<PAGE>
File No. 2-10836
811-229
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FORM N-1A
<S> <C>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __ [_]
Post-Effective Amendment No. 74 [X]
--
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 24 [X]
--
- -------------------------------------------------------------------------------
</TABLE>
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):
<TABLE>
<CAPTION>
<S> <C>
[X] immediately upon filing pursuant to [_] on (date) pursuant to paragraph (a)(1)
paragraph (b)
[_] on (date) pursuant to paragraph (b) [_] 75 days after filing pursuant to
paragraph (a)(2)
[_] 60 days after filing pursuant to [_] on (date) pursuant to paragraph
paragraph (a)(1) (a)(2) of rule 485.
</TABLE>
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 March 27,
1998.
<PAGE>
SELIGMAN GROWTH FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 74
Pursuant to Rule 481 (a)
------------------------
<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
- --------------------------- ----------------------
<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Organization and Capitalization
5. Management of the Fund Management Services
5a. Manager's Discussion of Fund Performance Management Services
6. Capital Stock and Other Securities Organization and Capitalization
7. Purchase of Securities Being Offered Alternative Distribution System; Purchase of Shares; Administration,
Shareholder Services and Distribution Plan
8. Redemption or Repurchase Telephone Transactions; Redemption of Shares; Exchange Privilege
9. Pending Legal Proceedings Not Applicable
<CAPTION>
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- -----------------------------------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information; Organization and Capitalization (Prospectus); Appendix
13. Investment Objectives and Policies Investment Objective, Policies And Risks; Investment Limitations
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers
Holders of Securities
16. Investment Advisory and Other Services Management and Expenses; Distribution Services
17. Brokerage Allocation Portfolio Transactions; Administration, Shareholder Services and Distribution
Plan
18. Capital Stock and Other Securities General Information; Organization and Capitalization (Prospectus)
19. Purchase, Redemption and Pricing Purchase And Redemptions of Fund Shares;
of Securities being Offered Redemptions; Valuation
20. Tax Status Federal Income Taxes (Prospectus)
21. Underwriters Distribution Services
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
SELIGMAN
- ----------
GROWTH
FUND, INC.
[ART]
PROSPECTUS
MAY 1, 1998
----
A
MONEY STOCK
FUND
IN ITS
62ND YEAR
LOGO
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
TABLE OF CONTENTS
Summary of Fund Expenses 2
Financial Highlights 3
Alternative Distribution System 5
Investment Objectives, Policies and Risks 7
Management Services 9
Purchase of Shares 10 [ART IN THE BACKGROUND]
Telephone Transactions 17
Redemption of Shares 18
Administration, Shareholder Services
and Distribution Plan 21
Exchange Privilege 22
Further Information about
Transactions in the Fund 24
Dividends and Capital Gain Distributions 24
Federal Income Taxes 25
Shareholder Information 26
Advertising the Fund's Performance 28
Organization and Capitalization 29
TIMES CHANGE ... VALUES ENDURE
<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
For Retirement Plan Information--Toll-Free Telephone: (800) 445-1777
May 1, 1998
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"). The Fund's distributor is Se-
ligman Financial Services, Inc., an affiliate of the Manager. For a descrip-
tion of the Fund's investment objectives and policies, including the risk fac-
tors associated with an investment in the Fund, see "Investment Objectives,
Policies and Risks." There can be no assurance that the Fund's investment ob-
jectives 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 gain 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.
<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 None; except 1% in 5% in 1st year 1% in 1st year
purchase price or first 18 months if 4% in 2nd year None thereafter
redemption proceeds, initial sales load 3% in 3rd and
whichever is lower)..... 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
ANNUAL FUND OPERATING CLASS A CLASS B CLASS D
EXPENSES FOR 1997 ------------------ --------------- ---------------
<S> <C> <C> <C>
(as a percentage of average
net assets)
<CAPTION>
Management Fees.......... .70% .70% .70%
12b-1 Fees............... .23% 1.00%* 1.00%*
Other Expenses........... .23% .23% .23%
----- ----- -----
Total Fund Operating 1.16% 1.93% 1.93%
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. For more information concerning reductions in sales loads
and for a more complete description of the various costs and expenses, see
"Purchase of Shares," "Redemption of Shares" and "Management Services" herein.
The Fund's Administration, Shareholder Services and Distribution Plan to which
the caption "12b-1 Fees" relates, is discussed under "Administration, Share-
holder Services and Distribution Plan" herein.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) redemption at the end of each
time period.......................... Class A $59 $83 $108 $182
Class B+ 70 91 124 205
Class D 30 61 104 225
An investor would pay the following
expenses on the same investment,
assuming no redemption............... Class A $59 $83 $108 $182
Class B+ 20 61 104 205
Class D 20 61 104 225
</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.
+ The expenses shown for the ten-year period reflect the conversion of Class
B shares to Class A shares after 8 years.
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 1997 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.
"Per share operating performance" data is designed to allow investors to
trace the operating performance, on a per share basis, from the beginning net
asset value to the ending net asset value so that they can understand what ef-
fect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by con-
verting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amount.
"Total return based on net asset value" measures a Class's performance as-
suming investors purchased Fund shares at net asset value as of the beginning
of the period, 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 in-
vestors may incur 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 to-
tal 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,
-----------------------------------------------------------------------------------------
1997O 1996O 1995O 1994O 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of year.................... $5.85 $5.22 $4.54 $5.26 $6.04 $5.95 $4.57 $5.10 $4.38
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment income
(loss)..................... -- (.01) .01 .01 .01 .03 .04 .10 .06
Net realized and unrealized
investment
gain (loss)................ 1.06 1.13 1.27 (.22) .35 .64 1.70 (.36) 1.40
Net realized and unrealized
gain (loss) from foreign
currency transactions...... (.03) (.01) .01 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Increase (decrease) from
investment operations...... 1.03 1.11 1.29 (.21) .36 .67 1.74 (.26) 1.46
Dividends paid.............. -- -- (.01) (.01) (.01) (.03) (.04) (.10) (.07)
Distributions from net gain
realized................... (.80) (.48) (.60) ( .50) (1.13) (.55) (.32) (.17) (.67)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
net asset value............ .23 .63 .68 ( .72) (.78) .09 1.38 (.53) .72
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
year....................... $6.08 $5.85 $5.22 $4.54 $5.26 $6.04 $5.95 $4.57 $5.10
======== ======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON NET
ASSET VALUE: 18.11% 21.14% 28.47% (3.84)% 6.20% 11.30% 38.45% (5.16)% 33.74%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets..................... 1.16% 1.20% .94% .90% .89% .77% .76% .71% .65%
Net investment income (loss)
to average
net assets................. (.02)% (.12)% .17% .14% .18% .49% .77% 2.04% 1.40%
Portfolio turnover.......... 54.15% 26.05% 102.30% 93.59% 105.64% 46.96% 12.60% 26.39% 60.34%
Average commission rate
paid....................... $.0573 $.0437
Net assets, end of year
(000s omitted)............. $732,754 $675,086 $597,510 $513,328 $591,491 $614,860 $598,423 $478,063 $554,364
<CAPTION>
1988
---------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of year.................... $4.23
---------
Net investment income
(loss)..................... .11
Net realized and unrealized
investment
gain (loss)................ .20
Net realized and unrealized
gain (loss) from foreign
currency transactions...... --
---------
Increase (decrease) from
investment operations...... .31
Dividends paid.............. (.11)
Distributions from net gain
realized................... (.05)
---------
Net increase (decrease) in
net asset value............ .15
---------
Net asset value, end of
year....................... $4.38
=========
TOTAL RETURN BASED ON NET
ASSET VALUE: 7.34%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
assets..................... .70%
Net investment income (loss)
to average
net assets................. 2.52%
Portfolio turnover.......... 66.39%
Average commission rate
paid.......................
Net assets, end of year
(000s omitted)............. $498,035
</TABLE>
- -------
* Per share amounts for the years ended December 31, 1997, 1996, 1995 and
1994, are calculated based on average shares outstanding.
The data provided above reflects historical information and therefore has
not been adjusted to reflect (i) through April 10, 1991, the effect of the in-
creased management fee which was approved by shareholders on April 10, 1991;
(ii) through December 31, 1992 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 (iii) through December 31, 1995,
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
------------------- --------------------------------------------
YEAR 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ---------------------------------- TO
12/31/97** 12/31/96** 1997** 1996** 1995** 1994** 12/31/93
---------- --------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $5.49 $5.35 $5.49 $4.96 $4.38 $5.23 $5.67
------ ------ ------- ------- ------- ------- -------
Net investment loss............. (.05) (.03) (.05) (.05) (.04) (.12) (.03)
Net realized and unrealized
investment gain (loss)......... .99 .65 .99 1.07 1.21 (.23) .72
Net realized and unrealized gain
(loss) from foreign currency
transactions................... (.03) -- (.03) (.01) .01 -- --
------ ------ ------- ------- ------- ------- -------
Increase (decrease) from
investment operations.......... .91 .62 .91 1.01 1.18 (.35) .69
Distributions from net gain
realized....................... (.80) (.48) (.80) (.48) (.60) (.50) (1.13)
------ ------ ------- ------- ------- ------- -------
Net increase (decrease) in net
asset value.................... .11 .14 .11 .53 .58 (.85) (.44)
------ ------ ------- ------- ------- ------- -------
Net asset value, end of period.. $5.60 $5.49 $5.60 $5.49 $4.96 $4.38 $5.23
====== ====== ======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET
VALUE: 17.10% 11.45% 17.10% 20.21% 27.01% (6.56)% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.. 1.93% 1.99%+ 1.93% 1.97% 1.91% 2.93% 2.17%+
Net investment loss to average
net assets..................... (.79)% (.83)%+ (.79)% (.88)% (.83)% (2.34)% (1.03)%+
Portfolio turnover.............. 54.15% 26.05%++ 54.15% 26.05% 102.30% 93.59% 105.64%+++
Average commission rate paid.... $.0573 $.0437++ $.0573 $.0437
Net assets, end of period (000s
omitted)....................... $4,219 $880 $15,765 $11,493 $6,412 $1,742 $1,197
</TABLE>
- -------
* Commencement of offering of shares.
* Per share amounts for the periods ended December 31, 1997, 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.
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 invest-
ors 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 invest-
ors 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
distribution 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 purchase, the length of time the shares are expected to be held and other
relevant circumstances. Investors should determine whether under their partic-
ular circumstances it is more advantageous to incur an initial sales load and
be subject to lower ongoing fees, as discussed below, or to have the entire
initial purchase price invested in the Fund with the investment thereafter be-
ing subject to higher ongoing fees and either a CDSL for a six-year period
with automatic 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 accu-
mulated 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 con-
sideration must be weighed against the fact that the amount invested 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 ad-
ditional 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 pay-
able 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 quali-
fies for a reduced sales load on the Class A shares.
5
<PAGE>
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 distribu-
tion 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.
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 Seligman Mutual Fund for which the exchange privilege is available. Al-
though Class D shareholders are subject to a shorter CDSL period at a lower
rate, they forgo the Class B automatic conversion feature, making their in-
vestment 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.
6
<PAGE>
<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.
INVESTMENT OBJECTIVES, POLICIES AND RISKS
The Fund is an open-end diversified management investment company, as de-
fined 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 increase in future income. In 1939, the Fund became the first mutual fund
to emphasize investments in common stocks of companies selected for their
growth prospects. Assets have been invested primarily in common stocks since
operations started. Risks are tempered by diversifying investments. When con-
sidered appropriate, assets may be shifted to stocks of companies less sensi-
tive to changes in economic or market conditions, or may be held in cash or
invested in senior securities. Securities owned may be changed whenever con-
sidered advisable. 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. 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 purchase restricted securities that can be offered and sold to "qualified
institutional buyers" under Rule 144A of the 1933 Act, and the Manager, acting
pursuant to procedures approved by the Fund's Board of Directors, may deter-
mine, when appropriate, that specific Rule 144A securities are liquid and not
subject to the 15% limitation on illiquid securities. Should this determina-
tion be made, the Manager, acting pursuant to such procedures, will carefully
monitor the security (focusing on such factors, among others, as trading ac-
tivity and availability of information) to determine that the Rule 144A secu-
rity continues to be liquid. It is not possible to predict with assurance ex-
actly how the market for Rule 144A securities will further evolve.
7
<PAGE>
This investment practice could have the effect of increasing the level of il-
liquidity 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 favorably or unfavorably by changes in
currency rates and exchange control regulations. There may be less information
available about a foreign company than about a U.S. company and foreign compa-
nies 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 foreign companies may involve greater market
risk than securities of U.S. companies, and foreign brokerage commissions and
custody fees are generally higher than in the United States. Investments in
foreign securities may also be subject to local economic or political risks,
political instability and possible nationalization of issuers. Depositary Re-
ceipts are instruments generally issued by domestic banks or trust companies
that represent the deposits of a security of a foreign issuer. ADRs may be
publicly traded on exchanges or over-the-counter in the United States and are
quoted and settled in dollars at a price that generally reflects the dollar
equivalent of the home country share price. EDRs are typically traded in Eu-
rope. GDRs are typically traded in both Europe and the United States. Deposi-
tary Receipts may be issued under sponsored or unsponsored programs. In spon-
sored 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 pro-
grams are generally similar, the is-suers of securities represented by
unsponsored Depositary Receipts are not obligated to disclose material infor-
mation 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 cer-
tificates 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.
YEAR 2000 RISKS. The Fund is dependent upon service providers and their com-
puter systems for its day-to-day operations, and many of the Fund's service
providers in turn depend upon computer systems of other persons. Many computer
systems currently cannot properly recognize or process date sensitive informa-
tion relating to the year 2000 and beyond. The Manager, Seligman Financial
Services, Inc., and the Fund's custodian have been evaluating the impact the
year 2000 issue may have on their computer systems. They expect that any modi-
fications to their computer systems necessary to address the year 2000 issue
8
<PAGE>
will be made and tested in a timely manner. They are also working with vendors
and other persons whose systems are linked to theirs to obtain satisfactory
assurances regarding the year 2000 issue. Seligman Data Corp., which provides
certain corporate and shareholder account services to the Fund at cost, has
informed the Fund that it does not expect that the cost to the Fund of its
services will increase materially as a result of the modifications to its com-
puter systems necessary to prepare for the year 2000. The costs of systems
remediation by persons other than Seligman Data Corp. will not be borne di-
rectly by the Fund. There can be no assurance that the remedial actions taken
by the Fund's service providers will be sufficient or timely. Inadequate
remediation could have an adverse effect on the Fund's operations, including
pricing and securities trading and settlement, and the provision of share-
holder services.
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." These 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
$20.2 billion at March 31, 1998. The Manager also provides investment manage-
ment or advice to institutional and other accounts having an aggregate value
at March 31, 1998 of approximately $7.4 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 management fee 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 1997,
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, Class B and Class D shares for the year
ended December 31, 1997 amounted to 1.16%, 1.93% and 1.93%, respectively, of
the average daily net assets of such class.
Prior to March 30, 1998, the Manager was party to a Subadvisory Agreement
with Seligman Henderson Co. pursuant to which Seligman Henderson Co. agreed to
provide investment advisory services to the Fund in respect of foreign assets
to the extent requested by the Manager. On March 30, 1998, the Subadvisory
Agreement terminated in accordance with its terms. The Manager has no present
plans to enter into similar subadvisory arrangements in respect of the Fund.
