File No. 2-80168
811-3596
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. -- |_|
Post-Effective Amendment No. 18 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 18 |X|
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SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
(Exact name of registrant as specified in charter)
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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
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
|X| immediately upon filing pursuant to paragraph (b)
|_| on (date) pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|_| on (date) pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on December
20, 1996.
<PAGE>
File No. 2-80168
811-3596
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 18
Pursuant to Rule 481(a)
<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
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<S> <C> <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
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- -----------------------------------------------
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 Redemption of Fund Shares; Valuation
of Securities being offered
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 COMMUNICATIONS AND
INFORMATION FUND, INC.
100 Park Avenue
New York, NY 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450--all continental United States
For Retirement Plan Information--Toll-Free Telephone: (800) 445-1777
May 1, 1997
Seligman Communications and Information Fund, Inc. (the "Fund") is a mutual
fund which invests to produce capital gain. The Fund invests primarily in
securities of companies in the communications, information and related
industries. Investment advisory and management services are provided to the Fund
by J. & W. Seligman & Co. Incorporated (the "Manager") and, to the extent
requested by the Manager in respect of foreign assets, Seligman Henderson Co.
(the "Subadviser"). The Fund's distributor is Seligman Financial Services, Inc.,
an affiliate of the Manager. For a description of the Fund's investment
objective and policies, including the risk factors associated with an investment
in the Fund, see "Investment Objective, Policies and Risks." There can be no
assurance that the Fund's investment objective 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 deferred sales
load ("CDSL") of 1% on redemptions within eighteen months of purchase. 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 distribution fee of up to .75% and
an annual service fee of up to .25% of the average daily net asset value of the
Class B shares. Class B shares will automatically convert to Class A shares on
the last day of the month that precedes the eighth anniversary of their date of
purchase. Class D shares are sold without an initial sales load but are subject
to a CDSL of 1% imposed on 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 acquired through the reinvestment of dividends
or distributions received from any Class of shares. See "Alternative
Distribution System." Shares of the Fund may be purchased through any authorized
investment dealer.
This Prospectus sets forth concisely the information a prospective investor
should know about the Fund before investing. Please read it carefully before you
invest and keep it for future reference. Additional information about the Fund,
including a Statement of Additional Information, has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
available upon request and without charge by calling or writing the Fund at the
telephone numbers or the address set forth above. The Statement of Additional
Information is dated the same date as this Prospectus and is incorporated herein
by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------------
TABLE OF CONTENTS
Page
---------
Summary of Fund Expenses............................. 2
Financial Highlights................................. 3
Alternative Distribution System...................... 5
Investment Objective, Policies and Risks............. 7
Management Services.................................. 9
Purchase of Shares................................... 12
Telephone Transactions............................... 17
Redemption of Shares................................. 19
Administration, Shareholder Services
and Distribution Plan.............................. 21
Exchange Privilege................................... 22
Further Information about Transactions in the Fund... 24
Dividends and Distributions.......................... 24
Federal Income Taxes................................. 25
Shareholder Information.............................. 26
Advertising the Fund's Performance................... 27
Organization and Capitalization...................... 28
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
Class A Class B Class D
---------------- ---------------- ----------------
(Initial Sales (Deferred Sales (Deferred Sales
Load Alternative) Load Alternative) Load Alternative)
<S> <C> <C> <C>
Shareholder Transaction Expenses
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 (percentage of
original purchase price or redemption
proceeds, whichever is lower)........................... None; 5% in 1st year 1% in 1st year
except 1% 4% in 2nd year None thereafter
in first 18 months 3% in 3rd and
if initial sales load 4th years
was waived in full 2% in 5th year
due to size of 1% in 6th year
purchase None thereafter
Redemption Fees............................................. None None None
Exchange Fees............................................... None None None
Class A Class B Class D
-------- -------- --------
Annual Fund Operating Expenses for 1996
(as a percentage of average net assets)
Management Fees............................................. .89% .89% .89%
12b-1 Fees.................................................. .25% 1.00%* 1.00%*
Other Expenses ............................................. .54% .54% .54%
----- ----- -----
Total Fund Operating Expenses............................... 1.68% 2.43% 2.43%
===== ===== =====
</TABLE>
The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of the Fund bear directly or
indirectly. 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
certain 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 purchase, respectively.
"Other Expenses" for Class B shares are estimated based on expenses incurred
during 1996. 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, Shareholder Services
and Distribution Plan" herein.
<TABLE>
<CAPTION>
Example 1 Year 3 Years 5 Years 10 Years
------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment, assuming
(1) (a) 5% annual return and (2)
redemption at the end of each time period...................Class A $64 $ 98 $134 $237
Class B+ $75 $106 $150 $258
Class D $35++ $ 76 $130 $277
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5%
ANNUAL 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
Dealers, 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 (including
distribution fees) than the economic equivalent of 6.25% of such
shareholder's investment in such shares.
