Services, Inc.,
broker/dealer; and Seligman Data Corp.,shareholder service
agent; formerly, Secretary, J. & W. Seligman Trust Company,
trust company; and attorney, Seward and Kissel, law firm.
-7-
<PAGE>
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment Companies; and
Seligman Data Corp., shareholder service agent; formerly,
Treasurer, American Investors Advisers, Inc. and the American
Investors Family of Funds.
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund for
which no market valuation is available and to elect or appoint officers of the
Fund to serve until the next meeting of the Board.
Compensation Table
------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as part of from Fund and
Position With Registrant from Fund (1) Fund Expenses Fund Complex (2)
------------------------ ------------- ------------------- ------------------
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
John R. Galvin, Director 2,367.95 N/A $41,252.75
Alice S. Ilchman, Director 3,869.48 N/A 68,000.00
Frank A. McPherson, Director 2,367.95 N/A 41,252.75
John E. Merow, Director 3,798.06(d) N/A 66,000.00(d)
Betsy S. Michel, Director 4,048.06 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 1,430.11 N/A 24,747.25
James C. Pitney, Director 3,869.48 N/A 68,000.00(d)
James Q. Riordan, Director 4,155.20 N/A 70,000.00
Herman J. Schmidt, Director* 1,430.11 N/A 24,747.25
Robert L. Shafer, Director 4,155.19 N/A 70,000.00
James N. Whitson, Director 4,083.78(d) N/A 68,000.00(d)
- ----------------------
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1995.
-
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
* Retired May 18, 1995.
(d) Deferred. As of December 31, 1995, the total amounts of deferred
compensation (including interest) payable to Messrs. Merow, Pitney and Whitson
were $103,242, $100,697 and $12,047, respectively. Mr. Pitney no longer defers
current compensation.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is
accrued on the deferred balances. The annual cost of such interest is included
in the directors' fees and expenses, and the accumulated balance thereof is
included in "Liabilities" in the Fund's financial statements.
Directors and officers of the Fund are also directors or trustees and officers
of some or all of the other investment companies in the Seligman Group.
Directors and officers of the Fund as a group owned less than 1% of the Fund's
Class A Capital Stock at March 29, 1996. As of that date, no Directors or
officers owned shares of the Fund's Class D Capital Stock.
-8-
<PAGE>
MANAGEMENT AND EXPENSES
Under the Management Agreement, dated December 29, 1988, as amended April 10,
1991, and January 1, 1996, subject to the control of the Board of Directors, J.
& W. Seligman & Co. Incorporated,( the "Manager") manages the investment of the
assets of the Fund, including making purchases and sales of portfolio securities
consistent with the Fund's investment objectives and policies, and administers
its business and other affairs. The Manager provides the Fund with such office
space, administrative and other services and executive and other personnel as
are necessary for Fund operations. The Manager pays all of the compensation of
directors of the Fund who are employees or consultants of the Manager and of the
officers and employees of the Fund. The Manager also provides senior management
for Seligman Data Corp., the Fund's shareholder service agent.
The Fund pays the Manager a management fee for its services, calculated daily
and payable monthly. Effective January 1, 1996, the management fee is equal to
.70% of the Fund's average daily net assets on the first $1 billion of net
assets, .65% of the Fund's average daily net assets on the next $1 billion of
net assets and .60% of the Fund's average daily net assets in excess of $2
billion. The management fee amounted to $2,706,813 in 1995, $2,732,091 in 1994
and $2,905,916 in 1993 which was equivalent to an annual rate of .48% of the
average net assets of the Fund in 1995, .49% in 1994 and .49% in 1993.
The Fund pays all its expenses other than those assumed by the Manager, or the
Subadviser 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 for qualifying the Fund
and its shares under Federal and state securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder record keeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees and expenses of
directors of the Fund not employed by (or serving as a Director of) the Manager
or its affiliates, insurance premiums and extraordinary expenses such as
litigation expenses. The Manager has undertaken to one state securities
administrators, so long as required, to reimburse the Fund for each year in the
amount by which total expenses, including the management fee, but excluding
interest, taxes, brokerage commissions, distribution fees and extraordinary
expenses, exceed 2 1/2% of the first $30,000,000 of average net assets, 2% of
the next $70,000,000 of average net assets, and 1 1/2% thereafter. Such
reimbursement, if any, will be made monthly.
The Management Agreement was initially approved by the Board of Directors on
September 30, 1988 and by the shareholders at a Special Meeting held on December
16, 1988. The amendments to the Management Agreement, to increase the fee rate
payable to the Manager by the Fund, were approved by the Board of Directors on
January 17, 1991 and by the shareholders at a special meeting held on April 10,
1991. The amendments to the Management Agreement effective January 1, 1996 to
incease the fee rate payable to the Manager by the Fund were approved by the
Board of Directors on September 21, 1995 and by the shareholders at a special
meeting on December 12, 1995. The Management Agreement will continue in effect
until December 31 of each year if (1) such continuance is approved in the manner
required by the 1940 Act (by a vote of a majority of the Board of Directors or
of the outstanding voting securities of the Fund and by a vote of a majority of
the Directors who are not parties to the Management Agreement or interested
persons of any such party) and (2) if the Manager shall not have notified the
Fund at least 60 days prior to December 31 of any year that it does not desire
such continuance. The Management Agreement may be terminated by the Fund,
without penalty, on 60 days' written notice to the Manager and will terminate
automatically in the event of its assignment. The Fund has agreed to change its
name upon termination of the Management Agreement if continued use of the name
would cause confusion in the context of the Manager's business.
The Manager is a successor firm to an investment banking business founded in
1864 which has thereafter provided investment services to individuals, families,
institutions and corporations. See the Appendix for further history of the
Manager. On December 29, 1988, a majority of the outstanding voting securities
of the Manager was purchased by Mr. William C. Morris and a simultaneous
recapitalization of the Manager occurred.
Under the Subadvisory Agreement, dated June 1, 1994, as amended January 1,
1996, Seligman Henderson Co. (the "Subadviser") supervises and directs a portion
of the Fund's investment in foreign securities and Depositary Receipts, as
designated by the Manager, consistent with the Fund's investment objectives,
policies and principles. For these services, the Subadviser is paid a fee, by
the Manager, as described in the Fund's Prospectus. The Subadvisory Agreement
was initially approved by the Board of Directors at a meeting held on January
20, 1994 and by the shareholders of the Fund on May 19, 1994. The amendments to
the Subadvisory Agremeent effective January 1, 1996 to increase the subadvisory
fee rate payable by the Manager to the Subadvisor were approved by the Board of
Directors on September 21, 1995 and by the
-9-
<PAGE>
shareholders at a special meeting on December 12, 1995. The Subadvisory
Agreement will continue in effect until December 31 of each year and from year
to year thereafter if such continuance is approved annually in the manner
required by the 1940 Act (by a vote of a majority of the Board of Directors or
of the outstanding voting securities of the Fund and by a vote of a majority of
the Directors who are not parties to the Subadvisory Agreement or interested
persons of any such party) and (2) if the Subadviser shall not have notified the
Manager in writing at least 60 days prior to December 31 of any year that it
does not desire such continuance. The Subadvisory Agreement may be terminated at
any time by the Fund, on 60 days written notice to the Subadviser. The
Subadvisory Agreement will terminate automatically in the event of its
assignment or upon the termination of the Management Agreement.
For the period June 1, 1994 through December 31, 1994, and for the year ended
December 31, 1995, the Subadviser was paid fees by the Manager of $145,441 and
240,843, respectively.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The Firm
currently manages approximately $19 billion in assets and is recognized as a
specialist in global equity investing.
Officers, directors and employees of the Manager are permitted to engage in
personal securities transactions, subject to the Manager's Code of Ethics (the
"Ethics Code"). The Ethics Code 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 the
Manager's Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The Ethics
Code prohibits each of the officers, directors and employees (including all
portfolio managers) of the Manager from purchasing or selling any security that
the officer, director or employee knows or believes (i) was recommended by the
Manager for purchase or sale by any client, including the Fund, within the
preceding two weeks, (ii) has been reviewed by the Manager for possible purchase
or sale within the preceding two weeks, (iii) is being purchased or sold by any
client, (iv) is being considered by a research analyst, (v) is being acquired in
a private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest they
may have in the securities or issuers that they recommend for purchase by any
client.
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may
not be purchased due to a possible conflict with clients. All officers,
directors and employees are also required to disclose all securities
beneficially owned by them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
The Fund has adopted an Administration, Shareholder Services and Distribution
Plan for each Class (the "Plan") in accordance with Section 12(b) of the 1940
Act and Rule 12b-1 thereunder.
The Plan was approved on July 16, 1992 by the Board of Directors of the Fund,
including a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan (the "Qualified Directors") and was approved by shareholders of the
Fund at a Special Meeting of Shareholders held on November 23, 1992. The Plan
became effective in respect of the Class A shares on January 1, 1993. The Plan
was approved in respect of the Class B shares on March 21, 1996 by the Board of
Directors of the Fund, including a majority of the Qualified Directors, and
became effective in respect of the Class B shares on April 22, 1996. The Plan
was approved in respect of the Class D shares on March 18, 1993 by the Board of
Directors of the Fund, including a majority of the Qualified Directors, and
became effective with respect to the Class D shares on May 1, 1993. The Plan
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 Fund, cast in person at a meeting called for the
purpose of voting on such approval. The Plan may not be amended to increase
materially
-10-
<PAGE>
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 Plan is
proposed to be increased materially, the Fund will either (i) permit holders of
Class B shares to vote as a separate class on the proposed increase or (ii)
establish a new class of shares subject to the same payment under the Plan as
existing Class A shares, in which case the Class B shares will thereafter
convert into the new class instead of into Class A shares. No material
amendment to the Plan may be made except by a majority of both the Directors and
Qualified Directors.
The Plan requires that the Treasurer of the Fund shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
PORTFOLIO TRANSACTIONS
The Management and Subadvisory Agreements recognize that in the purchase and
sale of portfolio securities the Manager and Subadviser will seek the most
favorable price and execution, and, consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager and Subadviser for their use, as well as to
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 the Manager and Subadviser to be beneficial to the Fund. In addition,
the Manager and Subadviser are authorized to place orders with brokers who
provide supplemental investment and market research and statistical and economic
analysis although the use of such brokers may result in a higher brokerage
charge to the Fund than the use of brokers selected solely on the basis of
seeking the most favorable price and execution and although such research and
analysis may be useful to the Manager and Subadviser in connection with its
services to clients other than the Fund.
In over the counter markets, the Fund deals with primary market makers unless
a more favorable execution or price is believed to be obtainable. The Fund may
but securities from or sell securities to dealers acting as principal, except
dealers with which its directors and/or officers are affiliated.
When two or more of the investment companies in the Seligman Group or other
investment companies in the Seligman Group or other investment advisory clients
of the Manager and Subadviser desire to buy or sell the same security at the
same time the securities purchased or sold are allocated by the Manager and
Subadviser 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.
Brokerage commissions for the last three fiscal years are set forth in the
following table:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
---------- ----------- -----------
<S> <C> <C> <C>
Total Brokerage Commissions Paid (1) $1,297,645 $1,242,724 $1,226,253
Brokerage Commissions Paid
to Seligman Securities, Inc. (2) -0- -0- 140,215
Brokerage Commissions Paid to Others for
Execution and Research and Statistical Services 1,297,645 1,242,724 1,086,038
</TABLE>
Notes:
(1) Not including any spreads on principal transactions on a net basis.
(2) Brokerage commissions paid to Seligman Securities, Inc. were 11.4% of
total brokerage commissions paid for 1993. The aggregate dollar amount of
the Fund's transactions for which Seligman Securities, Inc. acted as broker
was 13.1% of the total dollar amount of all commission transactions in
1993. The Board adopted procedures effective January 1, 1984, pursuant to
which Seligman Securities, Inc. was available to the Fund as broker for
approximately one-half of agency transactions in listed securities
(exclusive of option and option-related transactions)
-11-
<PAGE>
at commission rates believed in accordance with applicable regulations to
be fair and reasonable. As of March 31, 1993, Seligman Securities, Inc.
ceased functioning as a broker for the Fund and its other clients.
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund issues three classes of shares: Class A shares may be purchased at a
price equal to the next determined net asset value per share, plus a sales load.
Class B shares may be purchased at a price equal to the next determined net
asset value without an initial sales load, but a CDSL may be charged on
redemptions within 6 years of purchase. Class D shares may be purchased at
price equal to the next determined net asset value without an initial sales
load, but a CDSL may be charged on redemptions within one year of purchase. See
"Alternative Distribution System," "Purchase Of Shares," and "Redemption Of
Shares" in the Prospectus.
SPECIMEN PRICE MAKE-UP
Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold at a maximum sales charge of 4.75% and
Class B and Class D shares are sold at net asset value*. Using the Fund's net
asset value at December 31, 1995, the maximum offering price of the Fund's
shares is as follows:
CLASS A
Net asset value per Class A share............... $5.22
-----
Maximum sales load (4.75% of offering price).... $0.26
-----
Offering price to public........................ $5.48
=====
CLASS B AND CLASS D
Net asset value and offering prices per share*.. $4.96
=====
- -------------
* Class B shares are subject to a CDSL declining from 5% in the first year after
purchase to 0% after six years.
Class D shares are subject to a CDSL of 1% on redemptions within one year of
purchase. See "Redemption Of Shares" in the Prospectus.
CLASS A SHARES - REDUCED FRONT-END SALES LOADS
REDUCTIONS AVAILABLE. Shares of any of the Seligman Funds sold with a front-end
sales load in a continuous offering will be eligible for the following
reductions:
VOLUME DISCOUNTS are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other Funds in
the Seligman Group which are sold with a front-end sales load, reaches levels
indicated in the sales load schedule set forth in the Prospectus.
THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in Class A shares of the Fund, and shares of the other mutual funds in
the Seligman Group sold with a front-end sales load with the total net asset
value of shares of those mutual funds already owned that were sold with a front-
end sales load and the total net asset value of shares of Seligman Cash
Management Fund which were acquired through an exchange of shares of another
mutual fund in the Seligman Group on which there was a front-end sales load at
the time of purchase to determine reduced sales loads 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 mutual fund in the Seligman Group on which there was a front-end sales
load at the time of purchase will be taken into account in orders placed through
a dealer, however, only if Seligman Financial Services, Inc. ("SFSI") is
notified by an investor or a dealer of the amount owned at the time your
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 sales loads in accordance with the schedule in the
Prospectus, based on the total amount of Class A shares of the Fund that the
letter states the investor intends to purchase plus the total net asset value of
shares sold with a front-end sales load of the other mutual funds in the
Seligman Group 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 mutual fund in the Seligman Group on which there was a
-12-
<PAGE>
front-end sales load at the time of purchase. Reduced sales loads 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. For more information concerning the
terms of the letter of intent, see "Terms and Conditions - Letter of Intent -
Class A Shares Only" in the back of the Prospectus.
PERSONS ENTITLED TO REDUCTIONS. Reductions in sales loads 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 trustee 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), and non-qualified
employee benefit plans that satisfy uniform criteria are considered "single
persons" for this purpose. The uniform criteria are as follows:
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
prospectus, reports and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event,
the dropped participant would lose the discount on share purchases to which the
plan might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
ELIGIBLE EMPLOYEE BENEFIT PLANS. The table of sales loads in the Prospectus
applies to sales to "eligible employee benefit plans," (as defined in the
Prospectus), except that the Fund may sell shares at net asset value to
"eligible employee benefit plans," (i) which have at least $1 million invested
in the Seligman Group of Mutual Funds or (ii) of employers who have at least 50
eligible employees to whom such plan is made available or, regardless of the
number of employees, if such plan is established or maintained by any dealer
which has a sales agreement with SFSI. Such sales must be made in connection
with a payroll deduction system of plan funding or other systems acceptable to
Seligman Data Corp., the Fund's shareholder service agent. 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 investment dealers or SFSI.
PAYMENT IN SECURITIES. In addition to cash, the Fund may accept securities in
payment for Fund shares sold at the applicable public offering price (net asset
value plus any applicable sales load) although the Fund does not presently
intend to accept securities in payment for Fund shares. Generally, the Fund
will only consider accepting securities (1) to increase its holdings in a
portfolio security, or (2) if the Manager determines that the offered securities
are a suitable investment for the Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that the
Fund would not accept securities with a value of less than $100,000 per issue in
payment for shares. The Fund may reject in whole or in part offers to pay for
Fund shares with securities, may require partial payment in cash for applicable
sales loads, and may discontinue accepting securities as payment for Fund shares
at any time without notice. The Fund will not accept restricted securities in
payment for shares. The Fund will value accepted securities in the manner
provided for valuing portfolio securities of the Fund. Any securities accepted
by the Fund in payment for Fund shares will have an active and substantial
market and have a value which is readily ascertainable (See "Valuation"). In
accordance with Texas securities regulations, should the Fund accept securities
in payment for shares, such transactions would be limited to a bona fide
reorganization, statutory merger, or to other acquisitions of portfolio
securities (except for municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) which meet the investment
objectives and policies of the investment company; are acquired for investment
and not for resale; are liquid securities which are not restricted as to
transfer either by law or liquidity of market; and have a value which is readily
ascertainable (and not established only by evaluation procedures) as evidenced
by a listing on the American Stock Exchange, the New York Stock Exchange
("NYSE") or NASDAQ.
FURTHER TYPES OF REDUCTIONS. Class A shares may be issued without a sales load
in connection with the acquisition of cash and securities owned by other
investment companies and personal holding companies, to financial institution
trust departments, to registered investment advisers exercising discretionary
investment authority with respect to the purchase of Fund shares, or pursuant to
sponsored arrangements with organizations which make recommendations to, or
permit group solicitation of, its employees, members or participants in
connection with the purchase of shares of the Fund, to separate accounts
established and maintained by an insurance company which are exempt from
registration under Section 3(c)(11) of
-13-
<PAGE>
the 1940 Act, to registered representatives (and their spouses and minor
children) and employees of any dealer that has a sales agreement with SFSI, to
shareholders of mutual funds with investment objectives and policies similar to
the Fund's who purchase shares with redemption proceeds of such funds and to
certain unit investment trusts as described in the Prospectus.
Class A shares may be issued without a sales load to present and retired
directors, trustees, officers, employees and their spouses ( and family members
of the foregoing) of the Funds, the other investment companies in the Seligman
Group, the Manager and other companies affiliated with the Manager. 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.
