<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 [X]
Pre-Effective Amendment No. __ [_]
Pre-Effective Amendment No. 73 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 23 [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):
[X] immediately upon filing pursuant to paragraph (b)
[_] on (date) pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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
December 20, 1996.
<PAGE>
File No. 2-10836
811-229
SELIGMAN GROWTH FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 73
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 Objectives, 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
May 1, 1997
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 A shares purchased in an amount of $1,000,000 or more
are sold without an initial sales load but are subject to a contingent de-
ferred sales load ("CDSL") of 1% on redemptions within eighteen months of pur-
chase. Class B shares are sold without an initial sales load but are subject
to a CDSL 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 distri-
bution fee of .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 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. No CDSL will be imposed on Shares ac-
quired through the reinvestment of dividends or distributions received from
any class of shares. 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 Addi-
tional Information is dated the same date as this Prospectus and is incorpo-
rated 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............................................ 5
Investment Objectives, Policies and
Risks..................................................................... 7
Management Services........................................................ 8
Purchase of Shares......................................................... 10
Telephone Transactions..................................................... 16
Redemption of Shares....................................................... 17
Administration, Shareholder Services and
Distribution Plan......................................................... 20
Exchange Privilege......................................................... 21
Further Information about Transactions in the
Fund...................................................................... 23
Dividends and Distributions................................................ 23
Federal Income Taxes....................................................... 24
Shareholder Information.................................................... 25
Advertising the Fund's Performance......................................... 27
Organization and Capitalization............................................ 27
</TABLE>
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
------------------ --------------- ---------------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
SHAREHOLDER TRANSACTION LOAD LOAD LOAD
EXPENSES ALTERNATIVE) ALTERNATIVE) ALTERNATIVE)
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
purchase price or
redemption proceeds,
whichever is lower)..... None; except 1% in 5% in 1st year 1% in 1st year
first 18 months if 4% in 2nd year None thereafter
initial sales load 3% in 3rd and
was waived in full 4th years
due to size of 2% in 5th year
purchase 1% in 6th year
None thereafter
Redemption Fees.......... None None None
Exchange Fees............ None None None
<CAPTION>
ANNUAL FUND OPERATING CLASS A CLASS B CLASS D
EXPENSES FOR 1996 ------------------ --------------- ---------------
<S> <C> <C> <C>
(as a percentage of average
net assets)
Management Fee........... .70% .70% .70%
12b-1 Fees............... .23% 1.00%* 1.00%*
Other Expenses........... .27% .27% .27%
----- ----- -----
Total Fund Operating 1.20% 1.97% 1.97%
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 initial sales loads are available in cer-
tain circumstances. Class A shares are not subject to an initial sales load
for purchases of $1,000,000 or more; however, such shares are subject to a
CDSL, a one time charge, only if the shares are redeemed within eighteen
months of purchase. The CDSLs on Class B and Class D shares are one-time
charges paid only if shares are redeemed within six years or one year of pur-
chase, respectively. The "Other Expenses" disclosed for Class B shares are es-
timated based on expenses incurred during 1996. For more information concern-
ing reductions in sales loads and for a more complete description of the vari-
ous costs and expenses, see "Purchase of Shares," "Redemption of Shares" and
"Management Services" herein. The Fund's Administration, Shareholder Services
and Distribution Plan to which the caption "12b-1 Fees" relates, is discussed
under "Administration, Shareholder Services and Distribution Plan" herein.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE ------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses
on a $1,000 investment, assuming (1) a 5% an-
nual return and (2) redemption at the end of
each time period......................Class A $59 $84 $110 $186
Class B+ $70 $92 $126 $210
Class D $30++ $62 $106 $230
</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.
* 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) a 5% annual return and (2) no redemption at the end of the pe-
riod, the expenses on a $1,000 investment would be $20 for 1 year, $62 for
3 years and $106 for 5 years. The expenses shown for the ten-year period
reflect the conversion of Class B shares to Class A shares after 8 years.
++ Assuming (1) a 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, Class B and Class D shares for
the periods presented below have been audited by Deloitte & Touche LLP, inde-
pendent auditors. This information, which is derived from the financial and
accounting records of the Fund, should be read in conjunction with the finan-
cial statements and notes contained in the Fund's 1996 Annual Report, which is
incorporated 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 Pro-
spectus.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from a Class'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 a Class'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.
Average commission rate paid represents the average commissions paid by the
Fund to purchase or sell securities. It is determined by dividing the total
commission dollars paid by the number of shares purchased and sold during the
period for which commissions were paid.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1996O 1995O 1994O 1993 1992 1991 1990 1989 1988 1987
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of year.................... $5.22 $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 .01 .03 .04 .10 .06 .11 .09
Net realized and unrealized
investment gain (loss)..... 1.13 1.27 (.22) .35 .64 1.70 (.36) 1.40 .20 .09
Net realized and unrealized
gain on foreign currency
transactions............... (.01) .01 -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Increase (decrease) from
investment operations...... 1.11 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................... (.48) (.60) ( .50) (1.13) (.55) (.32) (.17) (.67) (.05) (1.10)*
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
net asset value............ .63 .68 ( .72) (.78) .09 1.38 (.53) .72 .15 (1.02)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
year....................... $5.85 $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: 21.14% 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..................... 1.20% .94% .90% .89% .77% .76% .71% .65% .70% .62%
Net investment income (loss)
to average net assets...... (.12)% .17% .14% .18% .49% .77% 2.04% 1.40% 2.52% 1.57%
Portfolio turnover.......... 26.05% 102.30% 93.59% 105.64% 46.96% 12.60% 26.39% 60.34% 66.39% 89.52%
Average commission rate
paid....................... $.0437
Net assets, end of year
(000s omitted)............. $675,086 $597,510 $513,328 $591,491 $614,860 $598,423 $478,063 $554,364 $498,035 $530,841
</TABLE>
- -------
o Per share amounts for the years ended December 31, 1996, 1995 and 1994, are
calculated based on average shares outstanding.
* Includes excess of taxable gain distribution over realized capital gain
charged to paid-in capital of $.01.
The data provided above reflects historical information and therefore
through April 10, 1991 has not been adjusted to reflect the effect of the in-
creased 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
Administration, Shareholder Services and Distribution Plan which was approved
by shareholders on November 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>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS D
--------- ---------------------------------------
4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
TO -------------------------- TO
12/31/96O 1996O 1995O 1994O 12/31/93
--------- ------- -------- ------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $5.35 $4.96 $4.38 $ 5.23 $5.67
------ ------- -------- ------- -----------
Net investment income (loss).... (.03) (.05) (.04) (.12) (.03)
Net realized and unrealized
investment gain (loss)......... .65 1.07 1.21 (.23) .72
Net realized and unrealized gain
on foreign currency
transactions................... -- (.01) .01 -- --
------ ------- -------- ------- -----------
Increase (decrease) from
investment operations.......... .62 1.01 1.18 (.35) .69
Dividends paid.................. -- -- -- -- --
Distributions from net gain
realized....................... (.48) (.48) (.60) (.50) (1.13)
------ ------- -------- ------- -----------
Net increase (decrease) in net
asset value.................... .14 .53 .58 (.85) (.44)
------ ------- -------- ------- -----------
Net asset value, end of period.. $5.49 $5.49 $4.96 $ 4.38 $5.23
====== ======= ======== ======= ===========
TOTAL RETURN BASED ON NET ASSET
VALUE: 11.45% 20.21% 27.01 % (6.56)% 12.40 %
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.. 1.99%+ 1.97% 1.91 % 2.93 % 2.17 %+
Net investment income (loss) to
average net assets............. (.83)%+ (.88)% (.83)% (2.34)% (1.03)%+
Portfolio turnover.............. 26.05%++ 26.05% 102.30 % 93.59 % 105.64 %+++
Average commission rate paid.... $.0437++ $ .0437
Net assets, end of period (000s
omitted)....................... $ 880 $11,493 $ 6,412 $ 1,742 $1,197
</TABLE>
- -------
o Per share amounts for the periods ended December 31, 1996, 1995 and 1994 are
calculated based on average shares outstanding.
* Commencement of offering of shares.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
The data provided above reflects historical information and therefore 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.
4
<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 expect to maintain their investment for an extended period of
time might also choose to purchase Class A shares because over time the accumu-
lated continuing distribution fees of Class B and Class D shares may exceed the
initial sales load and lower distribution fee of Class A shares. This consider-
ation 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 purchase. Furthermore, the higher distribution fees on Class B and
Class D shares will be offset to the extent any return is realized on the addi-
tional funds initially invested therein that would have been equal to the
amount of the initial sales load on Class A shares.
Investors who qualify for reduced initial sales loads, as described under
"Purchase of Shares" below, might also choose to purchase Class A shares be-
cause the sales load deducted at the time of purchase would be less or waived
in full. However, investors should consider the effect of the 1% CDSL imposed
on shares on which the initial sales load was waived because the amount of
Class A shares purchased was $1,000,000 or more. In addition, Class B shares
will be converted automatically to Class A shares after a period of approxi-
mately eight years, and thereafter 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 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 qualifies for a
reduced sales load on the Class A shares.
Investors should understand that the purpose and function of the initial
sales loads (and deferred sales load, when applicable) 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
distribution fees applicable to each class provide for the financing of the
distribution of the shares of the Fund.
5
<PAGE>
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 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 and a lower CDSL
rate 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 account 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 ongo-
ing 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 ad-
vantageous 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 an-
other 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 objectives.
<TABLE>
<CAPTION>
ANNUAL 12B-1
FEES
(AS A % OF
AVERAGE
INITIAL DAILY NET OTHER
SALES LOAD ASSETS) INFORMATION
---------- ------------ -----------
<S> <C> <C> <C>
CLASS A Maximum initial Service fee Initial sales load
sales load of of .25%. waived or reduced for
4.75% of the certain purchases. CDSL
public offering of 1% on redemptions
price. within 18 months of
purchase on shares on
which the initial sales
load was waived in full
due to
the size of the purchase.
CLASS B None Service fee CDSL of:
of .25%; 5% in 1st year
Distribution 4% in 2nd year
fee of .75% 3% in 3rd and 4th years
until 2% in 5th year
conversion.* 1% in 6th year
0% after 6th year.
CLASS D None Service fee CDSL of 1% on redemptions
of .25%; within one year of
Distribution purchase.
fee of up to
.75%.
</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.
6
<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 insti-
tutional buyers" under Rule 144A of the 1933 Act, and the Manager, acting pur-
suant to procedures approved by the Fund's Board of Directors, may determine,
when appropriate, that specific Rule 144A securities are liquid and not subject
to the 15% limitation on illiquid securities. Should this determination be
made, the Manager, acting pursuant to such procedures, will carefully monitor
the security (focusing on such factors, among others, as trading activity and
availability of information) to determine that the Rule 144A security continues
to be liquid. It is not possible to predict with assurance exactly how the mar-
ket for Rule 144A securities will further evolve. This investment practice
could have the effect of increasing the level of illiquidity 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 a foreign issuer. ADRs may be publicly traded on ex
7
<PAGE>
changes 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 seventeen 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
Municipal Fund Series, Inc., Seligman Municipal Series Trust, Seligman New
Jersey Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund Series, Se-
ligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman Se-
lect Municipal Fund, Inc., Seligman Value Fund Series, Inc. and Tri-Continen-
tal Corporation. The aggregate assets of the Seligman Group were approximately
$14.2 billion at March 31, 1997. The Manager also provides investment manage-
ment or advice to institutional accounts having an aggregate value at March
31, 1997 of approximately $4.2 billion.
Mr. William C. Morris is Chairman of the Manager and Chairman of the Board
and Chief Executive Officer of the Fund. Mr. Morris owns a majority 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 records of shareholder accounts and furnishes dividend
paying, redemption and related services.
The Manager is entitled to receive a management fee, calculated daily and
payable monthly. The man-
8
<PAGE>
agement 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 1996, the management fee paid by the Fund was equal to an annual
rate of .70% 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 for the year ended De-
cember 31, 1996 amounted to 1.20% and 1.97%, respectively, of the average daily
net assets of such class. The annualized total expenses of the Fund's Class B
Shares for the period ended December 31, 1996 amounted to 1.99% of the average
daily net assets of such class.
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. At Decem-
ber 31, 1996, net Qualifying Assets were $63.9 million. For the year ended De-
cember 31, 1996, the Subadviser was paid a fee of $395,363.
The Subadviser was founded in 1991 as a joint venture between the Manager and
Henderson International, Inc., a controlled affiliate of Henderson plc. The
Subadviser, headquartered in New York, was created to provide international and
global investment advice to institutional and individual investors and invest-
ment companies. The Subadviser also currently serves as subadviser to 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 Income Fund, Inc., certain portfolios of Se-
ligman Portfolios, Inc., each series of Seligman Value Fund Series, 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 Co-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 and Co-
Portfolio Manager of SPI's Seligman Henderson Global Growth Opportunities Port-
folio.
The Subadviser's Global Policy Group has overall responsibility for directing
and overseeing all aspects of foreign investment activity for the Fund and pro-
vides global investment policy, including country weightings, asset allocations
and industry sector
9
<PAGE>
guidelines, as appropriate. Mr. Iain C. Clark, a Managing Director and Chief
Investment Officer of the Subadviser, is responsible for the day-to-day foreign
investment activity of the Fund. Mr. Clark, who joined the Subadviser in 1992,
has been a Director of Henderson 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 Funds Average
is included in the Fund's 1996 Annual Report to Shareholders. Copies of the
1996 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 Pro-
spectus.
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 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
10
<PAGE>
BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR INVESTMENT OF DIVIDENDS AND CAPI-
TAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE RIGHT TO RETURN INVESTMENTS
WHICH DO NOT MEET THESE MINIMUMS. EXCEPTIONS TO THESE MINIMUMS ARE AVAILABLE
FOR FUND ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK (R)
SERVICE. THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE SELIGMAN TIME HORIZON
MATRIX SM ASSET ALLOCATION PROGRAM IS $10,000. FOR INFORMATION ABOUT THIS PRO-
GRAM, CONTACT YOUR FINANCIAL ADVISOR.
No purchase order may be placed for Class B shares for an amount for $250,000
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, any 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, any 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 will 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 of the Fund at any time
through any authorized dealer or by sending a check payable to the "Seligman
Group of Funds" in our postage-paid return envelope or directly to P.O. BOX
3947, NEW YORK, NY 10008-3947. Checks for investment must be in U.S. dollars
drawn on a domestic bank. Credit card convenience checks and third party checks
(i.e., checks made payable to someone other than the "Seligman Group of Funds")
may not be used to open a new fund account or purchase additional shares of the
Fund. The check should be accompanied 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 share-
holder. Orders sent directly to Seligman Data Corp. will be executed at the
Fund's net asset value next determined after the order is accepted plus, in the
case of Class A shares, the applicable 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 not readily available are valued at fair
value deter-
11
<PAGE>
mined in accordance with procedures approved by the Fund's Board of Directors.
Short-term holdings matur-ing in 60 days or less are generally valued at amor-
tized cost if their original 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 amor-
tized 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- or more* 0 0 0
</TABLE>
-------
* Shares acquired at net asset
value pursuant to the above
schedule will be subject to a
CDSL of 1% if redeemed within
18 months of purchase. See
"Purchase of Shares--Contingent
Deferred Sales Load."
There is no initial sales load on purchases of Class A shares of $1,000,000
or more ("NAV sales"); however, such shares are subject to a CDSL of 1% if re-
deemed within eighteen months of purchase.
SFSI shall pay broker/dealers, from its own resources, a fee on NAV sales,
calculated as follows: 100% of NAV sales up to but not including $2 million;
.80% of NAV sales from $2 million up to but not including $3 million; .50% of
NAV sales from $3 million up to but not including $5 million; and .25% of NAV
sales from $5 million and above. The calculation of the fee will be based on
assets held by a "'single person" as defined below.
SFSI shall also pay broker/dealers, from its own resources, a fee on assets
of certain investments in Class A shares of the Seligman Mutual Funds partici-
pating in an "eligible employee benefit plan" (as defined below under "Special
Programs") that are attributable to the particular broker/dealer. The shares
eligible for the fee are those on which an initial front-end sales load was not
paid because either the participating eligible employee benefit plan has at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. Class A shares representing only
an initial purchase of Seligman Cash Management Fund are not eligible for the
fee. Such shares will become eligible for the fee once they are exchanged for
shares of another Seligman Mutual Fund. The payment is based on cumulative
sales during a single calendar year, or portion thereof. The payment schedule,
for each calendar year, is as follows: 1.00% of sales up to but not including
$2 million; .80% of sales from $2 million up to but not including $3 million;
.50% of sales from $3 million up to but not including $5 million; and .25% of
sales from $5 million and above.
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
12
<PAGE>
trustee or other fiduciary purchasing for a single fiduciary account or single
trust. Purchases made by a trustee or other fiduciary for a fiduciary account
may not be aggregated 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 an initial 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 an initial sales
load with the total net asset value of shares of those Seligman Mutual Funds
already owned that were sold with an initial sales load and the total net asset
value of shares of Seligman Cash Management Fund that were acquired by the in-
vestor through an exchange of shares of another Seligman Mutual Fund on which
there was an initial sales load to determine reduced sales loads in accordance
with the sales load schedule. An investor or a dealer purchasing shares on be-
half of an investor must indicate that the investor has existing accounts when
making investments or opening new accounts.
. A LETTER OF INTENT allows an investor to purchase Class A shares over a 13-
month period at reduced initial sales loads, based upon the total amount the
investor intends to purchase, plus the total net asset value of shares of the
other Seligman Mutual Funds already owned that were sold with an initial 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 an initial sales load. An investor or a dealer purchas-
ing shares on behalf of an investor must indicate that the investor has exist-
ing accounts when making investments or opening new accounts. For more informa-
tion concerning terms of Letters of Intent, see "Terms and Conditions" on page
28.
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 an initial sales load in connection
with the acquisition of cash and securities owned by other investment compa-
nies; to any registered unit investment trust which is the issuer of periodic
payment plan certificates, the net proceeds of which are invested in Fund
shares; to separate accounts established and maintained by an insurance company
which are exempt from registration under Section 3(c)(11) of the 1940 Act; to
registered representatives and employees (and their spouses and minor children)
of any dealer that has a sales agreement with SFSI; to shareholders of mutual
funds with objectives and policies similar to the Fund who purchase shares with
redemption proceeds of such funds (not to exceed the dollar value of such re-
demption proceeds); to financial institution trust departments; to registered
investment advisers exercising discretionary investment authority with respect
to the purchase of Fund shares; to accounts of financial institutions or
broker/dealers that charge account management fees, provided 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 recommenda-
tions to or permit group solicitations of, its employees, members or partici-
pants in connection with the purchase of shares of the Fund; to other invest-
ment companies in the Seligman Group in connection with a deferred fee arrange-
ment for outside directors; and to "eligible
13
<PAGE>
employee benefit plans" which have at least (i) $500,000 invested in the Selig-
man Mutual Funds or (ii) 50 eligible employees to whom such plan is made avail-
able. "Eligible employee benefit plan" means any plan or arrangement, whether
or not tax qualified, which provides for the purchase of Fund shares. Sales of
shares to such plans must be made in connection with a payroll deduction system
of plan funding or other system acceptable to Seligman Data Corp.
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. Employee benefit plans eligible for
net asset value sales, as described above, will be subject to a CDSL of 1% for
terminations at the plan level only within eighteen months of such sales. Sales
pursuant to a 401(k) alliance program which has an agreement with SFSI are
available at net asset value and are not subject to a CDSL.
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 .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 purchases
of Class B shares. Approximately eight years after purchase, Class B shares
will convert automatically to Class A shares which are subject to an annual
service fee of up to .25% but no distribution fee. Shares purchased through re-
investment 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 ap-
plicable 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 exercising the ex-
change 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). 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 "Administration, Shareholder Serv
-
14
<PAGE>
ices And Distribution Plan") at the time of sale. Pursuant to an agreement with
FEP Capital, L.P. ("FEP") to fund payments in respect of Class B shares, SFSI
has agreed to pay any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on any redemption of Class A shares pur-
chased during the preceding eighteen months if such shares were acquired at net
asset value pursuant to the sales load schedule provided under "Class A
Shares--Initial Sales Load." Employee benefit plans eligible for net asset
value sales as described above under "Special Programs" may be subject to a
CDSL of 1% for terminations at the plan level only, on redemptions of shares
purchased within eighteen months prior to plan termination.
The 1% CDSL normally imposed on redemptions of certain Class A shares (i.e.,
those purchased during the preceding eighteen months at net asset value pursu-
ant to the sales load schedule provided under "Class A Shares--Initial Sales
Load") will be waived on shares that were purchased through Dean Witter Reyn-
olds, Inc. ("Dean Witter") by certain Chilean institutional investors (i.e.,
pension plans, insurance companies and mutual funds). Upon redemption of such
shares within an eighteen month period, Dean Witter will reimburse SFSI a pro
rata portion of the fee it received from SFSI at the time of sale of such
shares.
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 held for a period of time
longer than the applicable CDSL period. Shares held for the longest period of
time within the applicable CDSL 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. No CDSL will be imposed on shares acquired through the investment
of dividends or distributions from any Class A, Class B or Class D shares of
Seligman Mutual Funds.
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
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 (an "IRA") due to
15
<PAGE>
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 in-
strumentality, 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 registered investment management company;
(e) pursuant to an automatic cash withdrawal service; and (f) in connection
with the redemption of shares of the Fund if the Fund is combined with another
mutual fund in the Seligman Group, or another similar reorganization transac-
tion.
If, with respect to a redemption of any Class A, 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.
For the period from the date Seligman Global Horizon Funds (the "Offshore
Fund") commences offering its shares, until May 31, 1997, SFSI will reimburse
any CDSL charged upon the redemption of Class B or Class D shares of any Selig-
man Mutual Fund by a non-U.S. resident alien investor who uses the redemption
proceeds to purchase Class B or Class A shares, respectively, of the Offshore
Fund through Merrill Lynch, Pierce, Fenner & Smith Incorporated, or any of its
affiliates (collectively, "Merrill Lynch"). Merrill Lynch will, in turn, reim-
burse SFSI for the amount of CDSL so reimbursed by it over a period of four
years.
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.
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.
16
<PAGE>
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. Group retirement plans that may allow plan partici-
pants to place telephone exchanges directly with the Fund must first provide a
letter of authorization signed by the plan custodian or trustee, and provide a
telephone services election form signed by each plan participant. Additionally,
group retirement plans are not permitted to change a dividend or gain distribu-
tion option.
All Seligman Mutual Funds with the same account number (i.e., registered ex-
actly the same) as an existing account, including any new fund in which the
shareholder invests in the future, will automatically include telephone serv-
ices if the existing account has telephone services. Telephone services may
also be elected at any time on a supplemental telephone services election form.
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 may result
in the request being processed at a later time than if a telephone transaction
had been used, and the Fund's net asset value may fluctuate during such peri-
ods.
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 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 unauthorized or fraudulent in-
structions. Telephone transactions must be effected through a representative of
Seligman Data Corp., i.e., requests may not be communicated via Seligman Data
Corp.'s automated telephone answering system. Shareholders, of course, may ref-
use 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 SHAREHOLDER. Written acknowledgment of
the addition of telephone services to an existing account or 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 ("uncertificated") form
without charge, except a
17
<PAGE>
CDSL, if applicable at any time by SENDING A WRITTEN REQUEST to Seligman Data
Corp., P.O. Box 3947, New York, NY 10008-3947; or if the request is being sent
by overnight delivery service to 100 Park Avenue, New York, NY 10017. The re-
demption request must be signed by all persons in whose name the shares are
registered. A shareholder may redeem shares that are not in book credit form
without charge, except a CDSL, if applicable, by surrendering certificates in
proper form to the same address. Certificates should be sent by registered
mail. Share certificates must be endorsed for transfer or accompanied by an en-
dorsed stock power signed by all share owners exactly as their name(s)
appear(s) on the account registration. The shareholder's letter of instruction
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 redeemed.
The Fund cannot accept conditional redemption requests (i.e., requests to sell
shares at a specific price or on a future date).
If the redemption proceeds are (i) $50,000 or more, (ii) to be paid to some-
one 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 compa-
nies, credit unions, securities brokers and dealers, savings and loan associa-
tions and partici-pants in the Securities Transfer Association Medallion Pro-
gram (STAMP), the Stock Exchanges Medallion Program (SEMP) or the New York
Stock Exchange Medallion 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 accepting such guarantee. A signature guarantee is also nec-
essary in order to change the account registration. Notarization by a notary
public is not an acceptable signature guarantee. ADDITIONAL DOCUMENTATION MAY
ALSO BE REQUIRED BY SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY A COR-
PORATION, EXECUTOR, ADMINISTRATOR, TRUSTEE, CUSTODIAN OR RETIREMENT PLAN. FOR
FURTHER INFORMATION WITH RE-SPECT TO REDEMPTION REQUIREMENTS, PLEASE CONTACT
THE SHAREHOLDER SERVICES DEPARTMENT OF SELIGMAN DATA CORP. FOR ASSISTANCE.
In the case of Class A shares, (except for shares purchased without an ini-
tial sales load due to the size of the purchase), 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. Class A shares which were purchased without
an initial sales load because the purchase amount was $1 million or more are
redeemed within eighteen months 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 A Shares--Ini-
tial Sales Load" above. If Class B shares are redeemed within six years of pur-
chase, a shareholder will receive the net asset value per share next determined
after receipt of a request in good order, less the applicable sales load as de-
scribed under "Purchase 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 authorized dealer before the close of the NYSE and re-
ceived 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 re-
ceived from authorized
18
<PAGE>
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 payable
to the address of record may be made, once per day, in an amount of up to
$50,000 per fund account. Telephone redemption 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. Re-
demption requests by telephone will not be accepted within 30 days following an
address change. Qualified Plans, IRAs or other retirement plans are not eligi-
ble for telephone redemptions. The Fund reserves the right to suspend or termi-
nate 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. Payment of redemption proceeds will be delayed on redemptions of 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. 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 an initial sales load, all or any part of the investment in Class A
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 shareholder may reinstate all or any part of 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 applicable CDSL paid. Such investment will be reinstated at the net as-
set value per share established as of the close of the NYSE on the day the re-
quest is received. Seligman Data Corp. must be informed that the purchase rep-
resents a reinstated investment. REINSTATED SHARES MUST BE REGISTERED EXACTLY
AND BE OF THE SAME CLASS AS THE SHARES PREVIOUSLY REDEEMED; AND THE FUND'S MIN-
IMUM INITIAL INVESTMENT AMOUNT MUST BE MET AT THE TIME OF REINSTATEMENT.
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.
19
<PAGE>
some or all of the loss will not be allowed as a deduction, depending upon the
percentage of the proceeds reinvested.
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, 1996 in respect of the Fund's Class A shares pursuant to the Plan was equal
to .23% 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 distribution fees are used to pay Service Organizations a continu-
ing fee of up to .25% of an annual basis of the average net asset value of
Class B shares attributable to particular Service Organizations for providing
personal service and/or the maintenance of shareholder accounts and will also
be used by SFSI to defray the expense of the payment of 4% made by it to Serv-
ice Organizations at the time of the sale of Class B shares. In that connec-
tion, SFSI has assigned FEP its interest in most of the fees payable to it in
respect of the Class B Shares, other than the portion payable to Service Orga-
nizations on a continuing basis. Proceeds from Class D distribution fees are
used primarily to compensate Service Organizations for administration, share-
holder 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 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 defray the expense of the payment of 1% 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 re-
tained. 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.