9
<PAGE>
PORTFOLIO MANAGEMENT. Richard R. Schmaltz is primarily responsible for the
day-to-day management of the Fund's portfolio as a member of the Seligman
Growth Team. Mr. Schmaltz joined the Manager in September 1996 as a Managing
Director, Director of Investments. In November 1997, Mr. Schmaltz also was
named Director of the Manager. From May 1993 to September 1996, Mr. Schmaltz
was Director, Investment Research at Neuberger and Berman. Prior thereto, Mr.
Schmaltz was Executive Vice President of McGlinn Capital. Mr. Schmaltz is also
responsible for the management of Seligman Capital Fund, Inc. and the Seligman
Capital Portfolio of Seligman Portfolios, Inc. ("SPI"). Additionally, he is
responsible for directing and overseeing the domestic investments of the Se-
ligman Henderson Global Growth Opportunities Fund, a series of Seligman Hen-
derson Global Fund Series, Inc., and the Seligman Henderson Global Growth Op-
portunities Portfolio of SPI.
The Seligman Growth Team'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, the Lipper Growth Funds
Average and the Russell 1000 Growth Index is included in the Fund's 1997 An-
nual Report to Shareholders. Copies of the 1997 Annual Report may be obtained,
without charge, by calling or writing the Fund at the telephone numbers or ad-
dress listed on the cover page of this Prospectus.
PORTFOLIO TRANSACTIONS. The Management Agreement recognizes that in the pur-
chase and sale of portfolio securities the Manager will seek the most favora-
ble price and execution, and, consistent with that policy, may give considera-
tion to the research, statistical and other services furnished by brokers or
dealers to the Manager. 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 selected on the basis of the most favorable
brokerage commission rates, and research and analysis received may be useful
to the Manager 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 Man-
ager may consider sales of shares of the Fund and, if permitted under applica-
ble laws, may consider sales of shares of the other mutual funds in the Selig-
man Group as a factor in the selection of brokers or dealers to execute port-
folio 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 securi-
ties. 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 believes 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 Ave-
nue, New York, NY 10017.
The Fund issues three classes of shares: Class A shares are sold to invest-
ors choosing the initial sales load alternative; 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 with in six years of purchase and who de-
sire shares to convert automatically to Class A shares after eight years; and
Class D shares are sold to investors choosing no initial sales load, a higher
distribution fee and a CDSL on redemptions within one year of purchase. See
"Alternative Distribution System" above.
10
<PAGE>
Shares of the Fund may be purchased through any authorized investment deal-
er. All orders will be executed at the net asset value per share next deter-
mined after 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 BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR INVESTMENT OF
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE RIGHT TO RE-
TURN INVESTMENTS WHICH DO NOT MEET THESE MINIMUMS. EXCEPTIONS TO THESE MINI-
MUMS 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 IN-
FORMATION ABOUT THIS PROGRAM, CONTACT YOUR FINANCIAL ADVISOR.
The minimum amount for initial investment in the fund is $500 for investors
who purchase shares of the fund through Merrill Lynch's MFA or MFA Select Pro-
grams. There is no minimum investment required for investors who purchase
shares of the Fund through wrap fee programs.
Purchase orders placed for Class B shares must be for an amount LESS THAN
$250,000.
Orders received by an authorized dealer before the close of regular trading
on the New York Stock Exchange ("NYSE") (normally, 4:00 p.m. Eastern time) and
accepted 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 regular trading on the NYSE on that day plus, in the case of Class A
shares, any applicable sales load. Orders accepted by dealers after the close
of regular trading on the NYSE, or received by SFSI after the close of busi-
ness, will be executed at the Fund's net asset value as next determined plus,
in the case of Class A shares, any applicable sales load. The authorized
dealer through which a shareholder purchases shares is responsible for for-
warding 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 as-
signed a purchase confirmation number. Funds in payment 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 CON-
FIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT NUMBER. Persons
other than dealers who wish to wire payment should contact Seligman Data Corp.
for specific 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
9766, PROVIDENCE, RI 02940-9766. Checks for investment must be in U.S. dollars
drawn on a domestic bank. 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). Checks sent directly to Seligman Data Corp. and received
in good order will be invested at the Fund's net asset value determined as of
the close of regular trading on the NYSE on that day plus, in the case of
Class A shares, the applicable sales load.
IF A SHAREHOLDER DOES NOT INDICATE THE REQUIRED INFORMATION, SELIGMAN DATA
CORP. WILL SEEK FURTHER CLARIFICATION AND BE FORCED TO RETURN THE CHECK TO THE
SHAREHOLDER. IF ONLY THE CLASS DESIGNATION IS MISSING, THE INVESTMENT WILL
AUTOMATI-
11
<PAGE>
CALLY BE MADE IN CLASS A SHARES FOR NEW ACCOUNTS OR IN THE SHAREHOLDER'S EX-
ISTING CLASS FOR ADDITIONAL PURCHASES. Credit card convenience checks and
third party checks (i.e., checks made payable to someone other than the "Se-
ligman Group of Funds") may not be used to open a new fund account or purchase
additional shares of the Fund.
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.
Current shareholders may also purchase additional shares by having funds
electronically transferred directly from an employer, the Internal Revenue
Service or other government agency, or any institution capable of transmitting
payments through the Automated Clearing House ("ACH") network. Purchases may
be one-time transactions, or, for those institutions that offer direct deposit
programs, may be made on a systematic basis. To utilize this service, the fol-
lowing bank information must be provided to the paying institution:
Mellon Bank, N.A.
ABA #043000261
A/C No. 600FFFNNNNNNNNNN
"600" IDENTIFIES THE SELIGMAN GROUP OF FUNDS, "FFF" IS THE FUND CODE REPRE-
SENTING THE FUND AND CLASS OF SHARES IN WHICH THE PURCHASE SHOULD BE MADE
(this code is available on the back of all shareholder account statements),
AND "NNNNNNNNNN" INDICATES THE SHAREHOLDER'S TEN-DIGIT ACCOUNT NUMBER. In ad-
dition, the shareholder must indicate that this is a checking account at
Mellon Bank. For IRA and group retirement accounts, all electronic purchases
will be designated as current year contributions. For more information about
this service, please contact Seligman Data Corp.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Friday, as of the close of regular trading on the NYSE (nor-
mally, 4:00 p.m. Eastern time) on each day that the NYSE is open for business.
Net asset value is calculated separately 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 exchange or market on which they are traded. United
Kingdom securities and securities for which there are no recent sales transac-
tions are valued based on quotations provided by primary market makers in such
securities. Short-term holdings maturing in 60 days or less are generally val-
ued at amortized 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 amortized cost basis based on the value as of such date unless
the Board determines that amortized cost value does not represent fair market
value. Any securities for which recent market quotations are readily available
are valued at a fair value determined in accordance with procedures approved
by the Fund's Board of Directors.
Although the legal rights of Class A, Class B and Class D shares are sub-
stantially 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 follow-
ing schedule, and an annual service fee of up to .25%
12
<PAGE>
of the average daily net asset value of Class A shares. See "Administration,
Shareholder Services and Distribution Plan."
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: 1.00% of NAV sales up to but not including $2 million;
.80% of NAV sales from $2 million up to but not including $3 million; .50% of
NAV sales from $3 million up to but not including $5 million; and .25% of NAV
sales from $5 million and above. The calculation of the fee will be based on
assets held by a "single person" 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 sales load was not paid be-
cause 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 ini-
tial purchase of Seligman Cash Management Fund are not eligible for the fee.
Such shares will become eligible for the fee once they are exchanged for
shares of another Seligman Mutual Fund. The payment is based on cumulative
sales for each plan during a single calendar year, or portion thereof. The
payment schedule, for each calendar year, is as follows: 1.00% of sales up to
but not including $2 million; .80% of sales from $2 million up to but not in-
cluding $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 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 Selig-
man Mutual Funds that are sold with an initial sales load reaches levels indi-
cated in the above sales load schedule.
. THE RIGHT OF ACCUMULATION allows an investor to combine the amount being in-
vested in shares of any Seligman Mutual Fund sold with an initial sales load
with the total net asset value of shares already owned that were sold with an
initial sales load, including shares of Seligman Cash Management Fund that
were acquired by the investor through an exchange of shares of another Selig-
man 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-
13
<PAGE>
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 pur-
chasing shares on behalf of an investor must indicate that the investor has
existing accounts when making investments or opening new accounts. For more
information concerning terms of Letters of Intent, see "Terms and Conditions."
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 invest-
ment companies in the Seligman Group, the Manager and other companies affili-
ated with the Manager. Family members are defined to include lineal descend-
ants 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.
Class A shares also may be issued without an initial sales load in connec-
tion with the acquisition of cash and securities owned by other investment
companies; to any registered unit investment trust which is the issuer of pe-
riodic 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 financial in-
stitution trust departments; to registered investment advisers exercising dis-
cretionary 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 arrange-
ments with organizations which make recommendations to or permit group solici-
tations of, its employees, members or participants in connection with the pur-
chase 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 arrange-
ment, 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 pay-
roll deduction system of plan funding or other system acceptable to Seligman
Data Corp.
Section 403(b) plans sponsored by public educational institutions are not
eligible for net asset value purchases based on the aggregate investment made
by the plan or number of eligible employees. 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) or other retirement alliance program the sponsor of
which has an agreement with SFSI pursuant to which shares are made available
at net asset value 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
14
<PAGE>
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
reinvestment of dividends and distributions on Class B shares also will con-
vert 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 ex-
changed for Class B shares of another Seligman Mutual Fund, the conversion pe-
riod 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 pe-
riod of the shares acquired. Class B shareholders of the Fund exercising the
exchange privilege will continue to be subject to the Fund's CDSL schedule if
such schedule is higher or longer than the CDSL schedule relating to the new
Class B shares. In addition, Class B shares of the Fund acquired by exchange
will be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL schedule relating to the Class B shares of the Seligman
Mutual Fund from which the exchange has been made.
CLASS D SHARES. Class D shares are sold without an initial sales load but
are subject to a 1% CDSL if the shares are redeemed within one year, 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. SFSI will make a 1% pay-
ment 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 redemptions 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
Services 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 assign any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on redemptions of Class A shares purchased
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--Ini-
tial 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
pursuant to the sales load schedule provided under "Class A Shares--Initial
Sales Load") will be waived on shares that were purchased through Morgan
Stanley Dean Witter & Co. ("Morgan Stanley") by certain Chilean institutional
investors (i.e., pension plans, insurance companies and mutual
15
<PAGE>
funds). Upon redemption of such shares within an eighteen month period, Morgan
Stanley 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 pur-
suant to the investment of dividends and capital gain 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 re-
deemed. 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 origi-
nal purchase price, whichever is less. No CDSL will be imposed on shares ac-
quired through the investment of dividends or capital gain 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 calcu-
lated 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 (as defined in section
72(m)(7) of the Internal Revenue Code of 1986, as amended (the "Code")) of a
shareholder or beneficial owner; (b) in connection with (i) distributions from
retirement plans qualified under section 401(a) of the Code when such redemp-
tions are necessary to make distributions to plan participants (such payments
include, but are not limited to death, disability, retirement, or separation
of service), (ii) distributions from a custodial account under section 403
(b)(7) of the Code or an individual retirement account (an "IRA") due to
death, disability, minimum distribution requirements after attainment of age
70 1/2, or, for accounts established prior to January 1, 1998, attainment of
age 59 1/2, and (iii) a tax-free return of an excess contribution to an IRA;
(c) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund; (d) in whole or in part, in connection with shares sold
to any state, county, or city or any instrumentality, department, authority,
or agency thereof, which is prohibited by applicable investment laws from pay-
ing a sales load or commission in connection with the purchase of shares of
any registered investment management company; (e) in whole or in part, in con-
nection with systematic withdrawals; (f) in connection with participation in
the Merrill Lynch Small Market 401(k) Program; and (g) in connection with the
redemption of shares of the Fund if the Fund is combined with another Seligman
Mutual Fund, or another similar reorganization transaction.
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 no-
tice, an amount equal to the
16
<PAGE>
payment or a portion of the payment made by SFSI at the time of sale of such
shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the Seligman Mutual Funds. In
some instances, these bonuses or incentives may be offered only to certain
dealers which employ registered representatives who have sold or may sell a
significant amount of shares of the Fund and/or certain other mutual funds
managed by 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 representa-
tives 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, has the ability to effect the following transac-
tions via telephone: (i) redemption of Fund shares with proceeds sent to the
address of record (up to $50,000 per day per fund account), (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. In addition, a shareholder who has current bank information
on file with Seligman Data Corp. may redeem shares via telephone and have the
proceeds transferred electronically from the shareholder's fund account to the
shareholder's predesignated bank account. See "Redemption of Shares." All tel-
ephone transactions are effected through Seligman Data Corp. at (800) 221-
2450.
For investors who purchase shares by completing and submitting an Account
Application: 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 Application, will automatically receive telephone services. A
shareholder must provide bank information on the Account Application or a sup-
plemental election form in order to have redemptions via telephone sent to the
shareholder's bank account.
For investors who purchase shares through a broker/dealer: Telephone serv-
ices for a shareholder and the shareholder's representative may be elected by
completing a supplemental election application available from the
broker/dealer of record.
For accounts registered as IRAs: Telephone services will include only ex-
changes or address changes.
For corporations or group retirement plans: Telephone redemptions are not
permitted. Additionally, group retirement plans are not permitted to change a
dividend or gain distribution option. Group retirement plans that may allow
plan participants to place telephone exchanges directly with the Fund must
first provide a letter of authorization signed by the plan's custodian or
trustee, and provide a telephone services election form signed by each plan
participant.
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.
17
<PAGE>
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 "Redemp-
tion 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 periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine. These will in-
clude: 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, neither they nor any of their affiliates will be liable for any loss
to the shareholder caused by an unauthorized transaction. In any instance
where the Fund or Seligman Data Corp. is not reasonably satisfied that in-
structions received by telephone are genuine, the requested transaction will
not be executed, and neither 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 un-
authorized or fraudulent instructions. 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 refuse or cancel telephone services. Telephone
services may be terminated by a shareholder at any time by sending a written
request to Seligman Data Corp. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A
SHAREHOLDER'S BROKER/DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHARE-
HOLDER. Written acknowledgment of the addition of telephone services to an ex-
isting account or termination of telephone services will be sent to the share-
holder at the address of record.
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit ("uncertificated") form
without charge, except a CDSL, if applicable at any time by SENDING A WRITTEN
REQUEST to Seligman Data Corp., P.O. Box 9759, Providence, RI 02940-9759; or
if the request is being sent by overnight delivery service to 100 Park Avenue,
New York, NY 10017. The redemption 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 sur-
rendering certificates in proper form to the same address. Certificates should
be sent certified or registered mail. Return receipt is advisable, however,
this may increase mailing time. Share certificates must be endorsed for trans-
fer or accompanied by an endorsed stock power signed by all share owners ex-
actly as their name(s) appear(s) on the account registration. The sharehold-
er'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).