These sales may be made for investment purposes only, and shares may be resold
only to the Fund.
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.
MORE ABOUT REDEMPTIONS. The procedures for redemption of Fund shares under
ordinary circumstances are set forth in the Prospectus. In unusual
circumstances payment may be postponed, or the right of redemption postponed for
more than seven days, if the orderly liquidation of portfolio securities is
prevented by the closing of, or restricted trading on the NYSE during periods of
emergency, or such other periods as ordered by the Securities and Exchange
Commission. Payment may be made in securities, subject to the review of some
state securities commissions. If payment is made in securities, a shareholder
may incur brokerage expenses in converting these securities into cash.
DISTRIBUTION SERVICES
SFSI, an affiliate of the Manager, acts as general distributor of the
shares of the Fund and of the other mutual funds in the Seligman Group. The
Fund and SFSI are parties to a Distributing Agreement, dated January 1, 1993.
As general distributor of the Fund's Capital Stock, SFSI allows commissions to
all dealers, as indicated in the Prospectus. Pursuant to agreements with the
Fund, certain dealers may also provide sub-accounting and other services for a
fee. SFSI receives the balance of sales loads and any CDSLs paid by investors.
The balance of sales loads paid by investors received by SFSI in respect of
Class A shares amounted to $20,299 in 1995, after allowances of $157,932 as
commissions to dealers; $13,797 in 1994, after allowance of $108,097 as
commissions to dealers; and $17,851 in 1993, after allowance of $137,547 as
commissions to dealers. No Class B shares were outstanding throughout the 3
year period ended December 31, 1995. For the years ended December 31, 1995 and
1994, SFSI retained CDSL charges from Class D shares amounting to $1,751 and
$855, respectively. For the period May 3, 1993 to December 31, 1993, SFSI
retained CDSL charges from Class D shares amounting to $260.
VALUATION
Net asset value per share of each class of the Fund is determined as of the
close of trading on the NYSE (normally, 4:00 p.m. Eastern time), each day that
the NYSE is open for business. The NYSE is currently closed on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The Fund will also determine net asset
value for each class on each day in which there is a sufficient degree of
trading in the Fund's portfolio securities that the net asset value of Fund
shares might be materially affected. Net asset value per share for a class is
computed by dividing such class' share of the value of the net assets of the
Fund (i.e., the value of its assets less liabilities) by the total number of
outstanding shares of such class. All expenses of the Fund, including the
Manager's fee, are accrued daily and taken into account for the purpose of
determining net asset value. The net asset value of Class B and Class D
shares will generally be lower than the net asset value of Class A shares as a
result of the larger distribution fee with respect to such shares.
Portfolio securities, including open short positions and options written, are
valued at the last sale price on the securities exchange or securities market on
which such securities primarily are traded. Securities traded on a foreign
exchange or over-the counter market are valued at the last sales price on the
primary exchange or market on which they are traded. United Kingdom securities
and securities for which there are no recent sales transactions are valued based
on quotations provided by primary market makers in such securities. Other
securities not listed on an exchange or securities market, or securities in
which there were no transactions, are valued at the average of the most recent
bid and asked price, except in the case of open short positions where the asked
price is available. Any securities or other assets for which recent market
quotations are not readily available, including restricted securities, are
valued at fair value as determined in accordance with procedures approved by the
Board of Directors. Short-term obligations with less than sixty days remaining
to maturity are
-14-
<PAGE>
generally valued at amortized cost. Short-term obligations with
more than sixty days remaining to maturity will be valued at current market
value until the sixtieth day prior to maturity, and will then 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. Expenses
and fees, including the investment management fee, are accrued daily and taken
into account for the purpose of determining the net asset value of Fund shares.
Premiums received on the sale of call options will be included in the net asset
value, and the current market value of the options sold by the Fund will be
subtracted from net asset value.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of the shares of the
Fund are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of 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 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 the Fund, all
assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against U.S. 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.
PERFORMANCE
The average annual total return for the Fund's Class A shares for the one-
year, five-year and ten-year periods ended on December 31, 1995 were22.3%,
13.99%, and 12.18%, respectively. These returns were computed by subtracting
the maximum sales load of 4.75% of public offering price and assuming that all
of the dividends and distributions paid by the Fund over the relevant time
period were reinvested. It was then assumed that at the end of these periods,
the entire amount was redeemed. The average annual total return was then
calculated by calculating the annual rate required for the initial payment to
grow to the amount which would have been received upon redemption (i.e., the
average annual compound rate of return). The average annual total returns for
Class D shares of the Fund for the one-year period ended December 31, 1995 and
since inception through December 31, 1995 were 26.01% and 11.43%, respectively.
These returns were computed assuming that all of the dividends and
distributions paid by the Fund's Class D shares, if any, were reinvested over
the relevant time period. It was then assumed that at the end of each period,
the entire amount was redeemed, subtracting the 1% CDSL, if applicable.
Performance information is not provided for Class B shares because no Class B
shares were outstanding prior to April 22, 1996.
Table A below illustrates the total return (income and capital) on Class A
shares of the Fund with dividends invested and gain distributions taken in
shares. It shows that a $1,000 investment in Class A shares, assuming payment
of the 4.75% sales load, made on January 1, 1986 had a value of $3,155 on
December 31, 1995, resulting in an aggregate total return of 215.52%. Table B
illustrates the total return (income and capital) on Class D shares of the Fund
with dividends invested and gain distributions, if any, taken in shares. It
shows that a $1,000 investment in Class D shares made on May 3, 1993
(commencement of offering of Class D shares) had a value of $1,334 on December
31, 1995 resulting in an aggregate total return of 33.39%. The results shown
should not be considered a representation of the dividend income or gain or loss
in capital value which may be realized from an investment made in a class of
shares of the Fund today.
-15-
<PAGE>
<TABLE>
<CAPTION>
TABLE A - CLASS A SHARES
<S> <C> <C> <C> <C> <C>
Value of
Year Value of Initial Value of Gain Dividend Total
Ended (1) Investment (2) Distribution Invested Total Value(2) Return (3)
- -------------- ---------------- -------------- -------- ----------- ---------
1986 $819 $ 274 $ 15 $1,108
1987 660 457 29 1,146
1988 684 487 60 1,231
1989 796 760 90 1,646
1990 713 737 111 1,561
1991 928 1,074 159 2,161
1992 942 1,290 173 2,405
1993 821 1,579 154 2,554
1994 708 1,610 138 2,456
1995 814 2,177 164 3,155 215.52%
- ---------------------------------------------------------------------------------------
TABLE B - CLASS D SHARES
Value of
Year/Period Value of Initial Value of Gain Dividend Total
Ended (1) Investment (2) Distribution Invested Total Value(2) Return (3)
- -------------- ---------------- -------------- -------- ----------- ---------
1993 $922 $ 202 -- $1,124
1994 772 278 -- 1,050
1995 875 459 -- 1,334 33.39%
- ---------------------------------------------------------------------------------------
</TABLE>
(1) For the ten years ended December 31, 1995; and from commencement of offering
of Class D shares on May 3, 1993.
(2) The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load, assumes that all dividends and capital
gain distributions were taken in cash and reflects changes in the net asset
value of the shares purchased with the hypothetical initial investment.
"Total Value" reflects the effect of the CDSL, if applicable, assumes
investment of all dividends and capital gain distributions and reflects
changes in the net asset value.
(3) "Total Return" for each class of shares of the Fund is calculated by
assuming a hypothetical initial investment of $1,000 at the beginning of the
period specified, subtracting the maximum sales load for Class A shares;
determining total value of all dividends and distributions that would have
been paid during the period on such shares assuming that each dividend or
distribution was invested in additional shares at net asset value;
calculating the total value of the investment at the end of the period;
subtracting the CDSL on Class D shares, if applicable; and finally, by
dividing the difference between the amount of the hypothetical initial
investment at the beginning of the period and its total value at the end of
the period by the amount of the hypothetical initial investment.
No adjustments have been made for any income taxes payable by investors on
dividends invested or gain distributions taken in shares.
The total return and average annual total return of the Class A shares quoted
from time to time through December 31, 1992 do not reflect the deduction of the
administration, shareholder services and distribution fee, effective January 1,
1993; for the periods through April 10, 1991 also do not reflect the increased
management fee approved by shareholders on April 10, 1991, and through December
31, 1995, do not reflect the increased management fee, effective January 1,
1996; which fees if reflected would reduce the performance quoted.
The Fund may also include its aggregate total return over a specified period
in advertisements or in information furnished to present or prospective
shareholders.
GENERAL INFORMATION
CAPITAL STOCK. The Board of Directors is authorized to classify or reclassify
and issue any unissued Capital Stock of the Fund into any number of other
classes without further action by shareholders. The 1940 Act requires that
where more
-16-
<PAGE>
than one class exists, each class must be preferred over all other
classes in respect of assets specifically allocated to such class.
CUSTODIAN. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, Missouri 64105 serves as custodian of the Fund. It also maintains, under
the general supervision of the Manager, the accounting records and determines
the net asset value for the Fund.
AUDITORS. Delooite & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York,
New York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 1995 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1995,
as well as certain other financial information as of that date. The Annual
Report will be furnished, without charge, to investors who request copies of the
Fund's Statement of Additional Information.
-17-
<PAGE>
APPENDIX
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of J. & W.
Seligman & Co. In the years that followed, the Seligman Complex played a major
role in the geographical expansion and industrial development of the United
States.
THE SELIGMAN COMPLEX:
.... Prior to 1900
. Helps finance America's fledgling railroads through underwritings.
. Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
. Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
. Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
. Is appointed U.S. Navy fiscal agent by President Grant.
. Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
. Helps Congress finance the building of the Panama Canal.
...1910s
. Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
. Participates in hundreds of 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.
...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
-18-
<PAGE>
. Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
. Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
. Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
. Introduces Seligman Select Municipal Fund and Seligman Quality Municipal
Fund, two closed-end funds that invest in high-quality municipal bonds.
. In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global and
international investment products.
. Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
. Launches Seligman Henderson Global Fund Series, Inc., which today offers
three separate series: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund and Seligman Henderson Global Growth Opportunities Fund.
-19-
<PAGE>
------------------
59TH Annual Report
SELIGMAN
GROWTH
FUND, INC.
December 31, 1995
Seligman Financial Services, Inc.
an affiliate of
[Logo]
J. & W. Seligman & Co.
incorporated
established 1864
100 Park Avenue, New York, NY 10017
[Logo]
This report is intended only for
the information of shareholders or those
who have received the offering -------------------
prospectus covering shares of Capital
Stock of Seligman Growth Fund, Inc., A Growth Stock Fund
which contains information about the Established in 1937
sales charges, management fee, and other
costs. Please read the prospectus
carefully before investing or sending
money.
EQGR2 12/95
<PAGE>
================================================================================
SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
A mutual fund that seeks to provide
longer-term growth in capital value for
its shareholders and an increase in
future income. The Fund invests
primarily in the common stocks of
companies selected for their growth
prospects.
HIGHLIGHTS OF 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------- -----------------------
CLASS A CLASS D CLASS A CLASS D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets (in thousands)............................ $597,510 $6,412 $513,328 $1,742
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $5.22 $4.96 $4.54 $4.38
With December 1995 Gain Distribution
Taken in Shares.................................. 5.82 5.56 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares..................... 28.19%(1) 27.01% -- --
- ----------------------------------------------------------------------------------------------------------------------
Dividends Paid per Share............................. $0.01 -- $0.01 --
Distribution of Realized Gain per Share.............. 0.598 $0.598 $0.50 $0.50
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of Average Net Assets...... $0.0094 $0.0191 $0.0090 $0.0293
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excluding effect of dividend paid.
1
<PAGE>
================================================================================
To the Shareholders
- --------------------------------------------------------------------------------
Your Fund performed favorably during the past year, though its performance
trailed the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P
500's total return was driven by better-than-average advances by the companies
with the largest market capitalizations, and therefore heaviest weightings, in
the Index. As a result, the S&P 500 outperformed more than 87% of the US equity
funds. Long-term performance results and an interview with your Portfolio
Manager begin on page 3.
For Class A and D shares, net realized gain per share from investment
transactions for the 12 months totaled $0.68. Net unrealized gain per share
totaled $1.22 at December 31. A realized gain distribution of $0.598 was paid on
December 27 to shareholders of record December 21. The US equity markets had a
banner year. After a pessimistic start, many factors including low inflation,
falling interest rates, and strong corporate earnings paved the way for a
memorable year.
Overall, the market indices tell the best story. The S&P 500, which had its
second best gain since 1957, was up 34.11%, and other indices such as the New
York Stock Exchange Composite and the Wilshire 5000 were up 30% or more for the
year. The leading market indices have only twice, since the end of World War II,
risen more than 1995's powerful advance.
The equity markets, however, did teeter towards the end of the year due to
the Federal budget stalemate between the White House and Congress, which brought
on fears of higher inflation and interest rates. Nevertheless, the deadlock in
Washington did not deter the Federal Reserve Board from lowering short-term
interest rates on December 19--a move that quickly rejuvenated the equity
markets.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. We remain optimistic about your Fund's
performance and will continue to search for, and invest in, those companies that
can sustain earnings growth in a challenging and competitive global business
environment--a strategy we believe is key to investment performance.
As of January 1, 1996, the portfolio management responsibilities of
Seligman Growth Fund have been fully assumed by Mr. Loris D. Muzzatti. Mr.
Muzzatti is supported by a group of investment professionals dedicated to the
objectives of Seligman Growth Fund.
A Special Meeting of Shareholders was held on December 12, at which several
proposals were voted on. The results of the Special Meeting appear on page 6.
We thank you for your continued investment in Seligman Growth Fund, and
look forward to serving your investment needs in 1996 and the years ahead.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 2, 1996
2
<PAGE>
================================================================================
ANNUAL PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
The following is a biography of your Portfolio Manager, a discussion with him
regarding Seligman Growth Fund, and a comparison chart and table of your Fund's
performance against the Standard & Poor's 500 Composite Stock Price Index and
the Lipper Growth Fund Average.
YOUR PORTFOLIO MANAGER
After 38 successful years with the firm, David
Watts, Managing Director of J. & W. Seligman & Co.
Incorporated and Vice President and Portfolio
Manager of Seligman Growth Fund, has retired. At
year end, Loris D. Muzzatti, Managing Director of J.
& W. Seligman & Co. Incorporated and Vice President
and Portfolio Manager of Seligman Capital Fund and
Portfolio Manager of the Seligman Capital Portfolio
Photo of Seligman Portfolios, Inc. was appointed Vice
of Loris D. Muzzatti President, and assumed full portfolio management
responsibilities, of Seligman Growth Fund. Mr.
Muzzatti, who joined Seligman in 1985, also manages
the US portion of Seligman Henderson Global Growth
Opportunities Fund and a portion of the firm's
institutional accounts. Mr. Muzzatti is assisted by
a team of investment professionals who are dedicated
to the growth investment discipline, and to the
objectives of Seligman Growth Fund.
Iain C. Clark, Chief Investment Officer of Seligman
Henderson Co., is responsible for the investment activities of Seligman Growth
Fund's Subadviser, Seligman Henderson Co. Mr. Clark is also head of
International Investments for, and a Director of, Henderson Administration Group
plc, an investment manager in London, England. He has been with Henderson since
1985.
Your Manager's Investment Strategy
"DURING THE YEAR, YOUR FUND'S EXPOSURE TO HEALTH CARE ISSUES WAS INCREASED. IN
PARTICULAR, WE PURCHASED HMO AND PHARMACEUTICAL ISSUES THAT BENEFITED FROM GOOD
HMO ENROLLMENT GROWTH WHICH, IN TURN, RESULTED IN INCREASED PHARMACEUTICAL USE.
ALSO, THE UTILITY SECTOR WAS UP MORE THAN 40% IN 1995, BUT THIS SECTOR WAS NOT
REPRESENTED IN THE PORTFOLIO TO ANY EXTENT. SHARPLY LOWER INTEREST RATES DURING
THE YEAR HELPED THIS YIELD-ORIENTED SECTOR POST SUPERIOR PERFORMANCE; HOWEVER, A
LACK OF ANY SIGNIFICANT EARNINGS GROWTH IN THE UTILITY SECTOR WILL GENERALLY
PRECLUDE YOUR FUND FROM OWNING THESE ISSUES."
Economic Factors Affecting Seligman Growth Fund
"MODERATE INFLATION AND DECLINING INTEREST RATES WERE TWO MAJOR FACTORS THAT
POSITIVELY IMPACTED YOUR FUND'S PERFORMANCE IN 1995. IN ADDITION, STRONG GROWTH
IN CORPORATE PROFITS CONTRIBUTED TO A FAVORABLE ECONOMIC ENVIRONMENT FOR THE US
EQUITY MARKETS. THESE FACTORS BENEFITED YOUR FUND'S INTEREST-SENSITIVE FINANCIAL
ISSUES. ON THE OTHER HAND, THE STRENGTH OF THE US DOLLAR DAMPENED YOUR FUND'S
INTERNATIONAL HOLDINGS, AS DID THE LESS-FAVORABLE OVERSEAS ECONOMIC
ENVIRONMENT."
Individual Sector Performance
"YOUR FUND'S FINANCIAL, HEALTH CARE, AND CONSUMER STAPLES SECTORS ALL PERFORMED
FAVORABLY DURING THE YEAR. IN PARTICULAR, THE HEALTH CARE SECTOR'S PERFORMANCE
WAS LARGELY DRIVEN BY THE STRENGTH OF PHARMACEUTICAL ISSUES. THESE ISSUES
CONTINUED TO REBOUND FROM THEIR LOWS POSTED IN JUNE 1994--A RESULT OF STRONG
UNIT GROWTH. CONVERSELY, THE CONSUMER CYCLICAL SECTOR, MORE SPECIFICALLY
RETAILERS, PERFORMED POORLY AS A RESULT OF WEAK SALES IN GENERAL AND A
PARTICULARLY DOWNHEARTED HOLIDAY SEASON."
Outlook for the Year Ahead
"GOING FORWARD, WE MAY SEE AN ECONOMIC SLOWDOWN THAT WOULD REDUCE CORPORATE
PROFITS FOR THE S&P 500. YOUR FUND IS WELL POSITIONED TO BENEFIT IN THIS
ENVIRONMENT WITH ITS PORTFOLIO OF SUPERIOR GROWTH STOCKS. IN ADDITION, YOUR
FUND'S EXPOSURE TO THE INTERNATIONAL MARKETS, WHICH DAMPENED PERFORMANCE IN
1995, IS EXPECTED TO PROVIDE BETTER RESULTS IN 1996."