20
<PAGE>
The Plan, as it relates to Class B shares was approved by the Directors of
the Fund on March 21, 1996 and became effective April 22, 1996. The Plan, as it
relates to Class D shares, was approved by the Direc-tors on March 18, 1993 and
became effective May 1, 1993. The total amount paid for the period ended Decem-
ber 31, 1996 by the Fund's Class B and Class D shares pursuant to the Plan was
1% per annum of the average daily net assets of Class B and 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 as broker/dealer of record for most shareholder
accounts that do not have a designated broker/dealer of record including all
such shareholder accounts established after April 1, 1995 and receives compen-
sation 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 shares that are subject to a CDSL are exchanged for shares of another Se-
ligman Mutual Fund, for purposes of assessing the CDSL payable upon disposition
of the exchanged shares, the applicable holding period shall be reduced by the
holding period of the original 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 Emerging Markets Growth 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 com-
panies either globally or internationally.
. SELIGMAN HIGH INCOME FUND SERIES consists of the Seligman U.S. Government
Securities Series and the Seligman High-Yield Bond Series which seek high cur-
rent income by investing in debt securities.
21
<PAGE>
. SELIGMAN INCOME FUND, INC. seeks high current income and the possibility
of improvement of future income and capital value.
. SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and
a National Series. The National Municipal Series seeks to provide maxi-mum in-
come exempt from regular federal income taxes; individual state series, each
seeking to maximize income exempt from regular federal income taxes and from
personal income taxes in designated states, are available for Colorado, Geor-
gia, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New
York, Ohio, Oregon and South Carolina. (Does not currently offer Class B
shares.)
. SELIGMAN MUNICIPAL SERIES TRUST: includes the Seligman California Munici-
pal Quality Series, the Seligman California Municipal High-Yield Series, the
Seligman Florida Municipal Series and the Seligman North Carolina Municipal
Series, each of which invests in municipal securities of its designated state.
(Does not currently offer Class B shares.)
. SELIGMAN NEW JERSEY MUNICIPAL FUND, INC. invests in investment grade New
Jersey municipal securities. (Does not currently offer Class B shares.)
. SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES invests in investment grade
Pennsylvania municipal securities. (Does not currently offer Class B shares.)
. SELIGMAN VALUE FUND SERIES, INC. consists of the Seligman Large-Cap Value
Fund and the Seligman Small-Cap Value Fund, each of which seeks capital
appreciation by investing in equity securities of value companies.
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
22
<PAGE>
shares are registered and a duplicate confirmation will be sent to the dealer
of record. SFSI reserves the right to reject any telephone exchange request.
Any rejected telephone exchange order may be processed by mail. For more infor-
mation about telephone exchanges privileges, which, unless objected to, are as-
signed to most shareholders automatically, and the circumstances under which
shareholders may bear the risk of loss for a fraudulent transaction, see "Tele-
phone 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 any
shareholder account from which there have been two exchanges in the preceding
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 ex-
change or purchase order from any shareholder account if the shareholder or the
shareholder's broker/dealer has been advised that pervious patterns of pur-
chases 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. 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 distri-
butions 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 below. 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 elec-
tions must be received by Seligman Data Corp. before the record date for the
dividend or distribution in order to be effective for such dividend or distri-
bution.
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."
23
<PAGE>
Shareholders exchanging shares of one mutual fund for shares of another Se-
ligman Mutual Fund will continue to receive dividends and gains as elected
prior to such exchange unless otherwise specified. In the event that a share-
holder redeems, transfers or exchanges 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, which it distributes to its shareholders, pro-
vided that at least 90% of its net investment income and net short-term capital
gains are distributed to shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to 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.
24
<PAGE>
Shareholders are urged to consult their tax advisors concerning the effect
of the federal income taxes in their individual circumstances.
UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
(SOCIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND CERTI-
FIES 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 WITHHOLD-
ING IS 31%. SHAREHOLDERS SHOULD BE AWARE THAT, UNDER REGULATIONS PROMULGATED
BY THE INTERNAL REVENUE SERVICE, THE FUND MAY BE FINED $50 ANNUALLY FOR EACH
ACCOUNT FOR WHICH A CERTIFIED TAXPAYER IDENTIFICATION NUMBER IS NOT PROVIDED.
IN THE EVENT THAT SUCH A FINE IS IMPOSED, THE FUND MAY CHARGE A SERVICE FEE OF
UP TO $50 THAT MAY BE DEDUCTED FROM THE SHAREHOLDER'S ACCOUNT AND OFFSET
AGAINST ANY 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 semi-annually regarding the Fund. General
information 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, or (212) 682-7600 outside the 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-DIV AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DE-
LIVERY OF DISTRIBUTION CHECKS, ACCOUNT STATEMENTS AND OTHER INFORMATION, SE-
LIGMAN DATA CORP. SHOULD BE NOTIFIED IMMEDIATELY IN WRITING OF ANY ADDRESS
CHANGE. ADDRESS CHANGES MAY BE TELEPHONED TO SELIGMAN DATA CORP. IF THE SHARE-
HOLDER HAS TELEPHONE SERVICES. FOR MORE INFORMATION ABOUT TELEPHONE SERVICES,
SEE "TELEPHONE 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 estab-
lished 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. For investments
into the Seligman Time Horizon Matrix SM Asset Allocation Program, the minimum
amount of $500 at regular monthly intervals or $1,000 at regular quarterly in-
tervals. (See "Terms and Conditions" on page 28.)
. 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
25
<PAGE>
$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. For exchanges into the Seligman Time Horizon Matrix SM Asset Al-
location Program, the minimum amount is $500 at regular monthly intervals or
$1,000 at regular quarterly intervals. The shareholder's Cash Management Fund
account must have a value of at least $5,000 at the initiation of the service.
Exchanges 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 or another Seligman Mutual 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. Shareholders who wish to use this serv-
ice should contact Seligman Data Corp. or a broker to obtain the necessary doc-
umentation. Banks may charge a penalty on CD assets withdrawn prior to maturi-
ty. Accordingly, it will not normally be advisable 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 A shares purchased at net asset value because
the purchase amount was $1,000,000 or more should bear in mind that withdrawals
will be subject to a CDSL of 1% if made within eighteen months of purchase of
such shares. Holders of Class B shares may elect to use this service immediate-
ly, although certain withdrawals may be subject to a CDSL. 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 28).
. 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 will 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:
--Individual Retirement Accounts (IRAs);
--Savings Incentive Match Plans for Employees (SIMPLE 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
--Money Purchase 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.
26
<PAGE>
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, shareholder services and distribution fee and through
April 10, 1991 also have not been adjusted to reflect the increase in the man-
agement fee approved by shareholders 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, ef-
fective on such date, which if reflected 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.
27
<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 such 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 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 regularly 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, re-
deem shares held in the shareholder's account for an amount sufficient to re-
imburse the Fund for any loss it may have incurred as a result, and charge a
$10.00 return check fee. This fee will be deducted from the shareholder's ac-
count. 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 shareholder 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 result from acts done in good faith
and pursuant to these terms. Instructions for establishing Invest-A-Check(R)
Service are given on the Account Application. In the event a shareholder ex-
changes all of the shares from one mutual fund in the Seligman Group to anoth-
er, the Invest-A-Check(R) Service will be terminated in the Seligman Mutual
Fund that was closed as a result of the exchange of all shares and the share-
holder 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 continued, subject to the above conditions,
in the Seligman Mutual Fund from which the exchange was made. Accounts estab-
lished in conjunction with the Invest-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 connection with the quarterly investment
option. If a shareholder uses the Invest-A-Check(R) Service to make an IRA in-
vestment, the purchase will be credited as a current year contribution. If a
shareholder uses the Invest-A-Check(R) Service to make an investment in a pen-
sion 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 payment
and any applicable CDSL. 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. Automatic
withdrawals of Class A shares which were purchased at net asset value because
the purchase amount was $1,000,000 or more will be subject to a CDSL if made
within eighteen months of purchase of such shares. Under this Service, a Class
B shareholder who requests both dividends and distributions in additional
shares may withdraw up to 12% of the value of the shareholder's fund account
(at the time of election) per annum, without the imposition of a CDSL. A
shareholder may change the amount of scheduled payments or may suspend pay-
ments by written notice to Seligman 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 Seligman 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 with-
drawal of shares, other than to make scheduled withdrawal payments, reduces
the value of shares remaining on deposit to less than $5,000. Continued pay-
ments in excess of dividend 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 duplica-
tive sales loads, if applicable. For this reason, additional purchases of Fund
shares are discouraged 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 into the shareholder or credited to their ac-
count. Upon completion of the specified minimum purchase within the thirteen-
month period, all shares held in escrow will be deposited to the shareholder's
account 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 an initial 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 an initial
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 Seligman Mutual Funds.
5/97
28
<PAGE>
- --------------------------------------------------------------------------------
P R O S P E C T U S
SELIGMAN
GROWTH
FUND, INC.
[LOGO OF SELIGMAN GROWTH FUND, INC. APPEARS HERE]
- --------------------------------------------------------------------------------
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. May 1, 1997
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 1004
[LOGO OF JWS APPEARS HERE]
- --------------------------------------------------------------------------------
Growth Stock Fund
In Its 61th Year
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1997
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 May 1, 1997. 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 A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
load but are subject to a contingent sales load ("CDSL") of 1% (of the current
net asset value or original purchase price, whichever is less) if such shares
are redeemed within eighteen months of purchase. Class B shares may be
purchased at net asset value and are subject to a 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 price, 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
higher ongoing fees generally that will cause the Class B and Class D shares to
have higher expense ratios 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
<TABLE>
<CAPTION>
Page
<S> <C>
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
<CAPTION>
Page
<S> <C>
Purchase and Redemption of Fund Shares..... 11
Distribution Services...................... 14
Valuation.................................. 14
Performance................................ 15
General Information........................ 17
Financial Statements....................... 17
Appendix................................... 18
</TABLE>
EQGR1A
-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 indicated above or 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.
-3-
<PAGE>
The Fund's portfolio turnover rates for the years ended December 31, 1996 and
1995 were 26.05% and 102.30% , respectively .
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 selling call options, 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
____________________
/*/ The Fund has applied for, and expects to receive, an exemptive order from
the Securities and Exchange Commission that would permit it to purchase shares
of other investment companies advised by the Manager for the limited purpose of
hedging its obligations in connection with the deferred fee arrangement for
outside directors referred to under "Directors and Officers" below.
-4-
<PAGE>
. 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 entering into these types of transactions,
and will not do so without the prior approval of the Fund's Board of
Directors.
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.
<TABLE>
<S> <C>
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer and
(59) Chairman of the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors, 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,
President, J. & W. Seligman & Co. Incorporated, Chairman,
Seligman Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company; and Director, Daniel
Industries Inc., manufacturer of oil and gas metering
equipment.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(44)
Director and President, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; President( with the
exception of Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.) and Director or
Trustee, the Seligman Group of Investment Companies; and
Seligman Advisors, Inc., advisers; Chairman and President,
Seligman Data Corp., shareholder service agent; and Director,
Seligman Financial Services, Inc., broker/dealer; Seligman
Services, Inc., broker/dealer; and Seligman Henderson Co.,
advisers; formerly, Director, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust Company, trust
company.
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman, American Council on Germany;
a Governor of the Center for Creative Leadership; Director,
USLIFE Corporation, life insurance; National Committee on
U.S.-China Relations, National Defense University; the
Institute for Defense Analysis; and Raytheon Co.,
electronics; 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.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ALICE S. ILCHMAN Director
(62)
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
(64)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; 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; formerly, Chairman of the Board
and Chief Executive Officer, Kerr-McGee Corporation, energy
and chemicals.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW* Director
(67)
Retired Chairman and Senior Partner, Sullivan & Cromwell, law
firm; Director or Trustee, the Seligman Group of Investment
Companies; 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 The
New York Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(54)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; Trustee, Geraldine R. Dodge Foundation,
charitable foundation; and Chairman of the Board of Trustees
of St. George's School (Newport, RI); formerly, Director, the
National Association of Independent Schools (Washington, DC).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(70)
Retired 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
JAMES Q. RIORDAN Director
(69)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; The Houston
Exploration Company; 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
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(49)
Director, Managing Director and Chief Investment Officer,
Institutional, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Director or Trustee, the
Seligman Group of Investment Companies; Director, Seligman
Advisors, Inc., advisers; Seligman Holdings, Inc., holding
company; Seligman Financial Services, Inc., broker/dealer;
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, Seligman Data Corp.,
shareholder service agent; Seligman Henderson Co., advisers;
J. & W. Seligman Trust Company, trust company; and Seligman
Securities, Inc., broker/dealer.
ROBERT L. SHAFER Director
(64)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies and USLIFE
Corporation, life insurance; formerly, Vice President, Pfizer
Inc., pharmaceuticals.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(62)
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
LORIS D. MUZZATTI Vice President and Portfolio Manager
(39)
Managing Director, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; and
Vice President and Portfolio Manager, two other open-
end investment companies in the Seligman Group of
Investment Companies.
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Seligman
Financial Services, Inc., broker/dealer; and Seligman Advisors,
Inc., advisers; and Seligman Data Corp., shareholder service
agent; Vice President, the Seligman Group of Investment Companies;
and Seligman Services, Inc., broker/dealer; and Treasurer, Seligman
Holdings, Inc., holding company; and Seligman Henderson Co., advisers;
formerly, Senior Vice President, Seligman Securities, Inc., broker/dealer;
and Senior Vice President, J. & W. Seligman Trust Company, trust company.
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation and Corporate
Secretary, J. & W. Seligman & Co. Incorporated, investment
managers and advisers; Corporate Secretary, the Seligman
Group of Investment Companies; Seligman Advisors, Inc.,
advisers; Seligman Financial Services, Inc., broker/dealer;
Seligman Henderson Co., advisers; 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.
THOMAS G. ROSE Treasurer
(39)
Treasurer, the Seligman Group of Investment Companies; and
Seligman Data Corp., shareholder service agent; formerly,
Treasurer, American Investors Advisors, Inc. and the American
Investors Family of Funds.
</TABLE>
-7-
<PAGE>
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by 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.
<TABLE>
<CAPTION>
Compensation Table
------------------
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as part of from Fund and
Position With Fund from Fund (1) Fund Expenses Fund Complex (1)(2)
------------------ --------------- ------------- -------------------
<S> <C> <C> <C>
William C. Morris, Director and
Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director** N/A N/A N/A
John R. Galvin, Director $3,053.87 N/A $65,000.00
Alice S. Ilchman, Director 3,089.58 N/A 66,000.00
Frank A. McPherson, Director 3,053.87 N/A 65,000.00
John E. Merow, Director 3,089.58(d) N/A 66,000.00(d)
Betsy S. Michel, Director 3,089.58 N/A 66,000.00
James C. Pitney, Director 3,053.87 N/A 65,000.00
James Q. Riordan, Director 3,089.58 N/A 66,000.00
Robert L. Shafer, Director 3,089.58 N/A 66,000.00
James N. Whitson, Director 3,089.58(d) N/A 66,000.00(d)
- ----------------------
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1996.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired March 20, 1997.
(d) Deferred.
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. As of December 31,
1996, the total amounts of deferred compensation (including interest) payable in
respect of the Fund to Messrs. Merow and Whitson were $111,711 and $15,818,
respectively. As of January 1, 1997, Mr. Merow no longer defers current
compensation. Mr. Pitney no longer defers current compensation; however, he has
accrued deferred compensation in the amount of $105,885 as of December 31, 1996.
The Fund has applied for, and expects to receive, exemptive relief that would
permit a director who has elected deferral of his or her fees to choose a rate
of return equal to either (i) the interest rate on short-term Treasury bills, or
(ii) the rate of return on the shares of any of the investment companies advised
by the Manager, as designated by the director. The Fund may, but is not
obligated to, purchase shares of such investment companies to hedge its
obligations in connection with this deferral arrangement.
Directors and officers of the Fund are also directors 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 31, 1997. As of that date, no Directors or
officers owned shares of the Fund's Class B and Class D Capital Stock.
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
-8-
<PAGE>
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 $4,552,474 in 1996, $2,706,813 in 1995
and $2,732,091 in 1994 which was equivalent to annual rates of .70%, .48% and
.49%, respectively, of the average net assets of the Fund in 1996, 1995 1994.
The Fund pays all its expenses other than those assumed by the Manager or
Seligman Henderson Co. (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 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
increase 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 held 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. 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. See the
Appendix for further history of the Manager.
Under the Subadvisory Agreement, dated June 1, 1994, as amended January 1,
1996, 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 Agreement
effective January 1, 1996 to increase the subadvisory fee rate payable by the
Manager to the Subadviser were approved by the Board of Directors on September
21, 1995 and by the shareholders at a special meeting on December 12, 1995. The
Subadvisory 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 Subadvisory Agreement or interested persons of any such party)
and (2) 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.
-9-
<PAGE>
For the years ended December 31, 1996 and 1995, and for the period June 1,
1994 through December 31, 1994, the Subadviser was paid fees by the Manager of
$395,363, $240,843 and $145,441, respectively.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson plc.
Henderson plc, headquartered in London, is one of the largest independent money
managers in Europe. The Firm managed approximately $18.1 billion in assets as
of December 31, 1996 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 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.
-10-
<PAGE>
For the year ended December 31, 1996, Seligman Financial Services, Inc.
("SFSI") received payments of $1,499,727 under the Plan in respect of Class A
shares, or 0.23% per annum of the average daily net assets of Class A shares.
This amount was used primarily to pay Service Organizations on a continuing
basis for providing personal services and/or maintenance of shareholder
accounts. For the period ended December 31, 1996, fees incurred by the Fund in
respect of Class B shares amounted to $2,455, or 1.00% per annum of the average
daily net assets of Class B shares. Of this amount, 0.725% per annum was paid
directly to FEP Capital, L.P. ("FEP") to compensate it for having funded, at the
time of sale (i) the 4% commission paid to selling brokers and (ii) a payment of
0.25% of sales to SFSI; 0.025% per annum was paid to SFSI; and the remaining
0.25% per annum was paid to SFSI which, in turn, made an equal payment to
Service Organizations for providing personal services and/or maintenance of
shareholder accounts. For the year ended December 31, 1996, fees incurred in
respect of Class D shares amounted to $88,005, or 1.00% per annum of the average
daily net assets of Class D shares. This amount was paid to SFSI and, in the
first twelve months after a sale, reimbursed it primarily for the 1% payment
made to dealers at the time of sale and for certain other direct distribution
costs. After the first twelve months, fees paid to SFSI are used to pay a
continuing fee to Service Organizations.
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 paid to others for Execution and Research and
Statistical Services for the years ended December 31, 1996, 1995 and 1994 were
$382,226, $1,297,645 and $1,242,724, respectively.
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 A shares purchased at net asset value without an initial sales load due to
the size of the purchase are subject to a CDSL of 1% if such shares are redeemed
within eighteen months of purchase. 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.
-11-
<PAGE>
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, 1996, the maximum offering price of the Fund's
shares is as follows:
<TABLE>
<CAPTION>
Class A
<S> <C>
Net asset value per Class A share............... $5.85
-----
Maximum sales load (4.75% of offering price).... $0.29
-----
Offering price to public........................ $6.14
=====
Class B and Class D
Net asset value and offering prices per share*.. $5.49
=====
</TABLE>
- -----------
* 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 Initial Sales Loads
Reductions Available. Shares of any Seligman Mutual Fund sold with an initial
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 Seligman
Mutual Funds which are sold with an initial 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 Seligman Mutual
Funds sold with an initial sales load with the total net asset value of shares
of those mutual funds already owned that were sold with an initial 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 an initial 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 Seligman Mutual
Fund on which there was an initial sales load at the time of purchase will be
taken into account in orders placed through a dealer, however, only if SFSI is
notified by an investor or a dealer of the amount owned by the investor at the
time the purchase is made and is furnished sufficient information to permit
confirmation.
A Letter of Intent allows an investor to purchase Class A shares over a 13-
month period at reduced initial sales loads in accordance with the sales load
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 an initial sales load of the other Seligman
Mutual Funds already owned and the total net asset value of shares of Seligman
Cash Management Fund which were acquired through an exchange of shares of
another Seligman Mutual Fund on which there was an initial sales load at the
time of purchase. Reduced initial 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.
Class A shares purchased without an initial sales load in accordance with the
sales load schedule in the Fund's prospectus, or pursuant to a Volume Discount,
Right of Accumulation or Letter of Intent are subject to a CDSL of 1% on
redemptions of such shares within eighteen months of purchase.
-12-
<PAGE>
Persons Entitled to Reductions. Reductions in initial 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" which have at least (i) $500,000 invested in
Seligman Mutual Funds or (ii) 50 eligible employees to whom such plan is made
available. Such sales must be made in connection with a payroll deduction
system of plan funding or other systems acceptable to Seligman Data Corp., the
Fund's shareholder service agent. 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").
Further Types of Reductions. . Class A shares also may be issued without an
initial sales load in connection with the acquisition of cash and securities
owned by other investment companies and personal holding companies; to any
registered unit investment trust which is the issuer of periodic payment plan
certificates, the net proceeds of which are invested in fund shares; to separate
accounts established and maintained by an insurance company which are exempt
from registration under Section 3(c)(11) of the 1940 Act; to registered
representatives and employees (and their spouses and minor children) of any
dealer that has a sales agreement with SFSI; to shareholders of mutual funds
with objectives and policies similar to the Fund who purchase shares with
redemption proceeds of such funds (not to exceed the dollar value of such
redemption proceeds); to financial institution trust departments; to registered
investment advisers exercising discretionary investment authority with respect
to the purchase of Fund shares; to accounts of financial institutions or
broker/dealers that charge account management fees, provided 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; to other investment
companies in the Seligman Group in connection with a deferred fee arrangement
for outside directors; and to "eligible employee benefit plans" which have at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. "Eligible employee benefit plan"
means any plan or arrangement, whether or not tax qualified, which provides for
the purchase of Fund shares. Sales of shares to such plans must be made in
connection with a payroll deduction system of plan funding or other system
acceptable to Seligman Data Corp.
-13-
<PAGE>
The Fund may sell Class A shares at net asset value to present and retired
directors, trustees, officers, 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 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 Seligman Mutual Funds . 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 $20,514 in 1996, after allowances of $160,989 as commissions
to dealers; $20,299 in 1995, after allowances of $157,932 as commissions to
dealers; and $13,797 in 1994, after allowance of $108,097 as commissions to
dealers.
SFSI has assigned its rights to collect any CDSL imposed on
redemptions of Class B shares to FEP Capital, L.P. ("FEP"). SFSI has also
assigned its rights to substantially all of the distribution fee with respect of
Class B shares received by it pursuant to the Plans (other than the portion of
such fees used to make ongoing shareholder servicing payments to Service
Organizations as described in the Prospectus) to FEP, which provides funding to
SFSI to enable it to pay commissions to dealers at the time of the sale of the
related Class B shares. In connection with the assignment of its rights to
collect any CDSL and the distribution fees with respect to Class B shares, SFSI
receives payments from FEP based on the value of Class B shares sold. The
aggregate amounts of such payments from FEP and the Class B distribution fees
retained by SFSI for the period ended October 31, 1996 was $1,987.
For the years ended December 31, 1996, 1995 and 1994, SFSI retained CDSL
charges from Class D shares amounting to $4,805, $1,751 and $855, respectively.
Effective April 1, 1995, Seligman Services, Inc. ("SSI"), an affiliate of the
Manager, became eligible to receive commissions from certain sales of Fund
shares, as well as distribution and service fees pursuant to the Plan. For the
year ended December 31, 1996 and for the period April 1, 1995 through December
31, 1995, SSI received commissions of $22,876 and $13,509, respectively, from
sales of Fund shares. SSI also received distribution and service fees of
$568,663 and $404,497, respectively, pursuant to the Plan.
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 li-
-14-
<PAGE>
abilities) 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 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, 1996 were 15.39%,
10.98%, and 12.64%, 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 investment to
grow to the amount which would have been received upon redemption (i.e., the
average annual compound rate of return). The total return for Class B shares of
the Fund for the period April 22, 1996 (inception) through December 31, 1996 was
6.45%. This return was computed assuming that all of the dividends and
distributions paid by the Fund's Class B shares, if any, were reinvested over
the relevant time period. It was then assumed that at the end of this period,
the entire amount was redeemed, subtracting the 5% CDSL. 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, 1996 were 19.21% and
13.75%, 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.
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, 1987 had a value of $3,287 on
December 31, 1996, resulting in an aggregate total return of 228.65%. Table B
illustrates the total return (income and capital) on Class B shares of the Fund
with dividends invested and gains distributions, if any, taken in shares, It
shows that a $1,000 investment in Class D shares made on April 22, 1996
-15-
<PAGE>
(commencement of offering of Class B shares) had a value of $1,064 on December
31, 1996, resulting in an aggregate total return of 6.45%. Table C 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 $1,604 on December 31, 1996,
resulting in an aggregate total return of 60.35%. 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.
<TABLE>
<CAPTION>
TABLE A - CLASS A SHARES
Value of
Year Value of Initial Value of Gain Dividend Total
Ended (1) Investment (2) Distribution Invested Total Value (2) Return (3)
- --------- ---------------- -------------- -------- -------------- ---------
<S> <C> <C> <C> <C> <C>
1987 $ 768 $ 203 $ 15 $ 986
1988 795 222 41 1,058
1989 925 425 65 1,415
1990 830 428 84 1,342
1991 1,080 656 122 1,858
1992 1,096 838 134 2,068
1993 954 1,122 120 2,196
1994 824 1,180 108 2,112
1995 948 1,637 128 2,713
1996 1,062 2,081 144 3,287 228.65%
<CAPTION>
TABLE B - CLASS B SHARES
Value of
Year/Period Value of Initial Value of Gain Dividend Total
Ended (1) Investment (2) Distribution Invested Total Value (2) Return (3)
- --------- ---------------- ------------ -------- -------------- ----------
<S> <C> <C> <C> <C> <C>
1996 $ 976 $ 88 $ -- $1,064 6.45%
<CAPTION>
TABLE C - 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)
- --------- -------------- ------------- -------- --------------- ----------
<S> <C> <C> <C> <C> <C>
1993 $ 922 $ 202 $ -- $1,124
1994 772 278 -- 1,050
1995 875 459 -- 1,334
1996 969 635 -- 1,604 60.35%
</TABLE>
(1) For the ten years ended December 31, 1996; from commencement of offering of
Class D shares on May 3, 1993; from commencement of offering of Class B
shares on April 22, 1996.
(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 capital gain distributions that
would have been paid during the period on such shares assuming that each
dividend or capital gain distribution was invested in additional shares at
net asset value; calculating the total value of the investment at the end of
the period; subtracting the CDSL on Class B and Class D shares, if
applicable; and finally, by dividing the difference between the amount of
the hypothetical initial investment at the beginning of the period and its
total value at the end of the period by the amount of the hypothetical
initial investment.
-16-
<PAGE>
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
It is the intention of the Fund not to hold Annual Meetings of Shareholders.
The Directors may call Special Meetings of Shareholders for action by
shareholder vote as may be required by the 1940 Act or the Articles of
Incorporation.