18
<PAGE>
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 fi-
nancial institution including, but not limited to, the following: banks, trust
companies, credit unions, securities brokers and dealers, savings and loan as-
sociations and participants in the Securities Transfer Association Medallion
Program (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. A signature guarantee is not
required if redemption proceeds are transferred electronically to the share-
holder's pre- designated bank account.
ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED BY SELIGMAN DATA CORP. IN THE
EVENT OF A REDEMPTION BY A CORPORATION, EXECUTOR, ADMINISTRATOR, TRUSTEE, CUS-
TODIAN OR RETIREMENT PLAN. FOR FURTHER INFORMATION WITH RESPECT 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. If Class A shares which were purchased
without an initial sales load because the purchase amount was $1,000,000 or
more are redeemed within eighteen months of purchase, a shareholder will re-
ceive the net asset value per share next determined after receipt of a request
in good or-der, less a CDSL of 1% as described under "Purchase of Shares--
Class A Shares--Initial Sales Load" above. If Class B shares are redeemed
within six years of purchase, a shareholder will receive the net asset value
per share next determined after receipt of a request in good order, less the
applicable sales load as described under "Purchase of Shares--Class B Shares"
above. If Class D shares are redeemed within one year of purchase, a share-
holder will receive the net asset value per share next determined after re-
ceipt of a request in good order, less a CDSL of 1% as described under "Pur-
chase 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 receiv-
ing 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
regular trading on the NYSE (normally, 4:00 p.m. Eastern time) and received by
SFSI, the repurchase agent, before the close of business on the same day will
be executed at the net asset value per share determined as of the close of
regular trading on the NYSE on that day, less any applicable CDSL. Repurchase
orders received from authorized dealers after the close of regular trading on
the NYSE or not received by SFSI prior to the close of business, will be exe-
cuted at the net asset value determined as of the close of regular trading on
the NYSE on the next trading day, less any applicable CDSL. Shares held in a
"street name" account with a broker/dealer may be sold to the Fund only
through a broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares may be
made, once per day, in an amount of up to $50,000 per fund account. Proceeds
will be sent to the address of record. A shareholder whose bank is a member of
the ACH network and who has current bank information on file
19
<PAGE>
with Seligman Data Corp. may have redemption proceeds transferred electroni-
cally to the shareholder's predesignated bank account. Telephone redemption
requests received by Seligman Data Corp. at (800) 221-2450 by the close of
regular trading on the NYSE, (normally 4:00 p.m. Eastern time) will be proc-
essed at the Fund's net asset value determined as of the close of business on
that day. Redemption requests by telephone will not be accepted within 30 days
following an address change. IRAs, group retirement plans, corporations and
trusts for which the name of the current trustee does not appear in the ac-
count registration are not eligible for telephone redemptions. The Fund re-
serves the right to suspend or terminate its telephone redemption service at
any time without notice.
For more information about telephone redemptions and the circumstances under
which shareholders may bear the risk of loss for a fraudulent transaction, see
"Telephone Transactions" above.
GENERAL. With respect to shares redeemed, a check for the proceeds, less any
applicable CDSL, 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. Redemptions via telephone to the
shareholder's bank account will be transferred electronically within five
business days. Payment of redemption proceeds will be delayed on redemptions
of shares purchased by check (unless certified) until Seligman Data Corp. re-
ceives notice that the check has cleared, which may be up to 15 days from the
credit of the shares to the shareholder's account. No interest is earned on
the redemption proceeds during this time. The proceeds of a redemption or re-
purchase may be more or less than the shareholder's cost.
The Fund reserves the right to redeem shares owned by a shareholder whose
investment 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 investment 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
decides to reinvest them, or to shift the investment to one of the other Se-
ligman Mutual Funds, the shareholder may, within 120 calendar days of the date
of redemption, use all or any part of the proceeds of the redemption to rein-
state, 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 Se-
ligman Mutual Funds within 120 calendar days of the date of redemption and re-
ceive a credit for the applicable CDSL paid. Such investment will be rein-
stated at the net asset value per share established as of the close of regular
trading on the NYSE on the day the request is received. Seligman Data Corp.
must be informed that the purchase represents a reinstated investment. REIN-
STATED SHARES MUST BE REGISTERED EXACTLY AND BE OF THE SAME CLASS AS THE
SHARES PREVIOUSLY REDEEMED; AND THE FUND'S MINIMUM INITIAL INVESTMENT AMOUNT
MUST BE MET AT THE TIME OF REINSTATEMENT.
Generally, exercise of the Reinstatement Privilege does not alter the fed-
eral 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 re-
invested in shares of the same Fund some or all of the loss will not be al-
lowed as a deduction, depending upon the percentage of the proceeds reinvest-
ed.
20
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
Under the Fund's Administration, Shareholder Services and Distribution Plan
(the "Plan"), the Fund may pay to SFSI an administration, shareholder services
and distribution fee in respect of the Fund's Class A, Class B and Class D
shares. Payments under the Plan may include, but are not limited to: (i) com-
pensation to securities dealers and other organizations ("Service Organiza-
tions") for providing distribution assistance with respect to assets invested
in the Fund, (ii) compensation to Service Organizations for providing adminis-
tration, accounting and other shareholder services with respect to Fund share-
holders, and (iii) otherwise promoting the sale of shares of the Fund, includ-
ing paying for the preparation of advertising and sales literature and the
printing and distribution of such promotional materials and prospectuses to
prospective investors and defraying SFSI's costs incurred in connection with
its marketing efforts with respect to shares of the Fund. The Manager, in its
sole discretion, may also make similar payments to SFSI from its own re-
sources, 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 re-
viewed by the Directors annually. The total amount paid for the year ended De-
cember 31, 1997 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 the fees payable to it in respect
of the Class B Shares, other than the portion payable to Service Organizations
on a continuing basis. Proceeds from Class D distribution fees are used pri-
marily to compensate Service Organizations for administration, shareholder
services and distribution assistance (including a continuing fee of up to .25%
on an annual basis of the average daily net asset value of Class D shares at-
tributable 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 Organi-
zations at the time of the sale of Class B and Class D shares. The amounts ex-
pended by SFSI in any one year upon the initial purchase of Class B and Class
D shares may exceed the amounts received by it from Plan payments retained.
Expenses of administration, shareholder services and distribution of Class B
and Class D shares of the Fund in one fiscal year of the Fund may be paid from
Class B and Class D Plan fees, respectively, received from the Fund in any
other fiscal year.
21
<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 Directors on March 18, 1993
and became effective May 1, 1993. The total amount paid for the period ended
December 31, 1997 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 share-
holder accounts that do not have a designated broker/dealer of record includ-
ing all such shareholder accounts established after April 1, 1995 and receives
compensation for providing personal service and account maintenance to such
accounts of record.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any part or all of an investment in the Fund for shares of any of the other
Seligman Mutual Funds. Exchanges may be made by mail, or by telephone, 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 disposi-
tion of the exchanged shares, the applicable holding period shall be reduced
by the period for which the original shares were held.
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
objective.
. 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 in-
vesting in companies either globally or internationally.
. SELIGMAN HIGH INCOME FUND SERIES consists of the Seligman U.S. Government
Securities Series
22
<PAGE>
and the Seligman High-Yield Bond Series each of which seeks high current in-
come by investing in debt securities.
. 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 regular trading on the NYSE on that day.
Telephone requests for exchanges received by the close of regular trading on
the NYSE (normally, 4:00 p.m. Eastern time) by Seligman Data Corp. at (800)
221-2450, will be processed as of the close of business on that day. Requests
received after the close of regular trading on the NYSE will be processed at
the net asset values per share calculated the following business day The reg-
istration of an account into which an exchange is made must be identical to
the registration of the account from which shares are exchanged. When estab-
lishing a new account by an exchange 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 INDICATED, WILL BE CARRIED OVER TO THE NEW
FUND ACCOUNT, AS WILL TELEPHONE SERVICES. ACCOUNT SERVICES, SUCH AS INVEST-A-
CHECK(R) SERVICE, DIRECTED DIVIDENDS AND SYSTEMATIC WITHDRAWAL PLAN WILL NOT
BE CARRIED OVER TO THE NEW FUND ACCOUNT UNLESS SPECIFICALLY REQUESTED AND PER-
MITTED 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 exchanged via telephone and may be exchanged only upon
receipt of a written exchange 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 Seligman Mutual Funds 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
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broker/dealer has entered into a Telephone Exchange Agreement with SFSI
wherein the broker/dealer must agree to indemnify SFSI and the Seligman Mutual
Funds from any loss or liability incurred as a result of the acceptance of
telephone exchange orders.
Written confirmation of all exchanges will be forwarded to the shareholder
to whom the exchanged shares are registered and a duplicate confirmation will
be sent to the dealer of record. SFSI reserves the right to reject any tele-
phone exchange request. Any rejected telephone exchange order may be processed
by mail. For more information about telephone exchanges privileges, which, un-
less objected to, are assigned to most shareholders automatically, and the
circumstances under which shareholders may bear the risk of loss for a fraudu-
lent transaction, see "Telephone Transactions" above.
Exchanges of shares are sales, and may result in a gain or loss for federal
income tax purposes.
FURTHER INFORMATION ABOUT TRANSACTIONS IN THE FUND
Because excessive trading (including short-term, "market timing" trading)
can hurt the Fund's performance, the Fund may refuse any exchange (1) from 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 exchange or purchase order from any shareholder account if the shareholder
or the shareholder's broker/dealer has been advised that pervious patterns of
purchases and redemptions or exchanges have been considered excessive. Ac-
counts under common ownership or control, including those with the same tax-
payer ID number and those administered so as to redeem or purchase shares
based upon certain predetermined market indicators, will be considered one ac-
count for this purpose. Additionally, the Fund reserves the right to refuse
any order for the purchase of shares.
DIVIDENDS AND CAPITAL GAIN 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 and sent to the shareholder's address
of record or, if elected by a shareholder who has current bank information on
file with Seligman Data Corp., electronically deposited into the shareholder's
predesignated bank account. Such deposits will normally be credited to the
shareholder's bank account in 3 to 4 business days after the payable date of
the dividend or gain distribution.
In the case of prototype retirement plans, dividends and gain distributions
are reinvested in additional shares. Unless another election is made, divi-
dends and capital gain distributions will be credited to shareholder accounts
in additional shares. Shares acquired through a dividend or gain distribution
and credited to a shareholder's account are not subject to an initial sales
load or a CDSL. Dividends and gain distributions paid in shares are invested
on the payable date using the net asset value of the ex-dividend date. Share-
holders may elect to change their dividend and gain distribution options by
writing Seligman Data Corp. at the address listed below. If the shareholder
has elected 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 share-
holder or the broker/dealer of record on the account.
24
<PAGE>
For information about telephone services, see "Telephone Transactions." These
elections must be received by Seligman Data Corp. before the record date for
the dividend or gain distribution in order to be effective for such dividend
or gain distribution. For information on how to have dividend or gain distri-
butions electronically deposited into a shareholder's bank account, contact
Seligman Data Corp.
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 re-
sult of the higher distribution fees applicable with respect to Class B and
Class D shares. Per share dividends of the three classes may also differ as a
result of differing class expenses. Distributions of net capital gains, if
any, will be paid in the same amount for Class A, Class B and Class D shares.
See "Purchase of Shares--Valuation."
Shareholders exchanging shares of one mutual fund for shares of another
Seligman Mutual Fund will continue to receive dividends and gains as elected
prior to such exchange unless otherwise specified. In the event that a
shareholder redeems,all shares in an account between the record date and the
payable date, the value of dividends or gain distributions declared will be
paid in cash regardless of the existing election. A transfer or exchange of
all shares (closing an account), between the record date and payable date,
will result in the value of dividends or gain distributions being paid to the
new fund account in accordance with the option on the closed account, unless
Seligman Data Corp. is instructed otherwise.
FEDERAL INCOME TAXES
The Fund intends to continue to qualify as a regulated investment company
under the Code. For each year so qualified, the Fund will not be subject to
federal income taxes on its net investment income and capital gains, if any,
realized during any taxable year, which it distributes to its shareholders,
provided that at least 90% of its net investment income and net short-term
capital gains are distributed to shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to shareholders, whether received
in cash or reinvested in additional shares. To the extent designated as de-
rived from the Fund's dividend income that would be eligible for the dividends
received deduction if the Fund were not a regulated investment company, they
are eligible, subject to certain restrictions, for the 70% dividends received
deduction for corporations.
Distributions of net capital gain, (i.e., the excess of net long-term capi-
tal 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 a shareholder. Such distributions are not
eligible for the dividends received deduction allowed to corporate sharehold-
ers. Shareholders receiving distributions in the form of additional shares is-
sued by the Fund will be treated for federal income tax purposes as having re-
ceived a distribution in an amount equal to the fair market value on the date
of distribution of the shares received. Individual shareholders will be sub-
ject to federal income tax on distributions of net capital gains at a maximum
rate of 28% if designated as derived from the Fund's capital gains from prop-
erty held for more than one year and a maximum rate of 20% if designated as
derived from the Fund's capital gains from property held for more than eigh-
teen months.
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. Individual sharehold-
ers will be subject to federal income tax on net capital gains at a maximum
rate of 28% in respect of shares held for more than one year and at a maximum
rate of 20% in respect of shares held for more than eighteen
25
<PAGE>
months. 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 period 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 reinvestment) 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 permit-
ted to include in the tax basis attributable to such shares the sales load in-
curred 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 shareholder's tax basis in the shares acquired pursuant to the Exchange or
Reinstatement 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
declared in October, November or December payable to shareholders of record on
a specified date in such a month and paid in the following January will be
treated as having been paid by the Fund and received by each shareholder in
December. Under this rule, therefore, shareholders may be taxed in one year on
dividends or distributions actually received in January of the following year.
Shareholders are urged to consult their tax advisors concerning the effect
of 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, or (212) 850-1864 in the New York City area.
Information about shareholder accounts may be requested by writing Shareholder
Services, Seligman Data Corp. at the same address or by calling toll-free
(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,
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WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BALANCE, MOST RECENT
TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS AND FORM
1099-DIV CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF DISTRIBUTION CHECKS, AC-
COUNT STATEMENTS AND OTHER INFORMATION, SELIGMAN DATA CORP. SHOULD BE NOTIFIED
IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGE. ADDRESS CHANGES MAY BE TELE-
PHONED TO SELIGMAN DATA CORP. IF THE SHAREHOLDER 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 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 pur-
chase shares. Accounts may be established concurrently with the Invest-A-
Check(R) Service only if accompanied by a check for at least $100 in conjunc-
tion with the monthly investment option or a check for at least $250 in con-
junction with the quarterly investment option. For investments into the Selig-
man Time Horizon Matrix(SM) Asset Allocation Program, the minimum amount is
$500 at regular monthly intervals or $1,000 at regular quarterly intervals. By
utilizing the Invest-A-Check(R) Service to establish an account, you are
agreeing to continue the service until the Fund's minimum investment amount is
met. If you elect to cancel the service prior to meeting the minimum, your ac-
count may be subject to closure. (See "Terms and Conditions.")
. AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder of Seligman
Cash Management Fund to exchange a specified amount, at regular monthly inter-
vals in fixed amounts of $100 or more per fund, or regular quarterly intervals
in fixed amounts of $250 or more per fund, from shares of any class of the
Cash Management Fund into shares of the same class of any other Seligman Mu-
tual Fund registered in the same name. For exchanges into the Seligman Time
Horizon Matrix(SM) Asset Allocation Program, the minimum amount is $500 at reg-
ular monthly intervals or $1,000 at regular quarterly intervals. The share-
holder'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 in-
clude the shareholder's name, account number, the name of the Fund and the
class of shares in which the investment is to be made.) If the dividends are
to be invested in a new fund account, the first investment must meet the re-
quired minimum purchase amount for such Fund.
A shareholder may also direct that dividends payable on shares of other com-
panies be transferred electronically to purchase shares of any Seligman Mutual
Fund, if the other company provides this service. See "Purchase of Shares" or
contact Seligman Data Corp. for more information.
. 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
service should contact Seligman Data Corp. or a broker to obtain the necessary
documentation. Banks may charge a penalty on CD assets withdrawn prior to ma-
turity. Accordingly, it will not normally be advisable to liquidate a CD be-
fore its maturity.
. SYSTEMATIC WITHDRAWAL PLAN permits payments in fixed amounts of $50 or
more at regular in-
27
<PAGE>
tervals to be made to a shareholder who owns or purchases shares worth $5,000
or more held as book credits. Payments will be sent by check to the address
designated by the shareholder or, if elected by a shareholder who has current
bank information on file with Seligman Data Corp., electronically deposited
into the shareholder's predesignated bank account. Such deposits will normally
be credited to the shareholder's bank account in 2 to 3 business days after
the shares are redeemed from the shareholder's fund account. 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 and Class D shares may elect to use this plan immediately, although
certain withdrawals may be subject to a CDSL. (See "Terms and Conditions.")
. 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 PLANS. Shares of the Fund may be purchased for:
--Individual Retirement Accounts (IRAs), including Traditional IRAs, Roth
IRAs and Education 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 ap-
plication form. The Fund may register an IRA investment for which an account
application has not been received as an ordinary taxable account.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, NY 10017 or telephone toll-free (800) 445-1777 from
all continental United States. You also may receive information through an au-
thorized dealer.
ADVERTISING THE FUND'S PERFORMANCE
From time to time the Fund advertises its "total return" and "average annual
total return," each of which are calculated separately for Class A, Class B
and Class D shares. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. The "total return" shows what an in-
vestment 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
reinvestment 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 received at the end of the specified period (one, five and ten-year periods
or since inception); i.e., the average annual
28
<PAGE>
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 management fee approved by share hold-
ers 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 in-
crease in the Management fee payable by the Fund, effective on such date,
which if reflected would reduce the performance quoted. Total return and aver-
age annual total return may also be presented without the effect of the ini-
tial 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 Services, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total re-
turn of the Fund's Class A and Class D shares, the Lipper analysis assumes in-
vestment of all dividends and distributions paid but does not take into ac-
count applicable sales loads. The Fund may also refer in advertisements or in
other promotional material to articles, comments, listings and columns in the
financial press pertaining to the Fund's performance. Examples of such finan-
cial and other press publications include Barron's, Business Week,
CDA/Weisenberger Mutual Funds Investment Report, Christian Science Monitor,
Financial Planning, Financial Times, Financial World, Forbes, Fortune, Indi-
vidual Investor, Investment Advisor, Investors Business Daily, Kiplinger's,
Los Angeles Times, MONEY Magazine, Morningstar, Inc., Pensions and Invest-
ments, 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 common stock. In accordance with the Articles of Incorporation, the
Board of Directors may authorize the creation of additional classes of common
stock with such characteristics as are permitted by the Multiclass Plan and
Rule 18f-3. The 1940 Act requires that where more than one class exists, each
class must be preferred over all other classes in respect of assets specifi-
cally allocated to such class. Shares have non-cumulative voting rights, do
not have preemptive or subscription rights and are transferable.
29
<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 and certain waiver of probate
procedures 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.
By utilizing the Invest-A-Check(R) Service to establish an account, you are
agreeing to continue the service until the Fund's minimum investment amount is
met. If you elect to cancel the service prior to meeting the minimum, your ac-
count may be subject to closure. If an ACH debit or preauthorized check is not
honored by the shareholder's bank, or if the value of shares held falls below
the required minimum, the Invest-A-Check(R) Service may be suspended. In the
event that a check or ACH debit is returned as uncollectable, Seligman Data
Corp. will cancel the purchase, redeem shares held in the shareholder's ac-
count for an amount sufficient to reimburse the Fund for any loss it may have
incurred as a result, and charge a $10.00 return check fee. This fee will be
deducted from the shareholder's account. The Invest-A-Check(R) Service may be
reinstated upon written request indicating that the cause of interruption has
been corrected. The Invest-A-Check(R) Service may be terminated by the share-
holder or Seligman Data Corp. at any time by written notice. The shareholder
agrees to hold the Fund and its agents free from all liability which may re-
sult from acts done in good faith and pursuant to these terms. Instructions
for establishing Invest-A-Check(R) Service are given on the Account Applica-
tion. In the event a shareholder exchanges all of the shares from one mutual
fund in the Seligman Group to another, the Invest-A-Check(R) Service will be
terminated in the Seligman Mutual Fund that was closed as a result of the ex-
change of all shares and the shareholder must re-apply for the Invest-A-
Check(R) Service in the Seligman Mutual Fund into which the exchange was made.
In the event of a partial exchange, the Invest-A-Check(R) Service will be con-
tinued, subject to the above conditions, in the Seligman Mutual Fund from
which the exchange was made. Accounts established in conjunction with the In-
vest-A-Check(R) service must be accompanied by a check for at least $100 in
connection with the monthly investment option or a check for at least $250 in
connection with the quarterly investment option. If a shareholder uses the In-
vest-A-Check(R) Service to make an IRA or group retirement plan investment,
the purchase will be credited as a current year contribution.
SYSTEMATIC WITHDRAWAL PLAN
A sufficient number of full and fractional shares will be redeemed to pro-
vide the amount required for a scheduled payment and any applicable CDSL. Re-
demptions will be made at the asset value at the close of business on the spe-
cific day of each month designated by the shareholder (or on the prior busi-
ness day if the day specified falls on a weekend or holiday), less, in the
case of Class B or Class D shares, any applicable CDSL. Systematic 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 eigh-
teen months of purchase of such shares. Under this plan, a Class B or Class D
shareholder who requests both dividends and capital gain distributions in ad-
ditional shares may withdraw up to 12% or 10% respectively, of the value of
the shareholder's fund account (at the time of election) per annum, without
the imposition of a CDSL. A minimum payment amount of $50 per cycle is needed
to establish this plan. A shareholder may change the amount of scheduled pay-
ments or may suspend payments by written notice to Seligman Data Corp. at
least ten days prior to the effective date of such a change or suspension. The
plan 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 plan is considered terminated in
the event a withdrawal of shares, other than to make scheduled withdrawal pay-
ments, reduces the value of shares remaining on deposit to less than $5,000.
Continued payments in excess of dividend income invested will reduce and ulti-
mately exhaust capital. Withdrawals, concurrent with purchases of shares of
this or any other investment company, will be disadvantageous because of the
payment of duplicative sales loads, if applicable. For this reason, additional
purchases of Fund shares are discouraged when the Withdrawal plan is in ef-
fect.
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.
5/98
30
<PAGE>
SELIGMAN
GROWTH FUND, INC.
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
LOGO
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
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
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, 1998. 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 gain 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 Page
<S> <C> <C> <C>
Investment Objectives, Policies and Risks..... 2 Purchase and Redemption of Fund Shares...... 11
Investment Limitations......................... 4 Distribution Services....................... 14
Directors and Officers......................... 5 Valuation................................... 14
Management and Expenses........................ 9 Performance................................. 15
Administration, Shareholder Services and General Information......................... 17
Distribution Plan..........................10 Appendix.................................... 18
Portfolio Transactions.........................11
EQGR1A
</TABLE>
-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 Manager may enter into forward currency
contracts in excess of 75% of the Fund's portfolio position in any one country
as of the date the contract is entered into. The precise matching of the
forward contract amounts and the value of securities involved will not 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 Manager 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 Manager believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of the 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
Manager. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
at a future date. Additionally, although such contracts tend to minimize the
risk of loss due to a decline in the value of a hedged currency, at the same
time, they tend to limit any potential gain which might result from an increase
in the value of that currency.
Shareholders should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to 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).
-3-
<PAGE>
PORTFOLIO TURNOVER. The Fund's portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio securities for the fiscal
year by the monthly average value of the portfolio securities owned during the
fiscal year. Securities with remaining maturities of one year or less at the
date of acquisition are excluded from the calculation. The Fund's portfolio
turnover rates for the years ended December 31, 1997 and 1996 were 54.15% and
26.05%, respectively. The increase in portfolio turnover was due to the
repositioning of the Fund into larger capitalization equity securities.
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;
- ---------------------------
* The Fund has applied for and received 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>
. Make loans, except loans of portfolio securities and except to the extent
the purchase of notes, bonds or other evidences of indebtedness, the entry
into repurchase agreements or deposits with banks may be considered loans;
or
. Write or purchase put, call, straddle or spread options except that the Fund
may sell covered call options listed on a national securities exchange or
quoted on NASDAQ and purchase closing call options so listed or quoted. The
Fund has no present intention of 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
(60) Chairman of the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Chairman and Chief
Executive Officer, the Seligman Group of Investment
Companies; Chairman, Seligman Financial Services, Inc.,
broker/dealer; Seligman Services, Inc., broker/dealer;
and Carbo Ceramics Inc., ceramic proppants for oil and
gas industry; Director, 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
Advisors, Inc., advisers; Seligman Holdings, Inc.,
holding company; 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
(45) Committee
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; Chairman, 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 Advisors,
Inc., advisers; Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust Company,
trust company.
RICHARD R. SCHMALTZ* Director and Member of the Executive Committee
(57)
Director and Managing Director, Director of
Investments, J. & W. Seligman & Co. Incorporated;
Director of Seligman Henderson Co. and Trustee Emeritus
of Colby College; formerly, Director, Investment
Research at Neuberger & Berman from May 1993 to
September 1996 and Executive Vice President of McGlinn
Capital from July 1987 to May 1993.
</TABLE>
-5-
<PAGE>
<TABLE>
<S> <C>
JOHN R. GALVIN Director
(68)
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; National Committee on U.S.-China Relations,
National Defense University; the Institute for Defense
Analysis; and Raytheon Co., electronics; formerly,
Director, USLIFE Corporation, life insurance;
Ambassador, U.S. State Department for negotiations in
Bosnia; Distinguished Policy Analyst at Ohio State
University and Olin Distinguished Professor of National
Security Studies at the United States Military Academy.
From June, 1987 to June, 1992, he was the Supreme
Allied Commander, Europe and the Commander-in-Chief,
United States European Command.
Tufts University, Packard Avenue, Medford, MA 02105.
ALICE S. ILCHMAN Director
(63)
President, Sarah Lawrence College; Director or Trustee,
the Seligman Group of Investment Companies; the
Committee for Economic Development; Chairman, The
Rockefeller Foundation, charitable foundation;
formerly, Trustee, The Markle Foundation, philanthropic
organization; and Director, NYNEX, telephone company;
and International Research and Exchange Board,
intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(65)
Director, various corporations; Director or Trustee,
the Seligman Group of Investment Companies; Kimberly-
Clark Corporation, consumer products; Bank of Oklahoma
Holding Company; Baptist Medical Center; Oklahoma
Chapter of the Nature Conservancy; Oklahoma Medical
Research Foundation; and National Boys and Girls Clubs
of America; and Member of the Business Roundtable and
National Petroleum Council; formerly, Chairman of the
Board and Chief Executive Officer, Kerr-McGee
Corporation, diversified energy company; Chairman,
Oklahoma City Public Schools Foundation; Director,
Federal Reserve System's Kansas City Reserve Bank; and
the Oklahoma City Chamber of Commerce.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW Director
(68)
Retired Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the Seligman
Group of Investment Companies; Commonwealth Industries,
Inc., manufacturer of aluminum sheet products; the
Foreign Policy Association; Municipal Art Society of
New York; the U. S. Council for International Business;
and The New York and Presbyterian Hospital; Chairman,
American Australian Association; and The New York and
Presbyterian Hospital Care Network, Inc.; Vice-
Chairman, the U. S.-New Zealand Council; Member of the
American Law Institute and Council on Foreign
Relations.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(55)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; Trustee, The 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
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C>
JAMES C. PITNEY Director
(71)
Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of Investment
Companies; and Director, Public Broadcasting Service
(PBS); formerly, Director, Public Service Enterprise
Group, public utility.
Park Avenue at Morris County, P.O. Box 1945, Morristown,
NJ 07962-1945
JAMES Q. RIORDAN Director
(70)
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; and Public Broadcasting Service (PBS);
formerly, Co-Chairman of the Policy Council of the Tax
Foundation; Director and Vice Chairman, Mobil
Corporation; Director, Tesoro Petroleum Companies, Inc.;
Dow Jones & Co., Inc.; and Director and President,
Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
ROBERT L. SHAFER Director
(65)
Director, various corporations; Director or Trustee, the
Seligman Group of Investment Companies; formerly, Vice
President, Pfizer Inc., pharmaceuticals; Director,
USLIFE Corporation, life insurance.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(63)
Director, Sammons Enterprises, Inc.; Director or
Trustee, the Seligman Group of Investment Companies; C-
SPAN; and CommScope, Inc., manufacturer of coaxial
cables; formerly, Executive Vice President and Chief
Operating Officer, Sammons Enterprises, Inc.; and
Director, Red Man Pipe and Supply Company, piping and
other materials.
5949 Sherry Lane, Suite 1900, Dallas, TX 75225
LAWRENCE P. VOGEL Vice President
(41)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Seligman
Financial Services, Inc., broker/dealer; and Seligman
Data Corp., shareholder service agent; Vice President,
the Seligman Group of Investment Companies; and Seligman
Services, Inc., broker/dealer; and Treasurer, Seligman
Henderson Co., advisers; formerly, Senior Vice
President, Seligman Advisors, Inc., advisers; and
Treasurer, Seligman Holdings, Inc., holding company.
FRANK J. NASTA Secretary
(33)
Senior Vice President, Law and Regulation and Corporate
Secretary, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Secretary, the
Seligman Group of Investment Companies; Seligman
Financial Services, Inc., broker/dealer; Seligman
Henderson Co., advisers; Seligman Services, Inc.,
broker/dealer; and Seligman Data Corp., shareholder
service agent; formerly, Senior Vice President, Law and
Regulation and Corporate Secretary, Seligman Advisors,
Inc., advisers; and an attorney at Seward and Kissel,
law firm.
THOMAS G. ROSE Treasurer
(40)
Treasurer, the Seligman Group of Investment Companies;
and Seligman Data Corp., shareholder service agent.
</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.