3
<PAGE>
================================================================================
PERFORMANCE COMPARISON CHART AND TABLE December 31, 1995
- --------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman Growth
Fund Class A shares, with and without the maximum initial sales charge of 4.75%,
for the 10-year period ended December 31, 1995, to a $10,000 hypothetical
investment made in the Standard & Poor's 500 Composite Stock Price Index (S&P
500) and the Lipper Growth Fund Average (Lipper Growth) for the same period. The
performance of Seligman Growth Fund Class D shares is not shown in this chart,
but is included in the table below. It is important to keep in mind that the S&P
500 excludes the effect of any fees or sales charges, and the Lipper Growth
excludes the effects of any sales charges.
<TABLE>
<CAPTION>
Growth Fund With Sales Charge Growth Fund Without Sales Charge S&P 500 Index Lipper Growth Funds Average
<S> <C> <C> <C> <C>
12/31/85 9531.98 10000 10000 10000.00
3/31/86 11299.12 11853.9 11410.50 11500.00
6/30/86 12366.25 12973.42 12083.03 12108.35
9/30/86 10308.09 10814.21 11240.12 11051.29
12/31/86 11081.1 11625.18 11866.53 11472.35
3/31/87 13571.7 14238.08 14400.28 13844.83
6/30/87 14034.17 14723.25 15123.17 14186.79
9/30/87 14672.09 15392.49 16120.85 15066.37
12/31/87 11463.33 12026.17 12489.63 11845.18
3/31/88 11598.83 12168.33 13200.78 12734.76
6/30/88 12466.38 13078.48 14079.96 13470.83
9/30/88 12166.32 12763.68 14127.69 13384.61
12/31/88 12305.16 12909.34 14563.81 13585.38
3/31/89 13035.6 13675.64 15596.38 14570.32
6/30/89 14439.86 15148.85 16973.08 15762.17
9/30/89 16591.68 17406.33 18790.72 17401.44
12/31/89 16457.4 17265.46 19178.56 17265.71
3/31/90 15586.13 16351.4 18601.67 16884.14
6/30/90 17231.87 18077.95 19771.90 18109.93
9/30/90 14072.15 14763.09 17054.65 15246.75
12/31/90 15607.88 16374.23 18583.43 16512.23
3/31/91 18442.58 19348.1 21282.86 19451.40
6/30/91 18305.96 19204.78 21234.12 19270.50
9/30/91 19780.04 20751.23 22369.72 20706.16
12/31/91 21609.51 22670.53 24245.20 22623.55
3/31/92 21173.69 22213.31 23632.77 22370.16
6/30/92 20120.92 21108.85 24082.26 21810.91
9/30/92 21358.01 22406.68 24841.58 22478.32
12/31/92 24050.5 25231.37 26092.60 24501.37
3/31/93 23931.04 25106.05 27232.06 25126.16
6/30/93 23174.97 24312.86 27364.68 25291.99
9/30/93 25249.15 26488.88 28072.06 26523.71
12/31/93 25540.49 26794.52 28722.49 27133.76
3/31/94 24617.93 25826.66 27633.33 26224.77
6/30/94 23306.91 24451.27 27749.67 25553.42
9/30/94 24763.6 25979.48 29106.35 26943.53
12/31/94 24559.6 25765.46 29101.69 26590.57
3/31/95 25695.61 26957.25 31935.32 28550.29
6/30/95 27588.98 28943.58 34983.87 31262.57
9/30/95 30347.87 31837.93 37764.04 33960.53
12/31/95 31552.56 33101.77 40037.43 34762.00
</TABLE>
The table below shows the average annual total returns for the one-, five-, and
10-year periods through December 31, 1995, for the Seligman Growth Fund Class A
shares, with and without the maximum initial sales charge of 4.75%, the S&P 500,
and the Lipper Growth. Also included in the table are the average annual total
returns for the one-year and since-inception periods through December 31, 1995,
for the Seligman Growth Fund Class D shares, with and without the effect of the
1% contingent deferred sales load ("CDSL") imposed on shares redeemed within one
year of purchase, the S&P 500, and the Lipper Growth.
AVERAGE ANNUAL TOTAL RETURN
ONE FIVE 10
YEAR YEARS YEARS
-------- --------- ---------
Seligman Growth Fund
Class A with sales charge 22.28% 13.99% 12.18%
Class A without sales charge 28.47 15.12 12.72
S&P 500 37.58 16.59 14.86
Lipper Growth 30.73 16.05 13.27
SINCE
ONE INCEPTION
YEAR 5/3/93
------- ---------
Seligman Growth Fund
Class D with CDSL 26.01% n/a
Class D without CDSL 27.01 11.43%
S&P 500 37.58 16.62*
Lipper Growth 30.73 14.51*
* From 4/30/93.
No adjustment was made to performance for periods prior to January 1, 1993, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders. Performance data quoted represent changes in
price and assume that all distributions within the periods are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
4
<PAGE>
================================================================================
SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION FOR 1995 DIVIDEND AND GAIN DISTRIBUTION FOR TAXABLE
ACCOUNTS
The dividend of $0.01 per share, paid on December 27, 1995, to Class A
shareholders, is taxable as ordinary income for federal tax purposes. It makes
no difference whether you received it in cash or in shares. Under the Internal
Revenue Code, 55% of the dividend paid to Class A shareholders has been
designated as qualifying for the dividend received deduction available to
corporate shareholders. In order to claim the dividend received deduction for
this distribution, corporate shareholders must have held the Fund's shares for
at least 46 days.
A distribution of $0.598 per share, consisting of $0.574 from net long-term
and $0.024 from net short-term gain realized on investments in 1995, was paid on
December 27, 1995, to both Class A and D shareholders. The distribution from net
long-term gain is designated as a "capital gain dividend" for federal income tax
purposes and is taxable to shareholders in 1995 as a long-term gain from the
sale of capital assets, no matter how long the shares may have been owned or
whether the distribution was paid in additional shares or cash. However, if
shares on which a capital gain distribution was received are subsequently sold,
and such shares were held for six months or less from the date of purchase, any
loss would be treated as long-term to the extent it offsets the long-term gain
distribution. Net short-term gain is taxable as ordinary income whether paid to
you in cash or shares.
If the gain distribution was received in shares, the per share cost basis
for federal income tax purposes was $5.18 for Class A and $4.92 for Class D.
A year-end statement of account showing activity for 1995 and a combined
Form 1099-DIV/B have been mailed to each shareholder. Form 1099-B shows the
proceeds of any redemptions paid to shareholders during the year and reported to
the Internal Revenue Service as required by federal regulations. Form 1099-DIV
shows the amount of the dividend and distribution from gain on investments paid
during the year.
5
<PAGE>
================================================================================
SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
PROXY RESULTS
Seligman Growth Fund Shareholders voted on the following proposals at the
Special Meeting of Shareholders held on December 12, 1995, in New York, New
York. Each Director was elected, and all other proposals were approved. The
description of each proposal and number of shares voted are as follows:
FOR AGAINST NON-VOTE
----- ---------- ------------
Election of Directors:
Fred E. Brown 67,455,287 2,730,217 36,646,940
John R. Galvin 67,256,368 2,873,618 36,645,949
Alice S. Ilchman 67,498,741 2,739,834 36,646,925
Frank A. McPherson 67,334,490 2,834,446 36,648,938
John E. Merow 67,284,803 2,920,029 36,638,791
Betsy S. Michel 67,713,435 2,575,953 36,649,252
William C. Morris 67,707,714 2,596,558 36,649,254
James C. Pitney 67,739,484 2,558,852 36,641,104
James Q. Riordan 67,720,815 2,550,584 36,641,103
Ronald T. Schroeder 67,786,994 2,522,438 36,619,249
Robert L. Shafer 67,762,057 2,546,635 36,649,250
James N. Whitson 67,758,187 2,555,944 36,638,755
Brian T. Zino 67,693,368 2,606,917 36,649,253
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTE
----- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Ratification of Deloitte & Touche LLP
as independent auditors: 66,441,703 1,192,037 2,678,775 36,649,244
Approval of amendment to the Management
Agreement to increase management fee
payable by the Fund: 49,797,388 16,413,554 4,102,072 36,648,745
Approval of amendment to the Subadvisory
Agreement to increase the subadvisory fee
payable by J. & W. Seligman & Co. Incorporated: 49,760,584 16,140,986 4,410,944 36,649,245
Approval of amendment of the Fund's fundamental
investment policy to permit mortgaging
or pledging of its assets: 53,598,913 10,936,401 5,777,203 36,649,243
Approval of increasing borrowing limits: 55,782,761 10,934,163 4,135,591 36,373,890
</TABLE>
6
<PAGE>
================================================================================
SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
DIVERSIFICATION OF ASSETS DECEMBER 31, 1995
<TABLE>
<CAPTION>
PERCENT PERCENT OF
OF NET NET ASSETS
ISSUES COST VALUE ASSETS DEC. 31, 1994
------ ------------ ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Net Cash and Short-Term Holdings .......... 1 $ 1,014,270 $ 1,014,270 0.2 4.0
--- ------------ ------------ ----- -----
Common Stocks and Convertible Securities:
Aerospace................................... 1 11,214,838 13,715,625 2.3 --
Automotive and Related...................... 3 8,928,536 13,565,000 2.2 8.0
Building and Construction................... -- -- -- -- 0.2
Business Services........................... 7 42,024,412 74,787,500 12.4 7.6
Chemicals................................... 4 16,616,568 15,213,352 2.5 0.4
Consumer Goods and Services................. 8 32,240,586 42,398,749 7.0 9.4
Drugs and Health Care....................... 13 87,249,864 120,701,835 20.0 14.3
Electronics................................. 1 753,837 541,800 0.1 --
Energy...................................... 1 1,886,526 1,437,500 0.2 0.5
Financial Services.......................... 12 60,452,068 93,810,588 15.5 7.8
Industrial Equipment........................ 7 26,620,507 31,335,352 5.2 2.7
Leisure and Entertainment................... 6 36,634,689 40,419,357 6.7 6.8
Metals...................................... -- -- -- -- 1.0
Printing and Publishing..................... 1 1,725,354 2,661,692 0.4 0.4
Retail Trade................................ 5 24,339,515 24,720,665 4.1 11.9
Steel....................................... 2 6,136,497 5,815,625 1.0 --
Technology.................................. 13 60,639,799 71,736,146 11.9 14.2
Telecommunications.......................... 5 25,454,893 25,156,250 4.2 6.9
Tobacco..................................... 1 7,615,474 11,312,500 1.9 --
Transportation.............................. -- -- -- -- 0.4
Miscellaneous............................... 4 11,450,098 13,578,457 2.2 3.5
--- ------------ ------------ ----- -----
94 461,984,061 602,907,993 99.8 96.0
--- ------------ ------------ ----- -----
Net Assets ................................ 95 $462,998,331 $603,922,263 100.0 100.0
=== ============ ============ ===== =====
</TABLE>
7
<PAGE>
================================================================================
SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
-----------------------
HOLDINGS
ADDITIONS INCREASE 12/31/95
- --------- -------- --------
Century Telephone Enterprises 100,000 100,000
Duracell International...... 135,000 135,000
Guidant..................... 100,000 100,000
Hewlett-Packard............. 50,000 75,000
MBNA........................ 100,000 100,000
Nordstrom................... 125,000 175,000
Nucor....................... 75,000 75,000
Sterling Software........... 100,000 100,000
United Healthcare .......... 50,000 200,000
Xerox....................... 65,000 65,000
HOLDINGS
REDUCTIONS DECREASE 12/31/95
- ---------- -------- --------
Applied Materials........... 160,000(1) --
Capital Cities/ABC.......... 50,000 --
Citicorp.................... 75,000 100,000
DSC Communications.......... 125,000 --
General Nutrition........... 140,000 --
HFS Group................... 150,000 150,000
Linear Technology........... 200,000 --
MGM Grand................... 200,000 --
Oracle Systems.............. 150,000 --
Silicon Graphics............ 150,000 --
* Largest portfolio changes from the previous quarter to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 80,000 shares received as a result of a 2-for-1 stock split.
MAJOR PORTFOLIO HOLDINGS
AT DECEMBER 31, 1995
SECURITY VALUE
- --------- -----------
American International Group............ $20,812,500
First Data.............................. 15,046,875
Pfizer.................................. 14,175,000
Boeing.................................. 13,715,625
Schering-Plough......................... 13,687,500
United Healthcare....................... 13,100,000
Pacific Health Systems.................. 13,087,500
Interpublic Group of Companies.......... 13,012,500
Columbia/HCA Healthcare................. 12,687,500
HFS Group............................... 12,262,500
8
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCKS 99.7%
AEROSPACE 2.3%
Boeing
Aircraft manufacturer...... 175,000 $ 13,715,625
-------------
AUTOMOTIVE AND RELATED 2.2%
Autoliv (ADRs)+*
Swedish supplier of safety
restraint systems.......... 40,000 2,340,000
Echlin
Manufacturer of motor vehicle
replacement parts.......... 150,000 5,475,000
Harley-Davidson
Motorcycle manufacturer.... 200,000 5,750,000
-------------
13,565,000
-------------
BUSINESS SERVICES 12.4%
Alco Standard
Distributor of paper and office
equipment.................. 175,000 7,984,375
First Data
Credit card processing
services................... 225,000 15,046,875
General Motors (Class E)
Worldwide automotive
manufacturer............... 225,000 11,700,000
HFS Group*
Hotel and motel franchises. 150,000 12,262,500
Interpublic Group of Companies
Worldwide advertising agency 300,000 13,012,500
Reynolds & Reynolds (Class A)
Supplier of information systems
to auto and medical industries 200,000 7,750,000
SunGard Data Systems*
Back up computer services for
disaster recovery.......... 250,000 7,031,250
-------------
74,787,500
-------------
CHEMICALS 2.5%
Air Products & Chemicals
Industrial gases and chemicals 150,000 7,912,500
Bayer AG
Producer of specialty chemicals,
pharmaceuticals, and plastics 6,700 1,776,095
Engelhard
Specialty chemicals and
metals..................... 200,000 4,350,000
European Vinyls
Market leaders in PVC
industry................... 45,300 1,174,757
-------------
15,213,352
-------------
SHARES VALUE
------ -----
CONSUMER GOODS AND SERVICES 7.0%
Adidas
Sporting equipment, footware 40,000 $ 2,110,686
Coca-Cola
Soft drinks, consumer products 100,000 7,425,000
Duracell International
Alkaline batteries......... 135,000 6,986,250
Gillette
Personal care products..... 175,000 9,121,875
Gucci
Manufacturer and marketer
of apparel................. 23,500 913,563
LVMH Moet-Hennessey
Producers of wine, spirits,
and luxury products........ 10,000 2,078,875
Mattel
Manufacturer of dolls, games,
and action and activity toys 175,000 5,381,250
PepsiCo
Soft drinks, consumer goods 150,000 8,381,250
-------------
42,398,749
-------------
DRUGS AND HEALTH CARE 20.0%
Amgen*
Biotechnology company...... 200,000 11,862,500
Columbia/HCA Healthcare
Health care facilities and
services................... 250,000 12,687,500
Genzyme*
Biomedical and genetic
products................... 75,000 4,668,750
Guidant
Cardiac rhythm management
and coronary artery disease
intervention............... 100,000 4,225,000
Johnson & Johnson
Health care products....... 125,000 10,703,125
Medtronic
Manufacturer of pacemakers
and related cardiovascular
products................... 150,000 8,381,250
Oxford Health Plans*
Health maintenance
organization............... 125,000 9,218,750
PacifiCare Health Systems
(Class B)*
Health maintenance
organization............... 150,000 13,087,500
Pfizer
Health care consumer
products; specialty chemicals 225,000 14,175,000
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
DRUGS AND HEALTH CARE (continued)
Protein Design Laboratories*
Antibody technology........ 125,000 $ 2,875,000
Roussel
French developer and
manufacturer of specialty
pharmaceuticals............ 12,000 2,029,960
Schering-Plough
Pharmaceuticals, health and
personal care products..... 250,000 13,687,500
United Healthcare
Health maintenance
organization............... 200,000 13,100,000
-------------
120,701,835
-------------
ENERGY 0.2%
Huaneng Power International
(ADRs)*
Diversified Chinese energy
company.................... 100,000 1,437,500
-------------
FINANCIAL SERVICES 15.5%
American International Group
International insurance.... 225,000 20,812,500
Citicorp
New York commercial bank... 100,000 6,725,000
Federal National Mortgage
Association
Mortgage financing......... 75,000 9,309,375
General Re
Property casualty reinsurer 75,000 11,625,000
Green Tree Financial
Loans for manufacturered
homes...................... 300,000 7,912,500
Internationale Nederlanden Bank
Insurance and banking group 33,825 2,255,000
MBNA
Issuer of bank credit cards 100,000 3,687,500
MGIC Investment
Private mortgage insurance. 150,000 8,137,500
Norwest
Midwest bank............... 250,000 8,250,000
SunAmerica
Diversified financial services,
specializing in pre-retirement
savings.................... 112,500 5,343,750
UTD Overseas Bank
Second largest bank in
Singapore.................. 228,000 2,192,463
Wells Fargo
Commercial banking in
California................. 35,000 7,560,000
-------------
93,810,588
-------------
SHARES VALUE
------ -----
INDUSTRIAL EQUIPMENT 5.2%
BBC Brown Boverie
Manufacturer of heavy
equipment for electric power
generation and distribution 2,000 $ 2,322,357
FKI Babcock
Electrical engineering
company.................... 875,000 2,240,483
General Electric
Supplier of electrical equipment
and other industrial and
consumer products.......... 150,000 10,800,000
Glory Kogyo
Highly specialized company
servicing banking automations 25,000 917,874
Illinois Tool Works
Fasteners, tools, and plastic
items...................... 75,000 4,425,000
Keyence
Producer of detection devices for
the manufacturing process.. 15,000 1,724,638
Xerox
Office equipment and
supplies................... 65,000 8,905,000
-------------
31,335,352
-------------
LEISURE AND ENTERTAINMENT 6.7%
Circus Circus Enterprises*
Casino hotels.............. 300,000 8,362,500
Disney, Walt
Theme parks, hotels, films. 125,000 7,375,000
Granada Group
Radio and television
broadcasting, publishing... 230,000 2,302,169
Mirage Resorts*
Manager of casinos in
Las Vegas.................. 225,000 7,762,500
Scandinavian Broadcast System
Television broadcasting in
Scandinavia................ 125,000 2,773,438
Viacom (Class B)
Diverse entertainment
communications company..... 250,000 11,843,750
-------------
40,419,357
-------------
10
<PAGE>
================================================================================
December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
PRINTING AND PUBLISHING 0.4%
Reed Elsevier
Global printer and publisher
of professional trade
journals and magazines..... 200,000 $ 2,661,692
-------------
RETAIL TRADE 4.1%
Eckerd*
Operator of drug store chain 100,000 4,462,500
Home Depot
Chain of home improvement
stores..................... 150,000 7,181,250
Hornbach Baumarkt
A large home improvement
and garden center retailer
in Germany................. 25,000 1,073,790
Nordstrom
Department stores.......... 175,000 7,065,625
Office Depot*
Office supply retailer..... 250,000 4,937,500
-------------
24,720,665
-------------
STEEL 1.0%
Nucor
Mini-mill steel production. 75,000 4,284,375
Pohang Iron & Steel (ADRs)
A leading Korean
steel manufacturer......... 70,000 1,531,250
-------------
5,815,625
-------------
TECHNOLOGY 11.9%
Cisco Systems*
Computer network routers... 150,000 11,203,125
Farnell Electronics
Manufacturer and distributor of
electronic and electrical
equipment ................ 250,000 2,789,450
Hewlett-Packard
Computers and peripherals.. 75,000 6,281,250
Informix
Designer, manufacturer, and
supporter of database management
systems.................... 150,000 4,509,375
Intel
Semiconductor manufacturer. 150,000 8,521,875
Lam Research*
Manufacturer of plasma etching
equipment.................. 75,000 3,421,875
Microsoft*
Microcomputer software..... 100,000 8,781,250
SHARES VALUE
------ -----
Olivetti
PCs, software, minicomputers
and peripheral equipment... 3,000,000 $ 2,404,912
Secom
Manufacturer of electronic
instrumentation............ 30,000 2,081,159
Sterling Software
Software and network services;
automated program design
software................... 100,000 6,237,500
Tektronix
Manufacturer of electronic
equipment.................. 100,000 4,912,500
3Com*
Supplier of adapter cards, hubs,
and routers for local area
computer networks.......... 100,000 4,668,750
Xilinx*
Specialized semiconductors. 195,000 5,923,125
-------------
71,736,146
-------------
TELECOMMUNICATIONS 4.2%
American Telephone & Telegraph
International and domestic
telecommunications services 100,000 6,475,000
Century Telephone Enterprises
Regional telephone and cellular
services................... 100,000 3,175,000
Motorola
Producer of wireless
telecommunications equipment 100,000 5,700,000
Scientific-Atlanta
Satellite networks......... 300,000 4,500,000
WorldCom*
Long distance carrier...... 150,000 5,306,250
-------------
25,156,250
-------------
TOBACCO 1.9%
Philip Morris
Tobacco manufacturer....... 125,000 11,312,500
-------------
MISCELLANEOUS 2.2%
HIS
A leading discount tour
operator in Japan.......... 45,000 2,143,478
Land and General Berhad
Malaysian conglomerate with
interests in timber, real estate
development, and investment
services................... 500,000 1,083,104
11
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES OR
PRIN.AMT. VALUE
--------- -----
MISCELLANEOUS (continued)
Nera (ADSs)
Wireless equipment and billing
services for INMARSAT global
satellite communications network
and microwave radio relay.. 45,000shs. $ 1,445,625
Tyco International
Fire protection services worldwide 250,000 8,906,250
-------------
13,578,457
-------------
TOTAL COMMON STOCKS
(Cost $461,230,224) ..... 602,366,193
-------------
CONVERTIBLE BONDS 0.1%
(Cost $753,837)
ELECTRONICS 0.1%
United Micro Electronics
11/4%, 6/8/2004............ $430,000 541,800
-------------
SHORT-TERM HOLDINGS 2.5%
(Cost $15,100,000) ...... 15,100,000
-------------
TOTAL INVESTMENTS 102.3%
(Cost $477,084,061) ..... 618,007,993
OTHER ASSETS LESS
LIABILITIES (2.3)% ..... (14,085,730)
-------------
NET ASSETS 100.0% .......... $603,922,263
=============
- ----------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP. See
notes to financial statements.