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 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. Deloitte & 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, 1996 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1996, 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.
-18-
<PAGE>
...1950-1989
. Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
. Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
. Establishes 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 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
five separate series: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund Seligman Henderson Global Growth Opportunities Fund and
Seligman Henderson Emerging Markets Growth Fund.
. Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
-19-
<PAGE>
- --------------------------------------------------------------------------------
60TH ANNUAL REPORT
- --------------------------------------------------------------------------------
SELIGMAN
GROWTH
FUND, INC.
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
[Logo]
- --------------------------------------------------------------------------------
A Growth Stock Fund
Established in 1937
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[Logo]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Captial Stock of
Seligman Growth Fund, Inc., which contains information about the sales charges,
management fee, and other costs. Please read the prospectus carefully before
investing or sending money.
EQGR2 12/96
<PAGE>
================================================================================
SELIGMAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
A mutual fund that seeks to provide longer-term growth in capital value and
an increase in future income for its shareholders. The Fund invests primarily in
the common stocks of companies selected for their growth prospects.
<TABLE>
<CAPTION>
HIGHLIGHTS OF 1996
- ----------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1996 DECEMBER 31, 1995
-------------------------------- -----------------------
CLASS A CLASS B* CLASS D CLASS A CLASS D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets (in thousands)............................ $675,086 $880 $11,493 $597,510 $6,412
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $5.85 $5.49 $5.49 $5.22 $4.96
With November 1996 Gain Distribution
Taken in Shares.................................... 6.32 5.96 5.96 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares....................... 21.14% 11.45% 20.21% -- --
- ----------------------------------------------------------------------------------------------------------------------
Dividends Paid per Share............................. -- -- -- $0.01 --
Distribution of Realized Gain per Share.............. $0.475 $0.475 $0.475 $0.598 $0.598
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of Average Net Assets...... $0.0120 $0.0199+ $0.0197 $0.0094 $0.0191
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* From April 22, 1996 (commencement of operations).
+ Annualized.
1
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Seligman Growth Fund posted strong results this year. Though its total return
based on the net asset value of Class A shares slightly lagged that of the
Standard & Poor's 500 Composite Stock Price Index (S&P 500), it outperformed the
average of its peers as measured by the Lipper Growth Funds Average. The Fund's
investment results begin on page 6.
Driven by the outstanding performance of a small number of the largest
stocks, the US equity markets continued to advance in 1996, setting successive
new highs by rebounding from occasional sharp, short-term, setbacks. The S&P
500's total return for the year was 22.96%, and the Dow Jones Industrial Average
(DJIA) posted an exceptional total return of 28.91%.
A constructive economic environment supported strong corporate earnings in
most industries during 1996. In spite of continued corporate downsizing and
restructuring, the unemployment rate fell as low as 5.2% in August and ended the
year at 5.3%, as compared to 5.6% in December 1995. The increased
competitiveness of US industry and the low inflation environment provided strong
fundamental support to higher equity prices.
Currently, there are no clear indications that there will be either runaway
economic expansion or recession in 1997. Looking ahead, the environment for the
US financial markets and investors remains generally positive, given continued
modest economic growth, low inflation, and bipartisan efforts to balance the
federal budget without raising taxes. While we always recognize that there could
be further short-term volatility, we remain positive about the long-term outlook
for the equity markets and your Fund.
On a final note, the activity witnessed in the equity markets in 1996,
where large one-day increases followed abrupt corrections, is not unusual in the
challenging world of investing. We believe the best strategy for growth of
capital is long-term investing. A professional financial advisor can help you
formulate a long-term investment plan to help you seek your financial goals, and
can provide the insight and support needed to weather the day-to-day uncertainty
that accompanies investing. It is time, not timing, that counts when it comes to
investing.
A discussion with your Portfolio Manager and the Fund's portfolio of
investments follow this letter.
We thank you for your continued interest in Seligman Growth Fund, and look
forward to serving your investment needs in the many years to come.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
------------------
Brian T. Zino
President
January 31, 1997
2
<PAGE>
================================================================================
ANNUAL PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
The following is a discussion with your Portfolio Manager regarding Seligman
Growth Fund, and a chart and table comparing your Fund's performance to the
performance of the Standard & Poor's 500 Composite Stock Price Index (S&P 500)
and the Lipper Growth Funds Average.
YOUR PORTFOLIO MANAGER
- -------------------------
[PHOTOGRAPH APPEARS HERE]
- -------------------------
SELIGMAN GROWTH TEAM: (FROM LEFT) LOUISE OH, NATALIE BILLON, LOUISE KNIGHT
(ADMINISTRATIVE ASSISTANT), DAVID LEVY, KENNETH LONDONER, (SEATED) LORIS D.
MUZZATTI (PORTFOLIO MANAGER). MISSING FROM PHOTO: MICHELLE BORRE
Loris D. Muzzatti is a Managing Director of J. & W. Seligman & Co. Incorporated,
and has been Vice President and Portfolio Manager of Seligman Growth Fund for
the past year, and Vice President and Portfolio Manager of Seligman Capital Fund
for the past eight years. Mr. Muzzatti is also Vice President of Seligman
Portfolios, Inc. and Portfolio Manager of its Seligman Capital Portfolio and the
US portion of its Seligman Global Growth Opportunities Portfolio, and Vice
President of Seligman Henderson Global Fund Series, Inc. and Portfolio Manager
of the US portion of its Seligman Henderson Global Growth Opportunities Fund. He
also manages a portion of the firm's institutional accounts. Mr. Muzzatti joined
Seligman in 1985 as a Vice President and Portfolio Manager. He is assisted by a
team of seasoned investment professionals who are dedicated to the growth
investment discipline, and to the objectives of Seligman Growth Fund.
IAIN C. CLARK is Chief Investment Officer of Seligman Henderson Co., Seligman
Growth Fund's Subadviser, and is responsible for the international investment
activities of the Fund. Mr. Clark is also head of International Investments for,
and a Director of, Henderson plc, an investment manager in London, England. He
has been with Henderson since 1985.
HOW DID SELIGMAN GROWTH FUND PERFORM IN THE LAST 12 MONTHS?
"Seligman Growth Fund had a solid year, posting a total return of 21.14% based
on the net asset value of Class A shares, which outpaced the 19.31% total return
of its competitive universe, the Lipper Growth Funds Average, as measured by
Lipper Analytical Services. The Fund's results modestly lagged the 22.96% total
return of the S&P 500."
WHICH ECONOMIC FACTORS AFFECTED THE FUND'S PERFORMANCE IN 1996?
"The economy grew steadily in 1996, supported by low levels of inflation. This
constructive economic background helped improve corporate earnings across
several industries, and generally supported both the strong advances of
blue-chip stocks in the equity markets and the Fund's performance. On the other
hand, the interest rate environment was more difficult, as fears of inflation
pushed rates higher in the first half of the year. Interest rates did reverse
course though, trending lower through the second half of the year as low levels
of inflation persisted."
WHICH MARKET FACTORS INFLUENCED THE FUND'S PERFORMANCE IN THE LAST 12 MONTHS?
"Investors' tremendous appetite for the largest companies in the equity markets
was reflected in the record highs hit by the S&P 500 and the Dow Jones
Industrial Average. Although smaller and mid-sized companies had solid results
in 1996, they lagged the gains of the larger stocks.
"In 1996, most established international markets did not keep pace with the
remarkable year of the US equity markets. The Fund maintains a 9% allocation in
international companies, seeking quality investment opportunities and stronger
potential returns over the long term. This international weighting did not
improve the Fund's performance in 1996. However, we expect that international
markets should post stronger relative performance in 1997. Further, the fourth
quarter of 1996 marked a restructuring of the international portion of the
portfolio, as we implemented a bottom-up stock selection approach similar to the
one used in the domestic portion of the portfolio."
3
<PAGE>
================================================================================
ANNUAL PERFORMANCE OVERVIEW (CONTINUED)
- --------------------------------------------------------------------------------
WHAT WAS YOUR INVESTMENT STRATEGY?
"Over the last 12 months, we continued to use a thorough and rigorous investment
process in our stock selection, and this discipline was primarily responsible
for the Fund's strong results. We also maintained our selling discipline, taking
profits in companies whose prices appreciated to the high end of their
historical valuation ranges. If a company experienced a significant change in
its structure that could influence the corporate outlook, we reviewed that
position for future viability. For example, we sold our position in PepsiCo, as
the prospects of the restaurant division seemed weak."
WHICH SECTORS IMPROVED THE FUND'S OVERALL PERFORMANCE IN THE PAST YEAR?
"The Fund was overweighted in mid-sized technology stocks in order to capture
their growth and appreciation potential, and these holdings generally improved
overall performance. However, the portfolio's strongest holdings were in the
largest technology companies such as Microsoft, Intel, and Cisco Systems. We
continue to hold these companies, as they are market leaders and still have
strong prospects.
"Another area of strength in the portfolio was the financial sector. Major
banks such as Citicorp and Wells Fargo had a good year, as did financial
services companies such as MBNA. Though we still believe the prospects for the
financial sector are strong, stock selection will become increasingly important
for continued performance. Finally, issues in consumer goods and services
improved the Fund's results, particularly Gillette and Coca-Cola."
WHICH SECTORS IMPAIRED THE FUND'S PERFORMANCE IN 1996?
"The energy sector had very strong results in 1996, due primarily to tight
supply conditions which drove up oil and gas prices, and which led to strong
stock appreciation. Seligman Growth Fund had a minimal investment in energy, as
it is not a growth sector but rather an industry that depends on the supply and
demand conditions of the underlying commodities. Therefore, the Fund did not
capture the appreciation seen in the sector. The Fund will maintain its
underweighting in energy, as we believe that the performance seen in 1996 will
not continue into the new year.
"In health care, we began the year overweighted in HMOs, but shifted assets
in the second half of the year to large pharmaceutical companies which held the
fastest and most stable earnings growth. While the Fund's health care holdings
did not match the sector's gains in the markets, they posted good results and
generally improved the Fund's returns. Pharmaceutical companies had strong
performance due to unit volume growth, as the availability of cutting-edge drugs
led to increases in the number of prescriptions written. Eli Lilly and Pfizer
were the strongest pharmaceutical holdings in the portfolio, and Guidant, a
manufacturer of cardiological equipment, had a solid year. At this time, United
Healthcare, a market leader which is improving its pricing leverage and
administrative abilities, is the only remaining HMO in the Fund. We will
maintain our positions in pharmaceutical and specialty health care companies as
their prospects remain quite positive."
WHAT IS THE OUTLOOK?
"Seligman Growth Fund is well positioned for 1997 as the portfolio has
significantly stronger projected earnings growth than the S&P 500. The Fund's
holdings typically grow earnings at a projected rate of 15% or more a year, and
stocks are invested in fundamentally solid businesses with strong financials and
low levels of debt. We continue to invest in growth companies in expanding
business areas with attractive price-to-earnings ratios and good opportunities
for appreciation. We believe economic growth will remain moderate in 1997, and
that the possibility for a mild reduction in economic growth exists. In an
overall slower growth environment, stable high-quality growth stocks are
generally given greater attention in the marketplace for their abilities to
improve corporate earnings."
4
<PAGE>
================================================================================
SELIGMAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
DIVERSIFICATION OF ASSETS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
---------------------
ISSUES COST VALUE 1996 1995
------- -------------- -------------- ------- ------
<S> <C> <C> <C> <C> <C>
NET CASH AND SHORT-TERM HOLDINGS ......... 1 $ 5,335,582 $ 5,335,582 0.8 0.2
-- ------------ ------------ ----- -----
COMMON STOCKS AND
CONVERTIBLE SECURITIES:
Aerospace.................................. 1 9,669,962 15,956,250 2.3 2.3
Automotive and Related..................... 4 11,128,151 19,228,685 2.8 2.2
Business Services.......................... 8 50,024,265 82,016,875 11.9 12.4
Chemicals.................................. 3 15,017,494 17,437,906 2.5 2.5
Consumer Goods and Services................ 5 21,210,750 38,402,699 5.6 7.0
Drugs and Health Care...................... 11 65,230,686 86,653,787 12.6 20.0
Electronics................................ 1 753,837 603,613 0.1 0.1
Energy..................................... 1 1,894,123 2,261,250 0.3 0.2
Financial Services......................... 12 58,879,104 114,743,659 16.7 15.5
Industrial Equipment....................... 6 24,718,281 35,804,235 5.2 5.2
Leisure and Entertainment.................. 11 53,219,726 59,247,341 8.6 6.7
Printing and Publishing.................... 1 1,630,509 3,041,139 0.4 0.4
Retail Trade............................... 5 28,772,455 29,232,256 4.3 4.1
Steel...................................... 1 5,555,290 5,100,000 0.7 1.0
Technology................................. 12 62,840,986 103,698,374 15.1 11.9
Telecommunications......................... 9 34,946,651 39,010,791 5.7 4.2
Tobacco.................................... 1 7,615,474 14,078,125 2.1 1.9
Miscellaneous.............................. 2 8,701,092 15,606,758 2.3 2.2
-- ------------ ------------ ----- -----
94 461,808,836 682,123,743 99.2 99.8
-- ------------ ------------ ----- -----
NET ASSETS ................................ 95 $467,144,418 $687,459,325 100.0 100.0
== ============ ============ ===== =====
</TABLE>
5
<PAGE>
================================================================================
PERFORMANCE COMPARISON CHART December 31, 1996
- --------------------------------------------------------------------------------
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, 1996, to a $10,000 hypothetical
investment made in the Standard & Poor's 500 Composite Stock Price Index (S&P
500) and the Lipper Growth Funds Average (Lipper Growth Average) for the same
period. The performances of Seligman Growth Fund Class B and D shares are not
shown in this chart, but are included in the table on page 7. 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 Average excludes the effect of sales charges.
[The following table represents points that appear on the line chart in the
printed version]
[LINE GRAPH APPEARS HERE]
SELIGMAN GROWTH FUND - CLASS A
<TABLE>
<CAPTION>
With Without Lipper
Sales Sales Growth
Charge Charge S&P 500 Average
------ ------ ------- -------
<S> <C> <C> <C> <C>
12/31/86 ............ $ 9,528.13 $10,000.00 $10,000.00 $10,000.00
11,669.69 12,247.62 12,135.00 12,094.12
12,067.35 12,664.96 12,744.18 12,389.11
12,615.86 13,240.64 13,585.29 13,144.80
12/31/87 ............ 9,856.79 10,344.93 10,524.53 10,321.94
9,973.30 10,467.21 11,123.37 11,119.35
10,719.27 11,250.13 11,864.19 11,762.48
10,461.26 10,979.34 11,904.53 11,682.65
12/31/88 ............ 10,580.64 11,104.63 12,272.38 11,850.00
11,208.72 11,763.81 13,142.49 12,716.58
12,416.17 13,031.07 14,302.97 13,752.57
14,266.43 14,972.95 15,834.82 15,161.72
12/31/89 ............ 14,150.97 14,851.77 16,161.01 15,042.24
13,401.80 14,065.50 15,674.57 14,719.39
14,816.90 15,550.68 16,660.50 15,783.06
12,100.00 12,699.23 14,371.35 13,245.87
12/31/90 ............ 13,420.50 14,085.14 15,659.02 14,335.74
15,857.93 16,643.27 17,934.27 16,895.57
15,740.46 16,519.98 17,893.03 16,740.43
17,007.95 17,850.25 18,850.30 18,008.82
12/31/91 ............ 18,581.03 19,501.23 20,429.96 19,661.03
18,206.29 19,107.92 19,913.08 19,477.50
17,301.06 18,157.87 20,291.43 18,966.80
18,364.78 19,274.26 20,930.61 19,540.50
12/31/92 ............ 20,679.93 21,704.07 21,983.42 21,341.78
20,577.21 21,596.27 22,944.09 21,897.45
19,927.10 20,913.96 23,056.52 22,071.34
21,710.60 22,785.78 23,651.38 23,164.67
12/31/93 ............ 21,961.10 23,048.69 24,200.09 23,702.20
21,167.83 22,216.13 23,282.91 22,931.93
20,040.55 21,033.02 23,380.69 22,316.30
21,293.09 22,347.59 24,524.01 23,554.60
12/31/94 ............ 21,117.67 22,163.49 24,519.11 23,257.68
22,094.48 23,188.67 26,907.27 24,961.84
23,722.50 24,897.31 29,476.91 27,371.14
26,094.75 27,387.04 31,820.32 29,741.05
12/31/95 ............ 27,130.61 28,474.20 33,735.91 30,446.81
29,001.68 30,437.94 35,547.53 32,099.72
30,404.99 31,910.74 37,140.06 33,557.37
31,600.40 33,165.35 38,287.68 34,545.20
12/31/96 ............ 32,865.36 34,492.96 41,480.88 36,325.49
</TABLE>
Performance data quoted represent changes in price and assume that all
distributions within the periods are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
6
<PAGE>
================================================================================
SELIGMAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS*
FOR PERIODS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------
CLASS B CLASS D
SINCE SINCE
INCEPTION THREE ONE FIVE 10 INCEPTION
4/22/96 MONTHS YEAR YEARS YEARS 5/3/93
-------------- -------- -------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
With Sales Charge n/a (0.89)% 15.39% 10.98% 12.64% n/a
Without Sales Charge n/a 4.00 21.14 12.08 13.18 n/a
CLASS B
With 5% CDSL 6.45% (1.08) n/a n/a n/a n/a
Without CDSL 11.45% 3.69 n/a n/a n/a n/a
CLASS D
With 1% CDSL n/a 2.74 19.21 n/a n/a n/a
Without CDSL n/a 3.69 20.21 n/a n/a 13.75%
S&P 500** 15.00+ 8.34 22.96 15.22 15.27 18.29++
LIPPER GROWTH AVERAGE** 9.54+ 5.15 19.31 13.05 13.76 15.76++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
DECEMBER 31, 1996 SEPTEMBER 30, 1996 JUNE 30, 1996 MARCH 31, 1996 DECEMBER 31, 1995
-------------------- ------------------- -------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A $5.85 $6.08 $5.85 $5.58 $5.22
CLASS B 5.49 5.75 5.54 5.35+++ n/a
CLASS D 5.49 5.75 5.54 5.29 4.96
</TABLE>
CAPITAL GAIN INFORMATION
For the year ended December 31, 1996
<TABLE>
<CAPTION>
CAPITAL GAINS
------------------------------------------------------------
PAID REALIZED UNREALIZED o
--------------- --------------- ---------------
<S> <C> <C> <C>
CLASS A $0.475 $0.389 $1.873
CLASS B 0.475 0.389 1.873
CLASS D 0.475 0.389 1.873
</TABLE>
The performances of Class B and 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.
- ----------
* Return figures reflect any change in price per share and assume the
reinvestment of dividends and capital gain distributions. Return figures for
Class A shares are calculated with and without the effect of the initial
4.75% maximum sales charge. Class A share returns reflect the effect of the
0.25% Administration, Shareholder Services and Distribution Plan after
January 1, 1993, only. Returns for Class B shares are calculated with and
without the effect of the maximum 5% contingent deferred sales load
("CDSL"), charged only on certain redemptions made within one year of the
date of purchase, declining to 1% in the sixth year and 0% thereafter.
Returns for Class D shares are calculated with and without the effect of the
1% CDSL, charged only on redemptions made within one year of the date of
purchase. The rates of return will vary and the principal value of an
investment will fluctuate. Shares, if redeemed, may be worth more or less
than their original cost. Past performance is not indicative of future
investment results.
** The S&P 500 and the Lipper Growth Average are unmanaged benchmarks that
assume investment of dividends. The S&P 500 does not reflect fees or sales
charges and the Lipper Growth Average does not reflect sales charges. The
monthly performance of the Lipper Growth Average is used in the Performance
Comparison Chart and the Investment Results per Share. Investors may not
invest directly in an index or an average.
+ From April 30, 1996.
++ From April 30, 1993.
+++ As of April 22, 1996.
o Represents the per share amount of net unrealized appreciation of portfolio
securities as of December 31, 1996.
7
<PAGE>
================================================================================
SELIGMAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
DURING PAST THREE MONTHS
<TABLE>
<CAPTION>
SHARES
----------------------
HOLDINGS
ADDITIONS INCREASE 12/31/96
- --------- -------- --------
<S> <C> <C>
American Home Products............................... 100,000 100,000
Computer Associates
International....................................... 155,000 155,000
Crown Cork & Seal.................................... 100,000 100,000
Disney, Walt......................................... 50,800 115,000
Guidant.............................................. 95,000 195,000
Hewlett-Packard...................................... 85,000 235,000
Honeywell............................................ 50,000 100,000
Lucent Technologies.................................. 135,000 135,000
Seagate Technology................................... 200,000 200,000
Viatel............................................... 250,000 250,000
<CAPTION>
SHARES
----------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/96
- ---------- -------- --------
<S> <C> <C>
Amgen................................................ 55,000 115,000
Eckerd............................................... 200,000 --
HFS.................................................. 40,000 115,000
Informix............................................. 150,000 --
Medtronic............................................ 150,000 --
Nordstrom............................................ 125,000 --
Oxford Health Plans.................................. 50,000 --
PepsiCo.............................................. 300,000 --
Pharmacia & Upjohn................................... 170,000 --
Schering-Plough...................................... 100,000 --
</TABLE>
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
LARGEST PORTFOLIO HOLDINGS
AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
SECURITY VALUE
- -------- ----------
<S> <C>
Intel.................................... $19,640,625
Microsoft................................ 18,191,250
First Data............................... 16,425,000
American International Group............. 16,237,500
Boeing................................... 15,956,250
General Electric......................... 14,831,250
Pfizer................................... 14,503,125
Philip Morris............................ 14,078,125
Gillette................................. 13,606,250
Tyco International....................... 13,218,750
</TABLE>
8
<PAGE>
================================================================================
SELIGMAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF 1996
GAIN DISTRIBUTION FOR
TAXABLE ACCOUNTS
A distribution of $0.475 per share, consisting of $0.381 from net long-term and
$0.094 from net short-term gain realized on investments from November 1995 to
October 1996, was paid on November 22, 1996, to Class A, B, 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 1996
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 on the sale 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 distribution was paid in shares, the per share cost basis for
federal income tax purposes was $5.87 for Class A shares and $5.52 for both
Class B and D shares.
A year-end statement of account showing activity for 1996, a Form 1099-DIV,
and if applicable, a Form 1099-B have been mailed to each shareholder. Form
1099-B shows the proceeds of any redemptions paid to the shareholder during the
year and reported to the Internal Revenue Service as required by federal
regulations. Form 1099-DIV shows the amount of the distribution from gain on
investments paid to the shareholder during the year.
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS 99.1%
AEROSPACE 2.3%
BOEING
Aircraft manufacturer ....... 150,000 $15,956,250
-----------
AUTOMOTIVE AND RELATED 2.8%
AUTOLIV (ADRS)+*
Swedish supplier of safety
restraint systems ........... 55,000 2,392,500
ECHLIN
French manufacturer of motor
vehicle replacement parts ... 163,000 5,154,875
HARLEY-DAVIDSON
Motorcycle manufacturer ..... 200,000 9,400,000
VALEO
Manufacturer of commercial
automotive components in
France ...................... 37,000 2,281,310
-----------
19,228,685
-----------
BUSINESS SERVICES 11.9%
COMPUTER ASSOCIATES
INTERNATIONAL
Software utilities and
databases ................... 155,000 7,711,250
ELECTRONIC DATA SYSTEMS
Computer systems and
services .................... 225,000 9,731,250
FIRST DATA
Credit card processing
services .................... 450,000 16,425,000
HFS*
Hotel and motel franchises .. 115,000 6,871,250
IKON OFFICE SOLUTIONS
Distributor of paper and
office equipment ............ 175,000 9,034,375
INTERPUBLIC GROUP OF COMPANIES
Worldwide advertising
agency ...................... 250,000 11,875,000
REYNOLDS & REYNOLDS (CLASS A)
Supplier of information
systems to the auto and
medical industries .......... 400,000 10,400,000
SUNGARD DATA SYSTEMS*
Backup computer services
for disaster recovery ....... 250,000 9,968,750
-----------
82,016,875
-----------
CHEMICALS 2.5%
AIR PRODUCTS & CHEMICALS
Industrial gases and
chemicals ................... 150,000 10,368,750
BAYER
Producer of specialty
chemicals, pharmaceuticals,
and plastics in Germany ..... 80,000 3,244,156
ENGELHARD
Specialty chemicals
and metals .................. 200,000 3,825,000
-----------
17,437,906
-----------
CONSUMER GOODS
AND SERVICES 5.6%
ADIDAS
German manufacturer of
sporting equipment
and footware ................ 32,000 2,763,636
COCA-COLA
Soft drinks, consumer
products .................... 200,000 10,525,000
CROWN CORK & SEAL
Manufacturer of metal
and plastic containers ...... 100,000 5,437,500
GILLETTE
Personal care products ...... 175,000 13,606,250
MATTEL
Manufacturer of dolls,
games, and action and
activity toys ............... 218,750 6,070,313
-----------
38,402,699
-----------
DRUGS AND HEALTH CARE 12.6%
AMERICAN HOME PRODUCTS
Manufacturer of
pharmaceuticals, food,
and housewares .............. 100,000 5,862,500
AMGEN*
Biotechnology company ....... 115,000 6,260,313
COLUMBIA/HCA HEALTHCARE
Health care facilities
and services ................ 300,000 12,225,000
ELI LILLY
Developer and manufacturer
of pharmaceuticals .......... 100,000 7,300,000
GUIDANT
Manufacturer of
cardiological equipment ..... 195,000 11,115,000
</TABLE>
- ----------
See footnotes on page 13.
10
<PAGE>
================================================================================
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
DRUGS AND HEALTH CARE (continued)
JOHNSON & JOHNSON
Health care products ........ 175,000 $ 8,706,250
MERCK
Developer and manufacturer
of pharmaceuticals .......... 100,000 7,925,000
NOVARTIS
Swiss manufacturer of health
care products ............... 2,000 2,285,501
PFIZER
Health care consumer products;
specialty chemicals ......... 175,000 14,503,125
ROUSSEL-UCLAF
French developer and
manufacturer of specialty
pharmaceuticals ............. 5,000 1,471,098
UNITED HEALTHCARE
Health maintenance
organization ................ 200,000 9,000,000
-----------
86,653,787
-----------
ENERGY 0.3%
HUANENG POWER INTERNATIONAL
(ADRs)*
Diversified Chinese
energy company .............. 100,500 2,261,250
-----------
FINANCIAL SERVICES 16.7%
AMERICAN INTERNATIONAL GROUP
International insurance ..... 150,000 16,237,500
CITICORP
Global commercial bank ...... 100,000 10,300,000
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
Mortgage financing .......... 300,000 11,175,000
GENERAL RE
Property casualty reinsurer . 75,000 11,831,250
GREEN TREE FINANCIAL
Loans for manufactured
homes ....................... 300,000 11,587,500
ING GROEP
Banking and insurance
services group in the
Netherlands ................. 87,396 3,145,305
MBNA
Issuer of bank credit cards . 150,000 6,225,000
MGIC INVESTMENT
Private mortgage insurance .. 150,000 11,400,000
NORWEST
Midwest bank ................ 250,000 10,875,000
SUNAMERICA
Diversified financial services,
specializing in pre-
retirement savings .......... 225,000 9,984,375
UTD OVERSEAS BANK
Singapore bank .............. 228,000 2,541,479
WELLS FARGO
Commercial banking
in California ............... 35,000 9,441,250
-----------
114,743,659
-----------
INDUSTRIAL EQUIPMENT 5.2%
ABB
Swedish manufacturer of
heavy equipment for electric
power generation and
distribution ................ 2,350 2,916,698
FKI BABCOCK
Electrical engineering
company in the UK ........... 875,000 3,026,844
GENERAL ELECTRIC
Supplier of electrical
equipment and other
industrial and consumer
products .................... 150,000 14,831,250
HONEYWELL
Manufacturer of automation
and control systems ......... 100,000 6,575,000
ILLINOIS TOOL WORKS
Fasteners, tools, and
plastic items ............... 75,000 5,990,625
KEYENCE
Japanese producer of
detection devices for the
manufacturing process ....... 20,000 2,463,818
-----------
35,804,235
-----------
LEISURE AND
ENTERTAINMENT 8.6%
CAPITAL RADIO
Commercial radio stations in
the UK ...................... 200,000 1,871,762
CIRCUS CIRCUS ENTERPRISES*
Casino hotels ............... 250,000 8,593,750
DISNEY, WALT
Theme parks, hotels, films .. 115,000 8,006,875
</TABLE>
- ----------
See footnotes on page 13.