Compensation Table
------------------
<TABLE>
<CAPTION>
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
Richard R. Schmaltz, Director N/A N/A N/A
Fred E. Brown, Director Emeritus** N/A N/A N/A
John R. Galvin, Director $2,217.52 N/A $69,000.00
Alice S. Ilchman, Director 2,149.89 N/A 65,000.00
Frank A. McPherson, Director 2,185.60 N/A 66,000.00
John E. Merow, Director 2,149.89 N/A 65,000.00
Betsy S. Michel, Director 2,217.52 N/A 69,000.00
James C. Pitney, Director 2,139.25 N/A 64,000.00
James Q. Riordan, Director 2,196.24 N/A 67,000.00
Robert L. Shafer, Director 2,196.24 N/A 67,000.00
James N. Whitson, Director 2,206.88(d) N/A 68,000.00(d)
</TABLE>
______________________
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1997. Effective January 16, 1998, the per meeting fee
for Directors was increased by $1,000, which is allocated among all Funds
in the Fund Complex.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired as Director and designated Director Emeritus on 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,
1997, the total amount of deferred compensation (including interest) payable in
respect of the Fund to Mr. Whitson was $18,901. Messrs. Merow and Pitney no
longer defer current compensation; however, they have accrued deferred
compensation in the amounts of $117,541 and $111,411, respectively, as of
December 31, 1997. The Fund has applied for and received exemptive relief that
would permit a director who has elected deferral of his or her fees to choose a
rate of return equal to either (i) the interest rate on short-term Treasury
bills, or (ii) the rate of return on the shares of any of the investment
companies advised by the Manager, as designated by the director. The Fund may,
but is not obligated to, purchase shares of such investment companies to hedge
its obligations in connection with this deferral arrangement.
Directors and officers of the Fund are also directors 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, 1998. As of that date, no Directors or
officers owned shares of the Fund's Class B and Class D Capital Stock.
-8-
<PAGE>
MANAGEMENT AND EXPENSES
Under the Management Agreement, dated December 29, 1988, as amended April 10,
1991, and January 1, 1996, subject to the control of the Board of Directors, J.
& W. Seligman & Co. Incorporated,( the "Manager") manages the investment of the
assets of the Fund, including making purchases and sales of portfolio securities
consistent with the Fund's investment objectives and policies, and administers
its business and other affairs. The Manager provides the Fund with such office
space, administrative and other services and executive and other personnel as
are necessary for Fund operations. The Manager pays all of the compensation of
directors of the Fund who are employees or consultants of the Manager and of the
officers and employees of the Fund. The Manager also provides senior management
for Seligman Data Corp., the Fund's shareholder service agent.
The Fund pays the Manager a management fee for its services, calculated daily
and payable monthly. 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 $5,213,047 in 1997, $4,552,474 in 1996, and $2,706,813 in 1995 which
was equivalent to annual rates of .70%, .70% and .48%, respectively, of the
average net assets of the Fund in 1997, 1996 and 1995. The Manager paid fees to
Seligman Henderson Co., pursuant to a subadvisory contract no longer in effect,
of $399,004, $395,363, and $240,843 for the years ended December 31, 1997, 1996
and 1995, respectively.
The Fund pays all its expenses other than those assumed by the Manager,
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.
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 Compliance Officer, 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,
-9-
<PAGE>
(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 Compliance
Officer, 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.
For the year ended December 31, 1997, Seligman Financial Services, Inc.
("SFSI"), an affiliate of the Manager, received payments of $1,705,923 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 year ended December 31, 1997, fees
incurred by the Fund in respect of Class B shares amounted to $26,106, 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, 1997, fees
incurred in respect of Class D shares amounted to $146,380, 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
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<PAGE>
the selection and nomination of Directors who are not "interested persons" of
the Fund be made by such disinterested Directors.
PORTFOLIO TRANSACTIONS
The Management Agreement recognizes that in the purchase and sale of portfolio
securities the Manager 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 for its 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 to be beneficial to the Fund. In addition, the
Manager is 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 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
buy 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 desire to buy or sell the same security at the same time the
securities purchased or sold are allocated by the Manager 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, 1997, 1996 and 1995 were
$879,746, $382,226 and $1,297,645, 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.
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, 1997, 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............. $6.08
Maximum sales load (4.75% of offering price).. 0.30
-----
Offering price to public...................... $6.38
=====
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CLASS B AND CLASS D
Net asset value and offering prices per share* $5.60
=====
</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 any Seligman Mutual Fund sold with an
initial sales load with the total net asset value of shares already owned that
were sold with an initial sales load, including shares of Seligman Cash
Management Fund that were acquired by the investor through an exchange of shares
of another Seligman Mutual Fund on which there was an initial sales load, 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.
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.
-12-
<PAGE>
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 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.
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
-13-
<PAGE>
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 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 $21,774 in
1997, after allowances of $168,023 as commissions to dealers; $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. For the years ended December
31, 1997, 1996 and 1995, SFSI retained CDSL charges from Class D shares and on
certain redemptions of Class A shares occurring within eighteen months of
purchase amounting to $18,737, $4,805 and $1,751, respectively.
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 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 year ended December 31, 1997 and the period ended December 31, 1996 were
$7,140 and $1,987, 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
years ended December 31, 1997 and 1996 and for the period April 1, 1995 through
December 31, 1995, SSI received commissions of $23,434, $22,876 and $13,509,
respectively, from sales of Fund shares. SSI also received distribution and
service fees of $612,030, $568,663 and $404,497, respectively, pursuant to the
Plan.
VALUATION
Net asset value per share of each class of the Fund is determined by the close
of regular 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,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Fund will
also determine net asset value for each class on each day in which there is a
sufficient degree of trading in the Fund's portfolio securities that the net
asset value of Fund shares might be materially affected. Net asset value per
share for a class is computed by dividing such class' share of the value of the
net assets of the Fund (i.e., the value of its assets less liabilities) by the
total number of outstanding shares of such class. All expenses of the Fund,
including the Manager's fee, are accrued daily and taken into account for the
purpose of determining net asset value. The net asset value of Class B and
Class D shares will generally be lower than the net asset value of Class A
shares as a result of the larger distribution fee with respect to such shares.
Portfolio securities, including open short positions and options written, are
valued at the last sale price on the securities exchange or securities market on
which such securities primarily are traded. Securities traded on a foreign
exchange or over-the counter market are valued at the last sales price on the
primary exchange or market on which they are traded. United Kingdom securities
and securities for which there are no recent sales transactions are valued based
on quotations provided by primary market makers in such securities. Other
securities not listed on an exchange or securities market, or securities in
which there were no transactions, are valued at the average of the most recent
bid and asked price, except in the case of open short positions where the asked
price is available. Any securities or other assets for which recent market
quotations are not readily available, including restricted securities, are
valued at fair value as determined in accordance with procedures approved by the
Board of Directors. Short-term obligations with less than sixty days remaining
to maturity are 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 management fee, are accrued daily and taken into account
for the purpose of determining the net
-14-
<PAGE>
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 regular trading on 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 regular
trading on the NYSE. Occasionally, events affecting the value of such
securities and such exchange rates may occur between the times at which they are
determined and the close of regular trading on the NYSE, which will not be
reflected in the computation of net asset value. If during such periods events
occur which materially affect the value of such securities, the securities will
be valued at their fair market value as determined in accordance with procedures
approved by the Board of Directors.
For purposes of determining the net asset value per share of 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 returns for the Fund's Class A shares for the one-
year, five-year and ten-year periods ended on December 31, 1997 were 12.53%,
12.33%, and 14.14%, 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 gain 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
determined 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 average annual total returns for
Class B shares of the Fund for the one-year period ended December 31, 1997 and
the period April 22, 1996 (inception) through December 31, 1997 were 12.10% and
14.89%, respectively. These returns were computed assuming that all of the
dividends and gain 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 applicable CDSL
(5% for the one-year period and 4% for the period since inception). The average
annual total returns for Class D shares of the Fund for the one-year period
ended December 31, 1997 and since inception through December 31, 1997 were
16.10% and 14.46%, respectively. These returns were computed assuming that all
of the dividends and gain 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, 1988 had a value of $3,752 on
December 31, 1997, resulting in an aggregate total return of 275.18%. 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
(commencement of offering of Class B shares) had a value of $1,265 on December
31, 1997, after subtracting the 4% CDSL, resulting in an aggregate total return
of 26.50%. 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 $1,878 on
December 31, 1997, resulting in an aggregate total return of 87.77%. The
results shown should not be considered a representation of the dividend income
or gain or loss in capital value which may be realized from an investment made
in a class of shares of the Fund today.
-15-
<PAGE>
<TABLE>
<CAPTION>
TABLE A - CLASS A SHARES
VALUE OF
YEAR VALUE OF INITIAL VALUE OF GAIN DIVIDEND TOTAL
Ended /1/ INVESTMENT/ 2/ DISTRIBUTION INVESTED TOTAL VALUE /2/ RETURN /1, 3/
- ------------- ---------------- -------------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
12/31/88 $ 987 $ 11 $ 25 $1,023
12/31/89 1,149 174 45 1,368
12/31/90 1,029 202 66 1,297
12/31/91 1,340 358 98 1,796
12/31/92 1,361 529 109 1,999
12/31/93 1,185 840 98 2,123
12/31/94 934 1,018 89 2,041
12/31/95 1,175 1,341 106 2,622
12/31/96 1,318 1,740 119 3,177
12/31/97 1,370 2,258 124 3,752 275.18%
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 /1, 3/
- ------------- ---------------- -------------- -------- --------------- -------------
12/31/96 $1,026 $ 88 $ -- $1,114
12/31/97 1,007 258 -- 1,265 26.50%
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 /1, 3/
- ------------- ---------------- -------------- -------- --------------- -------------
12/31/93 $ 922 $ 202 $ -- $1,124
12/31/94 772 278 -- 1,050
12/31/95 875 459 -- 1,334
12/31/96 969 635 -- 1,604
12/31/97 990 888 -- 1,878 87.77%
</TABLE>
/1/ For the ten years ended December 31, 1997; 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 and CDSL, if applicable, assumes that all
dividends and capital gain distributions were taken in cash and reflects
changes in the net asset value of the shares purchased with the
hypothetical initial investment. "Total Value" 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.
No adjustments have been made for any income taxes payable by investors on
dividends invested or gain distributions taken in shares.
-16-
<PAGE>
The total return and average annual total return of the Class A shares quoted
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, do not reflect the increased management fee,
approved by shareholders on April 10, 1991; and for Class A and Class D shares,
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, 801 Pennsylvania, 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, 1997
contains a schedule of the investments as of December 31, 1997, as well as
certain other financial information as of that date. The financial statements
and notes included in the Annual Report, and the Independent Auditor's Report
thereon, are incorporated herein by reference. The Annual Report will be
furnished without charge to investors who request copies of this 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 $3 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 to the public Seligman Frontier Fund, Inc., a small capitalization
mutual fund.
. Launches Seligman Henderson Global Fund Series, Inc., which today offers five
separate series: Seligman Henderson International Fund, Seligman Henderson
Global Smaller Companies Fund, Seligman Henderson Global Technology Fund,
Seligman Henderson Global Growth Opportunities Fund and Seligman Henderson
Emerging Markets Growth Fund.
. Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
-19-
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
December 31, 1997
SHARES VALUE
------ -----
COMMON STOCKS 98.1%
AUTOMOTIVE AND
RELATED 0.3%
VALEO (FRANCE)
Manufacturer of commercial
automotive components 37,194 $ 2,523,492
-------------
BASIC MATERIALS 1.1%
NUCOR
Mini-mill steel production 175,000 8,454,687
-------------
CAPITAL GOODS 9.0%
BOEING
Aircraft manufacturer 200,000 9,787,500
EATON
Diversified manufacturer,
including truck transmissions
and axles 125,000 11,156,250
GENERAL ELECTRIC
Supplier of electrical
equipment and other
industrial and consumer
products 345,000 25,314,375
HONEYWELL
Manufacturer of automation
and control systems 135,000 9,247,500
ILLINOIS TOOL WORKS
Manufacturer of fasteners,
tools, and plastic items 200,000 12,025,000
-------------
67,530,625
-------------
COMMUNICATION
SERVICES 1.2%
WORLDCOM*
Long distance carrier 300,000 9,084,375
-------------
14,465,687
-------------
CONSUMER CYCLICALS 11.4%
DAYTON HUDSON
General merchandise retailer 245,000 16,537,500
HARLEY-DAVIDSON
Manufacturer of motorcycles 300,000 8,212,500
HILTON HOTELS
Owner, operator, and
manager of hotels 260,000 7,735,000
INTERPUBLIC GROUP OF COMPANIES
Worldwide advertising
agency 375,000 18,679,688
JONES APPAREL GROUP*
Designer and marketer of
women's clothing 205,000 8,815,000
LIZ CLAIBORNE
Designer and distributor of
women's apparel 70,000 2,926,875
MATTEL
Manufacturer of dolls,
games, and action and
activity toys 218,750 8,148,437
MIRAGE RESORTS*
Manager of casinos in
Las Vegas 300,000 6,825,000
WAL-MART STORES
Discount retailer 205,000 8,084,688
-------------
85,964,688
-------------
CONSUMER STAPLES 14.5%
ADIDAS (GERMANY)
Manufacturer of
sporting equipment
and footwear 25,000 3,308,404
CARDINAL HEALTH
Health care service provider
involved in pharmaceutical
distribution 105,000 7,888,125
COLGATE-PALMOLIVE
Manufacturer of household
and personal care products 180,000 13,230,000
CPC INTERNATIONAL
International food processor 90,000 9,697,500
DISNEY, WALT
Theme parks; hotels; films 115,000 11,392,187
GILLETTE
Manufacturer of personal
care products 175,000 17,576,563
PEPSICO
Soft drinks; consumer products 380,000 13,846,250
PHILIP MORRIS
Manufacturer of
tobacco products 360,000 16,312,500
PROCTER & GAMBLE
Manufacturer and distributor
of household and personal
care products 200,000 15,962,500
-------------
109,214,029
-------------
- -------------
See footnotes on page 11.
- -----
8
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
December 31, 1997
SHARES VALUE
------ -----
DRUGS AND
HEALTH CARE 19.0%
AMERICAN HOME PRODUCTS
Manufacturer of
pharmaceuticals, food,
and housewares 145,000 $ 11,092,500
AMGEN*
Biotechnology company 80,000 4,330,000
BOSTON SCIENTIFIC
Developer, producer, and
marketer of medical devices 78,700 3,610,363
BRISTOL-MYERS SQUIBB
Developer and manufacturer
of health and personal
care products 165,000 15,613,125
ELAN (ADRS)* (IRELAND)
Developer, manufacturer,
and marketer of drug
delivery systems 55,000 2,815,312
ELI LILLY
Developer and manufacturer
of pharmaceuticals 170,000 11,836,250
JOHNSON & JOHNSON
Developer and manufacturer
of health care products 250,000 16,468,750
MERCK
Developer and manufacturer
of pharmaceuticals 270,000 28,687,500
NOVARTIS (SWITZERLAND)
Manufacturer of health
care products 2,000 3,242,134
PFIZER
Manufacturer of health
care consumer products
and specialty chemicals 375,000 27,960,938
UNITED HEALTHCARE
Health maintenance
organization 220,000 10,931,250
WARNER-LAMBERT
Developer, manufacturer,
and marketer of
pharmaceutical and
health care products 50,000 6,200,000
-------------
142,788,122
-------------
ENERGY 1.1%
HUANENG POWER INTERNATIONAL
(ADRS)* (CHINA)
Diversified energy company 100,500 2,330,344
TRANSOCEAN OFFSHORE
Provider of contract
drilling services 125,900 6,066,806
-------------
8,397,150
-------------
FINANCIAL SERVICES 18.3%
AMERICAN INTERNATIONAL GROUP
International insurance provider 145,000 15,768,750
C.I.T. GROUP (CLASS A)*
Diversified finance organization 250,000 8,062,500
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
Provider of mortgage financing 300,000 17,118,750
GREENPOINT FINANCIAL
Bank holding company 110,000 7,981,875
ING GROEP (NETHERLANDS)
Banking and insurance
services group 70,000 2,949,914
MBNA
Issuer of bank credit cards 650,000 17,753,125
MORGAN STANLEY,
DEAN WITTER, DISCOVER
Provider of credit and
investment products 200,000 11,825,000
NORWEST
Commercial bank 500,000 19,312,500
SUNAMERICA
Diversified financial services,
specializing in pre-
retirement savings 216,100 9,238,275
TRAVELERS
Provider of diversified
financial services 382,500 20,607,187
WASHINGTON MUTUAL
Regional finance company for
small- and mid-sized businesses 106,100 6,767,191
-------------
137,385,067
-------------
- ------------
See footnotes on page 11.