12
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks and convertible securities (cost $461,984,061).................. $ 602,907,993
Short-term holdings (cost $15,100,000)....................................... 15,100,000 $ 618,007,993
-------------
Cash.......................................................................................... 6,848,593
Receivable for securities sold................................................................ 12,840,063
Receivable for dividends and interest......................................................... 574,451
Receivable for Capital Stock sold............................................................. 352,884
Investment in, and expenses prepaid to, shareholder service agent............................. 93,258
Net unrealized appreciation on forward currency contracts..................................... 2,198
Other......................................................................................... 124,517
-------------
Total Assets ................................................................................. 638,843,957
-------------
LIABILITIES:
Payable for securities purchased.............................................................. 32,889,345
Payable for Capital Stock repurchased......................................................... 1,122,677
Accrued expenses, taxes, and other............................................................ 909,672
-------------
Total Liabilities ............................................................................ 34,921,694
-------------
Net Assets .................................................................................. $ 603,922,263
=============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 150,000,000 shares authorized; 115,776,071
shares outstanding):
Class A..................................................................................... $ 114,483,498
Class D..................................................................................... 1,292,573
Additional paid-in capital.................................................................... 332,423,365
Dividends in excess of net investment income.................................................. (215,986)
Undistributed net realized gain............................................................... 15,018,871
Net unrealized appreciation of investments.................................................... 140,030,884
Net unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies and forward currency contracts........................... 889,058
-------------
Net Assets .................................................................................. $ 603,922,263
=============
NET ASSET VALUE PER SHARE:
Class A ($597,510,514 divided by 14,483,498 shares) .......................................... $5.22
=====
Class D ($6,411,749 divided by 1,292,573 shares) ............................................. $4.96
=====
</TABLE>
13
<PAGE>
- ----------
See notes to financial statements.
================================================================================
Statement of Operations For the Year Ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $127,323)........................... $ 5,460,868
Interest........................................................................ 689,049
-----------
Total investment income......................................................... $ 6,149,917
EXPENSES:
Management fee.................................................................. 2,706,813
Distribution and service fees................................................... 1,207,717
Shareholder account services.................................................... 899,231
Shareholder reports and communications.......................................... 119,664
Auditing and legal fees......................................................... 95,272
Registration.................................................................... 78,552
Directors' fees and expenses.................................................... 51,791
Shareholders' meeting........................................................... 18,000
Miscellaneous................................................................... 49,991
-----------
Total expenses.................................................................. 5,227,031
------------
Net investment income ........................................................ 922,886
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments................................................ 78,316,368
Net realized gain from foreign currency transactions............................ 406,810
Net change in unrealized appreciation of investments............................ 61,247,607
Net change in unrealized appreciation on translation of
assets and liabilities denominated in foreign
currencies and forward currency contracts.................................... 395,616
-----------
Net gain on investments and foreign currency transactions ...................... 140,366,401
------------
Increase in net assets from operations ......................................... $141,289,287
============
</TABLE>
- ----------
See notes to financial statements.
14
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income........................................................ $ 922,886 $ 747,696
Net realized gain on investments............................................. 78,316,368 51,360,333
Net realized gain (loss) from foreign currency transactions.................. 406,810 (32,375)
Net change in unrealized appreciation of investments......................... 61,247,607 (75,155,232)
Net change in unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies and forward currency contracts.......... 395,616 493,442
------------ ----------
Increase (decrease) in net assets from operations............................ 141,289,287 (22,586,136)
------------ ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income-- Class A.............................................. (1,048,188) (1,043,314)
Net realized gain on investments:
Class A.................................................................... (62,681,650) (52,165,692)
Class D.................................................................... (685,513) (180,695)
------------ ----------
Decrease in net assets from distributions.................................... (64,415,351) (53,389,701)
------------ ----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------------------------------
YEAR ENDED DECEMBER 31
------------------------------
CAPITAL SHARE TRANSACTIONS: 1995 1994
---------- ----------
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A................................ 1,963,645 1,199,567 9,903,613 6,135,690
Class D................................ 881,669 183,876 4,318,133 922,899
Investment of dividends-- Class A........ 141,801 164,106 734,496 733,553
Exchanged from associated Funds:
Class A................................ 7,453,091 4,032,992 39,381,227 20,642,340
Class D................................ 207,215 14,699 1,088,175 70,526
Shares issued in payment of gain distributions:
Class A................................ 9,630,233 9,228,545 49,877,844 41,252,296
Class D................................ 133,979 40,305 659,149 173,521
---------- ---------- ----------- ----------
Total.................................... 20,411,633 14,864,090 105,962,637 69,930,825
---------- ---------- ----------- ----------
Cost of shares repurchased:
Class A................................ (8,896,248) (9,117,651) (45,562,371) (46,398,985)
Class D................................ (94,062) (33,070) (462,501) (164,282)
Exchanged into associated Funds:
Class A................................ (8,899,690) (4,857,920) (46,762,125) (24,834,019)
Class D................................ (233,991) (37,097) (1,197,160) (176,395)
---------- ---------- ------------ ------------
Total.................................... (18,123,991) (14,045,738) (93,984,157) (71,573,681)
---------- ---------- ------------ ------------
Increase (decrease) in net assets from
capital share transactions............ 2,287,642 818,352 11,978,480 (1,642,856)
========== ========== ------------ ------------
Increase (decrease) in net assets.................................................. 88,852,416 (77,618,693)
NET ASSETS:
Beginning of year.................................................................. 515,069,847 592,688,540
------------ ------------
End of year (including dividends in excess of net investment
income of $215,986 and $196,776, respectively).................................. $603,922,263 $515,069,847
============ ============
</TABLE>
- ----------
See notes to financial statements.
15
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Growth Fund, Inc. (the "Fund") offers two classes of shares. All
shares existing prior to May 3, 1993, were classified as Class A shares. Class A
shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class D shares are sold without
an initial sales charge but are subject to a distribution fee of up to 0.75% and
a service fee of up to 0.25% on an annual basis, and a contingent deferred sales
load ("CDSL") of 1% imposed on certain redemptions made within one year of
purchase. The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in stocks and U.S. Government securities are valued at current
market values or, in their absence, at fair value determined in accordance
with procedures approved by the Board of Directors. Securities traded on
national exchanges are valued at last sales prices or, in their absence and
in the case of over-the-counter securities, a mean of bid and asked prices.
Short-term holdings maturing in 60 days or less are valued at amortized
cost.
b. The books and records of the Fund are maintained in U.S. dollars. The
market value of investment securities and other assets and liabili-ties
denominated in foreign currencies are translated into U.S. dollars at the
closing daily rate of exchange as reported by a pricing service. Purchases
and sales of investment securities, income, and expenses are translated
into U.S. dollars at the rate of exchange prevailing on the respective
dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the portfolio.
Similarly, the Fund separates the effect of changes in foreign exchange
rates from the fluctuations arising from changes in the market prices of
portfolio securities sold during the period.
c. There is no provision for federal income or excise tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
d. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income
tax purposes. Dividends receivable and payable are recorded on ex-dividend
dates. Interest income is recorded on an accrual basis.
e. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares
based upon the relative value of shares of each class. Class-specific
expenses, which include distribution and service fees and any other items
that are specifically attributed to a particular class, are charged
directly to such class.
f. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, or capital gain, and the
recharacterization of foreign exchange gains or losses to either ordinary
or realized capital gain for federal income tax purposes. Where such
differences are permanent in nature, they are reclassified in the
components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassifications will have no effect
on net assets, results of operations, or net asset value per share of the
Fund.
16
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December 31, 1995, amounted to $559,555,817 and
$591,309,732, respectively.
At December 31, 1995, the cost of investments for federal income tax
purposes was $477,813,828, and the tax basis gross unrealized appreciation and
depreciation of portfolio securities, including the effects of foreign currency
translations, amounted to $149,104,397 and $8,910,232, respectively.
4. At December 31, 1995, the Fund owned short-term investments which matured in
less than 7 days.
5. J. & W. Seligman & Co. Incorporated (the "Manager") manages the
affairs of the Fund and provides the necessary personnel and facilities.
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and the
Manager is paid by the Manager. The Manager receives a fee, calculated daily and
payable monthly, equal to a per annum percentage of the Fund's daily net assets.
The management fee for 1995 was calculated on a sliding scale of 0.50% to 0.44%,
based on average daily net assets of all investment companies managed by the
Manager. The management fee for the year ended December 31, 1995, was equivalent
to an annual rate of 0.48% of the average daily net assets of the Fund. Seligman
Henderson Co. (the "Subadviser"), a 50% owned affiliate of the Manager, is
entitled to a portion of the Manager's fee for acting as Subadviser for certain
of the international investments of the Fund.
Effective January 1, 1996, the management fee rate is 0.70% of the first $1
billion of the Fund's average daily net assets, 0.65% of the next $1 billion of
average daily net assets and 0.60% of average daily net assets in excess of $2
billion.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
concessions of $20,299 from sales of Class A shares after commissions of
$157,932 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Fund pursuant to
the Plan. For the year ended December 31, 1995, fees paid aggregated $1,168,109
or 0.21% per annum of the average daily net assets of Class A shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the year ended December 31, 1995,
fees paid amounted to $39,608, or 1% per annum of the average daily net assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended December
31, 1995, such charges amounted to $1,751.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became eligible to receive commissions from certain sales of shares of
the Fund, as well as distribution and service fees pursuant to the Plan. For the
period ended December 31, 1995, Seligman Services, Inc. received commissions of
$13,509 from sales of shares of the Fund. Seligman Services, Inc. also received
distribution and service fees of $404,497, pursuant to the Plan.
17
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $886,231 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $43,170.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Subadviser, the Distributor, Seligman Services, Inc., and/or
Seligman Data Corp.
Fees of $31,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1995, of
$215,986 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
6. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1995, which are included in the corresponding captions of the
Statement of Operations, were as follows:
CLASS A CLASS D
--------- ---------
Distribution and service fees..... $1,168,109 $39,608
Registration...................... 22,888 7,029
Shareholder reports and
communications................. 16,532 697
7. At December 31, 1995, the Fund had an outstanding forward currency contract
to sell foreign currency to hedge its exposure to changes in foreign currency
exchange rates on foreign currency held as follows:
SETTLEMENT CONTRACT IN EXCHANGE UNREALIZED
DATE TO RECEIVE FOR APPRECIATION
- ------------- ------------- ----------- -------------
1/5/96 $505,621 JPY(1) 52,104,271 $2,198
(1) Japanese Yen.
18
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
----------------------------------------------- ---------------------------
YEAR ENDED 5/3/93*
YEAR ENDED DECEMBER 31 DECEMBER 31 TO
----------------------------------------------- -----------------
1995** 1994** 1993 1992 1991 1995** 1994** 12/31/93
------ ------ ------ ------ ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period.................. $4.54 $5.26 $6.04 $5.95 $4.57 $4.38 $5.23 $5.67
----- ----- ----- ----- ----- ----- ----- -----
Net investment income (loss).. .01 .01 .01 .03 .04 (.04) (.12) (.03)
Net realized and unrealized
investment gain (loss)..... 1.27 (.22) .35 .64 1.70 1.21 (.23) .72
Net realized and unrealized gain
on foreign currency transactions .01 -- -- -- -- .01 -- --
----- ----- ----- ----- ----- ----- ----- -----
Increase (decrease) from
investment operations...... 1.29 (.21) .36 .67 1.74 1.18 (.35) .69
Dividends paid ............... (.01) (.01) (.01) (.03) (.04) -- -- --
Distributions from net
gain realized.............. (.60) (.50) (1.13) (.55) (.32) (.60) (.50) (1.13)
----- ----- ----- ----- ----- ----- ----- -----
Net increase (decrease) in
net asset value............ .68 (.72) (.78) .09 1.38 .58 (.85) (.44)
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period $5.22 $4.54 $5.26 $6.04 $5.95 $4.96 $4.38 $5.23
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 28.47% (3.84)% 6.20% 11.30% 38.45% 27.01% (6.56)% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .94% .90% .89% .77% .76% 1.91% 2.93 2.17%+
Net investment income (loss) .
to average net assets...... .17% .14% .18% .49% .77% (.83)% (2.34)% (1.03)%+
Portfolio turnover............ 102.30% 93.59% 105.64% 46.96% 12.60% 102.30% 93.59% 105.64%++
Net assets, end of period
(000's omitted)............. $597,510 $513,328 $591,491 $614,860 $598,423 $6,412 $1,742 $1,197
</TABLE>
- ----------
*Commencement of offering of Class D shares.
**Per share amounts for the years ended December 31, 1995 and 1994, are
calculated based on average shares outstanding.
+Annualized.
++For the year ended December 31, 1993.
See notes to financial statements.
19
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN GROWTH FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Growth Fund, Inc. as of December 31,
1995, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights 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 and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the Fund's custodians and brokers;
where replies were not received from brokers, we performed other auditing
procedures. 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 and financial highlights present
fairly, in all material respects, the financial position of Seligman Growth
Fund, Inc. as of December 31, 1995, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
New York, New York
February 2, 1996
20
<PAGE>
================================================================================
Board of Directors
- --------------------------------------------------------------------------------
Fred E. Brown
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
John R. Galvin 2, 4
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
Alice S. Ilchman 3, 4
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
Frank A. McPherson 2, 4
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
John E. Merow
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
Betsy S. Michel 2, 4
DIRECTOR OR TRUSTEE,
Various Organizations
William C. Morris 1
CHAIRMAN
CHAIRMAN OF THE BOARD AND PRESIDENT,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
James C. Pitney 3, 4
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
James Q. Riordan 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
Ronald T. Schroeder 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3, 4
VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFE Corporation
James N. Whitson 2, 4
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
Brian T. Zino 1
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
21
<PAGE>
================================================================================
Executive Officers
- --------------------------------------------------------------------------------
William C. Morris
CHAIRMAN
Brian T. Zino
PRESIDENT
Loris D. Muzzatti
VICE PRESIDENT
Lawrence P. Vogel
VICE PRESIDENT
Thomas G. Rose
TREASURER
Frank J. Nasta
SECRETARY
- --------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
Subadviser
Seligman Henderson Co.