11
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
LEISURE AND ENTERTAINMENT (continued)
GRANADA GROUP
Radio and television
broadcasting and publishing
based in the UK ............. 200,000 $ 2,950,637
HILTON HOTELS
Owner, operator, and
manager of hotels ........... 260,000 6,792,500
LADBROKE GROUP
UK hotel and property
investor and developer ...... 500,000 1,977,937
MIRAGE RESORTS*
Manager of casinos in
Las Vegas ................... 360,000 7,785,000
SOL MELIA
Hotel manager and franchise
company in Spain ............ 70,000 2,505,967
SUN INTERNATIONAL HOTELS
Operator of resort and
casino hotels ............... 150,000 5,475,000
VIACOM (CLASS B)
Diverse entertainment
communications company ...... 275,000 9,590,625
WPP GROUP
UK provider of worldwide
marketing services, including
advertising, public relations,
and market research ......... 850,000 3,697,288
-----------
59,247,341
-----------
PRINTING AND PUBLISHING 0.4%
ELSEVIER
Global printer and publisher
of professional trade
journals and magazines, based
in the Netherlands .......... 180,000 3,041,139
-----------
RETAIL TRADE 4.3%
CONSOLIDATED STORES*
Retailer of closed-out
merchandise ................. 250,000 8,031,250
HOME DEPOT
Chain of home improvement
stores ...................... 180,000 9,022,500
LIZ CLAIBORNE
Designer and distributor of
women's apparel ............. 200,000 7,725,000
OFFICE DEPOT*
Office supply retailer ...... 150,000 $ 2,662,500
SCHIMACHU
Japanese retailer of furniture 70,000 1,791,006
-----------
29,232,256
-----------
STEEL 0.7%
NUCOR
Mini-mill steel production .. 100,000 5,100,000
-----------
TECHNOLOGY 15.1%
CISCO SYSTEMS*
Computer network routers .... 200,000 12,737,500
HEWLETT-PACKARD
Computers and peripherals ... 235,000 11,808,750
INTEL
Semiconductor manufacturer .. 150,000 19,640,625
LINEAR TECHNOLOGY
Designer and manufacturer of
analog integrated circuits .. 40,000 1,755,000
MICROSOFT*
Microcomputer software ...... 220,000 18,191,250
SEAGATE TECHNOLOGY*
Global hard-disk drive
supplier .................... 200,000 7,900,000
SECOM
Japanese manufacturer of
electronic instrumentation .. 35,000 2,113,628
SGS-THOMSON
MICROELECTRONICS*
French manufacturer of semi-
conductor integrated circuits 45,000 3,182,081
STERLING COMMERCE*
Developer of electronic data
interchange software ........ 159,260 5,613,915
STERLING SOFTWARE*
Software and network
services; automated program
design software ............. 100,000 3,162,500
3COM*
Supplier of adapter cards,
hubs, and routers for local
area computer networks ...... 100,000 7,331,250
XEROX
Developer and marketer of
document processing
products and services ....... 195,000 10,261,875
-----------
103,698,374
-----------
</TABLE>
- ----------
See footnotes on page 13.
12
<PAGE>
================================================================================
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
TELECOMMUNICATIONS 5.7%
AMERICAN TELEPHONE &
TELEGRAPH
International and domestic
telecommunications services 150,000 $ 6,525,000
CENTURY TELEPHONE ENTERPRISES
Regional telephone and
cellular services ........... 125,000 3,859,375
L.M. ERICSSON TELEFON (SERIES B)
Global telecommunications
equipment and systems,
wired and mobile, based
in Sweden ................... 75,000 2,312,599
LUCENT TECHNOLOGIES
Designer and developer of
public and private networks 135,000 6,243,750
MOTOROLA
Producer of wireless
telecommunications
equipment ................... 100,000 6,137,500
NERA (ADSS)
Wireless equipment and
billing services for
INMARSAT global
satellite communications
network and microwave
radio relay, based in Norway 45,000 1,945,067
TELEFONICA DEL PERU (ADRS)
Provider of telecommuni-
cations services in Peru .... 100,000 1,887,500
VIATEL*
Provider of international
and national long-distance
telecommunications services 250,000 2,281,250
WORLDCOM*
Long distance carrier ....... 300,000 7,818,750
------------
39,010,791
------------
TOBACCO 2.1%
PHILIP MORRIS
Tobacco products manufacturer 125,000 14,078,125
------------
<CAPTION>
SHARES OR
PRIN. AMT VALUE
---------
<S> <C> <C>
MISCELLANEOUS 2.3%
HIS
Discount tour operator
in Japan .................... 49,500 shs. $ 2,388,008
TYCO INTERNATIONAL
Worldwide fire protection
services .................... 250,000 13,218,750
------------
15,606,758
------------
TOTAL COMMON STOCKS
(Cost $461,054,999) ........... 681,520,130
------------
CONVERTIBLE BONDS 0.1%
(Cost $753,837)
ELECTRONICS 0.1%
UNITED METRO ELECTRONICS
(TAIWAN)
1(TM)'%, 6/8/2004 ........... $430,000 603,613
------------
SHORT-TERM HOLDINGS 1.0%
(Cost $7,100,000) ............. 7,100,000
------------
TOTAL INVESTMENTS 100.2%
(Cost $468,908,836) .......... 689,223,743
OTHER ASSETS LESS
LIABILITIES (0.2)% ........... (1,764,418)
------------
NET ASSETS 100.0% .............. $687,459,325
============
- ----------
</TABLE>
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
13
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Common stocks and convertible securities (cost $461,808,836) ... $682,123,743
Short-term holdings (cost $7,100,000)........................... 7,100,000 $689,223,743
------------
Cash ........................................................................... 967,712
Receivable for dividends and interest .......................................... 757,828
Receivable for Capital Stock sold .............................................. 514,017
Investment in, and expenses prepaid to, shareholder service agent .............. 168,458
Other .......................................................................... 66,852
------------
TOTAL ASSETS ................................................................... 691,698,610
------------
LIABILITIES:
Payable for securities purchased ............................................... 2,087,618
Payable for Capital Stock repurchased .......................................... 923,378
Accrued expenses, taxes, and other ............................................. 1,228,289
------------
TOTAL LIABILITIES .............................................................. 4,239,285
------------
NET ASSETS ..................................................................... $687,459,325
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000 shares authorized;
117,643,091 shares outstanding):
Class A ....................................................................... $ 115,391,146
Class B ....................................................................... 160,153
Class D ....................................................................... 2,091,792
Additional paid-in capital ..................................................... 341,416,823
Accumulated net investment loss ................................................ (233,414)
Undistributed net realized gain ................................................ 8,317,206
Net unrealized appreciation of investments ..................................... 220,612,566
Net unrealized depreciation on translation of assets and liabilities
denominated in foreign currencies ............................................. (296,947)
------------
NET ASSETS ..................................................................... $687,459,325
============
NET ASSET VALUE PER SHARE:
CLASS A ($675,086,139 / 115,391,146 SHARES) .................................... $5.85
=====
CLASS B ($879,937 / 160,153 SHARES) ............................................ $5.49
=====
CLASS D ($11,493,249 / 2,091,792 SHARES) ....................................... $5.49
=====
</TABLE>
- ----------
See Notes to Financial Statements.
14
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $111,424)............ $ 6,557,285
Interest......................................................... 464,525
-----------
TOTAL INVESTMENT INCOME ......................................... $ 7,021,810
EXPENSES:
Management fee................................................... 4,552,474
Distribution and service fees.................................... 1,590,187
Shareholder account services..................................... 997,559
Custody and related services..................................... 245,493
Shareholder reports and communications........................... 146,858
Registration..................................................... 120,280
Auditing and legal fees.......................................... 82,856
Directors' fees and expenses..................................... 40,421
Shareholders' meeting............................................ 28,085
Miscellaneous.................................................... 37,848
-----------
TOTAL EXPENSES .................................................. 7,842,061
------------
NET INVESTMENT LOSS ............................................. (820,251)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments................................. 45,998,438
Net realized loss from foreign currency transactions ............ (192,526)
Net change in unrealized appreciation of investments ............ 80,581,682
Net change in unrealized appreciation on translation of assets and
liabilities denominated in foreign currencies and
forward currency contracts..................................... (1,186,005)
-----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ....... 125,201,589
------------
INCREASE IN NET ASSETS FROM OPERATIONS .......................... $124,381,338
============
</TABLE>
- ----------
See Notes to Financial Statements.
15
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1996 1995
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................................................... $ (820,251) $ 922,886
Net realized gain on investments ............................................... 45,998,438 78,316,368
Net realized gain (loss) from foreign currency transactions .................... (192,526) 406,810
Net change in unrealized appreciation of investments ........................... 80,581,682 61,247,607
Net change in unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies and forward currency contracts ............ (1,186,005) 395,616
------------- -------------
Increase in net assets from operations ......................................... 124,381,338 141,289,287
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income-- Class A ................................................ -- (1,048,188)
Net realized gain on investments:
Class A ....................................................................... (51,655,332) (62,681,650)
Class B ....................................................................... (48,869) --
Class D ....................................................................... (833,364) (685,513)
------------- -------------
Decrease in net assets from distributions ...................................... (52,537,565) (64,415,351)
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------
CAPITAL SHARE TRANSACTIONS:* YEAR ENDED DECEMBER 31,
----------------------------
1996 1995
----------- ----------
<S> <C> <C>
Net proceeds from sale of shares:
Class A ...................................... 1,555,646 1,963,645 8,910,750 9,903,613
Class B ...................................... 146,621 -- 807,268 --
Class D ...................................... 648,614 881,669 3,516,242 4,318,133
Investment of dividends-- Class A ............. -- 141,801 -- 734,496
Exchanged from associated Funds:
Class A ...................................... 13,065,985 7,453,091 74,567,188 39,381,227
Class B ...................................... 24,435 -- 136,451 --
Class D ...................................... 830,652 207,215 4,521,180 1,088,175
Shares issued in payment of gain distributions:
Class A ...................................... 6,962,221 9,630,233 40,868,393 49,877,844
Class B ...................................... 8,453 -- 46,662 --
Class D ...................................... 147,558 133,979 814,469 659,149
----------- ----------- ------------ ------------
Total ......................................... 23,390,185 20,411,633 134,188,603 105,962,637
----------- ----------- ------------ ------------
Cost of shares repurchased:
Class A ...................................... (7,581,746) (8,896,248) (43,251,632) (45,562,371)
Class B ...................................... (7,314) -- (40,259) --
Class D ...................................... (323,816) (94,062) (1,774,413) (462,501)
Exchanged into associated Funds:
Class A ...................................... (13,094,458) (8,899,690) (74,677,608) (46,762,125)
Class B ...................................... (12,042) -- (65,695) --
Class D ...................................... (503,789) (233,991) (2,685,707) (1,197,160)
----------- ----------- ------------ ------------
Total ......................................... (21,523,165) (18,123,991) (122,495,314) (93,984,157)
----------- ----------- ------------ ------------
Increase in Net Assets from
Capital Share Transactions ................. 1,867,020 2,287,642 11,693,289 11,978,480
=========== =========== ------------ ------------
Increase in Net Assets............................................................ 83,537,062 88,852,416
NET ASSETS:
Beginning of year................................................................. 603,922,263 515,069,847
------------ ------------
End of year (including accumulated net investment loss and dividends in
excess of net investment income of $233,414 and $215,986, respectively)........ $687,459,325 $603,922,263
============ ============
</TABLE>
- ----------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
16
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Growth Fund, Inc. (the "Fund") offers three classes of shares. All
shares existing prior to May 3, 1993, the commencement of Class D shares, were
classified as Class A shares. The Fund began offering Class B shares on April
22, 1996. 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 A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
charge but are subject to a contingent deferred sales load ("CDSL") of 1% on
redemptions within eighteen months of purchase. Class B 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 CDSL, if applicable, of
5% on certain redemptions in the first year after purchase, declining to 1% in
the sixth year and 0% thereafter. 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
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 CDSL of 1% imposed on certain redemptions
made within one year of purchase. The three 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 other class expenses, and has exclusive voting rights
with respect to any matter on 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, bonds, and U.S. Government securities are valued at
current market values or, in their absence, at fair values 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 US dollars. The market
value of investment securities and other assets and liabilities denominated
in foreign currencies are translated into US 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 US 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
17
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
that are specifically attributed to a particular class, are charged directly
to such class. For the year ended December 31, 1996, distribution and service
fees were the only class-specific expenses.
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 realized capital gain; and the
recharacterization of foreign exchange gains or losses to either ordinary
income or realized capital gains 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.
3. Purchases and sales of portfolio securities, excluding US Government
obligations and short-term investments, for the year ended December 31, 1996,
amounted to $167,872,026 and $213,883,151, respectively.
At December 31, 1996, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio
securities, including the effects of foreign currency translations, amounted to
$233,991,997 and $13,677,090, respectively.
4. At December 31, 1996, 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 .70% per annum of the first $1 billion of the Fund's average
daily net assets, 0.65% per annum of the next $1 billion of the Fund's average
daily net assets, and 0.60% per annum of the Fund's average daily net assets in
excess of $2 billion. Prior to January 1, 1996, the management fee rate 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
reflected in the Statement of Operations represents 0.70% per annum of the
Fund's average daily net assets. Seligman Henderson Co. (the "Subadviser"), an
entity owned 50% each by the Manager and Henderson plc, is entitled to a portion
of the Manager's fee for acting as Subadviser for certain of the international
investments of the Fund.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $20,514 from sales of Class A shares after commissions of
$160,989 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, 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,
1996, fees paid aggregated $1,499,727 or 0.23% per annum of the average daily
net assets of Class A shares.
Under the Plan, with respect to Class B and Class D shares, service
organizations can enter into
18
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
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 B and Class D
shares for which the organizations are responsible; and, for Class D shares
only, 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.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
of this fee to a third party (the "Purchaser"), which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the year ended December 31, 1996, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $2,455 and $88,005, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the
year ended December 31, 1996, such charges amounted to $4,805.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amount of such payments
and the Class B share distribution fees retained by the Distributor for the year
ended December 31, 1996, was $1,987.
Seligman Services, Inc., an affiliate of the Manager, is 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 year ended December
31, 1996, Seligman Services, Inc. received commissions of $22,876 from sales of
shares of the Fund. Seligman Services, Inc. also received distribution and
service fees of $568,663, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $985,009 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 $23,000 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, 1996, of
$233,414 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.
19
<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 each Class'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 each Class'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.
Average commission rate paid represents the average commissions paid by the
Fund to purchase or sell portfolio securities. It is determined by dividing the
total commission dollars paid by the number of shares purchased and sold during
the period for which commissions were paid. This rate is provided for periods
beginning January 1, 1996.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1996(1) 1995(1) 1994(1) 1993 1992
------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of year............. $5.22 $4.54 $5.26 $6.04 $5.95
----- ----- ----- ----- -----
Net investment income (loss)................... (.01) .01 .01 .01 .03
Net realized and unrealized
investment gain (loss)...................... 1.13 1.27 (.22) .35 .64
Net realized and unrealized gain (loss)
on foreign currency transactions............ (.01) .01 -- -- --
----- ----- ----- ----- -----
Increase (decrease) from investment
operations.................................. 1.11 1.29 (.21) .36 .67
Dividends paid ................................ -- (.01) (.01) (.01) (.03)
Distributions from net gain realized........... (.48) (.60) (.50) (1.13) (.55)
----- ----- ----- ----- -----
Net increase (decrease) in net asset value..... .63 .68 (.72) (.78) .09
----- ----- ----- ----- -----
Net asset value, end of year................... $5.85 $5.22 $4.54 $5.26 $6.04
===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 21.14% 28.47% (3.84)% 6.20% 11.30%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets................. 1.20% .94% .90% .89% .77%
Net investment income (loss)
to average net assets....................... (.12)% .17% .14% .18% .49%
Portfolio turnover............................. 26.05% 102.30% 93.59% 105.64% 46.96%
Average commission rate paid................... $.0437
Net assets, end of year (000s omitted)......... $675,086 $597,510 $513,328 $591,491 $614,860
</TABLE>
- ----------
See footnotes on page 21.
20
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B CLASS D
--------- -------------------------------------------------------
4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
TO ---------------------------------------- TO
012/31/96o 1996o 1995o 1994o 12/31/93
--------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period........... $5.35 $4.96 $4.38 $5.23 $5.67
----- ----- ----- ----- -----
Net investment income (loss)................... (.03) (.05) (.04) (.12) (.03)
Net realized and unrealized
investment gain (loss)...................... .65 1.07 1.21 (.23) .72
Net realized and unrealized gain (loss)
on foreign currency transactions............ -- (.01) .01 -- --
----- ----- ----- ----- -----
Increase (decrease) from investment
operations.................................. .62 1.01 1.18 (.35) .69
Dividends paid ................................ -- -- -- -- --
Distributions from net gain realized........... (.48) (.48) (.60) (.50) (1.13)
----- ----- ----- ----- -----
Net increase (decrease) in net asset value..... .14 .53 .58 (.85) (.44)
----- ----- ----- ----- -----
Net asset value, end of period................. $5.49 $5.49 $4.96 $4.38 $5.23
===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 11.45% 20.21% 27.01% (6.56)% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets................. 1.99%+ 1.97% 1.91% 2.93% 2.17%+
Net investment income (loss)
to average net assets....................... (.83)%+ (.88)% (.83)% (2.34)% (1.03)%+
Portfolio turnover............................. 26.05%++ 26.05% 102.30% 93.59% 105.64%+++
Average commission rate paid................... $.0437++ $.0437
Net assets, end of period (000s omitted)....... $880 $11,493 $6,412 $1,742 $1,197
</TABLE>
- ----------
* Commencement of offering of shares.
o Per share amounts for the periods ended December 31, 1996, 1995, and
1994, are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
See Notes to Financial Statements.
21
<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,
1996, 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 periods 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, 1996, by correspondence with the Fund's custodians; 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, 1996, 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.
DELOITTE & TOUCHE LLP
New York, New York
January 31, 1997
22
<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
SENIOR 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,
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
DIRECTOR OR TRUSTEE,
Various Organizations
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
PRESIDENT AND MANAGING DIRECTOR,
J. & W. Seligman & Co. Incorporated
CHAIRMAN AND PRESIDENT, Seligman Data Corp.
- ----------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
<TABLE>
- -------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
<S> <C> <C>
WILLIAM C. MORRIS LORIS D. MUZZATTI THOMAS G. ROSE
CHAIRMAN VICE PRESIDENT TREASURER
BRIAN T. ZINO LAWRENCE P. VOGEL FRANK J. NASTA
PRESIDENT VICE PRESIDENT SECRETARY
- -------------------------------------------------------------------------------------------------------
MANAGER INDEPENDENT AUDITORS IMPORTANT TELEPHONE NUMBERS
J. & W. Seligman & Co. Deloitte & Touche LLP (800) 221-2450 Shareholder
Incorporated Services
100 Park Avenue GENERAL DISTRIBUTOR
New York, NY 10017 Seligman Financial Services, Inc. (800) 445-1777 Retirement Plan
100 Park Avenue Services
SUBADVISER New York, NY 10017
Seligman Henderson Co. (800) 622-4597 24-Hour Automated
100 Park Avenue SHAREHOLDER SERVICE AGENT Telephone Access
New York, NY 10017 Seligman Data Corp. Service
100 Park Avenue
GENERAL COUNSEL New York, NY 10017
Sullivan & Cromwell
</TABLE>
<PAGE>
File No. 2-10836
811-229
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, 1996; Financial Highlights for Class B shares for
the period from April 22, 1996 (commencement of offering) to
December 31, 1996; Financial Highlights for Class D shares for
the period from May 3, 1993 (commencement of offering) to
December 31, 1996.
Part B Required Financial Statements are included in the Fund's Annual
Report to Shareholders, dated December 31, 1996, which are
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements are: Portfolio of
Investments as of December 31, 1996; Statement of Assets and
Liabilities as of December 31, 1996; Statement of Operations for
the year ended December 31, 1996; Statements of Changes in Net
Assets for the years ended December 31, 1996 and 1995; Notes to
Financial Statements; Financial Highlights for the five years
ended December 31, 1996 for the Fund's Class A shares; for the
period April 22, 1996 (commencement of offering) to December 31,
1996 for the Fund's Class B shares; and for the period May 3,
1993 (commencement of offering) through December 31, 1996 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.
(1) Articles of Incorporation of Registrant.*
(2) Amended and Restated By-laws.*
(3) Not applicable.
(4) Specimen Stock Certificate of Class B Capital Stock.
(Incorporated by Reference to Form SE filed on April 16, 1996.)
(4a) 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. (Incorporated by Reference to Post-Effective Amendment
No. 72 filed on April 19, 1996.)
(5a) Form of Subadvisory Agreement between the Manager and Seligman Henderson
Co. (Incorporated by Reference to Post-Effective Amendment No. 72 filed
on April 19, 1996.)
(6) Copy of amended Distributing Agreement between Registrant and Seligman
Financial Services, Inc.*
(6a) Copy of amended Sales Agreement between Seligman Financial Services, Inc.
and Dealers. (Incorporated by Reference to Post-Effective Amendment
No. 72 filed on April 19, 1996.)
(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.)
(6c) Form of Sales Agreement between Seligman Financial Services, Inc. and
Dean Witter Reynolds, Inc. (Incorporated by reference to Exhibit 6b of
Registration Statement No. 2-33566, Post-Effective Amendment No. 53,
filed on April 28, 1997.)
(6d) Form of Sales Agreement between Seligman Financial Services, Inc. and
Dean Witter Reynolds, Inc. with respect to certain Chilean institutional
investors. (Incorporated by reference to Exhibit 6c of Registration
Statement No. 2-33566, Post-Effective Amendment No. 53, filed on April
28, 1997.)
(6e) Form of Dealer Agreement between Seligman Financial Services, Inc. and
Smith Barney Inc. (Incorporated by reference to Exhibit 6d of
Registration Statement No. 2-33566, Post-Effective Amendment No. 53,
filed on April 28, 1997.)
(7) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to Exhibit 7 of Registration Statement
No. 2-92487, Post-Effective Amendment No. 21, filed on January 29,
1997.)
(7a) Deferred Compensation Plan for Directors of Seligman Group of Funds.
(Incorporated by Reference to Exhibit 7a of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29, 1997.)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company.*
(9) Not applicable.
(10) Opinion and Consent of Counsel.*
<PAGE>
File No. 2-10836
811-229
PART C. OTHER INFORMATION (continued)
-----------------
Item 24. Financial Statement and Exhibits (continued)
- -------- --------------------------------
(11) Report and Consent of Independent Auditors.*
(12) Not applicable.
(13) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to Post-Effective Amendment No. 72
filed on April 19, 1996.)
(13a) Purchase Agreement for Initial Capital between Registrant's Class D
shares and J. & W. Seligman & Co. Incorporated.*
(14) The Seligman IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement
No. 333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(14a) The Seligman Simple IRA Plan Set-Up Kit.
(Incorporated by reference to Exhibit 14 of Registration Statement
No. 333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(14b) The Seligman Simple IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement
No. 333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(15) Form of Administration, Shareholder Services and Distribution Plan of
Registrant. (Incorporated by Reference to Post-Effective Amendment No. 72
filed April 19, 1996.)
(15a) Form of Administration, Shareholder Services and Distribution Agreement
between Seligman Financial Services, Inc. and Dealers.
(Incorporated by Reference to Post-Effective Amendment No. 72
filed April 19, 1996.)
(16) Schedule of Computation of Performance Data provided in Registration
Statement in response to Item 22.*
(17) Financial Data Schedules 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. (Incorporated by Reference to
Post-Effective Amendment No. 72 filed on April 19, 1996.)
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
- ------- -------------------------------
<TABLE>
<CAPTION>
(1) (2)
Number of Record
Title of Class Holders as of March 31, 1997
- -------------- ----------------------------
<S> <C>
Class A Common Stock 21,990
Class B Common Stock 165
Class D Common Stock 1,525
</TABLE>
<PAGE>
File No. 2-10836
811-229
PART C. OTHER INFORMATION (continued)
-----------------
Item 27. Indemnification
- ------- ---------------
Reference is made to the provisions of Articles Twelfth and Thirteenth
of Registrant's Amended and Restated Articles of Incorporation filed
as Exhibit 24(b)(1) and Article IV of Registrant's Amended and
Restated By-laws filed as Exhibit 24(b)(2) to this Post-Effective
Amendment No. 73 to the Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised by the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser - The Manager
- ------- ----------------------------------------------------
also serves as investment manager to seventeen 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 Municipal
Fund Series, Inc., Seligman Municipal Series Trust, Seligman New
Jersey Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund
Series, Seligman Portfolios, Inc., Seligman Quality Municipal Fund
Series, Inc., Seligman Select Municipal Fund, Inc., Seligman Value
Fund Series, Inc. and Tri-Continental Corporation.
The Subadviser also serves as subadviser to nine 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., certain portfolios of Seligman Portfolios, Inc., Seligman Value
Fund Series, 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. 801-15798 and SEC File
No. 801-40670 filed on August 7, 1996 and October 2, 1996,
respectively).
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 Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.
Seligman Value Fund Series, Inc.