-----
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
December 31, 1997
SHARES VALUE
------ -----
INDUSTRIAL EQUIPMENT 0.8%
FKI BABCOCK (UK)
Electrical engineering
company 885,000 $ 2,806,569
KEYENCE (JAPAN)
Producer of detection
devices for the
manufacturing process 22,000 3,255,760
-------------
6,062,329
-------------
LEISURE AND
ENTERTAINMENT 1.6%
GRANADA GROUP (UK)
Radio and television
broadcasting and publishing 200,000 3,095,286
LADBROKE GROUP (UK)
Hotel and property
investor and developer 690,000 3,008,737
SOL MELIA (SPAIN)
Hotel manager and franchise
company 70,000 2,802,665
WPP GROUP (UK)
Provider of worldwide
marketing services 600,000 2,670,799
-------------
11,577,487
-------------
PRINTING AND PUBLISHING 0.1%
ELSEVIER (NETHERLANDS)
Global printer and publisher
of professional trade journals
and magazines 60,000 971,132
-------------
TECHNOLOGY 18.3%
APPLIED MATERIALS*
Developer, manufacturer, and
marketer of semiconductor
wafer fabrication equipment 225,000 6,771,094
CISCO SYSTEMS*
Manufacturer of computer
network routers and switches 277,500 15,487,969
COMPAQ COMPUTER
Global PC manufacturer 165,000 9,312,187
HEWLETT-PACKARD
Manufacturer of computers
and peripherals 235,000 14,687,500
INTEL
Semiconductor manufacturer 300,000 $ 21,065,625
LUCENT TECHNOLOGIES
Designer and developer of
public and private networks 185,000 14,776,875
MICROSOFT*
Developer of personal
computer software 149,800 19,356,969
MOTOROLA
Producer of wireless
telecommunications
equipment 220,000 12,553,750
SECOM (JAPAN)
Manufacturer of
electronic instrumentation 35,000 2,238,239
SGS-THOMSON
MICROELECTRONICS* (FRANCE)
Manufacturer of semiconductor
integrated circuits 30,000 1,857,392
TEXAS INSTRUMENTS
Global semiconductor company
and designer of electronic
components 120,000 5,400,000
XEROX
Developer and marketer of
document processing
products and services 190,000 14,024,375
-------------
137,531,975
-------------
TELECOMMUNICATIONS 1.3%
L.M. ERICSSON TELEFON
(SERIES B) (SWEDEN)
Global telecommunications
equipment and systems,
both wired and mobile 75,000 2,821,681
GRUPO IUSACELL (MEXICO)
Controller and operator of
wireless cellular services 135,000 2,927,812
MAGYAR TAVKOZLESI
(ADRS)* "MATAV" (HUNGARY)
Provider of
telecommunications services 41,000 1,066,000
- -----------
See footnotes on page 11.
- -----
10
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
December 31, 1997
SHARES VALUE
------ -----
TELECOMMUNICATIONS (CONTINUED)
NOKIA (ADRS) (FINLAND)
Developer and manufacturer
of telecommunications systems 25,000 $ 1,775,979
VIDESH SANCHAR NIGAM
(GDRS) (INDIA)
Provider of international
telecommunications services 100,000 1,387,500
-------------
9,978,972
-------------
MISCELLANEOUS 0.1%
HIS (JAPAN)
Discount tour operator 57,200 995,622
-------------
VALUE
-----
TOTAL COMMON STOCKS
(Cost $507,319,653) $ 738,459,752
-------------
SHORT-TERM HOLDINGS 4.2%
(Cost $31,800,000) 31,800,000
-------------
TOTAL INVESTMENTS 102.3%
(Cost $539,119,653) 770,259,752
OTHER ASSETS
LESS LIABILITIES (2.3)% (17,521,336)
-------------
NET ASSETS 100.0% $ 752,738,416
=============
- --------------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
-----
11
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks (cost $507,319,653) ..................... $738,459,752
Short-term holdings (cost $31,800,000) ................ 31,800,000 $770,259,752
------------
Cash ............................................................................ 1,179,640
Receivable for Capital Stock sold ............................................... 1,000,539
Receivable for interest and dividends ........................................... 794,908
Expenses prepaid to shareholder service agent ................................... 173,710
Other ........................................................................... 83,349
------------
TOTAL ASSETS .................................................................... 773,491,898
------------
LIABILITIES:
Payable for securities purchased ................................................ 14,095,519
Payable for Capital Stock repurchased ........................................... 5,381,449
Accrued expenses, taxes, and other .............................................. 1,276,514
------------
TOTAL LIABILITIES ............................................................... 20,753,482
------------
NET ASSETS ...................................................................... $752,738,416
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000 shares authorized;
124,137,761 shares outstanding):
Class A ....................................................................... $120,566,689
Class B ....................................................................... 753,572
Class D ....................................................................... 2,817,500
Additional paid-in capital ...................................................... 367,879,386
Accumulated net investment loss ................................................. (247,853)
Undistributed net realized gain ................................................. 29,829,139
Net unrealized appreciation of investments ...................................... 234,213,764
Net unrealized depreciation on translation of assets and liabilities
denominated in foreign currencies ............................................... (3,073,781)
------------
NET ASSETS ...................................................................... $752,738,416
============
NET ASSET VALUE PER SHARE:
CLASS A ($732,754,132 / 120,566,689 shares) ..................................... $ 6.08
============
CLASS B ($4,219,004 / 753,572 shares) ........................................... $ 5.60
============
CLASS D ($15,765,280 / 2,817,500 shares) ........................................ $ 5.60
============
</TABLE>
- ----------------
See Notes to Financial Statements.
- -----
12
<PAGE>
================================================================================
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $73,269) ...................... $ 7,146,665
Interest .................................................................. 1,222,646
Other ..................................................................... 136,223
-----------
TOTAL INVESTMENT INCOME ........................................................................... $ 8,505,534
EXPENSES:
Management fee ............................................................ 5,213,047
Distribution and service fees ............................................. 1,878,409
Shareholder account services .............................................. 1,072,674
Custody and related services .............................................. 215,000
Shareholder reports and communications .................................... 154,246
Registration .............................................................. 100,902
Auditing and legal fees ................................................... 82,913
Directors' fees and expenses .............................................. 38,513
Miscellaneous ............................................................. 31,261
-----------
TOTAL EXPENSES .................................................................................... 8,786,965
------------
NET INVESTMENT LOSS ............................................................................... (281,431)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments .......................................... 112,859,384
Net realized loss from foreign currency transactions ...................... (896,184)
Net change in unrealized appreciation of investments ...................... 13,601,198
Net change in unrealized depreciation on translations of assets
and liabilities denominated in foreign currencies ......................... (2,776,834)
-----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ........................................ 122,787,564
------------
INCREASE IN NET ASSETS FROM OPERATIONS ........................................................... $122,506,133
============
</TABLE>
- -------------------
See Notes to Financial Statements.
-----
13
<PAGE>
<TABLE>
<CAPTION>
===========================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment loss ............................................................ $ (281,431) $ (820,251)
Net realized gain on investments ............................................... 112,859,384 45,998,438
Net realized loss from foreign currency transactions ........................... (896,184) (192,526)
Net change in unrealized appreciation of investments ........................... 13,601,198 80,581,682
Net change in unrealized appreciation/depreciation of assets and liabilities
denominated in foreign currencies .............................................. (2,776,834) (1,186,005)
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS ......................................... 122,506,133 124,381,338
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ..................................................................... (88,125,334) (51,655,332)
Class B ..................................................................... (436,521) (48,869)
Class D ..................................................................... (1,908,912) (833,364)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS (90,470,767) (52,537,565)
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------------------------------
YEAR ENDED DECEMBER 31,
------------------------------
1997 1996
---------- ----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares:
Class A ................................. 1,803,217 1,555,646 11,441,313 8,910,750
Class B ................................. 445,150 146,621 2,599,277 807,268
Class D ................................. 574,002 648,614 3,413,694 3,516,242
Exchanged from associated Funds:
Class A ................................. 31,958,901 13,065,985 206,157,045 74,567,188
Class B ................................. 276,718 24,435 1,652,977 136,451
Class D ................................. 7,361,738 830,652 43,996,593 4,521,180
Shares issued in payment of
gain distributions:
Class A ................................. 11,845,991 6,962,221 69,654,414 40,868,393
Class B ................................. 75,334 8,453 408,312 46,662
Class D ................................. 325,908 147,558 1,766,426 814,469
---------- ---------- ------------ ------------
Total ...................................... 54,666,959 23,390,185 341,090,051 134,188,603
---------- ---------- ------------ ------------
Cost of shares repurchased:
Class A ................................. (8,524,026) (7,581,746) (54,800,294) (43,251,632)
Class B ................................. (127,571) (7,314) (798,290) (40,259)
Class D ................................. (545,926) (323,816) (3,268,572) (1,774,413)
Exchanged into associated Funds:
Class A ................................. (31,908,540) (13,094,458) (206,538,604) (74,677,608)
Class B ................................. (76,212) (12,042) (447,915) (65,695)
Class D ................................. (6,990,014) (503,789) (41,992,651) (2,685,707)
---------- ---------- ------------ ------------
Total ...................................... (48,172,289) (21,523,165) (307,846,326) (122,495,314)
---------- ---------- ------------ ------------
INCREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ................. 6,494,670 1,867,020 33,243,725 11,693,289
========== ========== ------------ ------------
INCREASE IN NET ASSETS ......................................................... 65,279,091 83,537,062
NET ASSETS:
Beginning of year .............................................................. 687,459,325 603,922,263
------------ ------------
END OF YEAR (including accumulated net investment
loss of $247,853 and $233,414, respectively) ................................... $752,738,416 $687,459,325
============ ============
</TABLE>
- ---------------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
- -----
14
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- 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 18 months of purchase.
Class B shares are sold without an initial sales charge but are subject to a
distribution fee of 0.75%, a service fee of up to 0.25% on an annual basis, and
a CDSL, if applicable, of 5% on redemptions in the first year of 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, if
applicable, of 1% imposed on 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 -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. SECURITY VALUATION -- Investments in common stocks and convertible 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, at the mean
of bid and asked prices. Short-term holdings maturing in 60 days or less are
valued at amortized cost.
b. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are
maintained in US dollars. The market value of investment securities, other
assets and liabilities denominated in foreign currencies are translated into
US dollars at the 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. FEDERAL TAXES -- There is no provision for federal income 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. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- 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, except
that certain dividends from foreign securities where the ex-dividend dates
may have passed are recorded as soon as the Fund is informed of the dividend.
Interest income is recorded on an accrual basis.
e. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses are allocated daily to
each class of shares based upon the relative value of shares of each class.
Class-specific expenses, which include distribution and service fees and any
other items that are specifically attributable to a particular class, are
charged directly to such class. For the year ended December 31, 1997,
distribution and service fees were the only class-specific expenses.
f. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders 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 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 reclassification
will have no effect on net assets, results of operations, or net asset value
per share of the Fund.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the year ended December 31, 1997, amounted to $388,619,598 and $454,034,047,
respectively.
At December 31, 1997, 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
$241,986,098 and $10,845,999, respectively.
-----
15
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
4. SHORT-TERM INVESTMENTS -- At December 31, 1997, the Fund owned short-term
investments which matured in less than seven days.
5. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides or arranges for the necessary personnel and facilities. Seligman
Henderson Co. (the "Subadviser"), an entity owned 50% each by the Manager and
Henderson plc, supervises and directs all or a portion of the Fund's foreign
investments. For this service, the Subadviser receives a fee from the Manager,
payable monthly. 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 or by Henderson plc. The Manager
receives a fee, calculated daily and payable monthly, equal to 0.70% 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. The
management fee reflected in the Statement of Operations represents .70% per
annum of the Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $21,774 from sales of Class A shares, after commissions of
$168,023 were 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,
1997, fees incurred aggregated $1,705,923, 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 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 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 provides 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, 1997, 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 $26,106 and $146,380, respectively.
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase and on certain redemptions
of Class A shares occurring within 18 months of purchase. For the year ended
December 31, 1997, such charges amounted to $18,737.
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 shares distribution fees retained by the Distributor for the
year ended December 31, 1997, amounted to $7,140.
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, 1997,
Seligman Services, Inc. received commissions of $23,434 from the sale of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $612,030, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $1,053,726 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.
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, 1997, of
$247,853 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.
- -----
16
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, 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.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value 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. Total returns for periods
of less than one year are not annualized.
"Average commission rate paid" represents the average commission 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,
------------------------------------------------------------------
1997o 1996o 1995o 1994o 1993
-------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ..................... $ 5.85 $ 5.22 $ 4.54 $ 5.26 $ 6.04
-------- -------- -------- -------- --------
Net investment income (loss) ........................... -- (.01) .01 .01 .01
Net realized and unrealized investment gain (loss) ..... 1.06 1.13 1.27 (.22) .35
Net realized and unrealized investment gain (loss)
from foreign currency transactions ..................... (.03) (.01) .01 -- --
-------- -------- -------- -------- --------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ............................................. 1.03 1.11 1.29 (.21) .36
Dividends paid ......................................... -- -- (.01) (.01) (.01)
Distributions from net gain realized ................... (.80) (.48) (.60) (.50) (1.13)
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSET VALUE ............. .23 .63 .68 (.72) (.78)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR ........................... $ 6.08 $ 5.85 $ 5.22 $ 4.54 $ 5.26
======== ======== ======== ======== ========
TOTAL RETURN BASED ON NET ASSET VALUE: 18.11% 21.14% 28.47% (3.84)% 6.20%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ......................... 1.16% 1.20% .94% .90% .89%
Net investment income (loss) to average net assets ..... (.02)% (.12)% .17% .14% .18%
Portfolio turnover ..................................... 54.15% 26.05% 102.30% 93.59% 105.64%
Average commission rate paid ........................... $ .0573 $ .0437
NET ASSETS, END OF YEAR (000S OMITTED) ................. $732,754 $675,086 $597,510 $513,328 $591,491
</TABLE>
- -----------------
See footnotes on page 18.