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
22
<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements and Schedule:
Part A Financial Highlights for Class A shares for the ten years ended
December 31, 1995; Financial Highlights for Class D shares for the
period from May 3, 1993 (commencement of offering) to December 31,
1995.
Part B Required Financial Statements are included in the Fund's Annual
Report to Shareholders, dated December 31, 1995, which are
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements are: Portfolio of Investments
as of December 31, 1995; Statement of Assets and Liabilities as of
December 31, 1995; Statement of Operations for the year ended
December 31, 1995; Statements of Changes in Net Assets for the years
ended December 31, 1995 and 1994; Notes to Financial Statements;
Financial Highlights for the five years ended December 31, 1995 for
the Fund's Class A shares and for the period May 3, 1993
(commencement of offering) through December 31, 1995 for the Fund's
Class D shares; Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except Exhibits marked
with an asterisk (*) which are incorporated herein.
(1a) Articles of Amendment and Articles Supplementary to Articles of
Incorporation of Registrant. (Incorporated by Reference to Post-Effective
Amendment No. 69 filed on April 23, 1993.)
(1b) Articles Supplementary to Articles of Incorporation of Registrant, dated
February 8, 1996.*
(1c) Articles Supplementary to Articles of Incorporation of Registrant, dated
April 10, 1996.*
(2) By-laws of the Corporation.
(Incorporated by Reference to Post-Effective Amendment No. 52 filed on
February 27, 1981.)
(4a) Specimen Stock Certificate of Class B Capital Stock.
(Incorporated by Reference to Form SE filed on April 16, 1996.)
(4b) Specimen certificate of Class D Capital Stock.
(Incorporated by Reference to Post-Effective Amendment No. 69 filed on
April 23, 1993.)
(5) Amended Management Agreement between Registrant and J. & W. Seligman & Co.
Incorporated.*
(5a) Form of Subadvisory Agreement between the Manager and Seligman Henderson
Co.*
(6) Copy of amended Distributing Agreement between Registrant and Seligman
Financial Services, Inc.
(Incorporated by Reference to Post-Effective Amendment No. 69 filed on
April 23, 1993.)
(6a) Copy of amended Sales Agreement between Seligman Financial Services, Inc.
and Dealers.*
(6b) Copy of Amendment to Fund Participation Agreement between Nationwide Life
Insurance Company and Seligman Marketing, Inc.
(Incorporated by Reference to Post-Effective Amendment No. 67 filed on
April 30, 1991.)
(7) Amendments to the Amended Retirement Income Plan of J. & W. Seligman & Co.
Incorporated and Trust.
(Incorporated by Reference to Post-Effective Amendment No. 70 filed on
April 29, 1994.)
(7a) Amendments to the Amended Employees' Thrift Plan of Union Data Service
Center, Inc. and Trust.
(Incorporated by Reference to Post-Effective Amendment No. 70 filed on
April 29, 1994.)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company.
(Incorporated by Reference to Post-Effective Amendment No. 67 filed on
April 30, 1991.)
(10) Opinion and Consent of Counsel.
(Incorporated by Reference to Seligman Capital Fund, Inc., File No. 2-
33566 Post-Effective Amendment No. 47 filed on March 31, 1994.)
(11) Report and Consent of Independent Auditors.*
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
Item 24. Financial Statement and Exhibits (Continued)
- -------- --------------------------------
(13a) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated.*
(13b) Purchase Agreement for Initial Capital between Registrant's Class D
shares and J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to Post-Effective Amendment No. 69
filed on April 23, 1993.)
(14) Copy of Amended Individual Retirement Account Trust and Related Documents.
(Incorporated by Reference to Post-Effective Amendment No. 68
filed on April 30, 1992.)
(14a) Copy of Amended Comprehensive Retirement Plans for Money Purchase and/or
Prototype Profit Sharing Plan.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.,
File No. 2-86008, Post-Effective Amendment No. 24 filed on November 30,
1992.)
(14b) Copy of Amended Basic Business Retirement Plans for Money Purchase
and/or Profit Sharing Plans.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc., File
No. 2-86008, Post-Effective Amendment No. 24 filed on November 30, 1992.)
(14c) Copy of Amended 403(b)(7) Custodial Account Plan.
(Incorporated by Reference to Seligman New Jersey Tax-Exempt Fund,
Inc., File No. 33-13401, Pre-Effective Amendment No. 1 filed on January
11, 1988.)
(14d) Copy of Amended Simplified Employee Pension Plan (SEP).
(Incorporated by Reference to Post-Effective Amendment No. 68 filed on
April 30, 1992.)
(14e) Copy of the Amended J. & W. Seligman & Co. Incorporated (SARSEP) Salary
Reduction and Other Elective Simplified Employee Pension-Individual
Retirement Accounts Contribution Agreement (Under Section 408(k) of the
Internal Revenue Code).
(Incorporated by Reference to Post-Effective Amendment No. 68 filed
on April 30, 1992.)
(15) Copy of Amended Administration, Shareholder Services and Distribution Plan
and form of Agreement of Registrant.*
(16) Schedule of Computation of Performance Data provided in Registration
Statement in response to Item 22.
(Incorporated by Reference to Post-Effective Amendment No. 65
filed on May 1, 1990.)
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule 18f-3
under the Investment Company Act of 1940.*
Item 25. Persons Controlled by or Under Common Control with Registrant -
- ------- -------------------------------------------------------------
Seligman Data Corp. ("SDC"), a New York corporation, is owned by the
Registrant and certain associated investment companies. The
Registrant's investment in SDC is recorded at a cost of $43,170.
Item 26. Number of Holders of Securities
- ------- -------------------------------
(1) (2)
Number of Record
Title of Class Holders as of March 29, 1996
------------------------- ----------------------------
Class A Common Stock 22,789
Class B Common Stock 0
Class D Common Stock 1,088
Item 27. Indemnification - Incorporated by reference to Registrant's Post-
- ------- ---------------
Effective Amendment #67 (File No. 2-10836) as filed with the
Commission on 5/1/92.
<PAGE>
File No. 2-10836
811-229
PART C. OTHER INFORMATION (continued)
-----------------
Item 28. Business and Other Connections of Investment Adviser - The Manager
- ------- ----------------------------------------------------
also serves as investment manager to sixteen 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 Henderson Global Fund Series, Inc., Seligman High
Income Fund Series, Seligman Income Fund, Inc., Seligman New Jersey
Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt Fund Series,
Seligman Portfolios, Inc., Seligman Quality Municipal Fund Series,
Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt
Series Trust, Seligman Select Municipal Fund, Inc. and Tri-Continental
Corporation.
The Subadviser also serves as subadviser to eight other associated
investment companies. They are Seligman Capital Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Growth Fund, Inc., Seligman Frontier Fund, Inc.,
Seligman Henderson Global Fund Series, Inc., Seligman Income Fund,
Inc., the Global and Global Smaller Companies Portfolios of Seligman
Portfolios, Inc. and Tri-Continental Corporation.
The Manager and Subadviser have investment advisory service divisions
which provide investment management or advice to private clients. The
list required by this Item 28 of officers and directors of the Manager
and the Subadviser, respectively, together with information as to any
other business, profession, vocation or employment of a substantial
nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV,
filed by the Manager and the Subadviser, respectively, pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-5798 and SEC File
No. 801-4067 both of which were filed on December 5, 1995.)
Item 29. Principal Underwriters
- -------- ----------------------
(a) The names of each investment company (other than the Registrant) for
which Registrant's principal underwriter currently distributing
securities of the Registrant also acts as a principal underwriter,
depositor or investment adviser follow:
Seligman Cash Management Fund, Inc., Seligman Capital Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and
Information Fund, Inc., Seligman Frontier Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman High Income Fund Series,
Seligman Income Fund, Inc., Seligman New Jersey Tax-Exempt Fund, Inc.,
Seligman Pennsylvania Tax-Exempt Fund Series, Seligman Portfolios,
Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt
Series Trust.
(b) Name of each director, officer or partner of Registrant's principal
underwriter named in the answer to Item 21:
Seligman Financial Services, Inc.
---------------------------------
As of March 29, 1996
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- --------------------------------------------- ------------------------------- -------------------------------------------------
<S> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board and Chief Executive Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director Director
FRED E. BROWN* Director Director
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
DAVID F. STEIN* Director None
STEPHEN J. HODGDON* President None
LAWRENCE P. VOGEL* Senior Vice President, Finance Vice President
MARK R. GORDON* Senior Vice President, Director None
of Marketing
GERALD I. CETRULO,
III Senior Vice President of Sales, None
140 West Parkway Regional Sales Manager
Pompton Plains, NJ 07444
BRADLEY F. HANSON Senior Vice President of Sales, None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Seligman Financial Services, Inc.
---------------------------------
As of March 29, 1996
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- --------------------------------------------- ------------------------------- -------------------------------------------------
<S> <C> <C>
BRADLEY W. LARSON Senior Vice President of Sales, None
367 Bryan Drive Regional Sales Manager
Danville, CA 94526
D. IAN VALENTINE Senior Vice President of Sales, None
307 Braehead Drive Regional Sales Manager
Fredericksburg, VA 22401
HELEN SIMON* Vice President, Sales None
Administration Manager
MARSHA E. JACOBY* Vice President, National Accounts None
Manager
WILLIAM W. JOHNSON* Vice President, Order Desk None
JAMES R. BESHER Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
BRAD DAVIS Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
ANDREW DRALUCK Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
JONATHAN EVANS Regional Vice Pesident None
222 Fairmont Way
Ft. Lauderdale, FL 33326
CARLA GOEHRING Regional Vice President None
11426 Long Pine
Houston, TX 77077
SUSAN GUTTERUD Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
MARK LIEN Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
RANDY D. LIERMAN Regional Vice President None
2627 R.D. Mize Road
Independence, MO 64057
JUDITH L. LYON Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
DAVID MEYNCKE Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
HERB W. MORGAN Regional Vice President None
11308 Monticook Court
San Diego, CA 92127
MELINDA NAWN Regional Vice President None
5850 Squire Hill Court
Cincinnati, OH 45241
ROBERT H. RUHM Regional Vice President None
167 Derby Street
Melrose, MA 02176
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Seligman Financial Services, Inc.
---------------------------------
As of March 29, 1996
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------------ -------------------------- ------------------------------
<S> <C> <C>
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
BRUCE TUCKEY Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
ANDREW VEASEY Regional Vice President None
14 Woodside
Rumson, NJ 07760
TODD VOLKMAN Regional Vice President None
4650 Cole Avenue, #216
Dallas, TX 75205
KELLI A. WIRTH-DUMSER Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
FRANK P. MARINO* Assistant Vice President,
Mutual Fund Product Manager None
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, NY 10017.
(c) Not applicable.
Item 30. Location of Accounts and Records
- -------- --------------------------------
(1) Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105 AND
(2) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Item 31. Management Services -Seligman Data Corp. ("SDC") the Registrant's
- -------- -------------------
shareholder service agent, has an agreement with First Data Investor
Services Group ("FDISG") pursuant to which FDISG provides a data
processing system for certain shareholder accounting and recordkeeping
functions performed by SDC, which commenced in July 1990. For the
fiscal years ended December 31, 1995, 1994 and 1993, the approximate
cost of these services were:
1995 1994 1993
--------- --------- ---------
Class A Shares $116,000 $120,480 $174,800
Class D Shares $ 1,500 $ 856 -0-
Item 32. Undertakings -The Registrant undertakes, (1) to furnish a copy of the
- -------- ------------
Registrant's latest annual report, upon request and without charge, to
every person to whom a prospectus is delivered and (2) if requested to
do so by the holders of at least ten percent of its outstanding shares,
to call a meeting of shareholders for the purpose of voting upon the
removal of a director or directors and to assist in communications with
other shareholders as required by Section 16(c) of the Investment
Company Act of 1940.
<PAGE>
File No. 2-10836
811-229
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment No. 72 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 19th day of April, 1996.
SELIGMAN GROWTH FUND, INC.
By: /s/ William C. Morris
-------------------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Post-Effective Amendment No. 72 has been signed below
by the following persons in the capacities indicated on April 19, 1996.
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
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director ) /s/ Brian T. Zino
Betsy S. Michel, Director ) ------------------------------------
James C. Pitney, Director ) *Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> SELIGMAN GROWTH FUND - CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 477084
<INVESTMENTS-AT-VALUE> 618008
<RECEIVABLES> 13769
<ASSETS-OTHER> 7067
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 638844
<PAYABLE-FOR-SECURITIES> 32889
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2033
<TOTAL-LIABILITIES> 34922
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 448199
<SHARES-COMMON-STOCK> 114483<F1>
<SHARES-COMMON-PRIOR> 113091<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (216)
<ACCUMULATED-NET-GAINS> 15019
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 140920
<NET-ASSETS> 597510<F1>
<DIVIDEND-INCOME> 5424<F1>
<INTEREST-INCOME> 684<F1>
<OTHER-INCOME> 8<F1>
<EXPENSES-NET> (5152)<F1>
<NET-INVESTMENT-INCOME> 956<F1>
<REALIZED-GAINS-CURRENT> 78715
<APPREC-INCREASE-CURRENT> 61643
<NET-CHANGE-FROM-OPS> 141289
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1048)<F1>
<DISTRIBUTIONS-OF-GAINS> (62682)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9416<F1>
<NUMBER-OF-SHARES-REDEEMED> (17796)<F1>
<SHARES-REINVESTED> 9772<F1>
<NET-CHANGE-IN-ASSETS> 88852
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (197)
<OVERDIST-NET-GAINS-PRIOR> (231)
<GROSS-ADVISORY-FEES> 2688<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5152<F1>
<AVERAGE-NET-ASSETS> 560299<F1>
<PER-SHARE-NAV-BEGIN> 4.54<F1>
<PER-SHARE-NII> .01<F1>
<PER-SHARE-GAIN-APPREC> 1.28<F1>
<PER-SHARE-DIVIDEND> (.01)<F1>
<PER-SHARE-DISTRIBUTIONS> (.60)<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.22<F1>
<EXPENSE-RATIO> .94<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A only. All other data are fund level.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> SELIGMAN GROWTH FUND - CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 477084
<INVESTMENTS-AT-VALUE> 618008
<RECEIVABLES> 13769
<ASSETS-OTHER> 7067
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 638844
<PAYABLE-FOR-SECURITIES> 32889
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2033
<TOTAL-LIABILITIES> 34922
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 448199
<SHARES-COMMON-STOCK> 1293<F1>
<SHARES-COMMON-PRIOR> 398<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (216)
<ACCUMULATED-NET-GAINS> 15019
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 140920
<NET-ASSETS> 6412<F1>
<DIVIDEND-INCOME> 37<F1>
<INTEREST-INCOME> 5<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (75)<F1>
<NET-INVESTMENT-INCOME> (33)<F1>
<REALIZED-GAINS-CURRENT> 78715
<APPREC-INCREASE-CURRENT> 61643
<NET-CHANGE-FROM-OPS> 141289
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (685)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1089<F1>
<NUMBER-OF-SHARES-REDEEMED> (328)<F1>
<SHARES-REINVESTED> 134<F1>
<NET-CHANGE-IN-ASSETS> 88852
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (197)
<OVERDIST-NET-GAINS-PRIOR> (231)
<GROSS-ADVISORY-FEES> 19<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 75<F1>
<AVERAGE-NET-ASSETS> 3961<F1>
<PER-SHARE-NAV-BEGIN> 4.38<F1>
<PER-SHARE-NII> (.04)<F1>
<PER-SHARE-GAIN-APPREC> 1.22<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (.60)<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.96<F1>
<EXPENSE-RATIO> 1.91<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99.1(B)
SELIGMAN GROWTH FUND, INC.
--------------------------
ARTICLES SUPPLEMENTARY
Seligman Growth Fund, Inc., a Maryland Corporation having its
principal office in Baltimore City, Maryland and registered as an open-end
investment company under the Investment Company Act of 1940 (hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The total number of shares of capital stock of all classes which
the Corporation has authority to issue is hereby increased to 500,000,000 shares
of capital stock (par value $1.00 per share), amounting to an aggregate par
value of $500,000,000.
SECOND: The Board of Directors of the Corporation on September 21,
1995, duly adopted and approved a resolution in accordance with Section 2-105(c)
of Maryland Corporations and Associations Code, in which was set forth the
foregoing increase in capital stock of the Corporation.
THIRD: (a) The total number of shares of capital stock of all
classes which the Corporation was heretofore authorized to issue was 150,000,000
shares of capital stock (par value $1.00), amounting to an aggregate par value
of $150,000,000.
(b) The total number of shares of Common Stock is increased by this
amendment to 500,000,000 shares of the par value of $1.00 each and of the
aggregate par value of $500,000,000.
(c) The Corporation currently has only one class of Common Stock
outstanding.
IN WITNESS WHEREOF, SELIGMAN GROWTH FUND, INC. has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed by its Secretary, and each of said officers of the Corporation has
also acknowledged these Articles Supplementary to be the corporate act of the
Corporation and has stated under penalties of perjury that to the best of his
knowledge, information and belief that the matters and facts set forth with
respect to approval are true in all material respects, all on February 8, 1996.
SELIGMAN GROWTH FUND, INC.
By /s/ Brian T. Zino
---------------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- ------------------
Frank J. Nasta
Secretary
<PAGE>
EXHIBIT 99.1(C)
SELIGMAN GROWTH FUND, INC.
--------------------------
ARTICLES SUPPLEMENTARY
Seligman Growth Fund, Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation") and registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: The total number of shares of capital stock of all classes
which the Corporation has authority to issue is 500,000,000 shares, which were
previously classified by the Board of Directors of the Corporation into two
classes designated as Class A Common Stock and Class D Common Stock. The number
of authorized shares of Class A Common Stock and of Class D Common Stock each
consisted of the sum of x and y, where x equalled the issued and outstanding
shares of such class and y equalled one-half of the authorized but unissued
shares of Common Stock of all classes; provided that at all times the aggregate
authorized, issued and outstanding shares of Class A and Class D Common Stock
shall not exceed the authorized number of shares of Common Stock; and, in the
event application of the formula above would have resulted, at any time, in
fractional shares, the applicable number of authorized shares of each class was
to have been rounded down to the nearest whole number of shares of such class.