<PAGE>
File No. 2-10836
811-229
PART C. OTHER INFORMATION (continued)
- ------ -----------------
(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 31, 1997
--------------------
<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 None
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
Ed Lynch* Senior Vice President, None
Director of Marketing
Mark R. Gordon* Senior Vice President, None
National Sales Manager
Gerald I. Cetrulo, III Senior Vice President of Sales None
140 West Parkway
Pompton Plains, NJ 07444
Bradley F. Hanson Senior Vice President of Sales, None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
Bradley W. Larson Senior Vice President of Sales None
367 Bryan Drive
Danville, CA 94526
D. Ian Valentine Senior Vice President of Sales None
307 Braehead Drive
Fredericksburg, VA 22401
Helen Simon* Vice President, Sales None
Administration Manager
Karen J. Bullot* Vice President, None
Retirement Plans
John Carl* Vice President, Marketing None
Marsha E. Jacoby* Vice President, National None
Accounts Manager
William W. Johnson* Vice President, Order Desk None
James R. Besher Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Bradford C. Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Christopher J. Derry Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
Andrew Draluck Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
</TABLE>
<PAGE>
File No. 2-10836
811-229
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1997
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Jonathan Evans Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
Michael C. Forgea Regional Vice President None
32 W. Anapamu Street # 186
Santa Barbara, CA 93101
David Gardner Regional Vice President None
2504 Clublake Trail
McKinney, TX 75070
Carla A. Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Mark Lien Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
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
Tim O'Connell Regional Vice President None
14872 Summerbreeze Way
San Diego, CA 92128
Juliana Perkins Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
Dave Petzke Regional Vice President None
1673 Montelena Court
Carson City, NV 89703
Robert H. Ruhm Regional Vice President None
167 Derby Street
Melrose, MA 02176
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
Kelli A. Wirth-Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
Jeffrey S. Dean* Assistant Vice President, None
Annuity Product Manager
</TABLE>
<PAGE>
File No. 2-10836
811-229
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1997
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Sandra Floris* Assistant Vice None
President, Order Desk
Keith Landry* Assistant Vice None
President, Order Desk
Gail S. Cushing* Assistant Vice President, None
National Sales Manager
Joseph M. McGill* Assistant Vice President None
and Compliance Officer
Jack Talvy* Assistant Vice President, None
Internal Marketing Services Manager
Joyce Peress* Assistant Secretary 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 years ended December 31, 1996, 1995 and
1994, the approximate cost of these services were:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Class A Shares $111,600 $116,000 $120,480
Class B Shares 220 -- --
Class D Shares 6,900 1,500 856
</TABLE>
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. 73 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 28th day of April, 1997.
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. 73 has been signed below
by the following persons in the capacities indicated on April 28, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William C. Morris Chairman of the Board
- --------------------------------- (Principal executive officer)
William C. Morris* and Director
/s/ Brian T. Zino Director and President
- ---------------------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- ---------------------------------
Thomas G. Rose
</TABLE>
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
James C. Pitney, Director ) ------------------------------------
James Q. Riordan, Director ) * Brian T. Zino, Attorney-in-fact
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
File No. 2-10836
811-229
SELIGMAN GROWTH FUND, INC.
Post-Effective Amendment No. 73 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
<TABLE>
<CAPTION>
Form N-1A Item No. Description
- ------------------ -----------
<S> <C>
24(b)(1) Amended and Restated Articles of Incorporation
24(b)(2) Amended and Restated By-laws
24(b)(6) Copy of Amended Distributing Agreement
24(b)(8) Copy of Custodian Agreement
24(b)(10) Opinion and Consent of Counsel
24(b)(11) Consent of Independent Auditors
24(b)(13)(a) Form of Purchase Agreement of Fund's Class D shares
24(b)(16) Schedule of Computation of Performance Data
24(b)(17) Financial Data Schedules
Other exhibits Power of Attorney
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELIGMAN GROWTH FUND, INC. CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996<F1>
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 468,909
<INVESTMENTS-AT-VALUE> 689,224
<RECEIVABLES> 1,397
<ASSETS-OTHER> 1,077
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 691,698
<PAYABLE-FOR-SECURITIES> 2,088
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,151
<TOTAL-LIABILITIES> 4,239
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 459,060
<SHARES-COMMON-STOCK> 115,391<F1>
<SHARES-COMMON-PRIOR> 114,483<F1>
<ACCUMULATED-NII-CURRENT> (233)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,317
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 220,315
<NET-ASSETS> 675,086<F1>
<DIVIDEND-INCOME> 6,465<F1>
<INTEREST-INCOME> 458<F1>
<OTHER-INCOME> (30)<F1>
<EXPENSES-NET> (7,664)<F1>
<NET-INVESTMENT-INCOME> (771)<F1>
<REALIZED-GAINS-CURRENT> 45,836
<APPREC-INCREASE-CURRENT> 79,395
<NET-CHANGE-FROM-OPS> 124,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (51,655)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,622<F1>
<NUMBER-OF-SHARES-REDEEMED> (20,676)<F1>
<SHARES-REINVESTED> 6,962<F1>
<NET-CHANGE-IN-ASSETS> 83,537
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 15,019
<OVERDISTRIB-NII-PRIOR> (216)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,489<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,664<F1>
<AVERAGE-NET-ASSETS> 641,308<F1>
<PER-SHARE-NAV-BEGIN> 5.22<F1>
<PER-SHARE-NII> (0.01)<F1>
<PER-SHARE-GAIN-APPREC> 1.12<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (0.48)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 5.85<F1>
<EXPENSE-RATIO> 1.20<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> 002
<NAME> SELIGMAN GROWTH FUND, INC. CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1996<F1>
<PERIOD-START> APR-22-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 468,909
<INVESTMENTS-AT-VALUE> 689,224
<RECEIVABLES> 1,397
<ASSETS-OTHER> 1,077
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 691,698
<PAYABLE-FOR-SECURITIES> 2,088
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,151
<TOTAL-LIABILITIES> 4,239
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 459,060
<SHARES-COMMON-STOCK> 160<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> (233)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,317
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 220,315
<NET-ASSETS> 880<F1>
<DIVIDEND-INCOME> 3<F1>
<INTEREST-INCOME> 0<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (5)<F1>
<NET-INVESTMENT-INCOME> (2)<F1>
<REALIZED-GAINS-CURRENT> 45,836
<APPREC-INCREASE-CURRENT> 79,395
<NET-CHANGE-FROM-OPS> 124,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (49)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 171<F1>
<NUMBER-OF-SHARES-REDEEMED> (19)<F1>
<SHARES-REINVESTED> 8<F1>
<NET-CHANGE-IN-ASSETS> 83,537
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 15,019
<OVERDISTRIB-NII-PRIOR> (216)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5<F1>
<AVERAGE-NET-ASSETS> 355<F1>
<PER-SHARE-NAV-BEGIN> 5.35<F1>
<PER-SHARE-NII> (0.03)<F1>
<PER-SHARE-GAIN-APPREC> 0.65<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (0.48)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 5.49<F1>
<EXPENSE-RATIO> 1.99<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS B ONLY. ALL OTHER DATA ARE FUND LEVEL.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 004
<NAME> SELIGMAN GROWTH FUND, INC. CLASS D
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 468,909
<INVESTMENTS-AT-VALUE> 689,224
<RECEIVABLES> 1,397
<ASSETS-OTHER> 1,077
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 691,698
<PAYABLE-FOR-SECURITIES> 2,088
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,151
<TOTAL-LIABILITIES> 4,239
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 459,060
<SHARES-COMMON-STOCK> 2,092<F1>
<SHARES-COMMON-PRIOR> 1,293<F1>
<ACCUMULATED-NII-CURRENT> (233)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,317
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 220,315
<NET-ASSETS> 11,493<F1>
<DIVIDEND-INCOME> 89<F1>
<INTEREST-INCOME> 7<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (173)<F1>
<NET-INVESTMENT-INCOME> (77)<F1>
<REALIZED-GAINS-CURRENT> 45,836
<APPREC-INCREASE-CURRENT> 79,395
<NET-CHANGE-FROM-OPS> 124,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (834)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,479<F1>
<NUMBER-OF-SHARES-REDEEMED> (828)<F1>
<SHARES-REINVESTED> 148<F1>
<NET-CHANGE-IN-ASSETS> 83,537
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 15,019
<OVERDISTRIB-NII-PRIOR> (216)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 61<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 173<F1>
<AVERAGE-NET-ASSETS> 8,800<F1>
<PER-SHARE-NAV-BEGIN> 4.96<F1>
<PER-SHARE-NII> (0.05)<F1>
<PER-SHARE-GAIN-APPREC> 1.06<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (0.48)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 5.49<F1>
<EXPENSE-RATIO> 1.97<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.B1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
of
NATIONAL INVESTORS CORPORATION
THIS IS TO CERTIFY that NATIONAL INVESTORS CORPORATION, a corporation
organized and existing under and by virtue of the laws of the State of Maryland,
amends and restates its charter to read in its entirety as follows:
FIRST: We, the subscribers, James L. Watson, Joseph T. Van Pelt and
Dorothy M. Gaston, the post office address of all of whom is No. 10 Light
Street, Baltimore, Maryland, all being of full legal age, do, under and by
virtue of the General Laws of the State of Maryland authorizing the formation of
corporations, associate ourselves with the intention of forming a corporation.
SECOND: Name. The name of the corporation (which is hereinafter
----
called the "Corporation") is
SELIGMAN GROWTH FUND, INC.
THIRD: Purposes and Powers. The purpose for which the Corporation is
-------------------
formed and the business or objects to be carried on or promoted by it are to
engage in the business of holding, investing and reinvesting its funds in
securities, and in connection therewith, to hold part or all of its funds in
cash, to acquire by purchase, subscription, contract, exchange or otherwise, and
to own, hold for investment, resale or otherwise, sell, assign, negotiate,
exchange, transfer or otherwise dispose of, or turn to account or realize upon,
and generally to deal in and with, all forms of stocks, bonds, debentures,
notes, evidences of interest, evidences of indebtedness, warrants, and other
securities, irrespective of their form, the name by which they may be described,
or the character or form of the entities by which they are issued or created
(hereinafter sometimes called "Securities"); and, subject to the provisions of
these Articles of Incorporation, to make payment thereof by any lawful means; to
exercise any and all rights, powers and privileges of individual ownership or
interest in respect of any and all such Securities, including the right to vote
thereon and to consent and otherwise act with respect thereto; to do any and all
acts and things for the preservation, protection, improvement and enhancement in
value of any and all such Securities; to acquire or become interested in any
such Securities as aforesaid, irrespective of whether or not such Securities be
fully paid or subject to further payments, and to make payments thereon as
called for or in advance of calls or otherwise;
And, in general, to do any or all such other things in connection with
the objects and purposes of the Corporation hereinbefore set forth, as are, in
the opinion of the Board of Directors of the Corporation, necessary, incidental,
relative or conducive to the attainment of such objects and purposes; and to do
such acts and things, and to exercise any and all such powers to the same extent
as a natural person might or could lawfully do to the full extent authorized or
permitted to a corporation under any laws that may be now or hereafter
applicable or available to the Corporation.
<PAGE>
In addition, the Corporation may issue, sell, acquire through
purchase, exchange, or otherwise, hold, dispose of, resell, transfer, reissue or
cancel shares of its capital stock in any manner and to the extent now or
hereafter permitted by the laws of Maryland and by these Articles of
Incorporation.
The foregoing matters shall each be construed as purposes, objects and
powers, and none of such matters shall be in any way limited by reference to, or
inference from, any other of such matters or any other Article of these Articles
of Incorporation, but shall be regarded as independent purposes, objects and
powers and the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms or the
general powers of the Corporation now or hereafter conferred by the laws of the
State of Maryland, nor shall the expression of one thing be deemed to exclude
another, although it be of like nature, not expressed.
Nothing herein contained shall be construed as giving the Corporation
any rights, powers or privileges not permitted to it by law.
FOURTH: Principal Office. The post office address of the principal
----------------
office of the Corporation in this State is c/o The Corporation Trust
Incorporated, First Maryland Building, 25 South Charles Street, Baltimore,
Maryland. The resident agent of the Corporation is The Corporation Trust
Incorporated, the post office address of which is First Maryland Building, 25
South Charles Street, Baltimore, Maryland. Said resident agent is a Corporation
of the State of Maryland.
FIFTH: Capital Stock.
-------------
A. The total number of shares of capital stock of all classes which
the Corporation has authority to issue is 500,000,000 shares of capital stock
(par value $1.00 per share), amouting to an aggregate par value of $500,000,000.
All such shares are intitially classified as "Common Stock." The Board of
Directors of the Corporation may classify or reclassify any unissued shares of
capital stock (which classes shall share ownership of specifically allocated
assets but may have differing dividend, distribution, anf other rights, as
hereinafter contemplated) whether or not such shares have been previously
classifed or reclassified from time to time by setting or changing in any one or
more respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock.
B. No holder of shares of the capital stock of the Corporation shall
be entitled as such, as a matter of right, to purchase or subscribe for any part
of any new or additional issue of stock or securities of the Corporation.
C. All shares of the capital stock of the Corporation now or
hereafter authorized shall be "subject to redemption" and "redeemable," in the
sense used in the General Laws of the State of Maryland authorizing the
formation of corporations. In the absence of any contrary specification as to
the purpose for which shares of the capital stock of the Corporation are
redeemed or repurchased by it, all shares of any class so redeemed or
repurchased shall thereafter have the status of authorized but unissued capital
stock of the Corporation.
-2-
<PAGE>
D. All classes of the Common Stock of the Corporation shall represent
the same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights with any other shares of capital stock; provided,
however, that not withstanding anything in the charter of the Corporation to the
contrary:
1. Each class of shares may be subject to such front-end sales
charges as may be established by the Board of Directors from time
to time in accordance with the Investment Company Act of 1940, as
amended, and applicable rules and regulations of the National
Association of Securities Dealers, Inc.
2. Each class of 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 of
1940, as amended, and applicable rules and regulations of the
National Association of Securities Dealers, Inc.
3. 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 amoung the various 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,
dividend, distributions and liquidation rights of the shares of
that class.
4. At such time as may be determined by the Board of Directors and
reflected in Articles Supplementary establishing a class, shares
of a particular class shall be automatically converted to 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 of the shares does not constitute
a taxable event under federal income tax law. The Board of
Directors, in its sole discretion, may suspend any conversion
provision if such opinion is no longer available.
5. As to any matter with respect to which a separate vote of any
class is required by the Investment Company Act of 1940, as
amended, or by the Maryland General Corporation Law (including,
without limitation, approval of any plan, agreement or other
arrangement referred to in subsection (3) above), such requirement
as to a separate vote by that class shall apply in lieu of single
class voting. As to any matter that does not affect the interest
of a particular class, only the holders of shares of the affected
classes hall be entitled to vote.
E. The terms of the common stock as further 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
-3-
<PAGE>
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 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 (e) 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 and Class A
shares as determined by the Corporation on the date of conversion.
(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
provision 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
-4-
<PAGE>
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 manner 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.
SIXTH: Directors. The Corporation has eleven directors in office, and the
---------
names of the directors in office are as follows:
Lane W. Adams Douglas R. Nichols, Jr.
Fred E. Brown Robert G. Olmsted
Stanley R. Currie James C. Pitney
William McBride Love B. W. Robertson
David Hunter McAlpin Robert L. Shafer
John E. Merow
The number of directors in office may be changed from time to time in such
lawful manner as the By-Laws of the Corporation shall provide.
SEVENTH: Provisions for Defining, Limiting and Regulating the Powers of
--------------------------------------------------------------
the Corporation, Directors and Shareholders.
-------------------------------------------
A. Board of Directors. The Board of Directors shall have the general
------------------
management and control of the business and property of the Corporation, and may
exercise all the powers of the Corporation, except such as are by statute or by
these Articles of Incorporation or by the By-Laws conferred upon or reserved to
the shareholders. In furtherance and not in limitation of the powers conferred
by statute the Board of Directors is hereby empowered:
1. To authorize the issuance and sale, from time to time, of shares
of the capital stock of the Corporation, whether for cash at not less
than the par value thereof or for such other consideration as the Board
of Directors may deem advisable, in the manner and to the extent now or
hereafter permitted by the laws of Maryland; provided, however, that the
consideration (or the value thereof as determined by the Board of
Directors) per share to be received by the
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<PAGE>
Corporation upon the sale of any shares of its capital stock (including
treasury shares) shall not be less than the net asset value (determined
as provided in Article NINTH hereof) per share of such capital stock
outstanding at the time (determined by the Board of Directors) as of
which the computation of such net asset value shall be made.
2. To authorize the execution and performance by the Corporation of
an agreement or agreements, which may be exclusive contracts, with
Seligman Distributor, Inc., a Delaware corporation, or any other person,
as distributor, providing for the distribution of shares of the capital
stock of the Corporation. Such agreement or agreements may provide for
the charge by the Corporation of a premium over the net asset value
(determined as provided in Article NINTH hereof) of such shares, which
premium shall not exceed an amount equal to 9% of the sum of such net
asset value plus such premium, and the payment or allowance of a
commission or discount by the Corporation to such distributor, and may
further provide for the reallowance by such distributor of commissions or
concessions from such commission or discount; provided, however, that
such commission or discount shall not exceed the amount of the
aforementioned premium. Any such agreement or agreements shall provide
that any such distributor may purchase shares of the capital stock of the
Corporation from the Corporation only to the extent that it shall have
received purchase orders therefor, that the distributor shall not make
any short sales of the shares of the capital stock of the Corporation,
and that the distributor shall not sell any shares of the capital stock
of the Corporation to officers or directors of the Corporation, of the
distributor or of any corporation or association furnishing managerial or
supervisory services to the Corporation, or to any such corporation or
association, unless the distributor is advised that the purchases are for
investment, that the shares purchased will not be resold except through
redemption or repurchase by or on behalf of the Corporation and that the
purchasers will advise the distributor of any sales of shares so
purchased made less than two months after the date or purchase.
3. To specify, in instances in which it may be desirable, that
shares of the capital stock of the Corporation repurchased by it are not
acquired for retirement and to specify the purposes for which such shares
are repurchased.
4. To authorize the execution and performance by the Corporation of
an agreement or agreements with Seligman or any other person whereby,
subject to the control of the Board of Directors, the investment and
other operations of the Corporation shall be managed by Seligman or such
other person.
5. To determine to the extent permitted by law at what times and
places and under what conditions and regulations the accounts and books
of the Corporation or any of them shall be open to inspection by
shareholders.
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<PAGE>
The Corporation may in its By-Laws confer powers on the Board of
Directors in addition to the foregoing and in addition to the powers expressly
conferred by statute.
B. Voting Powers: At any meeting of shareholders of the Corporation
-------------
each shareholder shall be entitled to one vote for every share of capital stock
standing in his name on the books of the Corporation on the date, determined in
accordance with the By-Laws, for the determination of shareholders entitled to
vote at such meeting. Notwithstanding any provision of law requiring any action
to be taken or authorized by the holders of a greater proportion than a majority
of the shares of capital stock of the Corporation entitled to vote thereon, such
action shall be valid and effective if taken or authorized by the affirmation
vote of the holders of a majority of the shares of the capital stock of the
Corporation outstanding and entitled to vote thereon.
C. Dividends. The Corporation shall distribute to its shareholders
---------
in the form of dividends, at such times and in such manner as the Board of
Directors shall determine, in cash or in shares of capital stock or rights to
subscribe to shares of capital stock of the Corporation, or in property or
otherwise, amounts substantially equal to the net income of the Corporation from
dividends and interest after deduction of operating expenses, taxes applicable
to such income, and reserves set aside out of such income.
In addition, the Board of Directors is empowered to distribute, from
time to time, in such form as the Board of Directors may determine, additional
dividends from any assets of the Corporation legally available for the payment
thereof (excluding unrealized appreciation of the Corporation's assets),
provided that each shareholder be notified at the time of payment of each such
dividend of the account or accounts from which it was paid.
EIGHTH: Redemptions and Repurchases.
---------------------------
A. The Corporation shall under some circumstances redeem, and may
under other circumstances repurchase, shares of its capital stock as follows:
1. Obligation of the Corporation to Redeem Shares. Each holder of
----------------------------------------------
shares of any class shall be entitled at his option to require the
Corporation to redeem all or any part of the shares of capital stock
of that class owned by such holder, upon written or telegraphic
request to the Corporation or its designated agent, accompanied by
surrender of the certificate or certificates for such shares, or such
other evidence of ownership as shall be specified by the Board of
Directors, for the proportionate interest per share in the assets of
the Corporation belonging to that class, or the cash equivalent
thereof (being the net asset value of such shares determined as
provided in Article NINTH hereof, less the amount of any applicable
contingent deferred sales charge payable on such redemption), subject
to and in accordance with the provisions of paragraph B of this
Article.
2. Right of the Corporation to Repurchase Shares. In addition
---------------------------------------------
the Board of Directors may, from time to time in its discretion,
authorize the officers of the Corporation to repurchase shares of its
capital stock either directly or through an
-7-
<PAGE>
agent, subject to and in accordance with the provisions of paragraph
B of this Article. The price to be paid by the Corporation upon any
such repurchase shall be determined, in the discretion of the Board
of Directors, in accordance with any provision of the Investment
Company Act of 1940 or any rule or regulation thereunder, including
any rule or regulation made or adopted pursuant to Section 22 of the
Investment Company act of 1940 by the Securities and Exchange
Commission or any securities association registered under the
Securities Exchange Act of 1934.
3. Redemption of Accounts. In addition the Board of Directors
----------------------
may, from time to time in its discretion, authorize the Corporation
to require the redemption of all or any part of the outstanding
Shares of any Class or all or any part of the outstanding Shares of
any shareholder, for the proportionate interest per Share in the
assets of the Corporation belonging to that Class or shareholder, or
the cash equivalent thereof (being the net asset value per Share of
that Class determined as provided in Article NINTH hereof), subject
to and in accordance with the provisions of paragraph B of this
Article, upon the sending of written notice thereof to each
shareholder any of whose Shares are so redeemed and on such terms and
conditions as the Board of Directors shall deem advisable.
B. The following provisions shall be applicable with respect to
redemptions and repurchases of shares of the capital stock of the Corporation
pursuant to paragraph A hereof:
1. Certificates for shares of capital stock to be redeemed or
repurchased shall be surrendered in proper form for transfer,
together with such proof of the authenticity of signatures as may be
required by resolution of the Board of Directors.
2. Payment of the redemption or repurchase price by the
Corporation or its designated agent shall be made in cash within
seven days after the time used for determination of the redemption or
repurchase price, but in no event prior to delivery to the
Corporation or its designated agent of the certificate or
certificates for the shares of capital stock so redeemed or
repurchased, or of such other evidence of ownership as shall be
specified by the Board of Directors; except that any payment may be
made in whole or in part in Securities or other assets of the
Corporation, if, in the event of the closing of the New York Stock
Exchange or the happening of any event at any time prior to actual
payment which makes the liquidation of Securities in orderly fashion
impractical or impossible, the Board of Directors shall determine
that payment in cash would be prejudicial to the best interests of
the remaining shareholders of the Corporation. In making any such
payment in whole or in part in Securities or other assets of the
Corporation, the Corporation shall, as nearly as may be practicable,
deliver Securities or other assets of a grosst value (determined in
the manner provided in Article NINTH hereof) representing the same
proportionate interest in the Securities and other assets of the
Corporation as is represented by the shares so to be paid for.
Delivery of the Securities included in any such
-8-
<PAGE>
payment shall be made as promptly as any necessary transfers on the
books of the several corporations whose Securities are to be
delivered may be made.
3. The right of the holder of shares of capital stock redeemed or
repurchased by the Corporation as provided in this Article to receive
dividends thereon and all other rights of such holder with respect to
such shares shall forthwith cease and terminate from and after the
time as of which the redemption or repurchase price of such shares
has been determined (except the right of such holder to receive (a)
the redemption or repurchase price of such shares from the
Corporation or its designated agent, in cash and/or in Securities or
other assets of the Corporation, and (b) any dividend to which such
holder had previously become entitled as the record holder of such
shares on the record date for such dividend).
NINTH: Determination of Net Asset Value. For the purposes referred to in
--------------------------------
Articles SEVENTH and EIGHTH hereof the net asset value per share of the capital
stock of the Corporation shall be determined by or pursuant to the direction of
the Board of Directors in accordance with the following provisions:
A. Such net asset value per Share of a particular Class on any day shall
be computed as follows:
The net asset value of each share of such stock shall be the
quotient obtained by dividing the "net value of the assets" of the
Corporation by the total number of shares at the time deemed to be
outstanding (including Shares sold whether paid for and issued or
not, and excluding shares redeemed or repurchased on the basis of
previously determined values, whether paid for, received and held in
treasury, or not).
The "net value of the assets" shall be the "gross value" after
deducting the amount of all expenses incurred and accrued and unpaid
as may be set up to cover taxes and any other liabilities, and such
other deductions as in the opinion of the officers of the Corporation
are in accordance with accepted accounting practice.
The "gross value" of the assets shall be the amount of all cash
and receivables and the market value of all Securities and other
assets held by the Corporation at the time as of which the
determination is made. Securities held shall be valued at market
value or, in the absence of readily available market quotations, at
fair value, both as determined pursuant to methods approved by the
Board of Directors and in accordance with applicable statutes and
regulations.
B. The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are deemed by it to be necessary or desirable in order to enable the
Corporation to comply with any provision of the Investment Company
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<PAGE>
Act of 1940 or any rule or regulation thereunder, including any rule or
regulation made or adopted pursuant to Section 22 of the Investment Company act
of 1940 by the Securities and Exchange Commission or any securities association
registered under the Securities Exchange Act of 1934.
TENTH: Determination Binding. Any determination made by or pursuant to
---------------------
the direction of the Board of Directors in good faith, and so far as accounting
matters are involved in accordance with accepted accounting practice, as to the
amount of the assets, obligations or liabilities of the Corporation, as to the
amount of the net income of the Corporation from dividends and interest for any
period or amounts at any time legally available for the payment of dividends, as
to the amount of any reserves or charges set up and the propriety thereof, as to
the time of or purpose for creating any reserves or charges, as to the use,
alteration or cancellation of any reserves or charges (whether or not any
obligation or liability for which such reserves or charges shall have been
created shall have been paid or discharged or shall be then or thereafter
required to be paid or discharged), as to the price or closing bid or asked
price of any security owned or held by the Corporation, as to the market value
of any security or fair value of any other asset owned by the Corporation, as to
the number of shares of the Corporation outstanding or deemed to be outstanding,
as to the impracticability or impossibility of liquidating Securities in orderly
fashion, as to the extent to which it is practicable to deliver the
proportionate interest in the Securities and other assets of the Corporation
represented by any shares redeemed or repurchased in payment for any such
shares, as to the method of payment for any such shares redeemed or repurchased,
or as to any other matters relating to the issue, sale, redemption, repurchase,
and/or other acquisition or disposition of Securities or shares of capital stock
of the Corporation shall be final and conclusive and shall be binding upon the
Corporation and all holders of shares of its capital stock, past, present and
future, and shares of the capital stock of the Corporation are issued and sold
on the condition and understanding that any and all such determinations shall be
binding as aforesaid. No provision of these Articles of Incorporation shall be
effective to (a) bind any person to waive compliance with any provision of the
Securities Act of 1933 or the Investment Company Act of 1940 or of any valid
rule, regulation or order of the Securities and Exchange Commission thereunder,
or (b) protect or purport to protect any director or officer of the Corporation
against any liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
ELEVENTH: Amendments. The Corporation reserves the right to take any
----------
lawful action and to make any amendment of these Articles of Incorporation,
including the right to make any amendment which changes the terms of any shares
of the capital stock of the Corporation of any class now or hereafter authorized
by classification, reclassification, or otherwise, and to make any amendment
authorizing any sale, lease, exchange or transfer of the property and assets of
the Corporation as an entirety, or substantially as an entirety, with or without
its good will and franchise, if a majority of all the shares of capital stock of
the Corporation at the time issued and outstanding and entitled to vote, vote in
favor of any such action or amendment, or consent thereto in writing, and
reserves the right to make any amendment of these Articles of Incorporation in
any form, manner or substance now or hereafter authorized or permitted by law.