+Assuming (1) a 5% annual return and (2) no redemption at the end of the
period, the expenses on a $1,000 investment would be $25 for 1 year, $76 for
3 years and $130 for 5 years. The expenses shown for the ten-year period
reflect the conversion of Class B shares to Class A shares after 8 years.
++Assuming (1) a 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be $25.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights for the Fund's Class A, Class B and Class D for
the periods presented below have been audited by Deloitte & Touche LLP,
independent auditors. This information, which is derived from the financial and
accounting records of the Fund, should be read in conjunction with the financial
statements and notes contained in the Fund's 1996 Annual Report, which is
incorporated by reference in the Fund's Statement of Additional information,
copies of which may be obtained free of charge by calling or writing the Fund at
the telephone numbers or address provided on the cover page of this Prospectus.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from each Class's
beginning net asset value to its ending net asset value so that they may
understand what effect the individual items have on their investment, assuming
it was held throughout the period. Generally, the per share amounts are derived
by converting the actual dollar amounts incurred for each item, as disclosed in
the financial statements, to their equivalent per share amount.
The total return based on net asset value measures each Class's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, invested dividends and capital gains paid at net asset value and
then sold their shares at the net asset value per share on the last day of the
period. The total return computations do not reflect any sales loads investors
may 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.
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------------------------------------------------------
1996(0) 1995(0) 1994(0) 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year . $ 21.99 $ 16.64 $ 13.43 $ 12.30 $ 11.57 $ 8.87 $ 10.11 $ 10.07 $ 10.19 $ 11.39
------- ------- ------- ------- ------- ------- ------- -------- -------- --------
Net investment income (loss) ....... (.26) (.33) (.19) (.14) (.12) (.12) (.08) (.05) .01 (.04)
Net realized and unrealized
investment gain (loss) ........... 2.84 7.59 4.86 4.37 2.09 4.87 (1.04) 3.00 .72 1.67
------- ------- ------- ------- ------- ------- ------- -------- -------- --------
Increase (decrease) from investment
operations ....................... 2.58 7.26 4.67 4.23 1.97 4.75 (1.12) 2.95 .73 1.63
Distributions from net gain realized (1.06) (1.91) (1.46) (3.10) (1.24) (2.05) (.12) (2.91) (.85) (2.83)
------- ------- ------- ------- ------- ------- ------- -------- -------- --------
Net increase (decrease) in net
asset value ...................... 1.52 5.35 3.21 1.13 .73 2.70 (1.24) .04 (.12) (1.20)
------- ------- ------- ------- ------- ------- ------- -------- -------- --------
Net asset value, end of year ....... $ 23.51 $ 21.99 $ 16.64 $ 13.43 $12.30 $ 11.57 $ 8.87 $ 10.11 $ 10.07 $ 10.19
======= ======= ======= ======= ======= ======= ======= ======== ======== ========
TOTAL RETURN BASED ON NET ASSET VALUE: 11.94% 43.39% 35.30% 35.13% 17.31% 54.91% (11.07)% 30.12% 7.33% 15.01%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ..... 1.68% 1.61% 1.65% 1.63% 1.51% 1.69% 1.67% 1.48% 1.60% 1.70%
Net investment income (loss)
to average net assets ............ (1.16)% (1.31)% (1.27)% (1.39)% (1.18)% (1.23)% (.83)% (.44)% .11% (.22)%
Portfolio turnover ................. 121.32% 65.77% 104.08% 137.10% 110.42% 107.72% 85.56% 123.16% 116.86% 87.08%
Average commission rate paid ....... $.0531
Net assets, end of year
(000s omitted) .................... $2,414,672 $1,940,693 $307,542 $92,987 $57,001 $50,175 $35,292 $42,200 $38,675 $42,583
</TABLE>
- ---------
o Per share amounts for the years ended December 31, 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 through December 31, 1992 the effect of the
Administration, Shareholder Services and Distribution Plan which was approved by
shareholders on November 23, 1992 and became effective on January 1, 1993; or to
reflect the effect of the increase in the management fee rate payable by the
Fund, which was approved by shareholders on February 7, 1996 and became
effective on February 8, 1996.