-----
17
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS D
---------------------- -----------------------------------------------
YEAR 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ------------------------------------- TO
12/31/97o 12/31/96o 1997o 1996o 1995o 1994o 12/31/93
--------- --------- -------- ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR .................. $ 5.49 $ 5.35 $ 5.49 $ 4.96 $ 4.38 $ 5.23 $ 5.67
------ ------ -------- ------- ------ ------ -------
Net investment loss ................................. (.05) (.03) (.05) (.05) (.04) (.12) (.03)
Net realized and unrealized investment gain (loss) .. .99 .65 .99 1.07 1.21 (.23) .72
Net realized and unrealized gain (loss)
from foreign currency transactions .................. (.03) -- (.03) (.01) .01 -- --
------ ------ -------- ------- ------ ------ -------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS .......................................... .91 .62 .91 1.01 1.18 (.35) .69
Distributions from net gain realized ................ (.80) (.48) (.80) (.48) (.60) (.50) (1.13)
------ ------ -------- ------- ------ ------ -------
NET INCREASE (DECREASE) IN NET ASSET VALUE .......... .11 .14 .11 .53 .58 (.85) (.44)
------ ------ -------- ------- ------ ------ -------
NET ASSET VALUE, END OF YEAR ........................ $ 5.60 $ 5.49 $ 5.60 $ 5.49 $ 4.96 $ 4.38 $ 5.23
====== ====== ======== ======= ====== ====== =======
TOTAL RETURN BASED ON NET ASSET VALUE: .............. 17.10% 11.45% 17.10% 20.21% 27.01% (6.56)% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ...................... 1.93% 1.99%+ 1.93% 1.97% 1.91% 2.93% 2.17%+
Net investment loss to average net assets ........... (.79)% (.83)%+ (.79)% (.88)% (.83)% (2.34)% (1.03)%+
Portfolio turnover .................................. 54.15% 26.05%++ 54.15% 26.05% 102.30% 93.59% 105.64%+++
Average commission rate paid ........................ $ .0573 $ .0437++ $ .0573 $ .0437
NET ASSETS, END OF YEAR (000S OMITTED) .............. $ 4,219 $ 880 $15,765 $ 11,493 $ 6,412 $1,742 $1,197
</TABLE>
- -------------------
* Commencement of offering of shares.
o Per share amounts for the years ended December 31, 1997, 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.
- -----
18
<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,
1997, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the Fund's custodian and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Growth
Fund, Inc. as of December 31, 1997, 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 30, 1998
- --------------------------------------------------------------------------------
-----
19
<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements and Schedule:
Part A Financial Highlights for Class A shares for the ten years ended
December 31, 1997; Financial Highlights for Class B shares for the
period from April 22, 1996 (commencement of offering) to December
31, 1997; Financial Highlights for Class D shares for the period
from May 3, 1993 (commencement of offering) to December 31,
1997.
Part B Required Financial Statements, which are included in the Fund's
Annual Report to Shareholders dated December 31, 1997, are
incorporated by reference in the Fund's Statement of Additional
Information. These Financial Statements are: Portfolio of
Investments as of December 31, 1997; Statement of Assets and
Liabilities as of December 31, 1997; Statement of Operations for the
year ended December 31, 1997; Statements of Changes in Net Assets
for the years ended December 31, 1997 and 1996; Notes to Financial
Statements; Financial Highlights for the five years ended December
31, 1997 for the Fund's Class A shares; for the period April 22,
1996 (commencement of offering) to December 31, 1997 for the Fund's
Class B shares; and for the period May 3, 1993 (commencement of
offering) through December 31, 1997 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. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 74, filed April 29, 1997.)
(2) Amended and Restated By-laws. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 74, filed April 29, 1997.)
(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.)
(6) Copy of amended Distributing Agreement between Registrant and Seligman
Financial Services, Inc. (Incorporated by reference to Registrant's Post-
Effective Amendment No. 74, filed April 29, 1997.)
(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.)
C-1
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
Item 24. Financial Statement and Exhibits (continued)
- -------- --------------------------------
(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 Growth Fund.*
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 74, filed April 29, 1997.)
(9) Not applicable.
(10) Opinion and Consent of Counsel. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 74, filed April 29, 1997.)
(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. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 74, filed April
29, 1997.)
(14) The Seligman Roth/Traditional IRA Information Kit. (Incorporated by
reference to Exhibit q(1) of Registration Statement No. 333-50295,
Form N-2, filed on April 16, 1998.)
(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.)
(14c) Qualified Plan and Trust Basic Plan Document. (Incorporated by reference
to Exhibit q(4) to Registration No. 333-50295, Form N-2, filed on
April 16, 1998.)
(14d) Flexible Standardized 401(k) Profit Sharing Plan Adoption Agreement.
(Incorporated by reference to Exhibit q(4) to Registration No. 333-50295,
Form N-2, filed on April 16, 1998.)
(14e) Flexible Nonstandardized Safe Harbor 401(k) Profit Sharing Plan Adoption
Agreement. (Incorporated by reference to Exhibit q(4) to Registration No.
333-50295, Form N-2, filed on April 16, 1998.)
(14f) Simplified Employee Pension Plan. (Incorporated by reference to Exhibit
14(f) to Registration No. 2-10835, Post-Effective Amendment No. 76, filed
on April 29, 1998.)
(14g) Educational IRA. (Incorporated by reference to Exhibit 14(f) to
Registration No. 2-10835, Post-Effective Amendment No. 76, filed on
April 29, 1998.)
(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. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 74, filed April 29, 1997.)
(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.)
C-2
<PAGE>
PART C. OTHER INFORMATION (continued)
-----------------
Other Exhibits: Power of Attorney*
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>
<S> <C>
(1) (2)
Number of Record
Title of Class Holders as of March 31, 1998
- ------------------------------------ ----------------------------
Class A Common Stock 21,128
Class B Common Stock 632
Class D Common Stock 1,871
</TABLE>
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 Registrant's 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 Manager has an investment advisory service division which provides
investment management or advice to private clients. The list required
by this Item 28 of officers and directors of the Manager, together
with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by the Manager, pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-15798), which was
filed on March 31, 1998.
C-3
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Item 29. Principal Underwriters
- -------- ----------------------
(a) The names of each investment company (other than the Registrant) for
which Registrant's principal underwriter is currently distributing
securities of the Registrant and also acts as a principal underwriter,
depositor or investment adviser are as follows:
Seligman 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.
(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, 1998
--------------------
<TABLE>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- -------------------------------- ------------------------------- -------------------------------------------------
WILLIAM C. MORRIS* Director Chairman of the Board and Chief Executive Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director None
FRED E. BROWN* Director Director Emeritus
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
David F. Stein* Director None
STEPHEN J. HODGDON* President None
CHARLES W. KADLEC* Chief Investment Strategist None
LAWRENCE P. VOGEL* Senior Vice President, Finance Vice President
ED LYNCH* Senior Vice President, Director None
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
JONATHAN EVANS Senior Vice President of Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
BRADLEY W. LARSON Senior Vice President of Sales None
367 Bryan Drive
Alamo, CA 94526
BRUCE TUCKEY Senior Vice President of Sales None
41644 Chathman Drive
Novi, MI 48375
ANDREW VEASEY Senior Vice President of Sales None
14 Woodside Drive
Rumson, NJ 07760
</TABLE>
C-4
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1998
--------------------
<TABLE>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- -------------------------------------- ------------------------------------ ---------------------
Michelle L. McCann Vice President, Manager, Retirement None
Plans Marketing
SCOTT H. NOVAK Vice President, Insurance Products None
Manager
MICHAEL R. SANDERS Vice President, Product Manager None
Managed Money Services
CHARLES L. VON BREITENBACH, II* Vice President, Product Manager None
Managed Money Services
ROBERT T. HAUSLER* Vice President, Global Mutual Funds, None
Product Management
MARSHA E. JACOBY* Vice President, Offshore Funds None
WILLIAM W. JOHNSON* Vice President, Order Desk None
TRACY A. SALOMON* Vice President, Retirement None
Marketing Manager
HELEN SIMON* Vice President, Sales None
Administration Manager
J. BRERETON YOUNG* Vice President, Mutual Funds None
Product Manager
PETER J. CAMPAGNA Vice President, Regional Retirement None
1130 Green Meadow Court Plans Manager
Acworth, GA 30102
MASON S. FLINN Vice President, Regional Retirement None
159 Varennes Plans Manager
San Francisco, CA 94133
CHARLES E. WENZEL Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
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
241 110th Avenue SE
Bellevue, WA 98004
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
KENNETH DOUGHERTY Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
ANDREW DRALUCK Regional Vice President None
4032 E. Williams Drive
Phoenix, AZ 85024
EDWARD S. FINOCCHIARO Regional Vice President None
120 Screenhouse Lane
Duxbury, MA 02332
MICHAEL C. FORGEA Regional Vice President None
32 W. Anapamu Street # 186
Santa Barbara, CA 93101
</TABLE>
C-5
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------ -----------------
Seligman Financial Services, Inc.
---------------------------------
As of March 31, 1998
--------------------
<TABLE>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ---------------------------------- ------------------------------------ ---------------------
David Gardner Regional Vice President None
2403 Cayenne Drive
McKinney, TX 75070
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine Drive
Houston, TX 77077
T. WAYNE KNOWLES Regional Vice President None
104 Morninghills Court
Cary, NC 27511
JUDITH L. LYON Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
DAVID MEYNCKE Regional Vice President None
4957 Cross Pointe Drive
Oldsmar, FL 34677
TIM O'CONNELL Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
THOMAS PARNELL Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
JULIANA PERKINS Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
DAVE PETZKE Regional Vice President None
4016 Saint Lucia Street
Boulder, CO 80301
NICHOLAS ROBERTS Regional Vice President None
200 Broad Street, Apt. 2225
Stamford, CT 06901
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
STEVE WILSON Regional Vice President None
83 Kaydeross Park
Saratoga Springs, NY 12866
KELLI A. WIRTH-DUMSER Regional Vice President None
7212 Jardiniere Court
Charlotte, NC 28226
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
JEFFREY S. DEAN* Assistant Vice President, Marketing None
SANDRA FLORIS* Assistant Vice President, Order Desk None
KEITH LANDRY* Assistant Vice President, Order Desk None
GAIL S. CUSHING* Assistant Vice President, None
National Sales Manager
JOSEPH M. MCGILL* Assistant Vice President and None
Compliance Officer
JACK TALVY* Assistant Vice President, Internal None
Marketing Services Manager
JOYCE PERESS* Assistant Secretary None
</TABLE>
C-6
<PAGE>
PART C. OTHER INFORMATION (continued)
- ------ -----------------
* 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
801 Pennsylvania
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, 1997, 1996 and 1995, the approximate cost of
these services were:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- ---------
<S> <C> <C> <C>
Class A Shares $108,700 $111,600 $116,000
Class B Shares 2,300 220 --
Class D Shares 9,200 6,900 1,500
</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.
C-7
<PAGE>
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. 74 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 30th day of April, 1998.
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. 74 has been signed below
by the following persons in the capacities indicated on April 30, 1998.
Signature Title
--------- -----
/s/ William C. Morris
- ------------------------------------------- Chairman of the Board
William C. Morris* (Principal executive officer)
and Director
/s/ Brian T. Zino Director and President
- -------------------------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- ---------------------
Thomas G. Rose
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
--------------------------------------------
James C. Pitney, Director ) * Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
C-8
<PAGE>
SELIGMAN GROWTH FUND, INC.
Post-Effective Amendment No. 74 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
24(b)(7)(a) Deferred Compensation Plan for Directors
24(b)(11) Consent of Independent Auditors
24(b)(17) Financial Data Schedules
Other Exhibits Power of Attorney
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELIGMAN GROWTH FUND, INC. CLASS A
<MULTIPLIER> 1000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 495335
<INVESTMENTS-AT-VALUE> 768732
<RECEIVABLES> 4105
<ASSETS-OTHER> 5380
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 778217
<PAYABLE-FOR-SECURITIES> 12041
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5505
<TOTAL-LIABILITIES> 17546
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 446561
<SHARES-COMMON-STOCK> 112741<F1>
<SHARES-COMMON-PRIOR> 115391<F1>
<ACCUMULATED-NII-CURRENT> 1089
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39634
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 273387
<NET-ASSETS> 743024<F1>
<DIVIDEND-INCOME> 3428<F1>
<INTEREST-INCOME> 833<F1>
<OTHER-INCOME> 1174<F1>
<EXPENSES-NET> (4084)<F1>
<NET-INVESTMENT-INCOME> 1351<F1>
<REALIZED-GAINS-CURRENT> 31317
<APPREC-INCREASE-CURRENT> 53071
<NET-CHANGE-FROM-OPS> 85710
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9958<F1>
<NUMBER-OF-SHARES-REDEEMED> (12608)<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 73211
<ACCUMULATED-NII-PRIOR> (233)
<ACCUMULATED-GAINS-PRIOR> 8317
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2433<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4084<F1>
<AVERAGE-NET-ASSETS> 701090<F1>
<PER-SHARE-NAV-BEGIN> 5.85<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> 0.73<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 6.59<F1>
<EXPENSE-RATIO> 1.18<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> 1000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 495335
<INVESTMENTS-AT-VALUE> 768732
<RECEIVABLES> 4105
<ASSETS-OTHER> 5380
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 778217
<PAYABLE-FOR-SECURITIES> 12041
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5505
<TOTAL-LIABILITIES> 17546
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 446561
<SHARES-COMMON-STOCK> 446<F1>
<SHARES-COMMON-PRIOR> 160<F1>
<ACCUMULATED-NII-CURRENT> 1089
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39634
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 273387
<NET-ASSETS> 2743<F1>
<DIVIDEND-INCOME> 9<F1>
<INTEREST-INCOME> 2<F1>
<OTHER-INCOME> 3<F1>
<EXPENSES-NET> (18)<F1>
<NET-INVESTMENT-INCOME> (4)<F1>
<REALIZED-GAINS-CURRENT> 31317
<APPREC-INCREASE-CURRENT> 53071
<NET-CHANGE-FROM-OPS> 85710
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 339<F1>
<NUMBER-OF-SHARES-REDEEMED> (53)<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 73211
<ACCUMULATED-NII-PRIOR> (233)
<ACCUMULATED-GAINS-PRIOR> 8317
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18<F1>
<AVERAGE-NET-ASSETS> 1857<F1>
<PER-SHARE-NAV-BEGIN> 5.49<F1>
<PER-SHARE-NII> (0.01)<F1>
<PER-SHARE-GAIN-APPREC> 0.67<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 6.15<F1>
<EXPENSE-RATIO> 1.94<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> 1000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 495335
<INVESTMENTS-AT-VALUE> 768732
<RECEIVABLES> 4105
<ASSETS-OTHER> 5380
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 778217
<PAYABLE-FOR-SECURITIES> 12041
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5505
<TOTAL-LIABILITIES> 17546
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 446561
<SHARES-COMMON-STOCK> 2422<F1>
<SHARES-COMMON-PRIOR> 2092<F1>
<ACCUMULATED-NII-CURRENT> 1089
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39634
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 273387
<NET-ASSETS> 14904<F1>
<DIVIDEND-INCOME> 66<F1>
<INTEREST-INCOME> 16<F1>
<OTHER-INCOME> 23<F1>
<EXPENSES-NET> (130)<F1>
<NET-INVESTMENT-INCOME> (25)<F1>
<REALIZED-GAINS-CURRENT> 31317
<APPREC-INCREASE-CURRENT> 53071
<NET-CHANGE-FROM-OPS> 85710
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3247<F1>
<NUMBER-OF-SHARES-REDEEMED> (2917)<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 73211
<ACCUMULATED-NII-PRIOR> (233)
<ACCUMULATED-GAINS-PRIOR> 8317
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 47<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130<F1>
<AVERAGE-NET-ASSETS> 13575<F1>
<PER-SHARE-NAV-BEGIN> 5.49<F1>
<PER-SHARE-NII> (0.01)<F1>
<PER-SHARE-GAIN-APPREC> 0.67<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 6.15<F1>
<EXPENSE-RATIO> 1.94<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 99.7A
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
SELIGMAN GROWTH FUND, INC.