Shareholders shall be advissed of the adoption of any and all amendments of
these Articles of Incorporation by statements in the regular financial report,
or by other communication, issued as of the close of the quarter in which such
amendments were adopted.
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<PAGE>
TWELFTH: Liability. A director or officer of the Corporation shall not be
---------
liable to the Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a Director or Officer, except to the extent such exemption
from liability or limitation thereof is not permitted by law (including the
Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended). No amendment, modification or repeal of this Article
Twelfth shall adversely affect any right or protection of a Director or Officer
that exists at the time of such amendment, modification or repeal.
THIRTEENTH: Indemnification of Directors, Officers and Employees. The
----------------------------------------------------
Corporation shall indemnify to the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended) any person made or threatened to be made a party to any
action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a Director, Officer or employee of the Corporation or
serves or served at the request of the Corporation any other enterprise as a
Director, Officer or employee. To the fullest extent permitted by law
(including the Investment Company Act of 1940 as currently in effect or as the
same may hereafter be amended), expenses incurred by any such person in
defending any such action, suit or proceeding shall be paid or reimbursed by the
Corporation promptly upon receipt by it of an undertaking of such person to
repay such expenses if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation. The rights provided to any
person by this Article shall be enforceable against the Corporation by such
person who shall be presumed to have relied upon it in serving or continuing to
serve as a Director, Officer or employee as provided above. No amendment of
this Article Thirteenth shall impair the rights of any person arising at any
time with respect to events occurring prior to such amendment. For purposes of
this Article Thirteenth, the term "Corporation" shall include any predecessor of
the Corporation and any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger; the term
"other enterprise" shall include any corporation, partnership, joint venture,
trust or employee benefit plan; service "at the request of the Corporation"
shall include service as a Director, Officer or employee of the Corporation
which imposes duties on, or involves services by, such Director, Officer or
employee with respect to an employee benefit plan, its participants or
beneficiaries; any excise taxes assessed on a person with respect to an employee
benefit plan shall be deemed to be indemnifiable expenses; and action by a
person with respect to any employee benefit plan which such person reasonably
believes to be in the interest of the participants and beneficiaries of such
plan shall be deemed to be action not opposed to the best interests of the
Corporation.
* * *
The foregoing amendment and restatement of the charter of the Corporation
has been duly advised by the Board of Directors and approved by the stockholders
of the Corporation.
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<PAGE>
IN WITNESS WHEREOF, NATIONAL INVESTORS CORPORATION has caused these
Articles of Amendment and Restatement to be signed in its name and on its behalf
by its President, witnessed by its Secretary, and the said officers of the
Corporation further also acknowledged said instrument to be the corporate act of
the Corporation and stated under the penalties of perjury that to the best of
their knowledge, information and belief the matters and facts therein set forth
with respect to approval are true in all material respects, all on April 22,
1982.
NATIONAL INVESTORS CORPORATION
By: /s/ Ronald T. Schroeder
------------------------------------
Ronald T. Schroeder
President
Witness:
/s/ Carl J. White
- ----------------------------------
Carl J. White, Secretary
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<PAGE>
SELIGMAN GROWTH FUND, INC.
BY-LAWS
ARTICLE I.
Shareholders' Meetings
SECTION 1. Place of Holding Meetings. Each meeting of shareholders
-------------------------
shall be held at the office of the Corporation in the City of Baltimore,
Maryland, or at such other place within the United States as may be fixed by the
Board of Directors.
SECTION 2. Annual Meetings. The annual meeting of the shareholders
---------------
of the Corporation shall be held during the 31-day period commencing April 15 of
each year on such day and at such hour as may from time to time be designated by
the Board of Directors and stated in the notice of such meeting, for the
transaction of such business as may properly be brought before the meeting;
provided, however, that an annual meeting of shareholders shall not be required
- -------- -------
to be held in any year in which none of the following is required to be acted on
by shareholders pursuant to the Investment Company Act of 1940: election of
directors; approval of the investment advisory agreement; ratification of the
selection of independent public accountants and approval of a distribution
agreement.
SECTION 3. Special Meetings. Special meetings of the shareholders
----------------
for any purpose or purposes may be called by the Chairman of the Board, the
President, a majority of the Board of Directors or a majority of the Executive
Committee and shall be called by the Secretary upon the written request of the
holders of shares entitled to not less than twenty-five percent of all the votes
entitled to be cast at such meeting. Such request shall state the purpose or
purposes of such meeting and the matters proposed to be acted on thereat. The
Secretary shall inform such shareholders of the reasonably estimated cost of
preparing and mailing such notice of meeting, and upon payment to the
Corporation of such costs the Secretary shall give notice stating the purpose or
purposes of the meeting, as required in this Article and by law, to all
shareholders entitled to notice of such meeting. No special meeting need be
called upon the request of the holders of shares entitled to cast less than a
majority of all votes entitled to be cast at such meeting, to consider any
matter which is substantially the same as a matter voted upon at any special
meeting of shareholders held during the preceding twelve months.
SECTION 4. Notice of Shareholders' Meetings. Not less than ten days
--------------------------------
nor more than ninety days before the date of every shareholders' meeting, the
Secretary shall give to each shareholder entitled to vote at or to notice of
such meeting, written or printed notice stating the time and place of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, either by mail or presenting it to him personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the shareholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
<PAGE>
SECTION 5. Quorum. At any meeting of shareholders, the presence in
------
person or by proxy of shareholders entitled to cast one-third of the votes
thereat shall constitute a quorum. If at any meeting of the shareholders there
shall be less than a quorum present, the holders of a majority of the shares
present at such meeting may, without further notice, adjourn the same from time
to time until a quorum shall attend, but no business shall be transacted at any
such adjourned meeting, except such as might have been lawfully transacted had
the meeting not been adjourned.
SECTION 6. Voting. A majority of the votes cast at a meeting of
------
shareholders, at which a quorum is present, shall be sufficient to take or
authorize action upon any matter which may properly come before the meeting,
unless more than a majority of votes cast is required by law or by the Articles
of Incorporation.
With respect to all shares having voting rights (a) a shareholder may
vote the shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, provided
that no proxy shall be valid after eleven months from its date unless otherwise
provided in the proxy and (b) in all elections for directors every shareholder
shall have the right to vote, in person or by proxy, the shares owned of record
by him, for as many persons as there are directors to be elected and for whose
election he has a right to vote.
SECTION 7. Conduct of Shareholders' Meetings. Each meeting of
---------------------------------
shareholders shall be presided over by the Chairman of the Board, or if he is
not present, by the President or a Vice-President of the Corporation designated
by the Chairman of the Board to act as Chairman of the meeting, or if none of
the foregoing is present, by a Chairman to be elected at the meeting. The
Secretary of the Corporation, or if he is not present, an Assistant Secretary,
or if neither is present, a secretary to be named at the meeting, shall act as
secretary of the meeting.
ARTICLE II.
Board of Directors.
SECTION 1. Number; Term. The business and affairs of the Corporation
------------
shall be managed under the direction of a Board of eleven members, but from time
to time such number may be increased to not more than twenty or decreased to not
less than three, by vote of a majority of the entire Board of Directors,
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors so made by the Board.
At each annual meeting of shareholders the shareholders shall elect
directors to hold office until the next annual meeting or until their successors
are elected and qualify, subject to the right of removal granted by law.
Directors need not be shareholders.
SECTION 2. Vacancies. Any vacancy occurring in the Board of
---------
Directors for any cause other than by reason of an increase in the number of
directors may be filled by the vote of a majority of the remaining directors,
although such majority is less than a quorum. Any vacancy occurring by reason
of an increase in the number of directors may be filled by action of a majority
of the entire Board of
2
<PAGE>
Directors. A director elected by the Board of Directors to fill a vacancy shall
be elected to hold office until the next annual meeting of shareholders or until
his successor is elected and qualifies.
SECTION 3. Meetings. Meetings of the Board of Directors, regular or
--------
special, may be held at any place in or out of the State of Maryland as the
Board may from time to time determine or as shall be specified or filed in the
respective notices or waivers of notice thereof.
Regular meetings of the Board shall be held at such time as the Board
may from time to time determine. No notice need be given of regular meetings of
the Board.
Special meetings of the Board may be held at any time upon call of the
Chairman of the Board, at the request of the Executive Committee or of a
majority of the directors, by the Secretary, by oral, telegraphic or written
notice duly served on or sent or mailed to each director not less than two days
before such meeting. Such notice need not include a statement of the business
to be transacted at, or the purpose of, such special meeting. A written waiver
of notice, signed by the director entitled to such notice and filed with the
records of the meeting, whether before or after the holding thereof, or actual
attendance at the meeting, shall be deemed equivalent to the giving of notice to
such director.
At all meetings of the Board, a majority of the entire Board, but not
less than two directors, shall constitute a quorum for the transaction of
business. If there be less than a quorum present at any meeting of the Board, a
majority of those present may adjourn the meeting from time to time.
The action of a majority of the directors present at a meeting at
which a quorum is present shall be the action of the Board unless the
concurrence of a greater proportion is required for such action by statute, the
Articles of Incorporation or these By-Laws.
SECTION 4. Board Operations Committee. The Board of Directors may
--------------------------
appoint those of its members who are not interested persons (as defined in the
Investment Company Act of 1940) of the Corporation as a Board Operations
Committee, which committee shall have the authority generally to direct the
operations of the Board of Directors including (a) the nomination for
appointment by the Board from among the members of the Board Operations
Committee of the members of the Audit Committee, the Director Nominating
Committee and the Portfolio Transactions Committee, (b) the nomination for
appointment by the Board of such other committees, if any, as the Board
Operations Committee shall determine, (c) the power of the Board to select legal
counsel for the Corporation, (d) the recommendation to the Board of (i) matters
to be submitted to the shareholders of the Corporation for consideration and
(ii) the recommendations to be made to the shareholders with respect thereto,
and (e) control of the agenda for meetings or other action of the Board.
SECTION 5. Audit Committee. The Board of Directors may appoint those
---------------
of its members nominated by the Board Operations Committee for that purpose as
an Audit Committee, such committee to be composed of two or more directors. The
Audit Committee shall (a) recommend independent public accountants for selection
by the Board, (b) review the scope of audit, accounting and financial internal
controls and the quality and adequacy of the Corporation's accounting staff with
the independent public accountants and such other persons as may be deemed
appropriate, (c) review
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reports of the independent public accountants and comment to the Board when
warranted, (d) report to the Board at least once each year and at such other
times as the committee deems desirable, and (e) be directly available at all
times to the independent public accountants and responsible officers of the
Corporation for consultation on audit, accounting and related financial matters.
SECTION 6. Director Nominating Committee. The Board of Directors may
-----------------------------
appoint those of its members nominated by the Board Operations Committee for
that purpose as a Director Nominating Committee, such committee to be composed
of two or more directors. The Director Nominating Committee shall recommend to
the Board a slate of persons to be nominated for election as directors by the
shareholders at each annual meeting of shareholders and a person to be elected
to fill any vacancy occurring for any reason in the Board.
SECTION 7. Portfolio Transactions Committee. The Board of Directors
--------------------------------
may appoint those of its members nominated by the Board Operations Committee for
that purpose as a Portfolio Transactions Committee, such committee to be
composed of two or more directors. The Portfolio Transactions Committee shall
maintain familiarity with, report to the Board concerning, and make such
recommendations to the Board as it may deem appropriate with respect to, the
practices followed in the handling of orders to buy and sell portfolio
securities for the Corporation.
SECTION 8. Executive Committee. The Board of Directors may appoint
-------------------
those of its members nominated by the Board Operations Committee for that
purpose as an Executive Committee, such committee to be composed of two or more
directors. In the intervals between meetings of the Board, the Executive
Committee shall have the power of the Board to (a) determine the value of
securities and assets owned by the Corporation, (b) elect or appoint officers of
the Corporation to serve until the next meeting of the Board and (c) take such
action as may be necessary to manage the portfolio security loan business of the
Corporation.
All action by the Executive Committee shall be recorded and reported
to the Board at its meeting next succeeding such action.
SECTION 9. Other Committees. The Board of Directors may appoint from
----------------
among its members other committees composed of two or more directors which shall
have such powers as may be delegated or authorized by the resolution appointing
them.
SECTION 10. Committee Procedures. The Board of Directors may at any
--------------------
time, in conformity with the recommendations of the Board Operations Committee,
change the members of any committee, fill vacancies or discharge any committee.
In the absence of any member of any committee, the member or members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an interested person (as
defined in the Investment Company Act of 1940) of the Corporation.
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Each committee may fix its own rules of procedure and may meet as and
when provided by those rules.
A majority of the members of the Board Operations Committee, and two
or more members of any other committee, shall constitute a quorum unless the
Board shall otherwise provide.
Copies of the minutes of all meetings of committees other than the
Nominating Committee and the Executive Committee shall be distributed to the
Board unless the Board shall otherwise provide.
SECTION 11. Telephone Meetings. Members of the Board of Directors or
------------------
a committee of the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time.
Participation in a meeting by these means constitutes presence in person at the
meeting.
SECTION 12. Action Without a Meeting. Any action required or
------------------------
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if a written consent to such
action is signed by all members of the Board or of such committee, as the case
may be, and such written consent is filed with the minutes of proceedings of the
Board or committee.
SECTION 13. Compensation of Directors. The Board of Directors shall
-------------------------
have the authority to fix the compensation of the directors for services in any
capacity.
ARTICLE III.
Officers.
SECTION 1. Officers. The executive officers of the Corporation shall
--------
be elected by the Board of Directors and shall be a Chairman of the Board, who
shall be the chief executive officer of the Corporation, a President, one or
more Vice-Presidents, a Secretary and a Treasurer. The Chairman of the Board
shall be selected from among the directors. The Board may also appoint such
other officers, employees and agents as it may deem appropriate. Any two or
more offices, except those of President and Vice-President, may be held by the
same person but no person shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law, the Articles of
Incorporation or these By-Laws to be executed, acknowledged or verified by two
or more officers.
SECTION 2. Term. Officers shall serve for one year and until their
----
successors are elected and shall qualify, but any officer may be removed (except
as a director) by action of a majority of the entire Board of Directors
whenever, in the judgment of the Board, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
SECTION 3. Authority and Duties. All officers and agents of the
--------------------
Corporation shall have such authority and perform such duties in the management
of the property and affairs of the
5
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Corporation as generally pertain to their respective offices, as well as such
authority and duties as may be determined by resolution of the Board of
Directors.
Without limiting the generality of the foregoing and subject to the
provisions of the Articles of Incorporation of the Corporation and to the order
of the Board of Directors, the Treasurer shall be the chief financial and
accounting officer of the Corporation and as such shall receive, or cause to be
received, and give, or cause to be given, receipt for all funds and securities
paid or delivered to, or for the account of the Corporation; shall cause such
funds and securities to be deposited for the account of the Corporation with
such custodians as may be designated by the Board of Directors; shall pay or
cause to be paid out of the funds of the Corporation all just debts of the
Corporation upon their maturity; shall maintain, or cause to be maintained,
accurate records of all receipts, disbursements, assets, liabilities and
transactions of the Corporation; shall see that adequate audits thereof are
regularly made; and shall, when required by the Board of Directors, render
accurate statements of the condition of the Corporation.
SECTION 4. Compensation of Officers. The Board of Directors may
------------------------
determine what, if any, compensation shall be paid to officers of the
Corporation.
ARTICLE IV.
INDEMNIFICATION.
The Corporation may indemnify any person, made a party to any action
by or in the right of the Corporation to procure a judgment in its favor, by
reason of the fact that he, his testator or intestate, is or was a director or
officer of the Corporation, against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred by him in connection with the
defense of such action, or in connection with an appeal therein, except in
relation to matters as to which such director or officer is adjudged to have
breached his duty to the Corporation as such director or officer. Such
indemnification shall in no case include amounts paid in settling or otherwise
disposing of a threatened action, or a pending action with or without court
approval, or expenses incurred in defending a threatened action, or a pending
action which is settled or otherwise disposed of without court approval.
The Corporation may indemnify any person made, or threatened to be
made, a party to an action or proceeding other than one by or in the right of
the Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, which any director or officer of the Corporation
served in any capacity at the request of the Corporation, by reason of the fact
that he, his intestator or intestate, was a director or officer of the
Corporation, or served such other corporation in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in the best interests of
the Corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any such civil or criminal action or proceeding by judgment, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not in
itself
6
<PAGE>
create a presumption that any such director or officer did not act, in good
faith, for a purpose which he reasonably believed to be in the best interests of
the Corporation or that he had reasonable cause to believe that his conduct was
unlawful.
A person who has been wholly successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding of the character
described in the first two paragraphs of this Article shall be entitled to
indemnification as authorized in such paragraphs. Except as provided in the
preceding sentence, any indemnification under such paragraphs, unless ordered
by a court, shall be made by the Corporation, only if authorized in the specific
case:
(a) By the Board of Directors acting by a quorum consisting
of directors who are not parties to such action or proceeding upon
a finding that the director or officer has met the standard of
conduct set forth in the first or second paragraph of this
Article, as the case may be, or,
(b) If such a quorum is not obtainable with due diligence:
(1) By the Board of Directors upon the opinion in
writing of independent legal counsel that indemnification
is proper in the circumstances because the applicable
standards of conduct set forth in such paragraphs has been
met by such director or officer, or
(2) By the shareholders upon a finding that the
director or officer has met the applicable standard of
conduct set forth in such paragraphs.
Expenses, including attorneys' fees, incurred in defending a civil or
criminal action or proceeding may be paid by the Corporation in advance of the
final disposition of such action or proceeding if authorized under the preceding
sentence, subject to repayment to the Corporation by the person receiving such
advancement in case he is ultimately found not to be entitled to indemnification
or, where indemnification is granted, to the extent the expenses so advanced by
the Corporation exceed the indemnification to which he is entitled.
Nothing herein shall affect the right of any person to be awarded
indemnification, including attorneys' fees, by a court in accordance with law.
If any expenses or other amounts are paid by way of indemnification,
otherwise than by court order or action by the shareholders, the Corporation
shall, not later than the next annual meeting of shareholders unless such
meeting is held within three months from the date of such payment, and, in any
event, within fifteen months from the date of such payment, mail to its
shareholders of record at the time entitled to vote for the election of
directors a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
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<PAGE>
To the extent permitted by law, the provisions of this Article shall apply
to all alleged or actual causes of action, whenever heretofore or hereafter
accrued, asserted against any person designated in the first two paragraphs
hereof.
Indemnification provided for in this Article shall not be deemed exclusive
of any other rights to which any person may lawfully be entitled under any By-
Law, agreement, vote of shareholders, or otherwise.
ARTICLE V.
Capital Stock.
SECTION 1. Certificates of Stock. Each shareholder shall be entitled to a
---------------------
certificate or certificates which shall represent and certify the number of
whole shares of stock owned by him in the Corporation. Each certificate shall
be signed by the Chairman of the Board, President or a Vice-President and
countersigned by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer and shall be sealed with the corporate seal. The signatures
may be either manual or facsimile signatures and the seal may be either
facsimile or any other form of seal. In case any officer who has signed any
certificate ceases to be an officer of the Corporation before the certificate is
issued, the certificate may nevertheless be issued by the Corporation with the
same effect as if the officer had not ceased to be such officer as of the date
of its issue.
SECTION 2. Lost Certificates. The Board of Directors may determine the
-----------------
conditions upon which a new certificate of stock may be issued in place of a
certificate which is alleged to have been lost, destroyed or stolen. It may, in
its discretion, require the owner of such certificate to give bond, with
sufficient surety, to the Corporation to indemnify it against any loss or claim
which may arise by reason of the issuance of a new certificate.
SECTION 3. Record Dates; Closing of Transfer Books. The Board of
---------------------------------------
Directors may fix, in advance, a date as the record date for the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders, or shareholders entitled to receive payment of any dividend or the
allotment of any rights, or in order to make a determination of shareholders for
any other proper purpose. Such date in any case shall be not more than sixty
days, and in the case of a meeting of shareholders, not less than ten days,
prior to the date of which the particular action, requiring such determination
of shareholders, is to be taken.
SECTION 4. Stock Ledger. An original or duplicate stock ledger containing
------------
the names and addresses of all shareholders and the number of shares of each
class held by each shareholder, shall be kept by the Secretary at the office of
the Corporation in the City of New York, or in Jersey City, New Jersey, or at
such other office or agency of the Corporation in the City of New York and
Jersey City, as the Board of Directors may from time to time by resolution
determine.
8
<PAGE>
ARTICLE VI.
Checks, Notes, Etc.
All checks and drafts on the Corporation's bank accounts and all bills of
exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers, or agent or agents, as shall be thereunto authorized from time to time
by the Board of Directors.
ARTICLE VII.
Books and Records.
The books of the Corporation other than the original or duplicate stock
ledger may be kept at such place or places in or out of the State of Maryland as
the Board of Directors may from time to time determine.
ARTICLE VIII.
Seal.
The Board of Directors shall provide a suitable corporate seal, in such
form and bearing such inscriptions as they may determine.
ARTICLE IX.
Fiscal Year.
The fiscal year of the Corporation shall be the calendar year, subject,
however, to change from time to time by the Board of Directors.
ARTICLE X.
Custodian.
All securities and funds of the Corporation shall be held by one or more
custodians each of which shall be a bank or trust company having not less than
$2,500,000 aggregate capital, surplus and undivided profits, as shown by its
last published report, provided any such custodian can be found ready and
willing to act.
The terms of custody of such securities and funds shall include provisions
to the effect that the custodian shall deliver securities owned by the
Corporation only (a) upon sales of such securities for the account of the
Corporation and receipt by the custodian of payment therefor, (b) when such
securities are called, redeemed or retired or otherwise become payable, (c) in
exchange for or upon conversion into other securities alone or other securities
and cash, whether pursuant to any plan of
9
<PAGE>
merger, consolidation, reorganization, recapitalization or readjustment, or
otherwise, (d) upon conversion of such securities pursuant to their terms into
other securities, (e) upon exercise of subscription, purchase or other similar
rights represented by such securities, (f) for the purpose of exchanging interim
receipts or temporary securities for definitive securities, (g) for the purpose
of redeeming in kind shares of the capital stock of the Corporation, (h) for
loans of securities by the Corporation, or (i) for other proper corporate
purposes.
Such terms of custody shall also include provisions to the effect that the
custodian shall deliver funds of the Corporation only (a) upon the purchase of
securities for the portfolio of the Corporation and the delivery of such
securities to the custodian, (b) for the repurchase or redemption of shares of
the capital stock of the Corporation, (c) for the payment of dividends, taxes,
management or supervisory fees or operating expenses, (d) for payments in
connection with the conversion, exchange or surrender of securities owned by the
Corporation, (e) for payments in connection with the return of securities loaned
by the Corporation or the reduction of cash collateral, or (f) for other proper
corporate purposes.
Upon the resignation or inability of any such custodian to serve, the
Corporation shall (a) use its best efforts to obtain a successor custodian, (b)
require the funds and securities of the Corporation held by the custodian to be
delivered to the successor custodian, and (c) in the event that no successor
custodian can be found, submit to the shareholders of the Corporation, before
permitting delivery of such funds and securities to anyone other than a
successor custodian, the question whether the Corporation shall be dissolved or
shall function without a custodian; provided, however, that nothing herein
contained shall prevent the termination of any agreement between the Corporation
and any such custodian by the affirmative vote of the holders of a majority of
the outstanding shares of the capital stock of the Corporation entitled to vote.
Such terms of custody shall further provide that, pending appointment of a
successor custodian or a vote of the shareholders to function without a
custodian, a custodian shall not deliver funds and other property of the
Corporation to the Corporation, but may deliver them to a bank or trust company
of its own selection having not less than $2,500,000 aggregate capital, surplus,
and undivided profits, as shown by its last published report, as custodian for
the Corporation to be held under terms similar to those under which they were
held by the retiring custodian.
Subject to such rules, regulations and orders as the Securities and
Exchange Commission may adopt, the Corporation may authorize or direct a
custodian to deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
custodian.
The Corporation may also have such transfer agents and registrars of the
shares of its capital stock as the Board of Directors shall from time to time
determine. The Board of Directors may employ
10
<PAGE>
and fix the powers, rights, duties, responsibilities, privileges, immunities,
and compensation of any such custodian, transfer agent, or registrar, subject
however, in the case of any such custodian, to the foregoing provision of this
paragraph.
As used herein, the term "receipt by the custodian of payment" shall
include the receipt of (a) a certified or official bank check, (b) any advice
that funds have been or will be credited to the account of the custodian at a
clearing agency registered under the Securities Exchange Act of 1934, or (c) a
bank wire from a correspondent bank of the custodian. As used herein, the term
"delivery of such securities to the custodian" shall include the receipt of (a)
securities in bearer form or in proper form for transfer, or (b) any advice that
securities have been credited to the account of the custodian at a clearing
agency registered under the Securities Exchange Act of 1934, or at the Federal
Reserve Bank of New York.
ARTICLE XI.
Amendments.
The Board of Directors is authorized and empowered to make, alter or repeal
the By-Laws of the Corporation, in any manner not inconsistent with the laws of
the State of Maryland or the Articles of Incorporation of the Corporation.
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<PAGE>
Exhibit 99.B6
DISTRIBUTING AGREEMENT
----------------------
DISTRIBUTING AGREEMENT, dated as of January 1, 1993, between SELIGMAN
GROWTH FUND, INC., a Maryland corporation (the "Fund"), and SELIGMAN FINANCIAL
SERVICES, INC., a Delaware corporation ("Seligman Financial Services").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Exclusive Distributor. The Fund hereby agrees that Seligman Financial
---------------------
Services shall be for the period of this Agreement exclusive agent for
distribution within the United States and its territories, and Seligman
Financial Services agrees to use its best efforts during such period to
effect such distribution of shares of Capital Stock ("Shares") of the Fund;
provided, however, that nothing herein shall prevent the Fund, if it so
-------- -------
elects, from selling or otherwise distributing its Shares directly to any
persons other than dealers. The Fund understands that Seligman Financial
Services also acts as agent for distribution of the shares of capital stock
or beneficial interest of other open-end investment companies which have
entered into management agreements with J. & W. Seligman & Co. Incorporated
(the "Manager").
2. Sales of Shares. Seligman Financial Services is authorized, as agent for
---------------
the Fund and not as principal, (a) to sell Shares of the Fund to such
dealers as Seligman Financial Services may select pursuant to the terms of
written sales agreements (which may also relate to sales of shares of
capital stock or shares of beneficial interest of other open-end investment
companies which have entered into management agreements with the Manager),
in form or forms approved by the Fund, and (b) to sell Shares of the Fund
to other purchasers on such terms as may be provided in the then current
prospectus of the Fund relating to such Shares; provided, however, that no
-------- -------
sales of Shares shall be confirmed by Seligman Financial Services at any
time when, according to advice received by Seligman Financial Services from
the Fund, the officers of the Fund have for any reason sufficient to them
temporarily or permanently suspended or discontinued the sale and issuance
of the Shares. Each sale of Shares shall be effected by Seligman Financial
Services only at the applicable price determined by the Fund in the manner
prescribed in its then current prospectus relating to such Shares.
Seligman Financial Services shall comply with all applicable laws, rules
and regulations including, without limiting the generality of the
foregoing, all rules or regulations made or adopted pursuant to Section 22
of the Investment Company Act of 1940 (the "1940 Act") by the Securities
and Exchange Commission or any securities association registered under the
Securities Exchange Act of 1934.