SECOND: Pursuant to the authority of the Board of Directors to
classify and reclassify unissued shares of capital stock, the Board of Directors
has reclassified the unissued shares of Class A Common Stock and Class D Common
Stock into the following classes and has provided for the issuance of shares of
such classes. The terms of the Common Stock as set by the Board of Directors
are as follows:
(a) The Common Stock of the Corporation shall have three classes of
shares, which shall be designated Class A Common Stock, Class B Common
Stock and Class D Common Stock. The number of authorized shares of Class A
Common Stock, of Class B Common Stock and of Class D Common Stock shall
each consist of the sum of x and y, where x equals the issued and
outstanding shares of such class and y equals one-third of the authorized
but unissued shares of Common Stock of all classes; provided that at all
times the aggregate authorized, issued and outstanding shares of Class A,
Class B and Class D Common Stock shall not exceed the authorized number of
shares of Common Stock (i.e., 500,000,000 shares of Common Stock until
changed by further action of the Board of Directors in accordance with
Section 2-208.1 of the Maryland General Corporation Law, or any successor
provision); and, in the event application of the formula above would
result, at any time, in fractional shares, the applicable number of
authorized shares of each class shall be rounded down to the nearest whole
number of shares of such class. Any class of Common Stock shall be
referred to herein individually as a "Class" and collectively, together
with any further class or classes from time to time established, as the
"Classes".
(b) All Classes shall represent the same interest in the Corporation
and have identical voting, dividend, liquidation, and other rights;
provided, however, that notwithstanding anything in the charter of the
Corporation to the contrary:
(1) Class A shares may be subject to such front-end sales loads
as may be established by the Board of Directors from time to time in
accordance with the Investment Company Act and applicable rules and
regulations of the National Association of Securities Dealers, Inc.
(the "NASD").
(2) Class B shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD. Subject to subsection (5) below,
each Class B share shall convert automatically into Class A shares on
the last business day of the month that precedes the eighth
anniversary of the date of issuance of such Class B share; such
conversion shall be effected on the basis of the relative net asset
values of Class B shares and Class A shares as determined by the
Corporation on the date of conversion.
-1-
<PAGE>
(3) Class D shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD.
(4) Expenses related solely to a particular Class (including,
without limitation, distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement,
plan or other arrangement, however designated, which may differ
between the Classes) shall be borne by that Class and shall be
appropriately reflected (in the manner determined by the Board of
Directors) in the net asset value, dividends, distribution and
liquidation rights of the shares of that Class.
(5) At such time as shall be permitted under the Investment
Company Act, any applicable rules and regulations thereunder and the
provisions of any exemptive order applicable to the Corporation, and
as may be determined by the Board of Directors and disclosed in the
then current prospectus of the Corporation, shares of a particular
Class may be automatically converted into shares of another Class;
provided, however, that such conversion shall be subject to the
continuing availability of an opinion of counsel to the effect that
such conversion does not constitute a taxable event under Federal
income tax law. The Board of Directors, in its sole discretion, may
suspend any conversion rights if such opinion is no longer available.
(6) As to any matter with respect to which a separate vote of
any Class is required by the Investment Company Act or by the Maryland
General Corporation Law (including, without limitation, approval of
any plan, agreement or other arrangement referred to in subsection (4)
above), such requirement as to a separate vote by the Class shall
apply in lieu of single Class voting, and, if permitted by the
Investment Company Act or any rules, regulations or orders thereunder
and the Maryland General Corporation Law, the Classes shall vote
together as a single Class on any such matter that shall have the same
effect on each such Class. As to any matter that does not affect the
interest of a particular Class, only the holders of shares of the
affected Class shall be entitled to vote.
THIRD: These Articles Supplementary do not change the total number of
authorized shares of the Corporation.
IN WITNESS WHEREOF, SELIGMAN GROWTH FUND, INC. has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Secretary, and each of said officers of the
Corporation has also acknowledged these Articles Supplementary to be the
corporate act of the Corporation and has stated under penalties of perjury that
to the best of his knowledge, information and belief that the matters and facts
set forth with respect to approval are true in all material respects, all on
April 10, 1996.
SELIGMAN GROWTH FUND, INC.
By: /s/ Brian T. Zino
-----------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- ------------------
Frank J. Nasta
Secretary
-2-
<PAGE>
EXHIBIT 99.5
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of December 29, 1988, and amended April
10, 1991 and January 1, 1996 between SELIGMAN GROWTH FUND, INC., a Maryland
corporation (the "Corporation"), and J. & W. SELIGMAN & CO. INCORPORATED, a
Delaware corporation (the "Manager").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. DUTIES OF THE MANAGER. The Manager shall manage the affairs of the
Corporation including, but not limited to, continuously providing the
Corporation with investment management, including investment research,
advice and supervision, determining which securities shall be purchased or
sold by the Corporation, making purchases and sales of securities on behalf
of the Corporation and determining how voting and other rights with respect
to securities of the Corporation shall be exercised, subject in each case
to the control of the Board of Directors of the Corporation and in
accordance with the objectives, policies and principles set forth in the
Registration Statement and Prospectus of the Corporation and the
requirements of the Investment Company Act of 1940 (the "Act") and other
applicable law. In performing such duties, the Manager shall provide such
office space, such bookkeeping, accounting, internal legal, clerical,
secretarial and administrative services (exclusive of, and in addition to,
any such services provided by any others retained by the Corporation) and
such executive and other personnel as shall be necessary for the operations
of the Corporation. The Manager shall also, if requested by and subject to
the control of the Board of Directors of Seligman Data Corp. ("Data"),
manage the affairs of Data and provide Data with such office management,
personnel, reproduction, employee cafeteria and internal legal services and
such senior executive officers (other than vice presidents) as may be
necessary for the operation of Data, and with a treasurer, a corporate
secretary and a principal operating officer.
2. EXPENSES. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1 and shall pay any salaries,
fees and expenses of the directors of the Corporation who are employees of
the Manager or its affiliates. The Manager shall not be required to pay
any other expenses of the Corporation, including, but not limited to,
direct charges relating to the purchase and sale of portfolio securities,
interest charges, fees and expenses of independent attorneys and auditors,
taxes and governmental fees, cost of stock certificates and any other
expenses (including clerical expenses) of issue, sale, repurchase or
redemption of shares, expenses of registering and qualifying shares for
sale, expenses of printing and distributing reports, notices and proxy
materials to shareholders, expenses of corporate data processing and
related services, shareholder recordkeeping and shareholder account
service, expenses of printing and filing reports and other documents filed
with governmental agencies, expenses of printing and distributing
prospectuses, expenses of annual and special shareholders' meetings, fees
and disbursements of transfer agents and custodians, expenses of disbursing
dividends and distributions, fees and expenses of directors of the
Corporation who are not employees of the Manager or its affiliates,
membership dues in the Investment Company Institute, insurance premiums and
extraordinary expenses such as litigation expenses.
3. COMPENSATION.
(a) As compensation for the services performed and the facilities and
personnel provided by the Manager pursuant to Section 1, the
Corporation will pay to the Manager promptly after the end of each
month a fee, calculated on each day during such month, on the basis of
the Corporation's net assets at the close of business on the previous
day, at an annual rate of .70% of the Corporation's average daily net
assets on the first $1,000,000,000 of net assets, .65% of the
Corporation's average daily net assets on the next $1,000,000,000 and
.60% of the Corporation's average daily net assets over $2,000,000,000.
<PAGE>
(b) If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. PURCHASE AND SALE OF SECURITIES. The Manager shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers (including the Manager or an affiliate of the Manager) as the
Manager shall deem appropriate in order to carry out the policy with
respect to brokerage as set forth in the Registration Statement and
Prospectus of the Corporation or as the Board of Directors of the
Corporation may direct from time to time. In providing the Corporation
with investment management and supervision it is recognized that the
Manager will seek the most favorable price and execution, and, consistent
with such policy, may give consideration to the research, statistical and
other services furnished by brokers or dealers to the Manager for its use,
to the general attitude of brokers or dealers toward investment companies
and their support of them, and to such other considerations as the Board of
Directors of the Corporation may direct or authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the
Corporation that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers who execute
brokerage transactions at a higher cost to the Corporation than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Corporation with such brokers,
subject to review by the Corporation's Board of Directors from time to time with
respect to the extent and continuation of this practice. It is understood that
the services provided by such brokers may be useful to the Manager in connection
with its services to other clients as well as to the Corporation.
The placing of purchase and sale orders may be carried out by the Manager
or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the
Corporation, the Manager or any subsidiary of the Manager may, without material
risk, arrange to receive a soliciting dealer's fee or other underwriter's or
dealer's discount or commission, the Manager shall, unless otherwise directed by
the Board of Directors of the Corporation, obtain such fee, discount or
commission and the amount thereof shall be applied to reduce the compensation to
be received by the Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Corporation of additional compensation to
others for consulting services, supplemental research and security and economic
analysis.
5. TERM OF AGREEMENT. This Agreement shall continue in full force and effect
until December 31, 1996 and from year to year thereafter if such
continuance is approved in the manner required by the Act and if the
Manager shall not have notified the Corporation in writing at least 60 days
prior to such December 31 or prior to December 31 of any year thereafter
that it does not desire such continuance. This Agreement may be terminated
at any time, without payment of penalty by the Corporation, on 60 days'
written notice to the Manager by vote of the Board of Directors of the
Corporation or by vote of a majority of the outstanding voting securities
of the Corporation (as defined by the Act). This Agreement shall
automatically terminate in the event of its assignment (as defined by the
Act).
2
<PAGE>
6. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require,
or to impose any duty upon either of the parties, to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Corporation and the Manager have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
SELIGMAN GROWTH FUND, INC.
By /s/ Brian T. Zino
-------------------------------
Brian T. Zino
J. & W. SELIGMAN & CO. INCORPORATED
By /s/ William C. Morris
--------------------------------
William C. Morris
3
<PAGE>
EXHIBIT 99.5(A)
SUBADVISORY AGREEMENT
SELIGMAN GROWTH FUND, INC.
SUBADVISORY AGREEMENT, dated as of May 19, 1994 and amended January 1, 1996
between J. & W. SELIGMAN & CO. INCORPORATED, a Delaware corporation (the
"Manager") and SELIGMAN HENDERSON CO., a New York general partnership (the
"Subadviser").
WHEREAS, the Manager has entered into a Management Agreement dated December 29,
1988, as amended April 10, 1991 and January 1, 1996 (the "Management Agreement")
with Seligman Growth Fund, Inc. (the "Fund"), an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), pursuant to which the Manager will render investment
management services to the Fund, and to administer the business and other
affairs of the Fund; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment
management services to the Fund, and the Subadviser is willing to render such
investment management services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. DUTIES OF THE SUBADVISER. The Subadviser will provide the Fund with
investment management services with respect to assets of the Fund if, and to the
extent, designated by the Manager (such designated assets, "Qualifying Assets").
Such services shall include investment research, advice and supervision,
determining which securities shall be purchased or sold by the Fund, making
purchases and sales of securities on behalf of the Fund and determining how
voting and other rights with respect to securities of the Fund shall be
exercised, subject in each case to the control of the Board of Directors of the
Fund and in accordance with the objectives, policies and principles set forth in
the Registration Statement and Prospectus(es) of the Fund and the requirements
of the 1940 Act and other applicable law.
Subject to Section 36 of the 1940 Act, the Subadviser shall not be liable to the
Fund for any error of judgment or mistake of law or for any loss arising out of
any investment or for any act or omission in the management of the Fund and the
performance of its duties under this Agreement except for willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
2. EXPENSES. The Subadviser shall pay all of its expenses arising from the
performance of its obligations under Section 1.
3. COMPENSATION
(a) As compensation for the services performed and the facilities and
personnel provided by the Subadviser pursuant to Section 1, the Manager
will pay to the Subadviser each month a fee, equal to the Applicable
Percentage of the average monthly Net Qualifying Assets of the Fund.
<PAGE>
(b) As used herein:
(1) The term "Applicable Percentage" means the percentage fee rate
that the Manager receives from the Fund pursuant to the Management
Agreement, which equals .70% of the Funds average daily net assets
on the first $1,000,000,000 of net assets, .65% of the Funds
average daily net assets on the next $1,000,000,000 and .60% of
the Funds average daily net assets in excess of $2,000,000,000.
(2) The term "Net Qualifying Assets" means the Qualifying Assets less
related liabilities as designated by the Manager.
(c) Average monthly Net Qualifying Assets shall be determined, for any
month, by taking the average of the value of the Net Qualifying Assets
as of the (i) opening of business on the first day of such month and
(ii) close of business on the last day of such month.
(d) If the Subadviser shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. PURCHASE AND SALE OF SECURITIES. The Subadviser shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers as the Subadviser shall deem appropriate in order to carry out the
policy with respect to allocation of portfolio transactions as set forth in the
Registration Statement and Prospectus(es) of the Fund or as the Board of
Directors of the Fund may direct from time to time. In providing the Fund with
investment management and supervision, it is recognized that the Subadviser will
seek the most favorable price and execution, and, consistent with such policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the Subadviser for its use, to the general attitude of
brokers or dealers toward investment companies and their support of them, and to
such other considerations as the Board of Directors of the Fund may direct or
authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the Fund
that the Subadviser have access to supplemental investment and market research
and security and economic analysis provided by brokers who execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
execution. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities of the Fund with such brokers, subject to review
by the Fund's Board of Directors from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Subadviser in connection with its services
to other clients as well as the Fund.
If, in connection with purchases and sales of securities for the Fund, the
Subadviser may, without material risk, arrange to receive a soliciting dealer's
fee or other underwriter's or dealer's discount or commission, the Subadviser
shall, unless otherwise directed by the Board of Directors of the Fund, obtain
such fee, discount or commission and the amount thereof shall be applied to
reduce the compensation to be received by the Subadviser pursuant to Section 3
hereof.
<PAGE>
Nothing herein shall prohibit the Board of Directors of the Fund from approving
the payment by the Fund of additional compensation to others for consulting
services, supplemental research and security and economic analysis.
5. TERM OF AGREEMENT. This Agreement shall continue in full force and effect
until December 31, 1996, and from year to year thereafter if such continuance is
approved in the manner required by the 1940 Act, and if the Subadviser shall
not have notified the Manager in writing at least 60 days prior to such date or
prior to December 31 of any year thereafter that it does not desire such
continuance. This Agreement may be terminated at any time, without payment of
penalty by the Fund, on 60 days' written notice to the Subadviser by vote of the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act). This Agreement will
automatically terminate in the event of its assignment (as defined by the 1940
Act) or upon the termination of the Management Agreement.
6. AMENDMENTS. This Agreement may be amended by consent of the parties hereto
provided that the consent of the Fund is obtained in accordance with the
requirements of the 1940 Act.
7. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Manager and the Subadviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
J. & W. SELIGMAN & CO. INCORPORATED
BY____________________________________________
Brian T. Zino
SELIGMAN HENDERSON CO.
BY____________________________________________
David F. Stein
<PAGE>
EXHIBIT 99.6(A)
ADDENDUM
TO
Sales Agreement
covering shares of capital stock
or shares of beneficial interest of
the Seligman Mutual Funds
between
SELIGMAN FINANCIAL SERVICES, INC.
and
DEALER
Dear Dealer:
Your Sales Agreement with Seligman Financial Services, Inc. ("SFSI")
is hereby amended to include the following provisions in connection with the
offering by certain of the Seligman Mutual Funds of Class B shares as described
in each applicable prospectus:
1. Dealer agrees to comply with the attached "Policies and Procedures" with
respect to sales of Seligman Mutual Funds offering three classes of shares.
2. SFSI shall be entitled to a contingent deferred sales load ("CDSL") on
redemptions within six years of purchase on any Class B shares sold and
within one year of purchase on any Class D shares sold. With respect to
omnibus accounts in which Class B shares or Class D shares are held at
Seligman Data Corp. ("SDC") in Dealer's name, Dealer agrees that by the
tenth day of each month it will furnish to SDC a report of each redemption
in the preceding month to which a CDSL was applicable, accompanied by a
check payable to SFSI in payment of the CDSL due.
3. If, with respect to a redemption of any Class B shares or Class D shares
sold by Dealer, the CDSL is waived because the redemption qualifies for a
waiver set forth in the Fund's prospectus, Dealer shall promptly remit to
SFSI an amount equal to the payment made by SFSI to Dealer at the time of
sale with respect to such Class B shares or Class D Shares.
4. The Dealer will comply in all respects with Notice to Members 95-80 of the
National Association of Securities Dealers, Inc. regarding members
obligations and responsibilities regarding mutual fund sales practices.
The sale of any Class A,Class B or Class D shares of a Seligman Mutual Fund
will constitute Dealer's acceptance of and agreement with the terms set forth
herein.
<PAGE>
EXHIBIT C
POLICIES AND PROCEDURES
In connection with the offering by the Funds of three classes of
shares, one subject to a front-end sales load and a service fee ("Class A
Shares"), one subject to a service fee, a distribution fee, no front-end sales
load and a contingent deferred sales load on redemptions within six years of
purchase ("Class B Shares") and one subject to a service fee, a distribution
fee, no front-end sales load and a contingent deferred sales load on redemptions
within one year of purchase ("Class D Shares"), it is important for an investor
to choose the method of purchasing shares which best suits his or her particular
circumstances. To assist investors in these decisions, Seligman Financial
Services has instituted the following policies with respect to orders for
Shares:
1. No purchase order may be placed for Class B Shares or Class D Shares
for amounts of $4,000,000 or more.
2. Any purchase order for less than $4,000,000 may be for either Class A,
Class B or Class D Shares in light of the relevant facts and
circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his Shares; and
c. any other relevant circumstances such as the availability of
purchases under a Letter of Intent, Volume Discount, or Right of
Accumulation.
There are instances when one method of purchasing Shares may be more
appropriate than another. For example, an investor who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of higher ongoing distribution fee. On the other hand, an
investor whose order would not qualify for such a discount may wish to have all
of his or her funds invested in Class B or Class D Shares. An investor who
expects to hold his or her shares for longer than eight years might prefer Class
B Shares over Class D Shares because of the conversion feature; once the Class B
Shares have converted to Class A Shares, the ongoing distribution fees will be
reduced. Class D Shares may remain a more attractive choice for shorter-term
investors because of the contingent deferred sales load on such shares is only
1%, and it does not apply if the investor owns his or her shares for at least
one year. If an investor anticipates that he or she will redeem his or her
Class B Shares or Class D Shares while still subject to a contingent deferred
sales charge, the investor may, depending on the amount of the purchase, pay an
amount greater than the sales load and service fee attributable to Class A
Shares.