("FUND")
1. Election to Defer Payments. Any member of the Board of Directors (herein, a
--------------------------
"Director") of the Fund may elect to have payment of that Director's annual
retainer or meeting fees or both for Board service deferred as provided in this
Plan. The election shall be made in writing prior to, and to take effect from,
the beginning of a calendar year. For any Director in the year in which this
Plan is adopted or for a person elected a director in other than the last
calendar month of a year, the election shall be made within 30 days after that
event and prior to, and to take effect from, the beginning of the calendar
quarter next ensuing after that event. Elections shall continue in effect until
terminated in writing, any such termination to take effect on the first day of
the calendar year beginning after receipt of the notice of termination. An
election shall be irrevocable as to payments deferred in conformity with that
election.
2. Deferred Payment Account. Each deferred retainer or fee shall be credited
------------------------
at the time when it otherwise would have been payable to an account to be
established in the name of the Director on the books of the Fund (the "Deferred
Payment Account") adjusted for notional investment experience as hereinafter
described.
3. Return on Deferred Payment Account Balance. (a) For purposes of measuring
------------------------------------------
the investment return on his Deferred Payment Account, the Director may elect to
have the aggregate amount of his deferred compensation (or a specified portion
thereof) receive a return (i) at a rate equal to the return earned on three-
month U.S. Treasury Bills at the beginning of each calendar quarter (the
"Treasury Bill Rate") and such interest shall be credited to the account
quarterly at the end of each calendar quarter, or (ii) at a rate of return
(positive or negative) equal to the rate of return on the shares of any of the
registered investment companies managed by J. & W. Seligman & Co. Incorporated
("Seligman") or any other entity controlling, controlled by, or under common
control with (as such terms are defined in the Investment Company Act of 1940)
Seligman (each, a "Notional Fund"), assuming reinvestment of dividends and
distributions from the Notional Funds. (b) A Director may amend his designation
of investment return as of the end of each calendar quarter by giving written
notice to the President of the Fund at least 30 days prior to the end of such
calendar quarter. A timely change to a Director's designation of investment
return shall become effective on the first day of the calendar quarter following
receipt by the President of the Fund (the "President").
4. Notional Investment Experience. Amounts credited to a Deferred Payment
------------------------------
Account shall be periodically adjusted for notional investment experience. In
each case such notional investment experience shall be determined by treating
the Deferred Payment Account as though an equivalent dollar amount had been
invested and reinvested in one or more of the Notional Funds. The Notional
Funds used as a basis for determining notional investment experience with
respect to any Director's Deferred Payment Account shall be designated by the
Director in writing by instrument of election substantially in the form attached
hereto as Exhibit C and may be changed prospectively by similar written election
effective as of the first day of any calendar quarter. The President may from
time to time limit the Notional Funds available for purposes of such election.
If at any time any Notional Fund that has previously been
<PAGE>
designated by a Director as a notional investment shall cease to exist or shall
be unavailable for any reason, or if the Director fails to designate one or more
Notional Funds pursuant to this Section 4, the President may, at his discretion
and upon notice to the Director, treat any amounts notionally invested in such
Notional Fund (whether representing past amounts credited to a Director's
Deferred Payment Account or subsequent fee deferrals or both) as having been
invested at the Treasury Bill Rate, only until such time as the Director shall
have made another investment election in accordance with the foregoing
procedures. Deferred Payment Accounts shall continue to be adjusted for notional
investment experience until distributed in full in accordance with the
distribution method elected by the Director pursuant to Section 5 hereof.
5. Payment of Deferred Amounts. All amounts credited to an account pursuant to
---------------------------
any election by the Director made as provided in Section 1 hereof shall be paid
to the Director
(a) in, or beginning in, the calendar year following the calendar year in
which the Director ceases to be a Director of the Fund, or
(b) in, or beginning in, the calendar year following the earlier of the
calendar year in which the Director ceases to be a Director of the
Fund or attains age 70,
and shall be paid
(c) in a lump sum payable on the first day of the calendar year in which
payment is to be made, or
(d) in 10 or fewer installments, payable on the first day of each year
commencing with the calendar year in which payment is to begin, all as
the Director shall specify in making the election. If the payment is
to be made in installments, the amount of each installment shall be
equal to a fraction of the total of the amounts in the account at the
date of the payment the numerator of which shall be one and the
denominator of which shall be the then remaining number of unpaid
installments (including the installment then to be paid). If the
Director dies at any time before all amounts in the account have been
paid, such amounts shall be paid at that time in a lump sum to the
beneficiary or beneficiaries designated by the Director in writing to
receive such payments or in the absence of such a designation to the
estate of the Director.
The Board of Directors may, in the case of an unforseeable emergency, at its
sole discretion accelerate the payment of any unpaid amount for any or all
Directors. For purposes of this paragraph, an unforseeable emergency is severe
financial hardship to the Director resulting from a sudden and unexpected
illness or accident of the Director or of a dependent (as defined in section
152(a) of the Internal Revenue Code) of the Director, loss of the Director's
property due to casualty, or other similar extraordinary and unforseeable
circumstances arising as a result of events beyond the control of the Director.
Payment due to an unforseeable emergency may not be made to the extent that such
hardship is or may be relieved (i) through reimbursement or compensation by
insurance or otherwise; (ii) by liquidation of the Director's assets, to the
extent the liquidation of such assets would not itself cause severe financial
hardship, or (iii) by cessation of deferrals under the Plan. Examples of what
are not considered to be unforseeable emergencies include the need to send a
Director's child to college or the desire to purchase a home.
<PAGE>
Withdrawals of amounts because of an unforseeable emergency are only permitted
to the extent reasonably necessary to satisfy the emergency need.
6. Assignment. No deferred amount or unpaid portion thereof may be assigned or
----------
transferred by the Director except by will or the laws of descent and
distribution.
7. Withholding Taxes. The Fund shall deduct from all payments any federal,
-----------------
state or local taxes and other charges required by law to be withheld with
respect to such payments.
8. Nature of Rights; Nonalienation. A Director's rights to deferred payment
-------------------------------
under the Plan shall be solely those of an unsecured general creditor of the
Fund, and any payments by the Fund pursuant to the Plan will be made solely from
the Fund's general assets and property. The Fund will be under no obligation to
purchase, hold or dispose of any investment for the specific benefit of any
Director but, if the Fund should choose to purchase shares of any Notional Fund
in order to cover all or a portion of its obligations under the Plan, then such
investments will continue to be a part of the general assets and property of the
Fund. A Director's rights under the Plan may not be transferred, assigned,
pledged or otherwise alienated, and any attempt by the Director to do so shall
be null and void.
9. Status of Director. Nothing in the Plan nor any election hereunder shall be
------------------
construed as conferring on any Director the right to remain a Director of the
Fund or to receive fees at any particular rate.
10. Amendment and Acceleration. The Board of Directors may at any time at its
--------------------------
sole discretion amend or terminate this Plan, provided that no such amendment or
termination shall adversely affect the right of Directors to receive deferred
amounts credited to their account.
11. Administration. The Plan shall be administered by the President or by such
--------------
person or persons as the President may designate to carry out administrative
functions hereunder. The President shall have complete discretion to interpret
and administer the Plan in accordance with its terms, and his determinations
shall be binding on all persons.
Amended as of March 19, 1998
<PAGE>
EXHIBIT A
SELIGMAN INVESTMENT COMPANIES
DEFERRED COMPENSATION PLAN
ELECTION FORM
Pursuant to the Deferred Compensation Plan for Directors, as amended as of
March 19, 1998, (the "Plan") adopted by each of the Seligman Investment
Companies (the "Funds"), I hereby elect to have ___% of my annual retainer fees
and ___% of my meeting fees for service to the Funds deferred as provided in the
Plan. This election will take effect at such time as is provided in section 1
of the Plans, and shall continue in effect until terminated in writing, any such
termination to take effect of the first day of the next calendar year beginning
after receipt of the notice of termination.
The Deferred Compensation Plan Return Designation Form attached hereto
indicates the percentage of each of the above amounts that should earn the
designated returns. Such designations shall remain in effect until changed by
submission of a new form as provided in the Plan.
All amounts deferred with respect to any Fund and the earnings thereon made
pursuant to any election by me shall be credited to an account for my benefit
and shall be paid to me:
<TABLE>
<CAPTION>
Check (a) or (b)
<S> <C> <C>
(a) in, or beginning in, the calendar year following the calendar year in
- ------------ which I cease to be a director of the Fund, or
- ------------ (b) in, or beginning in, the calendar year following the earlier of the
calendar year in which I cease to be a director of the Fund or attain age 70,
and shall be paid
Check (c) or (d)
(c) in a lump sum payable on the first day of the calendar year in which
- ------------ payment is to be made, or
(d) in 10 or fewer installments, payable on the first day of each year
- ------------ commencing with the calendar year in which payment is to begin.
</TABLE>
If (d) is selected, enter number of annual installments _________.
If the payment is to be made in installments, the amount of each
installment shall be equal to a fraction of the total of the amounts in the
account at the date of the payment the numerator of which shall be one and the
denominator of which shall be the then remaining number of unpaid installments
(including the installment then to be paid). If I die at any time before all
amounts in the account have been paid, such amounts shall be paid at that time
in a lump sum to the beneficiary or beneficiaries designated by me on the
attached Beneficiary Designation Form or in the absence of such a designation to
my estate.
- ----------------------------- -------------------------------------
Date Signature
<PAGE>
EXHIBIT B
DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION FORM
I hereby designate the following beneficiary or beneficiaries to receive at my
death the amounts held in my Deferred Payment Accounts from my participation in
the Deferred Compensation Plans for Directors/Trustees of all registered
investment companies advised by J. & W. Seligman & Co. Incorporated for which I
serve as a director or trustee (the "Plans").
A. PRIMARY BENEFICIARY(IES)
1. Name: % Share:
------------------------------------- --------------------
Address:
----------------------------------------------------------------
Relationship: DOB:
-------------------------------- ---------------------
Social Security #:
---------------------------
Trustee Name and Date (if beneficiary is a trust): ----------------------
Trustee of Trust: -------------------------------------------------------
2. Name: % Share:
------------------------------------- --------------------
Address:
----------------------------------------------------------------
Relationship: DOB:
-------------------------------- ---------------------
Social Security #:
---------------------------
Trustee Name and Date (if beneficiary is a trust): ----------------------
Trustee of Trust: -------------------------------------------------------
B. Contingent Beneficiary(ies)
1. Name: % Share:
------------------------------------- --------------------
Address:
----------------------------------------------------------------
Relationship: DOB:
-------------------------------- ---------------------
Social Security #:
---------------------------
Trustee Name and Date (if beneficiary is a trust): ----------------------
Trustee of Trust: -------------------------------------------------------
2. Name: % Share:
------------------------------------- --------------------
Address:
----------------------------------------------------------------
Relationship: DOB:
-------------------------------- ---------------------
Social Security #:
---------------------------
Trustee Name and Date (if beneficiary is a trust): ----------------------
Trustee of Trust: -------------------------------------------------------
<PAGE>
I understand that I may revoke or amend the above designation at any time. I
understand that payment will be made to my Contingent Beneficiary(ies) only if
there is no surviving Primary Beneficiary(ies). I further understand that if I
am not survived by any Primary or Contingent Beneficiaries, payment will be made
to my estate as set forth under the Plans.
- --------------------- --------------------------------------------
Date Signature
--------------------------------------------
Participant's Name Printed
<PAGE>
EXHIBIT C
SELIGMAN INVESTMENT COMPANIES
DEFERRED COMPENSATION PLANS
RETURN DESIGNATION FORM
I elect to have my deferred compensation for all registered investment companies
advised by J. & W. Seligman & Co. Incorporated for which I serve as a Director
or Trustee deemed to be invested as specified below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
| | | % Allocation |
| | % Allocation | for accumulated |
| | for future fees| balances |
| <S> | <C> | <C> |
|---------------------------------------------------------------|-----------------|-------------------|
| At the prevailing three-month U.S. Treasury Bill Rate | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Capital Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Cash Management Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Common Stock Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Communications and Information Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Frontier Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Growth Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Henderson Global Fund Series, Inc. - | | |
| Seligman Henderson Emerging Markets Growth Fund | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Henderson Global Fund Series, Inc. - | | |
| Seligman Henderson Global Growth Opportunities Fund | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Henderson Global Fund Series, Inc. - | | |
| Seligman Henderson Global Smaller Companies Fund | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Henderson Global Fund Series, Inc. - | | |
| Seligman Henderson Global Technology Fund | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Henderson Global Fund Series, Inc. - | | |
| Seligman Henderson International Fund | | |
- ----------------------------------------------------------------|-----------------|-------------------|
| Seligman High Income Fund Series - | | |
| Seligman High-Yield Bond Series | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman High Income Fund Series - | | |
| Seligman U.S. Government Securities Series | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Income Fund, Inc. | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Value Fund Series, Inc. - | | |
| Seligman Large-Cap Value Fund | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Seligman Value Fund Series, Inc. - | | |
| Seligman Small-Cap Value Fund | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Tri-Continental Corporation | | |
|---------------------------------------------------------------|-----------------|-------------------|
| Total | 100% | 100% |
- -------------------------------------------------------------------------------------------------------
</TABLE>
I acknowledge that I may amend this Return Designation in the manner, and
at such time as permitted, under the Plans. Furthermore, I acknowledge that in
certain circumstances, and pursuant to Section 4 of the Plans, the President may
at his discretion, and upon notice to me, disregard the designations made above
and cause all or a portion of my Deferred Account to receive a return equal to
the prevailing three-month U.S. Treasury Bill Rate.
- ----------------------------- ---------------------------------------
Date Signature
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Seligman Growth Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 74 to Registration
Statement No. 2-10836 of our report dated January 30, 1998, appearing in the
Annual Report to Shareholders for the year ended December 31, 1997, which is
incorporated by reference in the Statement of Additional Information, which is
included in such Registration Statement, and to the references to us under the
captions "Financial Highlights" in the Prospectus and "General Information" in
the Statement of Additional Information, which are also included in such
Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 24, 1998
<PAGE>
EXHIBIT 99.24
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, 1998.
/s/Richard R. Schmaltz (L.S.)
----------------------
Richard R. Schmaltz