3
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Class B Class D
--------- -----------------------------------------------
4/22/96* 5/3/93*
to Year Ended December 31, to
-----------------------------------
12/31/96(0) 1996(0) 1995(0) 1994(0) 12/31/93
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 21.51 $ 21.35 $ 16.31 $ 13.32 $ 12.24
------- -------- ------- ------- -------
Net investment income (loss) (.28) (.40) (.50) (.33) (.05)
Net realized and unrealized
investment gain (loss) 2.45 2.72 7.45 4.78 4.23
------- -------- ------- ------- -------
Increase (decrease) from
investment operations 2.17 2.32 6.95 4.45 4.18
Distributions from net gain realized (1.06) (1.06) (1.91) (1.46) (3.10)
------- -------- ------- ------- -------
Net increase (decrease) in net asset value 1.11 1.26 5.04 2.99 1.08
------- -------- ------- ------- -------
Net asset value, end of period $ 22.62 $ 22.61 $ 21.35 $16.31 $ 13.32
======= ======== ======= ======= =======
Total Return Based on Net Asset Value: 10.30 %11.07% 42.37% 33.94 %34.89%
Ratios/Supplemental Data:
Expenses to average net assets 2.44%+ 2.43% 2.37% 2.50% 2.56%+
Net investment income (loss)
to average net assets (1.96)%+ (1.91)% (2.07)% (2.20)% (2.33)%+
Portfolio turnover 121.32%++ 121.32% 65.77% 104.08% 137.10%+++
Average commission rate paid $ .0531++ $ .0531
Net assets, end of period (000s omitted) $120,848 $737,979 $609,332 $96,100 $7,833
</TABLE>
- ----------
* Commencement of offering of shares.
0 Per share amounts for the periods ended December 31, 1996, 1995 and 1994
are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
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 February 7, 1996
and became effective on February 8, 1996.
4
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers three classes of shares. Class A shares are sold to
investors who have concluded that they would prefer to pay an initial sales load
and have the benefit of lower continuing fees. Class B shares are sold to
investors choosing to pay no initial 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
particular 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 being
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 choose to purchase Class A shares because over time the accumulated
continuing distribution fees of Class B and Class D shares may exceed the
initial sales load and lower ongoing fee of Class A shares. This consideration
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 distribution fees on Class B and Class D shares will
be offset to the extent any return is realized on the additional funds initially
invested therein that would have been equal to the amount of the initial sales
load on Class A shares.
Investors who qualify for reduced initial sales loads, as described under
"Purchase of Shares" below, might also choose to purchase Class A shares because
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 in full 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 approximately 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
invested 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
reduced 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 investment
over this period of time.
Investors should bear in mind that total asset based sales charges (i.e.,
the higher continuing distribution fee plus the CDSL) on Class B shares that are
redeemed may exceed the total asset based sales charges that would be payable on
the same amount of Class A or Class D shares, particularly if the Class B shares
are redeemed shortly after purchase or if the investor qualifies for a reduced
sales load on the Class A shares.
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 distribution
fees with respect to Class B and Class D shares in that the sales loads and
distribution fees applicable to each class provide for the financing of the
distribution of the shares of the Fund.
Class B and Class D shares are subject to the same ongoing distribution
fees but Class D shares are subject to a CSDL 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, which are
subject to lower ongoing fees.
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, 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 Investment Company Act
of 1940, as amended (the "1940 Act") or Maryland law. The net income
attributable 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
exists 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
purpose, the Directors will monitor the Fund for the existence of any material
conflict among the classes and will take such action as is reasonably necessary
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 expenses 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 ongoing fees
resulting from the conversion to Class A shares. Other investors, however, may
elect to purchase Class D shares if they determine that it is advantageous to
have all their assets invested initially and they are uncertain as to the length
of time they intend to hold their assets in the Fund or another mutual fund in
the Seligman Group for which the exchange privilege is available. Although Class
D shareholders are subject to a shorter CDSL period at a lower rate, they forgo
the Class B automatic conversion feature, making their investment subject to
higher distribution fees 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>
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE
SALES LOAD DAILY NET ASSETS)OTHER INFORMATION
---------- -------------- ---------------
CLASS A Maximum initial Service fee of Initial sales load
sales load of .25%. waived or reduced
4.75% of the for certain purchases.
public offering CDSL of 1% on
price. redemptions within
eighteen months of purchase on shares
on which initial sales load was waived
in full due to the size of the
purchase.
CLASS B None Service fee of CDSL of:
.25%; 5% in 1st year
Distribution fee 4% in 2nd year
of .75% until 3% in 3rd and
conversion*. 4th years
2% in 5th year 1% in 6th year 0% after
6th year.
CLASS D None Service fee of CDSL of 1% on
.25%; redemptions within
Distribution fee one year of
of up to .75%. purchase.
- ----------
* Conversion occurs at the end of the month which precedes 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 OBJECTIVE, POLICIES AND RISKS
The Fund is an open-end diversified management investment company, as
defined in the 1940 Act, or mutual fund, incorporated in Maryland in 1982.
The Fund invests to produce capital gain. Income is not an objective.
Investing for capital gain ordinarily exposes capital to added risk. Shares
of the Fund are intended for you only if you are able and willing to take such
risk. There can be no assurance that the Fund's investment objectives will be
attained.