Appropriate supervisory personnel within your organization must ensure that
all employees receiving investor inquiries about the purchase of Shares of a
Fund advise the investor of then available pricing structures offered by the
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.
Questions relating to this policy should be directed to Stephen J. Hodgdon,
President, Seligman Financial Services at (212) 850-1217.
<PAGE>
SALES AGREEMENT
covering shares of capital stock
and/or shares of beneficial interest of
THE SELIGMAN MUTUAL FUNDS
Seligman Capital Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman New Jersey Tax-Exempt Fund, Inc.
Seligman Pennsylvania Tax-Exempt Fund Series
Seligman Tax-Exempt Fund Series, Inc.
Seligman Tax-Exempt Series Trust
between
SELIGMAN FINANCIAL SERVICES, INC.
and
____________________________________________________________________________
Dealer
The Dealer named above and Seligman Financial Services, Inc., exclusive agent
for distribution of shares of capital stock of Seligman Capital Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman Income Fund, Inc., Seligman New
Jersey Tax-Exempt Fund, Inc., and Seligman Tax-Exempt Fund Series, Inc., and
shares of beneficial interest of Seligman High Income Fund Series, Seligman
Pennsylvania Tax-Exempt Fund, and Seligman Tax-Exempt Series Trust, agree to the
terms and conditions set forth in this agreement.
DEALER SIGNATURE SELIGMAN FINANCIAL SERVICES, INC. ACCEPTANCE
- ------------------------------- ---------------------------------
Principal Officer Stephen J. Hodgdon, President
SELIGMAN FINANCIAL SERVICES, INC.
- ------------------------------- 100 Park Avenue
Address New York, New York 10017
- ------------------------------- ---------------------------------
Employer Identification No. Date
REV 1/95
<PAGE>
The Dealer and Seligman Financial Services, Inc. ("Seligman Financial
Services"), as exclusive agent for distribution of Class A and Class D Shares
(as described in the "Policies and Procedures," as set forth below) of the
Capital Stock and/or Class A and Class D Shares of beneficial interest
(collectively, the "Shares") of Seligman Capital Fund, Inc., Seligman Common
Stock Fund, Inc., Seligman Communications and Information Fund, Inc., Seligman
Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund
Series, Inc., Seligman High Income Fund Series, Seligman Income Fund, Inc.,
Seligman New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt
Fund, Seligman Tax-Exempt Fund Series, Inc. and Seligman Tax-Exempt Series Trust
and or any other mutual fund for which Seligman Financial Services is exclusive
agent for distribution (herein called the Funds), agree as follows:
1. The Dealer agrees to comply with the attached "Policies and Procedures"
with respect to sales of Seligman Mutual Funds offering two classes of
shares, as set forth below.
2. An order for Shares of one or more of the Funds, placed by the Dealer with
Seligman Financial Services, will be confirmed at the public offering price
as described in each Fund's current prospectus. Unless otherwise agreed
when an order is placed, the Dealer shall remit the purchase price to the
Fund, or Funds, with issuing instruction, within the period of time
prescribed by existing regulations. No wire orders under $1,000 may be
placed for initial purchases.
3. Shares of the Funds shall be offered for sale and sold by the Dealer only
at the applicable public offering price currently in effect, determined in
the manner prescribed in each Fund's prospectus. Seligman Financial
Services will make a reasonable effort to notify the Dealer of any
redetermination or suspension of the current public offering price, but
Seligman Financial Services shall be under no liability for failure to do
so.
4. On each purchase of Shares by the Dealer, the Dealer shall be entitled,
based on the Class of Shares purchased and except as provided in each
Fund's current prospectus, to a concession determined as a percentage of
the price to the investor as set forth in each Fund's current prospectus.
On each purchase of Class A Shares, Seligman Financial Services reserves
the right to receive a minimum concession of $.75 per transaction. No
concessions will be paid to the Dealer for the investment of dividends in
additional shares.
5. Except for sales to and purchases from the Dealer's retail customers, all
of which shall be made at the applicable current public offering price or
the current price bid by Seligman Financial Services on behalf of the Fund,
the Dealer agrees to buy Shares only through Seligman Financial Services
and not from any other sources and to sell shares only to Seligman
Financial Services, the Fund or its redemption agent and not to any other
purchasers.
6. By signing this Agreement, both Seligman Financial Services and the Dealer
warrant that they are members of the National Association of Securities
Dealers, Inc., and agree that termination of such membership at any time
shall terminate this Agreement forthwith regardless of the provisions of
paragraph 10 hereof. Each party further agrees to comply with all rules
and regulations of such Association and specifically to observe the
following provisions:
(a) Neither Seligman Financial Services nor the Dealer shall withhold
placing customers' orders for Shares so as to profit itself as a
result of such withholding.
(b) Seligman Financial Services shall not purchase Shares from any of the
Funds except for the purpose of covering purchase orders already
received, and the Dealer shall not purchase Shares of any of the Funds
through Seligman Financial Services other than for investment, except
for the purpose of covering purchase orders already received.
<PAGE>
(c) Seligman Financial Services shall not accept a conditional order for
Shares on any basis other than at a specified definite price. The
Dealer shall not, as principal, purchase Shares of any of the Funds
from a recordholder at a price lower than the bid price, if any, then
quoted by or for the Fund, but the Dealer shall not be prevented from
selling Shares for the account of a record owner to Seligman Financial
Services, the Fund or its redemption agent at the bid price currently
quoted by or for such Fund, and charging the investor a fair
commission for handling the transaction.
(d) If Class A Shares are repurchased by a Fund or by Seligman Financial
Services as its agent, or are tendered for redemption within seven
business days after confirmation by Seligman Financial Services of
the original purchase order of the Dealer for such Shares, (i) the
Dealer shall forthwith refund to Seligman Financial Services the full
concession allowed to the Dealer on the original sales and (ii)
Seligman Financial Services shall forthwith pay to the Fund Seligman
Financial Services' share of the "sales load" on the original sale by
Seligman Financial Services, and shall also pay to the Fund the refund
which Seligman Financial Services received under (i) above. The
Dealer shall be notified by Seligman Financial Services of such
repurchase or redemption within ten days of the date that such
redemption or repurchase is placed with Seligman Financial Services,
the Fund or its authorized agent. Termination or cancellation of this
Agreement shall not relieve the Dealer or Seligman Financial Services
from the requirements of this clause (d).
7. (a) Seligman Financial Services shall be entitled to a contingent deferred
sales load ("CDSL") on redemptions within one year of purchase on any
Class D Shares sold. With respect to omnibus accounts in which Class D
Shares are held at Seligman Data Corp. ("SDC") in the Dealer's name,
the Dealer agrees that by the tenth day of each month it will furnish
to SDC a report of each redemption in the preceding month to which a
CDSL was applicable, accompanied by a check payable to Seligman
Financial Services in payment of the CDSL due.
(b) If, with respect to a redemption of any Class D Shares sold by the
Dealer, the CDSL is waived because the redemption qualifies for a
waiver set forth in the Fund's prospectus, the Dealer shall promptly
remit to Seligman Financial Services an amount equal to the payment
made by Seligman Financial Services to the Dealer at the time of sale
with respect to such Class D Shares.
8. In all transactions between Seligman Financial Services and the Dealer
under this Agreement, the Dealer will act as principal in purchasing from
or selling to Seligman Financial Services. The dealer is not for any
purposes employed or retained as or authorized to act as broker, agent or
employee of any Fund or of Seligman Financial Services and the Dealer is
not authorized in any manner to act for any Fund or Seligman Financial
Services or to make any representations on behalf of Seligman Financial
Services. In purchasing and selling Shares of any Fund under this
Agreement, the Dealer shall be entitled to rely only upon matters stated in
the current offering prospectus of the applicable Fund and upon such
written representations, if any, as may be made by Seligman Financial
Services to the Dealer over the signature of Seligman Financial Services.
9. Seligman Financial Services will furnish to the Dealer, without charge,
reasonable quantities of the current offering prospectus of each Fund and
sales material issued from time to time by Seligman Financial Services.
10. Either Party to this Agreement may cancel this Agreement by written notice
to the other party. Such cancellation shall be effective at the close of
business on the 5th day following the date on which such notice was given.
Seligman Financial Services may modify this Agreement at any time by
written notice to the Dealer. Such notice shall be deemed to have been
given on the date upon which it was either delivered personally to the
other party or any officer or member thereof, or was mailed postage-paid,
or delivered to a telegraph office for transmission to the other party at
his or its address as shown herein.
<PAGE>
11. This Agreement shall be construed in accordance with the laws of the State
of New York and shall be binding upon both parties hereto when signed by
Seligman Financial Services and by the Dealer in the spaces provided on the
cover of this Agreement. This Agreement shall not be applicable to Shares
of a Fund in a state in which such Fund Shares are not qualified for sale.
POLICIES AND PROCEDURES
In connection with the offering by the Funds of three classes of
shares, one subject to a front-end sales load and a service fee ("Class A
Shares"), one subject to a service fee, a distribution fee, no front-end sales
load and a contingent deferred sales load on redemptions within six years of
purchase ("Class B Shares") and one subject to a service fee, a distribution
fee, no front-end sales load and a contingent deferred sales load on redemptions
within one year of purchase ("Class D Shares"), it is important for an investor
to choose the method of purchasing shares which best suits his or her particular
circumstances. To assist investors in these decisions, Seligman Financial
Services has instituted the following policies with respect to orders for
Shares:
1. No purchase order may be placed for Class B Shares or Class D Shares
for amounts of $4,000,000 or more.
2. Any purchase order for less than $4,000,000 may be for either Class A,
Class B or Class D Shares in light of the relevant facts and
circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his Shares; and
c. any other relevant circumstances such as the availability of
purchases under a Letter of Intent, Volume Discount, or Right of
Accumulation.
There are instances when one method of purchasing Shares may be more
appropriate than another. For example, an investor who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of higher ongoing distribution fee. On the other hand, an
investor whose order would not qualify for such a discount may wish to have all
of his or her funds invested in Class B or Class D Shares. An investor who
expects to hold his or her shares for longer than eight years might prefer Class
B Shares over Class D Shares because of the conversion feature; once the Class B
Shares have converted to Class A Shares, the ongoing distribution fees will be
reduced. Class D Shares may remain a more attractive choice for shorter-term
investors because of the contingent deferred sales load on such shares is only
1%, and it does not apply if the investor owns his or her shares for at least
one year. If an investor anticipates that he or she will redeem his or her
Class B Shares or Class D Shares while still subject to a contingent deferred
sales charge, the investor may, depending on the amount of the purchase, pay an
amount greater than the sales load and service fee attributable to Class A
Shares.
Appropriate supervisory personnel within your organization must ensure that
all employees receiving investor inquiries about the purchase of Shares of a
Fund advise the investor of then available pricing structures offered by the
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.
Questions relating to this policy should be directed to Stephen J. Hodgdon,
President, Seligman Financial Services at (212) 850-1217.
<PAGE>
EXHIBIT 99.11
CONSENT OF INDEPENDENT AUDITORS
Seligman Growth Fund, Inc.:
We consent to the incorporation by reference in the Statement of Additional
Information in this Post-Effective Amendment No. 72 to Registration Statement
No. 2-10836 of our report dated February 2, 1996, appearing in the Annual Report
to shareholders for the year ended December 31, 1995, and to the reference to us
under the caption "Financial Highlights" in the Prospectus, which is a part of
such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 17, 1996
<PAGE>
EXHIBIT 99.13(A)
INVESTMENT LETTER
SELIGMAN GROWTH FUND, INC.
Seligman Growth Fund, Inc. (the "Fund"), an open-end diversified management
investment company, and the undersigned ("Purchaser"), intending to be legally
bound, hereby agree as follows:
1. The Fund hereby sells to Purchaser and Purchaser purchases 1 Class B share
(the "Share") of Capital Stock (par value $1.00) of the Fund at a price
equivalent to the net asset value of one share of the Fund as of the close
of business on April 18, 1996. The Fund hereby acknowledges receipt from
Purchaser of funds in such amount in full payment for the Share.
2. Purchaser represents and warrants to the Fund 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 Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the 17th day
of April, 1996 ("Purchase Date").
SELIGMAN GROWTH FUND, INC.
By: /s/ Lawrence P. Vogel
---------------------
Name: Lawrence P. Vogel
Title: Vice President
J. & W. SELIGMAN & CO. INCORPORATED
By: /s/ Lawrence P. Vogel
---------------------
Name: Lawrence P. Vogel
Title: Senior Vice President
<PAGE>
EXHIBIT 99.15
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
----------------------------------------------------------
SECTION 1. Seligman Growth Fund, Inc. (the "Fund") will pay fees to
Seligman Financial Services, Inc., the principal underwriter of its shares (the
"Distributor"), for administration, shareholder services and distribution
assistance for the Class A, Class B and Class D shares of the Fund. As a
result, the Fund is adopting this Administration, Shareholder Services and
Distribution Plan (the "Plan") pursuant to Section 12(b) of the Investment
Company Act of 1940, as amended (the "Act") and Rule 12b-1 thereunder.
SECTION 2. . Pursuant to this Plan, the Fund may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Fund (payable quarterly with respect to Class A
and monthly with respect to Class B and Class D) and a distribution fee of .75%
on an annual basis, payable monthly, of the average daily net assets of the Fund
attributable to the Class B Shares and a distribution fee of up to .75% on an
annual basis, payable monthly, of the average daily net assets of the Fund
attributable to Class D shares. Such fees will be used in their entirety by the
Distributor to make payments for administration, shareholder services and
distribution assistance, including, but not limited to (i) compensation to
securities dealers and other organizations (each, a "Service Organization" and
collectively, the "Service Organizations"), for providing distribution
assistance with respect to assets invested in the Fund, (ii) compensation to
Service Organizations for providing administration, accounting and other
shareholder services with respect to Fund shareholders, and (iii) 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
the Distributor's costs incurred in connection with its marketing efforts with
respect to shares of the Fund. To the extent a Service Organization provides
administration, accounting and other shareholder services, payment for which is
not required to be made pursuant to a plan meeting the requirements of Rule 12b-
1, a portion of the fee paid by the Fund shall be deemed to include compensation
for such services. The fees received from the Fund hereunder in respect of the
Class A shares may not be used to pay any interest expense, carrying charges or
other financing costs, and fees received hereunder may not be used to pay any
allocation of overhead of the Distributor. The fees of any particular class of
the Fund may not be used to subsidize the sale of shares of any other class.
The fees payable to Service Organizations from time to time shall, within such
limits, be determined by the Directors of the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's investment
manager (the "Manager"), in its sole discretion, may make payments to the
Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Fund.
SECTION 4. This Plan shall continue in effect through December 31 of
each year so long as such continuance is specifically approved at least annually
by vote of a majority of both (a) the Directors of the Fund and (b) the
Qualified Directors, cast in person at a meeting called for the purpose of
voting on such approval.
SECTION 5. The Distributor shall provide to the Fund's Directors, and
the Directors shall review, at least quarterly, a written report of the amounts
so expended and the purposes for which such expenditures were made.
<PAGE>
SECTION 6. This Plan may be terminated by the Fund with respect to
any class at any time by vote of a majority of the Qualified Directors, or by
vote of a majority of the outstanding voting securities of such class. If this
Plan is terminated in respect of a class, no amounts (other than amounts accrued
but not yet paid) would be owed by the Fund to the Distributor with respect to
such class.
SECTION 7. All agreements related to this Plan shall be in writing,
and shall be approved by vote of a majority of both (a) the Directors of the
Fund and (b) the Qualified Directors, cast in person at a meeting called for the
purpose of voting on such approval, provided, however, that the identity of a
particular Service Organization executing any such agreement may be ratified by
such a vote within 90 days of such execution. Any agreement related to this
Plan shall provide:
A. That such agreement may be terminated in respect of any class of the
Fund at any time, without payment of any penalty, by vote of a
majority of the Qualified Directors or by vote of a majority of the
outstanding voting securities of the class, on not more than 60 days'
written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event of its
assignment.
SECTION 8. This Plan may not be amended to increase materially the
amount of fees permitted pursuant to Section 2 hereof without the approval of a
majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Fund is not obligated to pay any administration,
shareholder services or distribution expense in excess of the fee described in
Section 2 hereof, and, in the case of Class A shares, any expenses of
administration, shareholder services and distribution of Class A shares of the
Fund accrued in one fiscal year of the Fund may not be paid from administration,
shareholder services and distribution fees received from the Fund in respect of
Class A shares in any other fiscal year.
2
<PAGE>
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION AGREEMENT, dated as of
____________________, 19__ between Seligman Financial Services, Inc. ("Seligman
Financial Services") and ____________________________________________ (the
"Service Organization").
The Parties hereto enter into a Administration, Shareholder Services and
Distribution Agreement ("Service Agreement") with respect to the shares of
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 New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania
Tax-Exempt Fund Series, Seligman Tax-Exempt Fund Series, Inc., Seligman Tax-
Exempt Series Trust (the "Funds"), and any other future mutual funds that may
become members of the Seligman Group of Investment Companies which adopt an
Administration, Shareholder Services and Distribution Plan, pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "Act"), and in
consideration of the mutual agreements herein made, agree as follows:
The Service Organization shall make such use of or provide such information
and services as may be necessary or appropriate (i) to provide shareholder
services to shareholders of the Funds and (ii) to assist Seligman Financial
Services in any distribution of shares of the Funds, including, without
limitation, making use of the Service Organization's name, client lists, and
publications, for the solicitation of sales of shares of the Funds to Service
Organization clients, and such other assistance as Seligman Financial Services
reasonably requests, to the extent permitted by applicable statute, rule or
regulation.
1. Except with respect to the Class D shares of a Fund for the first year
following the sale thereof, Seligman Financial Services shall pay to the
Service Organization a service fee (as defined in the National Association
of Securities Dealers, Inc. Rules of Fair Practice) not to exceed .25 of 1%
per annum of the average daily net assets of each class of shares of each
Fund attributable to the clients of the Service Organization.
2. With respect to the first year following the sale of Class D shares of a
Fund, Seligman Financial Services shall pay to the Service Organization at
or promptly after the time of sale a service fee (as defined in the
National Association of Securities Dealers, Inc. Rules of Fair Practice)
not to exceed .25 of 1% of the net asset value of the Class D shares sold
by the Service Organization. Such service fee shall be paid to the Service
Organization solely for personal services and/or the maintenance of
shareholder accounts to be provided by the Service Organization to the
purchaser of such Class D Shares over the course of the first year
following the sale.