1
<PAGE>
The Fund agrees, as long as its Shares may legally be issued, to fill all
orders confirmed by Seligman Financial Services in accordance with the
provisions of this Agreement.
3. Repurchase Agent. Seligman Financial Services is authorized, as agent for
----------------
the Fund and not as principal, to accept offers for resale to the Fund and
to repurchase on behalf of the Fund Shares of the Fund at net asset values
determined by the Fund in conformity with its then current prospectus
relating to such Shares.
4. Compensation. As compensation for the services of Seligman Financial
------------
Services under this Agreement, Seligman Financial Services shall be
entitled to receive the sales charge, determined in conformity with the
Fund's then current prospectus relating to such Shares, on all sales of
Shares of the Fund confirmed by Seligman Financial Services hereunder and
for which payment has been received, less the dealers' concession allowed
in respect of such sales. In addition, in accordance with the terms of the
Fund's Administration, Shareholder Services and Distribution Plan (the
"Plan"), the Fund may make payments from time to time to Seligman Financial
Services in accordance with the terms and limitations of, and for the
purposes set forth in the Plan.
5. Expenses. Seligman Financial Services agrees promptly to pay or reimburse
--------
the Fund for all expenses (except expenses incurred by the Fund in
connection with the preparation, printing and distribution of any
prospectus or report or other communication to shareholders, to the extent
that such expenses are incurred to effect compliance with any Federal or
State law or to enable such distribution to shareholder(s) (a) of printing
and distributing copies of any prospectus and of preparing, printing and
distributing any other material used by Seligman Financial Services in
connection with offering Shares of the Fund for sale, and (b) of
advertising in connection with such offering. The Fund agrees to pay all
expenses in connection with the registration of Shares of the Fund under
the Securities Act of 1933 (the "Act"), all fees and related expenses which
may be incurred in connection with the qualification of Shares of the Fund
for sale in such States (as well as the District of Columbia, Puerto Rico
and other territories) as Seligman Financial Services may designate, and
all expenses in connection with maintaining facilities for the issue and
transfer of its Shares, of supplying information, prices and other data to
be furnished by it hereunder, and through Union Data Service Center, Inc.,
of all data processing and related services related to the share
distribution activity contemplated hereby.
The Fund agrees to execute such documents and to furnish such information
as may be reasonably necessary, in the discretion of the Directors of the
Fund, in
2
<PAGE>
connection with the qualification of Shares of the Fund for sale in such
States (as well as the District of Columbia, Puerto Rico and other
territories) as Seligman Financial Services may designate. Seligman
Financial Services also agrees to pay all fees and related expenses
connected with its own qualification as a broker or dealer under Federal or
State laws and, except as otherwise specifically provided in this Agreement
or agreed to by the Fund, all other expenses incurred by Seligman Financial
Services in connection with the sale of Shares of the Fund as contemplated
in this Agreement (including the expenses of qualifying the Fund as a
dealer or broker under the laws of such States as may be designated by
Seligman Financial Services, if deemed necessary or advisable by the Fund).
It is understood and agreed that any payments made to Seligman Financial
Services pursuant to the Plan may be used to defray some or all of the
expenses incurred by Seligman Financial Services pursuant to this
Agreement.
6. Prospectus and Other Information. The Fund represents and warrants to and
--------------------------------
agrees with Seligman Financial Services that:
(a) A registration statement, including one or more prospectuses relating
to the Shares, has been filed by the Fund under the Act and has become
effective. Such registration statement, as now in effect and as from
time to time hereafter amended, and also any other registration
statement relating to the Shares which may be filed by the Fund under
the Act which shall become effective, is herein referred to as the
"Registration Statement", and any prospectus or prospectuses filed by
the Fund as a part of the Registration Statement, as the "Prospectus".
(b) At all times during the term of this Agreement, except when the
officers of the Fund have suspended or discontinued the sale and
issuance of Shares of the Fund as contemplated by Section 2 hereof,
the Registration Statement and Prospectus will conform in all respects
to the requirements of the Act and the rules and regulations of the
Securities and Exchange Commission, and neither of such documents will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statement therein not misleading, except that the foregoing does not
apply to any statements or omissions in either of such documents based
upon written information furnished to the Fund by Seligman Financial
Services specifically for use therein.
3
<PAGE>
The Fund agrees to prepare and furnish to Seligman Financial Services from
time to time a copy of its Prospectus, and authorizes Seligman Financial
Services to use such Prospectus, in the form furnished to Seligman
Financial Services from time to time, in connection with the sale of the
Fund's Shares. The Fund also agrees to furnish Seligman Financial Services
from time to time, for use in connection with the sale of such Shares, such
information with respect to the Fund and its Shares as Seligman Financial
Services may reasonably request.
7. Reports. Seligman Financial Services will prepare and furnish to the
-------
Directors of the Fund at least quarterly a written report complying with
the requirements of Rule 12b-1 under the 1940 Act setting forth all amounts
expended under the Plan and the purposes for which such expenditures were
made.
8. Indemnification. (a) The Fund will indemnify and hold harmless Seligman
---------------
Financial Services and each person, if any, who controls Seligman Financial
Services within the meaning of the Act against any losses, claims, damages
or liabilities to which Seligman Financial Services or such controlling
person may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's Registration Statement
or Prospectus or any other written sales material prepared by the Fund
which is utilized by Seligman Financial Services in connection with the
sale of Shares or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
(in the case of the Registration Statement and Prospectus) necessary to
make the statements therein not misleading or (in the case of such other
sales material) necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; and will
reimburse Seligman Financial Services and each such controlling person for
any legal or other expenses reasonably incurred by Seligman Financial
Services or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
--------
however, that the Fund will not be liable in any such case to the extent
-------
that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus in
conformity with written information furnished to the Fund by Seligman
Financial Services specifically for use therein; and provided, further,
that nothing herein shall be so construed as to protect Seligman Financial
Services against any liability to the Fund or its security holders to which
Seligman Financial Services would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence, in the performance of its
duties, or by reason of the reckless disregard by Seligman Financial
Services of its obligations and duties under this Agreement.
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<PAGE>
This indemnity agreement will be in addition to any liability which the
Fund may otherwise have.
(b) Seligman Financial Services will indemnify and hold harmless the Fund,
each of its Directors and officers and each person, if any, who
controls the Fund within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Fund or any such Director,
officer or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or Prospectus or any sales material not
prepared by the Fund which is utilized in connection with the sale of
Shares or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or (in the case of the Registration Statement and Prospectus)
necessary to make the statements therein not misleading or (in the
case of such other sales material) necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, in the case of the Registration Statement and
Prospectus to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in conformity with written information furnished to the Fund
by Seligman Financial Services specifically for use therein; and
Seligman Financial Services will reimburse any legal or other expenses
reasonably incurred by the Fund or any such Director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Seligman
Financial Services may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be
5
<PAGE>
liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
9. Effective Date. This Agreement shall become effective upon its execution
--------------
by an authorized officer of the respective parties to this Agreement, but
in no event prior to shareholder approval of the Plan.
10. Term of Agreement. This Agreement shall continue in effect until December
-----------------
31 of the year in which it is first effective and through December 31 of
each year thereafter if such continuance is approved in the manner required
by the 1940 Act and the rules thereunder and Seligman Financial Services
shall not have notified the Fund 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 penalty on 60 days' written notice to the other party by vote of a
majority of the Directors of the Fund who are not interested persons (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Plan or any agreement related
thereto, or by vote of a majority of the outstanding voting securities of
the Fund (as defined in the 1940 Act). This Agreement shall automatically
terminate in the event of its assignment (as defined in the 1940 Act).
11. 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 Fund and Seligman Financial Services have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.
SELIGMAN GROWTH FUND, INC.
By_______________________________________
Ronald T. Schroeder, President
SELIGMAN FINANCIAL SERVICES, INC.
6
<PAGE>
By_______________________________________
Donald R. Pitti, President
7
<PAGE>
CUSTODY AGREEMENT
-----------------
THIS AGREEMENT made the ______ day of ____________, 19__, by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the
laws of the state of Missouri, having its trust office located at 127 West 10th
Street, Kansas City, Missouri 64105 ("Custodian"), and SELIGMAN GROWTH FUND,
INC., a Maryland corporation, having its principal office and place of business
at One Bankers Trust Plaza, New York, New York 10006 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian and Recordkeeper of the securities and monies of Fund and its now
existing and future established portfolios (individually referred to herein as
Portfolio); and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian
-------------------------
as custodian of the Fund which is to include:
A. Appointment as custodian of the securities and monies at any time
owned by each Portfolio of the Fund; and
B. Appointment as agent to perform certain accounting and recordkeeping
functions required of a duly registered investment company in
compliance with applicable provisions of federal, state, and local
laws, rules and regulations including, as may be required:
1
<PAGE>
1. Providing information necessary for Fund and each Portfolio to
file required financial reports; maintaining and preserving
required books, accounts and records as the basis for such
reports; and performing certain daily functions in connection
with such accounts and records, and
2. Calculating daily net asset value of each Portfolio of the Fund,
and
3. Acting as liaison with independent auditors.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
--------------------------------
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Board of Directors of Fund appointing Custodian as
custodian hereunder and approving the form of this Agreement; and
B. Resolutions of the Board of Directors of Fund designating certain
persons to give instructions on behalf of Fund to Custodian and
authorizing Custodian to rely upon such instructions.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
-----------------------------------------
A. Delivery of Assets
------------------
Fund will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as
practicable, and from time to time thereafter, all portfolio
securities acquired by it and monies then owned by it (except as
permitted by the Investment Company Act of 1940) or from time to time
coming into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies not so
delivered. All securities so delivered to Custodian (other than
bearer securities) shall be registered in the name of Fund or its
nominee, or of a nominee of Custodian, or shall be properly endorsed
and in form for transfer satisfactory to Custodian.
B. Delivery of Accounts and Records
--------------------------------
2
<PAGE>
Fund shall turn over to Custodian all of the Fund's relevant accounts
and records previously maintained by it. Custodian shall be entitled
to rely conclusively on the completeness and correctness of the
accounts and records turned over to it by Fund, and Fund shall
indemnify and hold Custodian harmless of and from any and all
expenses, damages and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy or other deficiency of
such accounts and records or in the failure of Fund to provide any
portion of such or to provide any information needed by the Custodian
knowledgeably to perform its function hereunder.
C. Delivery of Assets to Third Parties
-----------------------------------
Custodian will receive delivery of and keep safely the assets of Fund
delivered to it from time to time and the assets of each Portfolio
segregated in a separate account. Custodian will not deliver, assign,
pledge or hypothecate any such assets to any person except as
permitted by the provisions of this Agreement or any agreement
executed by it according to the terms of section 3.S. of this
Agreement. Upon delivery of any such assets to a subcustodian
pursuant to Section 3.S. of this agreement, Custodian will create and
maintain records identifying those assets which have been delivered to
the subcustodian as belonging to the applicable Portfolio of the Fund.
The Custodian is responsible for the safekeeping of the securities and
monies of Fund only until they have been transmitted to and received
by other persons as permitted under the terms of this Agreement,
except for securities and monies transmitted to United Missouri Bank
of Kansas City, N.A. (UMBKC), United Missouri Trust Company of New
York (UMBTC), First National Bank of Chicago (FNBC) for which
Custodian remains responsible. Custodian shall also be responsible
for the monies and securities of Fund(s) held by eligible foreign
subcustodians to the extent the domestic custodian with which the
Custodian contracts is responsible to Custodian. Custodian may
participate directly or indirectly through a subcustodian in the
Depository Trust
3
<PAGE>
Company, Treasury/Federal Reserve Book Entry System, Participant Trust
Company or other depository approved by the Fund (as such entities are
defined at 17 CFR Section 270.17f-4(b)).
4
<PAGE>
D. Registration of Securities
--------------------------
Custodian will hold stocks and other registerable portfolio
securities of Fund registered in the name of Fund or its nominee or
in the name of any nominee of Custodian for whose fidelity and
liability Custodian will be fully responsible, or in street
certificate form, so-called, with or without any indication of
fiduciary capacity. Unless otherwise instructed, Custodian will
register all such portfolio securities in the name of its authorized
nominee, as defined in the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder or in any provision of
any subsequent Federal tax law exempting such transaction from
liability for stock transfer taxes. All securities, and the ownership
thereof by a Portfolio of the Fund, which are held by Custodian
hereunder, however, shall at all times be identifiable on the records
of the Custodian. The Fund agrees to hold Custodian and its nominee
harmless for any liability as a record holder of securities held in
custody.
E. Exchange of Securities
----------------------
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of the applicable Portfolio of
the Fund for other securities or cash issued or paid in connection
with any reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or otherwise, and
will deposit any such securities in accordance with the terms of any
reorganization or protective plan. Without instructions, Custodian is
authorized to exchange securities held by it in temporary form for
securities in definitive form, to effect an exchange of shares when
the par value of the stock is changed, and, upon receiving payment
therefor, to surrender bonds or other securities held by it at
maturity or when advised of an earlier mandatory call for redemption,
except that Custodian shall receive instructions prior to surrendering
any convertible security. Pursuant to this paragraph, the Custodian
will inform the Fund of such corporate
5
<PAGE>
actions and capital changes when it is informed of them through the
publications it subscribes to.
F. Purchases of Investments of the Fund
------------------------------------
Fund will, on each business day on which a purchase of securities
shall be made by it, deliver to Custodian instructions which shall
specify with respect to each such purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer through
whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of such named Portfolio, but only insofar
as monies are available therein for such purpose, and receive the
portfolio securities so purchased by such named Portfolio, except that
Custodian may in its sole discretion advance funds to the Fund which
may result in an overdraft because the monies held by the Custodian on
behalf of the Fund are insufficient to pay the total amount payable
upon such purchase. Such payment will be made only upon receipt by
Custodian of the securities so purchased in form for transfer
satisfactory to Custodian. Custodian agrees to promptly inform Fund
of any failures by sellers to make proper deliveries of securities
purchased by the Fund.
G. Sales and Deliveries of Investments of the Fund - Other than Options
--------------------------------------------------------------------
and Futures
-----------
6
<PAGE>
Fund will, on each business day on which a sale of investment
securities of Fund has been made, deliver to Custodian instructions
specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of such Portfolio to the broker or other person specified in the
instructions relating to such sale, such delivery to be made only upon
receipt of payment therefor in such form as is satisfactory to
Custodian, with the understanding that Custodian may deliver or cause
to be delivered securities for payment in accordance with the customs
prevailing among dealers in securities. Custodian agrees to promptly
inform Fund of any failures of purchasers to make proper payment for
securities sold by Fund.
H. Purchases or Sales of Security Options, Options on Indices and
--------------------------------------------------------------
Security Index Futures Contracts
--------------------------------
7
<PAGE>
Fund will, on each business day on which a purchase or sale of the
following options and/or futures shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
8
<PAGE>
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
9
<PAGE>
I. Securities Pledged or Loaned
----------------------------
If specifically allowed for in the prospectus of the applicable
Portfolio of the Fund:
1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in such instructions by way of pledge or hypothecation to secure
any loan incurred by a Portfolio of the Fund; provided, however,
that the securities shall be released only upon payment to
Custodian of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already
made, further securities may be released or caused to be released
for that purpose upon receipt of instructions. Upon receipt of
instructions, Custodian will pay, but only from funds available
for such purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release securities
held in custody to the borrower designated in such instructions;
provided, however, that the securities will be released only upon
deposit with Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned securities.
Upon receipt of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
J. Routine Matters
---------------
Custodian will, in general, attend to all routine and mechanical
matters in connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with securities or other property of Fund
except as may be otherwise provided in this Agreement or directed from
time to time by the Board of Directors of Fund.
K. Deposit Account
---------------
10
<PAGE>
Custodian will open and maintain a special purpose deposit account(s)
in the name of Custodian on behalf of each Portfolio (Accounts),
subject only to draft or order by Custodian upon receipt of
instructions. All monies received by Custodian from or for the
account of a Portfolio shall be deposited in said Accounts. Barring
events not in the control of the Custodian such as strikes, lockouts
or labor disputes, riots, war or equipment or transmission failure or
damage, fire, flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond its control,
at 9:00 a.m., Kansas City time, on the second business day after
deposit of any check into Fund's Account, Custodian agrees to make Fed
Funds available to the appropriate Portfolio of the Fund in the amount
of the check. Deposits made by Federal Reserve wire will be available
to the Fund immediately and ACH wires will be available to the Fund on
the next business day. Income earned on the portfolio securities will
be credited to the applicable Portfolio of the Fund based on the
schedule attached as Exhibit A, except that income earned on portfolio
securities held by domestic subcustodians other than UMBKC, UMBTC,
Bank of New York (previously Irving Trust Company and hereinafter
referred to as BONY) and Morgan Guaranty and Trust Company (MGT) will
be credited when received. The Custodian will be entitled to reverse
any credited amounts where credits have been made and monies are not
finally collected. If monies are collected after such reversal, the
Custodian will credit the applicable Portfolio in that amount.
Custodian may open and maintain an Account in such other banks or
trust companies as may be designated by it and by properly authorized
resolution of the Board of Directors of Fund, such Account, however,
to be in the name of Custodian on behalf of the applicable portfolio
of the Fund and subject only to its draft or order.
L. Income and other Payments to Fund
---------------------------------
Custodian will:
11
<PAGE>
1. Collect, claim and receive and deposit for the Account of each
Portfolio of the Fund all income and other payments which become
due and payable on or after the effective date of this Agreement
with respect to the securities deposited under this Agreement,
and credit the account of the applicable Portfolio of the Fund in
accordance with the schedule attached hereto as Exhibit A, except
that income earned on portfolio securities held by domestic
subcustodians other than UMBKC, UMBTC, BONY, and MGT will be
credited when received. Income from foreign securities and
assets held by eligible foreign subcustodians shall be credited
by Custodian upon receipt of income from the domestic
subcustodian contracting with the foreign eligible subcustodians.
If, for any reason, the Fund is credited with income that is not
subsequently collected, Custodian may reverse that credited
amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
notice of which is contained in publications of the
type to which a custodian for investment companies
normally subscribes for such purpose; and
12
<PAGE>
b. the endorsement for collection, in the name of the
applicable Portfolio of the Fund, of all checks, drafts or
other negotiable instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to instructions.
Unless prior instructions have been received to the contrary,
Custodian will, without further instructions, sell any rights held for
the account of Fund on the last trade date prior to the date of
expiration of such rights.
M. Payment of Dividends and other Distributions
--------------------------------------------
On the declaration of any dividend or other distribution on the shares
of Capital Stock of any Portfolio ("Portfolio Shares") by the Board of
Directors of Fund, Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of said Board of
Directors certified by the Secretary or an Assistant Secretary of Fund
wherein there shall be set forth the record date as of which
shareholders entitled to receive such dividend or other distribution
shall be determined, the date of payment of such dividend or
distribution, and the amount payable per share on such dividend or
distribution. Except if the ex-dividend date and the reinvestment
date of any dividend are the same, in which case funds shall remain in
the Custody Account, on the date specified in such Resolution for the
payment of such dividend or other distribution, Custodian will pay out
of the monies held for the account of the applicable Portfolio of the
Fund, insofar as the same shall be available for such purposes, and
wire to the account of the Dividend Disbursing Agent for Fund, such
amount as may be necessary to pay the amount per share payable in cash
on Portfolio Shares issued and outstanding on the record date
established by such Resolution.
13
<PAGE>
N. Shares of Fund Purchased by Fund
--------------------------------
Whenever any Portfolio Shares are repurchased or redeemed by Fund,
Fund or its agent shall advise Custodian of the aggregate dollar
amount to be paid for such shares and shall confirm such advice in
writing. Upon receipt of such advice, Custodian shall charge such
aggregate dollar amount to the Account of Portfolio and either deposit
the same in the account maintained for the purpose of paying for the
repurchase or redemption of Portfolio Shares or deliver the same in
accordance with such advice.
Custodian shall not have any duty or responsibility to determine that
Fund Shares have been removed from the proper shareholder account or
accounts or that the proper number of such shares have been canceled
and removed from the shareholder records.
O. Shares of Fund Purchased from Fund
----------------------------------
Whenever Portfolio Shares are purchased from Fund, Fund will deposit
or cause to be deposited with Custodian the amount received for such
shares. Custodian shall not have any duty or responsibility to
determine that Portfolio Shares purchased from Fund have been added to
the proper shareholder account or accounts or that the proper number
of such shares have been added to the shareholder records.
P. Proxies and Notices
-------------------
Custodian will promptly deliver or mail or have delivered or mailed
to Fund all proxies properly signed, all notices of meetings, all
proxy statements and other notices, requests or announcements
affecting or relating to securities held by Custodian for Fund and
will, upon receipt of instructions, execute and deliver or cause its
nominee to execute and deliver or mail or have delivered or mailed
such proxies or other authorizations as may be required. Except as
provided by this Agreement or pursuant to instructions hereafter
received by Custodian, neither it nor its nominee will exercise any
power inherent in any such securities, including
14
<PAGE>
any power to vote the same, or execute any proxy, power of attorney,
or other similar instrument voting any of such securities, or give any
consent, approval or waiver with respect thereto, or take any other
similar action.
Q. Disbursements
-------------
Custodian will pay or cause to be paid insofar as funds are available
for the purpose, bills, statements and other obligations of Fund
(including but not limited to obligations in connection with the
conversion, exchange or surrender of securities owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
R. Daily Statement of Accounts
---------------------------
Custodian will, within a reasonable time, render to Fund as of the
close of business on each day, a detailed statement of the amounts
received or paid and of securities received or delivered for the
account of Fund during said day. Custodian will, from time to time,
upon request by Fund, render a detailed statement of the securities
and monies held for Fund under this Agreement, and Custodian will
maintain such books and records as are necessary to enable it to do so
and will permit such persons as are authorized by Fund including
Fund's independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded, will
permit federal and state regulatory agencies to examine the
securities, books and records. Upon the written instructions of Fund
or as demanded by federal or state regulatory agencies, Custodian will
instruct any subcustodian to give such persons as are authorized by
Fund including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, to
15
<PAGE>
permit federal and state regulatory agencies to examine the books,
records and securities held by subcustodian which relate to Fund. Fund
will be entitled to receive reports produced by the Custodian's
portfolio accounting system, including without limitation, those
listed on Exhibit C hereof.
S. Appointment of Subcustodians
----------------------------
1. Notwithstanding any other provisions of this Agreement, all of or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by Custodian and approved by
the Fund's Board of Directors. Any such subcustodian must have
the qualifications required for custodian under the Investment
Company Act of 1940, as amended. The subcustodian may
participate directly or indirectly in the Depository Trust
Company, Treasury/Federal Reserve Book Entry System, Participant
Trust Company or other depository approved by the Fund (as such
entities are defined at 17 CFR Sec. 270.17f-4(b)). The
appointment of UMBKC or any other subcustodian, depository or
clearing agency used by the Custodian and approved by the Fund
will not relieve Custodian of any of its obligations hereunder
except as provided in Section 3.C hereof. The Custodian will
comply with Section 17f-4 of the Investment Company Act of 1940,
as amended, as to depositories and clearing agencies used by
Custodian and approved the Fund. The Custodian will not be
entitled to reimbursement by Fund for any fees or expenses of any
subcustodian, depository or clearing agency.
2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts reasonably necessary to effect Fund's
foreign securities transactions, may be held in the custody of
one or more banks or trust companies acting as
16
<PAGE>
subcustodians, according to Section 3.S.1; and thereafter,
pursuant to a written contract or contracts as approved by Fund's
Board of Directors, may be transferred to an account maintained
by such subcustodian with an eligible foreign custodian, as
defined in Rule 17f-5(c)(2), provided that any such arrangement
involving a foreign custodian shall be in accordance with the
provisions of Rule 17f-5 under the Investment Company Act of 1940
as that Rule may be amended from time to time.
T. Accounts and Records
--------------------
Custodian, with the direction and as interpreted by the Fund, Fund's
accountants and/or other tax advisors, will prepare and maintain as
complete, accurate and current all accounts and records required to be
maintained by Fund under the Internal Revenue Code of 1986 ("Code") as
amended and under the general Rules and Regulations under the
Investment Company Act of 1940 ("Rules") as amended, and as agreed
upon between the parties and will preserve said records in the manner
and for the periods prescribed in said Code and Rules, or for such
longer period as is agreed upon by the parties.
Custodian relies upon Fund to furnish, in writing, accurate and timely
information to complete Fund's records and perform daily calculation
of the Fund's net asset value, as provided in Section 3.W. below.
Custodian shall incur no liability and Fund shall indemnify and hold
harmless Custodian from and against any liability arising from any
failure of Fund to furnish such information in a timely and accurate
manner, even if Fund subsequently provides accurate but untimely
information. It shall be the responsibility of Fund to furnish
Custodian with the declaration, record and payment dates and amounts
of any dividends or income and any other special actions required
concerning each of its securities when such information is not readily
available from generally accepted securities industry services or
publications.
17
<PAGE>
U. Accounts and Records Property of Fund
-------------------------------------
Custodian acknowledges that all of the accounts and records maintained
by Custodian pursuant to this Agreement are the property of Fund, and
will be made available to Fund for inspection or reproduction within a
reasonable period of time, upon demand. Custodian will assist Fund's
independent auditors, or upon approval of Fund, or upon demand, any
regulatory body having jurisdiction over the Fund or Custodian, in any
requested review of Fund's accounts and records but shall be
reimbursed for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews. Upon receipt
from Fund of the necessary information, Custodian will supply
necessary data for Fund's completion of any necessary tax returns,
questionnaires, periodic reports to Shareholders and such other
reports and information requests as Fund and Custodian shall agree
upon from time to time.
V. Adoption of Procedures
----------------------
Custodian and Fund may from time to time adopt procedures as they
agree upon, and Custodian may conclusively assume that no procedure
approved by Fund, or directed by Fund, conflicts with or violates any
requirements of its prospectus, "Articles of Incorporation", Bylaws,
or any rule or regulation of any regulatory body or governmental
agency. Fund will be responsible to notify Custodian of any changes
in statutes, regulations, rules or policies which might necessitate
changes in Custodian's responsibilities or procedures.
W. Calculation of Net Asset Value
------------------------------
Custodian will calculate Fund's net asset value, in accordance with
Fund's prospectus, once daily. Custodian will prepare and maintain a
daily evaluation of securities for which market quotations are
available by the use of outside services normally used and contracted
for this purpose; all other securities will be evaluated in accordance
with Fund's instructions. Custodian will have no
18
<PAGE>
responsibility for the accuracy of the prices quoted by these outside
services or for the information supplied by Fund or upon instructions.
X. Overdrafts
----------
If Custodian shall in its sole discretion advance funds to the account
of the Fund which results in an overdraft because the monies held by
Custodian on behalf of the Fund are insufficient to pay the total
amount payable upon a purchase of securities as specified in Fund's
instructions or for some other reason, the amount of the overdraft
shall be payable by the Fund to Custodian upon demand and shall bear
an interest rate determined by Custodian from the date advanced until
the date of payment. Custodian shall have a lien on the assets of the
Fund in the amount of any outstanding overdraft.