3. Any service fee paid hereunder shall be paid solely for personal services
and/or the maintenance of shareholder accounts. For greater certainty, no
part of a service fee shall be paid for subtransfer agency services,
subaccounting services, or administrative services.
<PAGE>
4. In addition to payment of the service fee, from time to time Seligman
Financial Services may make payments to the Service Organization in
addition to those contemplated above for providing distribution assistance
with respect to assets invested in each Fund by its clients.
5. Neither the Service Organization nor any of its employees or agents are
authorized to make any representation concerning the Funds or the Funds'
shares except those contained in the then current Prospectus, copies of
which will be supplied by Seligman Financial Services. The Service
Organization shall have no authority to act as agent for Seligman Financial
Services or the Funds.
6. In consideration of the services provided pursuant to paragraphs 1, 2
and/or 4 above, the Service Organization shall be entitled to receive fees
as are set forth in Exhibit A hereto as may be amended from time to time by
Seligman Financial Services. Seligman Financial Services has no obligation
to make any such payments and the Service Organization agrees to waive
payment of its fee until Seligman Financial Services is in receipt of the
fee from the Fund(s). The payment of fees has been authorized pursuant to
an Administration, Shareholder Services and Distribution Plans (the
"Plans") approved by the Directors/Trustees and the shareholders of the
Funds pursuant to the requirements of the Act and such authorizations may
be withdrawn at any time.
7. It is understood that the Funds reserve the right, at their discretion and
without notice, to suspend or withdraw the sale of shares of the Funds.
This Agreement shall not be construed to authorize the Service Organization
to perform any act that Seligman Financial Services would not be permitted
to perform under the respective Distributing Agreements between each of the
Funds and Seligman Financial Services.
8. Subject to the proviso in Section 6 of the Plans, this Agreement shall
continue until December 31 of the year in which any Plan has first been
approved by shareholders and through December 31 of each year thereafter
provided such continuance is specifically approved at least annually by a
vote of a majority of (i) the Fund's Directors/Trustees and (ii) the
Qualified Directors/Trustees cast in person at a meeting called for the
purpose of voting on such approval and provided further that the Service
Organization shall not have notified Seligman Financial Services in writing
at least 60 days prior to the anniversary date of the previous continuance
that it does not desire such continuance. This Agreement may be terminated
at any time without payment of any penalty with respect to any of the Funds
by vote of a majority of the Qualified Directors/Trustees, or by vote of a
majority of the outstanding voting securities of the particular Fund or
class or series of a Fund, on 60 days' written notice to the Service
Organization and Seligman Financial Services. Notwithstanding anything
contained herein, in the event that any of the Plans shall be terminated or
any of the Plans or any part thereof shall be found invalid or ordered
terminated by any regulatory or judicial authority, or the Service
Organization shall fail to perform the services contemplated by this
Agreement, such determination to be made in good faith by Seligman
Financial Services, this Agreement may be terminated with respect to such
Plan effective upon receipt of written notice thereof by the Service
Organization. This Agreement will also terminate automatically in the
event of its assignment.
<PAGE>
9. All communications to Seligman Financial Services shall be sent to it at
its offices, 100 Park Avenue, New York, New York 10017.
Any notice to the Service Organization shall be duly given if mailed or
telegraphed to it at the address shown below.
10. As used in this Agreement, the terms "assignment", "interested person" and
"vote of a majority of the outstanding voting securities" shall have the
respective meanings specified in the Act and in the rules and regulations
thereunder and the term "Qualified Directors/Trustees" shall mean the
Directors/Trustees of a Fund who are not interested persons of the Fund and
have no direct or indirect financial interest in its Plan or in any
agreements related to the Plan.
11. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or to
impose any duty upon, any of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, Seligman Financial Services and the Service Organization
have caused this Agreement to be executed by their duly authorized offices as of
the date first above written.
SELIGMAN FINANCIAL SERVICES, INC.
By
--------------------------------
Stephen J. Hodgdon, President
SERVICE ORGANIZATION
--------------------------------
By
------------------------------
Address
-------------------------
--------------------------------
1/95
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION AGREEMENT
EXHIBIT A
The payment schedule for Service Organizations is set forth immediately below:
<TABLE>
<CAPTION>
AVERAGE DAILY FEES AS A PERCENTAGE
NET ASSETS OF EACH FUND'S/SERIES'
ATTRIBUTABLE TO NET ASSETS ATTRIBUTABLE
FUND NAME SERVICE ORGANIZATIONS TO SERVICE ORGANIZATIONS*
- ------------------------------------------------------- --------------------- ---------------------------
CLASS A SHARES CLASS A SHARES/ CLASS D
--------------------- ----------------
CLASS B SHARES+ SHARES**
---------------- ---------
<S> <C> <C> <C>
Seligman Capital Fund, Inc. $100,000 or more .25% 1.00%
Seligman Cash Management Fund, Inc: $100,000 or more -0-/.25% 1.00%
Seligman Common Stock Fund, Inc. $100,000 or more .25% 1.00%
Seligman Communications and Information Fund, Inc. $100,000 or more .25% 1.00%
Seligman Frontier Fund, Inc. $100,000 or more .25% 1.00%
Seligman Growth Fund, Inc. $100,000 or more .25% 1.00%
Seligman Henderson Global Fund Series, Inc:
Seligman Henderson Emerging Markets Growth Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Smaller Companies Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Growth Opportunities Fund $100,000 or more .25% 1.00%
Seligman Henderson Global Technology Fund $100,000 or more .25% 1.00%
Seligman Henderson International Fund $100,000 or more .25% 1.00%
Seligman High Income Fund Series:
U.S. Government Securities Portfolio $100,000 or more .25% 1.00%
High-Yield Bond Portfolio $100,000 or more .25% 1.00%
Seligman Income Fund, Inc. $100,000 or more .25% 1.00%
Seligman New Jersey Tax-Exempt Fund, Inc. $100,000 or more .25% 1.00%
Seligman Pennsylvania Tax-Exempt Fund Series $100,000 or more .25% 1.00%
Seligman Tax-Exempt Fund Series, Inc:
National Series $100,000 or more .10% 1.00%
Colorado Series $100,000 or more .10% 1.00%
Georgia Series $100,000 or more .10% 1.00%
Louisiana Series $100,000 or more .10% 1.00%
Maryland Series $100,000 or more .10% 1.00%
Massachusetts Series $100,000 or more .10% 1.00%
Michigan Series $100,000 or more .10% 1.00%
Minnesota Series $100,000 or more .10% 1.00%
Missouri Series $100,000 or more .10% 1.00%
New York Series $100,000 or more .10% 1.00%
Ohio Series $100,000 or more .10% 1.00%
Oregon Series $100,000 or more .10% 1.00%
South Carolina Series $100,000 or more .10% 1.00%
Seligman Tax-Exempt Series Trust:
California Tax-Exempt Quality Series $100,000 or more .10% 1.00%
California Tax-Exempt High-Yield Series $100,000 or more .10% 1.00%
Florida Tax-Exempt Series $100,000 or more .25% 1.00%
North Carolina Tax-Exempt Series $100,000 or more .25% 1.00%
</TABLE>
March 21, 1996
* Included in each of the percentages above is the service fee (as defined in
the National Association of Securities Dealers, Inc. Rules of Fair Practice)
with respect to each class of shares referred to in paragraph 1 of this
Agreement. Except as provided in Footnote ** below, Seligman Financial Services
shall pay the fees provided for above to the Service Organization quarterly.
** At or promptly after the time of sale of any Class D Shares, a Service
Organization shall be paid 1.00% of the net asset value of the Class D Shares
sold by it. The difference between .75% and the amount paid is comprised of the
service fee referred to in paragraph 1 of this Agreement for services to be
provided to Class D shareholders over the course of the one year period
immediately following the sale.
+ Class B Shares are not available for the U.S. Government Securities Portfolio
of Seligman High Income Fund Series, Selligman New Jersey Tax-Exempt Fund, Inc.,
Seligman Pennsylvania Tax-Exempt Fund Series or any Series of Seligman Tax-
Exempt Fund Series, Inc. or Seligman Tax-Exempt Series Trust.
<PAGE>
EXHIBIT 99.18
SELIGMAN GROUP OF MUTUAL FUNDS
Plan for Multiple Classes of Shares (three classes)
---------------------------------------------------
THIS PLAN, as it may be amended from time to time, sets forth the
separate arrangement and expense allocation of each class of shares (a "Class")
of each registered open-end management investment company, or series thereof, in
the Seligman Group of Mutual Funds that offers multiple classes of shares (each,
a "Fund"). The Plan has been adopted pursuant to Rule 18f-3(d) under the
Investment Company Act of 1940, as amended (the "Act"), by a majority of the
Board of Directors or Trustees, as applicable ("Directors"), of each Fund listed
on Schedule I hereto, including a majority of the Directors who are not
interested persons of such Fund within the meaning of Section 2(a)(19) of the
Act ("Disinterested Directors"). Any material amendment to this Plan is subject
to the prior approval of the Board of Directors of each Fund to which it
relates, including a majority of the Disinterested Directors.
1. General
-------
A. Any Fund may issue more than one Class of voting stock, provided that
each Class:
i. Shall have a different arrangement for shareholder services or
the distribution of securities or both, and shall pay all of the
expenses of that arrangement;
ii. May pay a different share of other expenses, not including
advisory or custodial fees or other expenses related to the
management of the Fund's assets, if these expenses are actually
incurred in a different amount by that Class, or if the Class
receives services of a different kind or to a different degree
than other Classes of the same Fund ("Class Level Expenses");
iii. May pay a different advisory fee to the extent that any
difference in amount paid is the result of the application of the
same performance fee provisions in the advisory contract of the
Fund to the different investment performance of each Class;
iv. Shall have exclusive voting rights on any matter submitted to
shareholders that relates solely to its arrangement;
-1-
<PAGE>
v. Shall have separate voting rights on any matter submitted to
shareholders in which the interests of one Class differ from the
interests of any other Class; and
vi. Shall have in all other respects the same rights and obligations
as each other Class of the Fund.
B. i. Except as expressly contemplated by this paragraph B., no types
or categories of expenses shall be designated Class Level
Expenses.
ii. The Directors recognize that certain expenses arising in certain
sorts of unusual situations are properly attributable solely to
one Class and therefore should be borne by that Class. These
expenses ("Special Expenses") may include, for example: (i) the
costs of preparing a proxy statement for, and holding, a special
meeting of shareholders to vote on a matter affecting only one
Class; (ii) the costs of holding a special meeting of Directors
to consider such a matter; (iii) the costs of preparing a special
report relating exclusively to shareholders of one Class; and
(iv) the costs of litigation affecting one Class exclusively. J.
& W. Seligman & Co. Incorporated (the "Manager") shall be
responsible for identifying expenses that are potential Special
Expenses.
iii. Subject to clause iv. below, any Special Expense identified by
the Manager shall be treated as a Class Level Expense.
iv. Any Special Expense identified by the Manager that is material to
the Class in respect of which it is incurred shall be submitted
by the Manager to the Directors of the relevant Fund on a case by
case basis with a recommendation by the Manager as to whether it
should be treated as a Class Level Expense. If approved by the
Directors, such Special Expense shall be treated as a Class Level
Expense of the affected class.
C. i. Realized and unrealized capital gains and losses of a Fund shall
be allocated to each class of that Fund on the basis of the
aggregate net asset value of all outstanding shares ("Record
Shares") of the Class in relation to the aggregate net asset
value of Record Shares of the Fund.
-2-
<PAGE>
ii. Income and expenses of a Fund not charged directly to a
particular Class shall be allocated to each Class of that Fund on
the following basis:
a. For periodic dividend funds, on the basis of the aggregate
net asset value of Record Shares of each Class in relation
to the aggregate net asset value of Record Shares of the
Fund.
b. For daily dividend funds, on the basis of the aggregate net
asset value of Settled Shares of each Class in relation to
the aggregate net asset value of Settled Shares of the Fund.
"Settled Shares" means Record Shares minus the number of
shares of that Class or Fund that have been issued but for
which payment has not cleared and plus the number of shares
of that Class or Fund which have been redeemed but for which
payment has not yet been issued.
D. On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the Act and otherwise, will monitor each Fund
for the existence of any material conflicts among the interests of its
several Classes. The Directors, including a majority of the
Disinterested Directors, shall take such action as is reasonably
necessary to eliminate any such conflicts that may develop. The
Manager and Seligman Financial Services, Inc. (the "Distributor") will
be responsible for reporting any potential or existing conflicts to
the Directors. If a conflict arises, the Manager and the Distributor
will be responsible at their own expense for remedying such conflict
by appropriate steps up to and including separating the classes in
conflict by establishing a new registered management company to
operate one of the classes.
E. The plan of each Fund adopted pursuant to Rule 12b-1 under the Act
(the "Rule 12b-1 Plan") provides that the Directors will receive
quarterly and annual statements complying with paragraph (b)(3)(ii) of
Rule 12b-1, as it may be amended from time to time. To the extent
that the Rule 12b-1 Plan in respect of a specific Class is a
reimbursement plan, then only distribution expenditures properly
attributable to the sale of shares of that Class will be used in the
statements to support the Rule 12b-1 fee charged to shareholders of
such Class. In such cases expenditures not related to the sale of a
specific Class will not be presented to the Directors to support Rule
12b-1 fees charged to shareholders of such Class. The statements,
including the allocations upon which they are based, will be subject
to the review of the Disinterested Directors.
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F. Dividends paid by a Fund with respect to each Class, to the extent any
dividends are paid, will be calculated in the same manner, at the same
time and on the same day and will be in the same amount, except that
fee payments made under the Rule 12b-1 Plan relating to the Classes
will be borne exclusively by each Class and except that any Class
Level Expenses shall be borne by the applicable Class.
G. The Directors of each Fund hereby instruct such Fund's independent
auditors to review expense allocations each year as part of their
regular audit process, to inform the Directors and the Manager of any
irregularities detected and, if specifically requested by the
Directors, to prepare a written report thereon. In addition, if any
Special Expense is incurred by a Fund and is classified as a Class
Level Expense in the manner contemplated by paragraph B. above, the
independent auditors for such Fund, in addition to reviewing such
allocation, are hereby instructed to report thereon to the Audit
Committee of the relevant Fund and to the Manager. The Manager will
be responsible for taking such steps as are necessary to remedy any
irregularities so detected, and will do so at its own expense to the
extent such irregularities should reasonably have been detected and
prevented by the Manager in the performance of its services to the
Fund.
2. Specific Arrangements for Each Class
------------------------------------
The following arrangements regarding shareholder services, expense
allocation and other indicated matters shall be in effect with respect to the
Class A shares, Class B shares and Class D shares of each Fund. The following
descriptions are qualified by reference to the more detailed description of such
arrangements set forth in the prospectus relating to each Fund, as the same may
from time to time be amended or supplemented (for each Fund, the "Relevant
Prospectus"), provided that no Relevant Prospectus may modify the provisions of
--------
this Plan applicable to Rule 12b-1 fees or Class Level Expenses.
(a) Class A Shares
--------------
i. Class A shares are subject to an initial sales load which varies
with the size of the purchase, to a maximum of 4.75% of the
public offering price. Reduced sales loads shall apply in
certain circumstances. Class A shares of Seligman Cash
Management Fund, Inc. shall not be subject to an initial sales
load.
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<PAGE>
ii. Class A shares shall be subject to a Rule 12b-1 service fee of up
to 0.25% of average daily net assets.
iii. Special Expenses attributable to the Class A shares, except those
determined by the Directors not to be Class Level Expenses of the
Class A shares in accordance with paragraph 1.B.iv., shall be
Class Level Expenses and attributed solely to the Class A shares.
No other expenses shall be treated as Class Level Expenses of the
Class A shares.
iv. The Class A shares shall be entitled to the shareholder services,
including exchange privileges, described in the Relevant
Prospectus.
(b) Class B Shares
--------------
i. Class B shares are sold without an initial sales load but are
subject to a contingent deferred sales load ("CDSL") in certain
cases. The CDSL in respect of any Class B share, if applicable,
will be in the following amount (as a percentage of the current
net asset value or the original purchase price, whichever is
less) if the redemption occurs within the indicated number of
years of issuance of such share:
Years since issuance CDSL
-------------------- ----
less than one 5%
one but less than two 4%
two but less than four 3%
four but less than five 2%
five but less than six 1%
six or more 0%
ii. Class B shares shall be subject to a Rule 12b-1 fee of up to
1.00% of average daily net assets, consisting of an asset-based
distribution fee of up to 0.75% and a service fee of up to 0.25%.
iii. Each Class B share shall automatically convert to a Class A share
on the last day of the month which precedes the eighth
anniversary of its date of issue occurs.
iv. Special Expenses attributable to the Class B shares, except those
determined by the Directors not to be Class Level Expenses of the
Class B shares in accordance with paragraph 1.B.iv., shall be
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<PAGE>
Class Level Expenses and attributed solely to the Class B shares.
No other expenses shall be treated as Class Level Expenses of the
Class B shares.
v. The Class B shares shall be entitled to the shareholder services,
including exchange privileges, described in the Relevant
Prospectus.
(c) Class D Shares
--------------
i. Class D shares are sold without an initial sales load but are
subject to a CDSL of 1% of the lesser of the current net asset
value or the original purchase price in certain cases if the
shares are redeemed within one year.
ii. Class D shares shall be subject to a Rule 12b-1 fee of up to
1.00% of average daily net assets, consisting of an asset-based
distribution fee of up to 0.75% and a service fee of up to 0.25%.
iii. Special Expenses attributable to the Class D shares, except those
determined by the Directors not to be Class Level Expenses of the
Class D shares in accordance with paragraph 1.B.iv., shall be
Class Level Expenses and attributed solely to the Class D shares.
No other expenses shall be treated as Class Level Expenses of the
Class D shares.
iv. The Class D shares shall be entitled to the shareholder services,
including exchange privileges, described in the Relevant
Prospectus.
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SCHEDULE I
Seligman Cash Management Fund, Inc.
Seligman Capital Fund, Inc.
Seligman Common Stock, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Income Fund, Inc.
Seligman Henderson Emerging Markets Growth Fund
Seligman Henderson Global Growth Opportunities Fund
Seligman Henderson Global Smaller Companies Fund
Seligman Henderson Global Technology Fund
Seligman Henderson International Fund
Seligman High-Yield Bond Fund
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