19
<PAGE>
4. INSTRUCTIONS.
-------------
A. The term "instructions", as used herein, means written or facsimile
instructions or advice to Custodian from two designated
representatives of Fund. Certified copies of resolutions of the Board
of Directors of Fund naming two or more designated representatives to
give instructions in the name and on behalf of Fund, may be received
and accepted from time to time by Custodian as conclusive evidence of
the authority of any two designated representatives to act for Fund
and may be considered to be in full force and effect (and Custodian
will be fully protected in acting in reliance thereon) until receipt
by Custodian of notice to the contrary. Unless the resolution
delegating authority to any person to give instructions specifically
requires that the approval of anyone else will first have been
obtained, Custodian will be under no obligation to inquire into the
right of the person giving such instructions to do so.
Notwithstanding any of the foregoing provisions of this Section 4. no
authorizations or instructions received by Custodian from Fund, will
be deemed to authorize or permit any director, trustee, officer,
employee, or agent of Fund to withdraw any of the securities or
similar investments of Fund upon the mere receipt of such
authorization or instructions from such director, trustee, officer,
employee or agent.
Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgement if required at the discretion of
Custodian) of the instructions of any two designated representatives
of Fund, will undertake to deliver for Fund's account monies,
(provided such monies are on hand or available) in connection with
Fund's transactions and to wire transfer such monies to such broker,
dealer, subcustodian, bank or other agent specified in such
instructions.
B. If oral instructions are permitted pursuant to Section 4.A. hereunder,
no later than the next business day immediately following such oral
instruction the Fund will send Custodian written confirmation of such
oral instruction. At Custodian's sole
20
<PAGE>
discretion, Custodian may record on tape, or otherwise, any oral
instruction whether given in person or via telephone, each such
recording identifying the parties, the date and the time of the
beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
-------------------------------------
A. Custodian shall hold harmless and indemnify Fund from and against any
loss or liability arising out of Custodian's failure to comply with
the terms of this Agreement or arising out of Custodian's negligence
or bad faith. Custodian may request and obtain the advice and opinion
of counsel for Fund, or of its own counsel with respect to questions
or matters of law, and it shall be without liability to Fund for any
action taken or omitted by it in good faith, in conformity with such
advice or opinion. If Custodian reasonably believes that it could not
prudently act according to the instructions of the Fund or the Fund's
counsel, it may in its discretion, with notice to the Fund, not act
according to such instructions.
B. Custodian may rely upon the advice of Fund and upon statements of
Fund's public accountants and other persons believed by it in good
faith, to be expert in matters upon which they are consulted, and
Custodian shall not be liable for any actions taken, in good faith,
upon such statements.
C. If Fund requires Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable
for payment of monies or in any other way, Custodian, upon notice to
Fund given prior to such actions, shall be and be kept indemnified by
Fund in an amount and form satisfactory to Custodian against any
liability on account of such action.
D. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably appearing to it to be genuine and to
have been properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive as
21
<PAGE>
conclusive proof of any fact or matter required to be ascertained from
Fund hereunder, a certificate signed by the Fund's President, or other
officer specifically authorized for such purpose.
E. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The validity of the issue of any securities purchased by or for
Fund, the legality of the purchase thereof or evidence of
ownership required by Fund to be received by Custodian, or the
propriety of the decision to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the Capital
Stock of Fund, or the sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any stock
dividend.
F. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
received by it on behalf of Fund, until Custodian actually receives
such money, provided only that it shall advise Fund promptly if it
fails to receive any such money in the ordinary course of business,
and use its best efforts and cooperate with Fund toward the end that
such money shall be received.
G. Custodian shall not be responsible for loss occasioned by the acts,
neglects, defaults or insolvency of any broker, bank, trust company,
or any other person with whom Custodian may deal in the absence of
negligence, or bad faith on the part of Custodian, except as provided
in Section 3.S.1 hereof.
22
<PAGE>
H. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section
3.S.2. must, provide Fund for its approval, agreements with banks or
trust companies which will act as subcustodians for Fund pursuant to
Section 3.S of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
------------
the Fee Schedule attached hereto as Exhibit B which may be changed from
time to time as agreed to in writing by Custodian and Fund. Custodian may
charge such compensation against monies held by it for the account of Fund.
Custodian will also be entitled, notwithstanding the provisions of Sections
5.C. or 5.D. hereof, to charge against any monies held by it for the
account of Fund the amount of any loss, damage, liability, advance, or
expense for which it shall be entitled to reimbursement under the
provisions of this Agreement including fees or expenses due to Custodian
for other services provided to the Fund by the Custodian. Custodian will
not be entitled to reimbursement by Fund for any loss or expenses of any
subcustodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
-----------
notice in writing, delivered or mailed, postage prepaid, to the other party
hereto and received not less than ninety (90) days prior to the date upon
which such termination will take effect. If the Custodian terminates this
Agreement, the Fund may extend the effective date of the termination ninety
(90) days by written request to the Custodian thirty (30) days prior to the
end of the initial ninety (90) days notice period unless the Custodian in
good faith could not perform the duties hereunder. Upon termination of
this Agreement, Fund will pay to Custodian such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to such
date and Fund will use its best efforts to obtain a successor custodian.
Unless the holders of a majority of the outstanding shares of "Capital
Stock" of Fund vote to have the securities, funds and other properties held
under this Agreement delivered and paid over to some other person, firm or
corporation specified in the vote, having not less the Two Million Dollars
($2,000,000) aggregate capital, surplus and undivided profits, as shown by
its last published report, and meeting
23
<PAGE>
such other qualifications for custodian as set forth in the Bylaws of Fund,
the Board of Directors of Fund will, forthwith upon giving or receiving
notice of termination of this Agreement, appoint as successor custodian a
bank or trust company having such qualifications. Custodian will, upon
termination of this Agreement, deliver to the successor custodian so
specified or appointed, at Custodian's office, all securities then held by
Custodian hereunder, duly endorsed and in form for transfer, all funds and
other properties of Fund deposited with or held by Custodian hereunder, or
will co-operate in effecting changes in book-entries at the Depository
Trust Company or in the Treasury/Federal Reserve Book-Entry System pursuant
to 31 CFR Sec. 306.118. In the event no such vote has been adopted by the
stockholders of Fund and no written order designating a successor custodian
has been delivered to Custodian on or before the date when such termination
becomes effective, then Custodian will deliver the securities, funds and
properties of Fund to a bank or trust company at the selection of Custodian
and meeting the qualifications for custodian, if any, set forth in the
Bylaws of Fund and having not less that Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report. Upon either such delivery to a successor custodian,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such bank or trust company will be the successor
custodian under this Agreement and will be entitled to reasonable
compensation for its services. In the event that no such successor
custodian can be found, Fund will submit to its shareholders, before
permitting delivery of the cash and securities owned by Fund to anyone
other than a successor custodian, the question of whether Fund will be
liquidated or function without a custodian. Notwithstanding the foregoing
requirement as to delivery upon termination of this Agreement, Custodian
may make any other delivery of the securities, funds and property of Fund
which is permitted by the Investment Company Act of 1940, Fund's
Certificate of Incorporation and Bylaws then in effect or apply to a court
of competent jurisdiction for the appointment of a successor custodian.
24
<PAGE>
8. NOTICES. Notices, requests, instructions and other writings received by
-------
Fund at One Bankers Trust Plaza, New York, New York 10006 such other
address as Fund may have designated to Custodian in writing, will be deemed
to have been properly given to Fund hereunder; and notices, requests,
instructions and other writings received by Custodian at its offices at 127
West 10th Street, Kansas City, Missouri 64105, or to such other address as
it may have designated to Fund in writing, will be deemed to have been
properly given to Custodian hereunder.
9. MISCELLANEOUS.
-------------
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement shall become effective at the close of business on
the _____________________ day of ______, 19__.
F. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of
25
<PAGE>
the parties shall be construed and enforced as if the Agreement did
not contain the particular part, term or provision held to be illegal
or invalid.
H. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between
such issuer and Fund unless the Fund directs the Custodian otherwise.
I. This Agreement may not be assigned by either party without prior
written consent of the other party.
J. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder, such statutes, rules and regulations shall be
deemed to control and supersede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.
26
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:_______________________________
Gerard P. Dipoto, Jr.
Senior Vice President
ATTEST:
- --------------------------------
Cheryl J. Naegler
Assistant Secretary
SELIGMAN GROWTH FUND, INC.
By:____________________________
Title:_________________________
ATTEST:
- --------------------------------
Secretary
27
<PAGE>
EXHIBIT 99(b)(10)
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
Seligman Growth Fund, Inc.
One Bankers Trust Plaza
New York, New York 10006
Dear Sirs:
Your have requested our opinion in connection with Post-Effective Amendment
No. 56 to your Registration Statement on Form N-1A (File No. 2-10836) which you
expect to file under the Securities Act of 1933 with respect to shares of your
capital stock, $1.00 par value.
As your counsel, we are familiar with your organization and corporate
status and the legality of your capital stock. We are also familiar with the
Distributing Agreement between you and J. & W. Seligman & Co. Marketing, Inc.
We advise you that, in our opinion, shares of the capital stock of Seligman
Growth Fund, Inc., when issued for at least the par value thereof in accordance
with such Distributing Agreement and as authorized by the Board of Directors,
will be legally and validly issued, fully paid and nonassessable.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Post-Effective Amendment referred to above. In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
Sullivan & Cromwell
<PAGE>
EXHIBIT 99(b)(11)
CONSENT OF INDEPENDENT AUDITORS
Seligman Growth Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 73 to Registration
Statement No. 2-10836 of our report dated January 31, 1997, appearing in the
Annual Report to Shareholders for the year ended December 31, 1996, incorporated
by reference in the Statement of Additional Information, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is also
part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 25, 1997
<PAGE>
Exhibit 99.B13a
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 D 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 30, 1993. 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 Share is 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 day of
, 1993 ("Purchase Date").
SELIGMAN GROWTH FUND, INC.
By:________________________________________
Name:
Title:
J. & W. SELIGMAN & CO. INCORPORATED
By:________________________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
SELIGMAN GROWTH FUND, INC. -CLASS A
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN COMPUTATION FOR THE 10.00 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 4.75% MAXIMUM OFFERING PRICE EQUALS $5.51
DVD PER #OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
- --------- ---------- --- ------- ----- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
31-Dec-86 5.25 181,488 181.488 $952.81
31-Mar-87 6.43 0.247 0.000 181.488 1,166.97
19-Jun-87 0.050000 D 6.72 0.466 1.350 182.838 1,228.67
30-Jun-87 6.60 0.496 0.000 182.838 1,206.73
30-Sep-87 6.90 0.748 0.000 182.838 1,261.58
22-Dec-87 1.100000 G 4.19 0.975 48.000 230.838 967.21
22-Dec-87 0.050000 D 4.19 0.975 2.182 233.020 976.35
31-Dec-87 4.23 1.000 0.000 233.020 985.67
31-Mar-88 4.28 1.249 0.000 233.020 997.33
24-Jun-88 0.030000 D 4.55 1.482 1.536 234.556 1,067.23
30-Jun-88 4.57 1.499 0.000 234.556 1,071.92
30-Sep-88 4.46 1.751 0.000 234.556 1,046.12
23-Dec-88 0.050000 G 4.35 1.981 2.696 237.252 1,032.05
23-Dec-88 0.080000 D 4.35 1.981 4.314 241.566 1,050.81
31-Dec-88 4.38 2.003 0.000 241.566 1,058.06
31-Mar-89 4.64 2.249 0.000 241.566 1,120.87
23-Jun-89 0.040000 D 5.12 2.479 1.887 243.453 1,246.48
30-Jun-89 5.10 2.499 0.000 243.453 1,241.61
30-Sep-89 5.86 2.751 0.000 243.453 1,426.63
22-Dec-89 0.670000 G 5.01 2.978 32.558 276.011 1,382.82
22-Dec-89 0.030000 D 5.01 2.978 1.458 277.469 1,390.12
31-Dec-89 5.10 3.003 0.000 277.469 1,415.09
31-Mar-90 4.83 3.249 0.000 277.469 1,340.18
22-Jun-90 0.050000 D 5.29 3.477 2.623 280.092 1,481.69
30-Jun-90 5.29 3.499 0.000 280.092 1,481.69
21-Sep-90 0.000000 4.39 3.726 0.000 280.092 1,229.60
30-Sep-90 4.32 3.751 0.000 280.092 1,210.00
28-Dec-90 0.170000 G 4.54 3.995 10.488 290.580 1,319.23
28-Dec-90 0.050000 D 4.54 3.995 3.085 293.665 1,333.24
31-Dec-90 4.57 4.003 0.000 293.665 1,342.05
31-Mar-91 5.40 4.249 0.000 293.665 1,585.79
27-Jun-91 0.020000 D 5.34 4.490 1.100 294.765 1,574.05
30-Jun-91 5.34 4.499 0.000 294.765 1,574.05
30-Sep-91 5.77 4.751 0.000 294.765 1,700.79
26-Dec-91 0.020000 D 5.72 4.989 1.031 295.796 1,691.95
26-Dec-91 0.320000 G 5.72 4.989 16.490 312.286 1,786.28
31-Dec-91 5.95 5.003 0.000 312.286 1,858.10
31-Mar-92 5.83 5.252 0.000 312.286 1,820.63
26-Jun-92 0.010000 D 5.46 5.490 0.572 312.858 1,708.20
30-Jun-92 5.53 5.501 0.000 312.858 1,730.10
21-Sep-92 0.000000 5.91 5.729 0.000 312.858 1,848.99
30-Sep-92 5.87 5.753 0.000 312.858 1,836.48
28-Dec-92 0.020000 D 6.04 5.997 1.036 313.894 1,895.92
28-Dec-92 0.550000 G 6.04 5.997 28.489 342.383 2,067.99
31-Dec-92 6.04 6.005 0.000 342.383 2,067.99
01-Jan-93 0.000000 6.04 6.008 0.000 342.383 2,067.99
31-Mar-93 0.000000 6.01 6.252 0.000 342.383 2,057.72
25-Jun-93 0.010000 D 5.74 6.488 0.596 342.979 1,968.70
30-Jun-93 0.000000 5.81 6.501 0.000 342.979 1,992.71
</TABLE>
<PAGE>
31-Jul-93 0.000000 5.77 6.586 0.000 342.979 1,978.99
31-Aug-93 0.000000 6.09 6.671 0.000 342.979 2,088.74
30-Sep-93 0.000000 6.33 6.753 0.000 342.979 2,171.06
28-Dec-93 1.130000 G 5.20 6.997 74.532 417.511 2,171.06
31-Dec-93 0.000000 5.26 7.005 0.000 417.511 2,196.11
30-Mar-94 0.000000 5.07 7.249 0.000 417.511 2,116.78
31-Mar-94 0.000000 5.07 7.252 0.000 417.511 2,116.78
31-Mar-94 0.000000 5.04 7.419 0.000 417.511 2,104.26
29-Jun-94 0.000000 4.84 7.499 0.000 417.511 2,020.75
30-Jun-94 0.000000 4.80 7.501 0.000 417.511 2,004.05
31-Jul-94 0.000000 4.94 7.586 0.000 417.511 2,062.50
31-Aug-94 0.000000 5.22 7.671 0.000 417.511 2,179.41
15-Sep-94 0.000000 5.24 7.712 0.000 417.511 2,187.76
21-Sep-94 0.000000 5.11 7.729 0.000 417.511 2,133.48
30-Sep-94 0.000000 5.10 7.753 0.000 417.511 2,129.31
31-Oct-94 0.000000 5.25 7.838 0.000 417.511 2,191.93
30-Nov-94 0.000000 5.06 7.921 0.000 417.511 2,112.61
14-Dec-94 0.500000 G 4.47 7.959 46.701 464.212 2,075.03
14-Dec-94 0.010000 D 4.47 7.959 0.934 465.146 2,079.20
31-Dec-94 0.000000 4.54 8.005 0.000 465.146 2,111.76
31-Jan-95 0.000000 4.57 8.090 0.000 465.146 2,125.72
28-Feb-95 0.000000 4.66 8.167 0.000 465.146 2,167.58
31-Mar-95 0.000000 4.75 8.252 0.000 465.146 2,209.44
28-Apr-95 0.000000 4.81 8.329 0.000 465.146 2,237.35
30-Apr-95 0.000000 4.81 8.334 0.000 465.146 2,237.35
31-May-95 0.000000 4.97 8.419 0.000 465.146 2,311.78
30-Jun-95 0.000000 5.10 8.501 0.000 465.146 2,372.24
31-Jul-95 0.000000 5.38 8.586 0.000 465.146 2,502.49
31-Aug-95 0.000000 5.40 8.671 0.000 465.146 2,511.79
21-Sep-95 0.000000 5.64 8.729 0.000 465.146 2,623.42
30-Sep-95 0.000000 5.61 8.753 0.000 465.146 2,609.47
31-Oct-95 0.000000 5.63 8.838 0.000 465.146 2,618.77
30-Nov-95 0.000000 5.77 8.921 0.000 465.146 2,683.89
22-Dec-95 0.598000 G 5.18 8.981 53.698 518.844 2,687.61
22-Dec-95 0.010000 D 5.18 8.981 0.898 519.742 2,692.26
31-Dec-95 0.000000 5.22 9.005 0.000 519.742 2,713.05
29-Feb-96 0.000000 5.52 9.170 0.000 519.742 2,868.98
31-Mar-96 0.000000 5.58 9.255 0.000 519.742 2,900.16
24-May-96 0.000000 5.94 9.403 0.000 519.742 3,087.27
31-May-96 0.000000 5.93 9.422 0.000 519.742 3,082.07
05-Jun-96 0.000000 6.03 9.436 0.000 519.742 3,134.04
30-Jun-96 0.000000 5.85 9.504 0.000 519.742 3,040.49
16-Jul-96 0.000000 5.35 9.548 0.000 519.742 2,780.62
31-Jul-96 0.000000 5.53 9.589 0.000 519.742 2,874.17
06-Aug-96 0.000000 5.76 9.605 0.000 519.742 2,993.71
31-Aug-96 0.000000 5.70 9.674 0.000 519.742 2,962.53
30-Sep-96 0.000000 6.08 9.756 0.000 519.742 3,160.03
31-Oct-96 0.000000 6.08 9.841 0.000 519.742 3,160.03
15-Nov-96 0.475000 G 5.87 9.882 42.057 561.799 3,297.76
30-Nov-96 0.000000 6.00 9.923 0.000 561.799 3,370.79
31-Dec-96 0.000000 5.85 10.008 0.000 561.799 3,286.52
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)(CARROT APPEARS HERE)N = ERV
<PAGE>
<TABLE>
<S> <C>
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - 12.64%
N = NUMBER OF YEARS - 10
ERV = ENDING REDEEMABLE VALUE $3,286.52
TOTAL RETURN FOR PERIOD 228.65%
</TABLE>
<PAGE>
SELIGMAN COMMON STOCK FUND, INC. - CLASS B
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN (LESS CDSL) FOR THE 0.69 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 0.00% MAXIMUM OFFERING PRICE - $14.8000
<TABLE>
<CAPTION>
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
---------- --------- --- ------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
22-Apr-96 0.000000 14.8000 67.568 67.568 $1,000.00
30-Apr-96 0.000000 14.8900 0.022 0.000 67.568 1,006.09
31-May-96 0.000000 15.1400 0.107 0.000 67.568 1,022.98
21-Jun-96 0.058000 D 14.8200 0.164 0.264 67.832 1,005.27
21-Jun-96 0.292000 G 14.8200 0.164 1.331 69.163 1,025.00
30-Jun-96 0.000000 14.9300 0.189 0.000 69.163 1,032.60
31-Jul-96 0.000000 14.2200 0.274 0.000 69.163 983.50
31-Aug-96 0.000000 14.4500 0.359 0.000 69.163 999.41
20-Sep-96 0.058000 14.8600 0.414 0.270 69.433 1,031.77
30-Sep-96 0.000000 14.9700 0.441 0.000 69.433 1,039.41
31-Oct-96 0.000000 15.3700 0.526 0.000 69.433 1,067.19
15-Nov-96 0.823000 G 15.0000 0.567 3.810 73.243 1,098.65
30-Nov-96 0.000000 15.2300 0.608 0.000 73.243 1,115.49
18-Dec-96 0.040000 D 14.7400 0.658 0.199 73.442 1,082.54
31-Dec-96 14.8700 0.693 0.000 73.442 1,092.08
LESS CDSL 50.00
----------
1,042.08
==========
</TABLE>
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - N/A
N = NUMBER OF YEARS - 0.693
ERV= ENDING REDEEMABLE VALUE $1,042.08
TOTAL RETURN (LESS CDSL) 4.21%
<PAGE>
SELIGMAN GROWTH FUND, INC. -CLASS D
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN COMPUTATION FOR THE 3.67 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 0.00% MAXIMUM OFFERING PRICE EQUALS $5.670
<TABLE>
<CAPTION>
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
- ------------ --------- ----- ----- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
03-May-93 0.000000 5.67 176.367 176.367 $1,000.00
31-May-93 0.000000 5.88 0.077 0.000 176.367 1,037.04
30-Jun-93 0.000000 5.82 0.159 0.000 176.367 1,026.46
31-Jul-93 0.000000 5.77 0.244 0.000 176.367 1,017.64
31-Aug-93 0.000000 6.08 0.329 0.000 176.367 1,072.31
30-Sep-93 0.000000 6.32 0.411 0.000 176.367 1,114.64
29-Oct-93 0.000000 6.31 0.490 0.000 176.367 1,112.88
31-Oct-93 0.000000 6.31 0.496 0.000 176.367 1,112.88
30-Nov-93 0.000000 6.14 0.578 0.000 176.367 1,082.89
28-Dec-93 1.130000 G 5.17 0.655 38.548 214.915 1,111.11
31-Dec-93 0.000000 5.23 0.663 0.000 214.915 1,124.01
31-Jan-94 0.000000 5.38 0.748 0.000 214.915 1,156.24
28-Feb-94 0.000000 5.29 0.825 0.000 214.915 1,136.90
30-Mar-94 0.000000 4.98 0.907 0.000 214.915 1,070.28
31-Mar-94 0.000000 4.99 0.910 0.000 214.915 1,072.43
29-Apr-94 0.000000 4.92 0.989 0.000 214.915 1,057.38
30-Apr-94 0.000000 4.92 0.992 0.000 214.915 1,057.38
31-May-94 0.000000 4.92 1.077 0.000 214.915 1,057.38
29-Jun-94 0.000000 4.84 1.156 0.000 214.915 1,040.19
30-Jun-94 0.000000 4.67 1.159 0.000 214.915 1,003.65
31-Jul-94 0.000000 4.80 1.244 0.000 214.915 1,031.59
31-Aug-94 0.000000 5.07 1.329 0.000 214.915 1,089.62
15-Sep-94 0.000000 5.09 1.370 0.000 214.915 1,093.92
30-Sep-94 0.000000 4.95 1.411 0.000 214.915 1,063.83
31-Oct-94 0.000000 5.09 1.496 0.000 214.915 1,093.92
30-Nov-94 0.000000 4.90 1.578 0.000 214.915 1,053.08
14-Dec-94 0.500000 G 4.32 1.616 24.874 239.789 1,035.89
31-Dec-94 0.000000 4.38 1.663 0.000 239.789 1,050.28
31-Jan-95 0.000000 4.40 1.748 0.000 239.789 1,055.07
28-Feb-95 0.000000 4.48 1.825 0.000 239.789 1,074.25
31-Mar-95 0.000000 4.57 1.910 0.000 239.789 1,095.84
28-Apr-95 0.000000 4.62 1.986 0.000 239.789 1,107.83
30-Apr-95 0.000000 4.62 1.992 0.000 239.789 1,107.83
31-May-95 0.000000 4.78 2.077 0.000 239.789 1,146.19
30-Jun-95 0.000000 4.89 2.159 0.000 239.789 1,172.57
31-Jul-95 0.000000 5.15 2.244 0.000 239.789 1,234.91
31-Aug-95 0.000000 5.17 2.329 0.000 239.789 1,239.71
30-Sep-95 0.000000 5.37 2.411 0.000 239.789 1,287.67
31-Oct-95 0.000000 5.37 2.496 0.000 239.789 1,287.67
30-Nov-95 0.000000 5.51 2.578 0.000 239.789 1,321.24
22-Dec-95 0.598000 G 4.92 2.638 29.145 268.934 1,323.16
31-Dec-95 0.000000 4.96 2.663 0.000 268.934 1,333.91
31-Jan-96 0.000000 5.10 2.748 0.000 268.934 1,371.56
29-Feb-96 0.000000 5.24 2.827 0.000 268.934 1,409.21
31-Mar-96 0.000000 5.29 2.912 0.000 268.934 1,422.66
30-Apr-96 0.000000 5.43 2.995 0.000 268.934 1,460.31
31-May-96 0.000000 5.62 3.079 0.000 268.934 1,511.41
30-Jun-96 0.000000 5.54 3.162 0.000 268.934 1,489.89
31-Jul-96 0.000000 5.24 3.247 0.000 268.934 1,409.21
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
31-Aug-96 0.000000 5.39 3.332 0.000 268.934 1,449.55
30-Sep-96 0.000000 5.75 3.414 0.000 268.934 1,546.37
31-Oct-96 0.000000 5.74 3.499 0.000 268.934 1,543.68
15-Nov-96 0.475000 G 5.52 3.540 23.142 292.076 1,612.26
30-Nov-96 0.000000 5.64 3.581 0.000 292.076 1,647.31
31-Dec-96 0.000000 5.49 3.666 0.000 292.076 1,603.50
</TABLE>
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - 13.75%
N = NUMBER OF YEARS - 3.666
ERV = ENDING REDEEMABLE VALUE $1,603.50
TOTAL RETURN FOR PERIOD 60.35%
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ John R. Galvin (L.S.)
-------------------------------------
John R. Galvin
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, her
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in her name and stead, in her capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Alice S. Ilchman (L.S.)
---------------------------------------
Alice S. Ilchman
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Frank A. McPherson (L.S.)
------------------------------------
Frank A. McPherson
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ John E. Merow (L.S.)
------------------------------------
John E. Merow
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Betsy S. Michel (L.S.)
---------------------------------------
Betsy S. Michel
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 1st day of April, 1997.
/s/ William C. Morris (L.S.)
-------------------------------------
William C. Morris
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 30th day of April, 1997.
/s/ James C. Pitney (L.S.)
--------------------------------------
James C. Pitney
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ James Q. Riordan (L.S.)
-----------------------------------
James Q. Riordan
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 1st day of April, 1997.
/s/ Ronald T. Schroeder (L.S.)
----------------------------------
Ronald T. Schroeder
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Robert L. Shafer (L.S.)
-------------------------------------
Robert L. Shafer
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ James N. Whitson (L.S.)
----------------------------------
James N. Whitson
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN GROWTH
FUND, INC., a Maryland corporation, which proposes to file with the Securities
and Exchange Commission an Amendment to Registration Statement on Form N-1A and
further amendments thereto, as necessary, under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, hereby constitutes and appoints
William C. Morris and Brian T. Zino, and each of them individually, his
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for in his name and stead, in his capacity as such director, to sign and file
such Amendment to Registration Statement or further amendments thereto, and any
and all applications or other documents to be filed with the Securities and
Exchange Commission pertaining thereto, with full power and authority to do and
perform all acts and things requisite and necessary to be done on the premises.
Executed this 1st day of April, 1997.
/s/ Brian T. Zino (L.S.)
-----------------------------------------
Brian T. Zino