The Fund seeks to achieve its objective by investing in a portfolio
consisting of securities of companies operating in virtually all aspects of the
communications, information and related industries. It invests at least 80% of
its net assets, exclusive of government securities, short-term notes, cash and
cash equivalents, in securities of companies engaged in these industries.
The communication and use of information using existing and developing
technologies is increasingly permeating global civilization. Consequently, there
are opportunities for continued growth in demand for components, products, media
and systems to collect, store, retrieve, transmit, process, distribute, record,
reproduce and put information to use. The pervasive impact of communications and
information upon society is being accelerated by the blending of computers with
telecommunications systems, with resulting lower costs and higher efficiencies.
Accordingly, companies engaged in the production of methods for using electronic
technology to communicate information are important in the Fund's portfolio.
However, older technologies such as photography and print may also be
represented. Companies that successfully converge technologies--medical
databases and computer networks for example--are sought for the portfolio.
The value of Fund shares may be susceptible to factors affecting the
communications, information and related industries. These industries may be
subject to greater governmental regulation than many other industries and
changes in governmental policies and the need for regulatory approvals may have
a material effect on the products and services of these industries.
Although securities of large companies that now are well established in the
world communications and information market and can be expected to grow with the
market are held in the Fund's portfolio, rapidly changing technologies and the
expansion of the communications, information and related industries provide a
favorable environment for investing in companies of small to medium size.
Securities of smaller, less seasoned companies may be subject to greater price
fluctuation, limited liquidity and above-average investment risk.
The Fund invests primarily in common stocks. It also may invest in
securities convertible into or ex-
7
<PAGE>
changeable for common stocks, in rights and warrants to purchase common stocks
and in debt securities or preferred stocks believed to provide opportunities for
capital gain.
It is the Fund's present intention to invest not more than 5% of its net
assets in debt securities which are not rated within the four highest rating
categories by Standard & Poor's Rating Service or by Moody's Investors Service,
Inc.
Securities owned are kept under continuing supervision, and changes may be
made whenever such securities no longer seem to meet the Fund's capital gain
objectives. Neither the length of time a security has been held nor the rate of
turnover of the Fund's portfolio is considered a limiting factor on changes.
Portfolio turnover may vary with such changes.
BORROWING. The Fund may from time to time borrow money to increase its
portfolio of securities. It may borrow only from banks and may not borrow in
excess of one-third of the market value of its assets, less liabilities other
than such borrowing. The Fund may pledge its assets only to the extent necessary
to effect permitted borrowings of up to 15% of its total assets on a secured
basis. These limits may be changed only by a vote of the shareholders. Current
asset value coverage of three times any amount borrowed is required at all
times.
Borrowed money creates an opportunity for greater capital appreciation, but
at the same time increases exposure to capital risk. The net cost of any money
borrowed would be an expense that otherwise would not be incurred, and this
expense could limit the Fund's net investment income in any given period.
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
portfolio securities are on loan, the borrower pays the Fund an amount
equivalent to any dividends or interest paid on the securities and the Fund may
invest the cash collateral and earn additional income or may receive an agreed
upon amount of interest income from the borrower.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933 (the
"1933 Act")) and other securities that are not readily marketable. 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 determine,
when appropriate, that specific Rule 144A securities are liquid and not subject
to the 15% limitation on illiquid securities. Should this determination be made,
the Manager acting pursuant to such procedures will carefully monitor the
security (focusing on such factors, among others, as trading activity and
availability of information) to determine that the Rule 144A security continues
to be liquid. It is not possible to predict with assurance exactly how the
market for Rule 144A securities will further evolve. This investment practice
could have the effect of increasing the level of illiquidity in the Fund, if,
and 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 foreign issuers directly or through American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs") or Global Depositary Receipts
("GDRs") (collectively, "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
companies may not be subject to reporting standards and requirements comparable
to
8
<PAGE>
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 Receipts 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 and GDRs are typically traded in Europe and in both
Europe and the United States, respectively. Depositary Receipts may be issued
under sponsored or unsponsored programs. In sponsored programs, the issuer has
made arrangements to have its securities traded in the form of a Depositary
Receipt. In unsponsored programs, the issuers may not be directly involved in
the creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored Depositary Receipt programs are generally similar, the
issuers of securities represented by unsponsored Depositary Receipts are not
obligated to disclose material information in the United States, and therefore,
the import of such information may not be reflected in the market value of such
receipts. The Fund may invest up to 10% of its total assets in foreign
securities that it holds directly, but this 10% limit does not apply to foreign
securities held through Depositary Receipts which are traded in the United
States or to commercial paper and certificates of deposit issued by foreign
banks.
OPTIONS TRANSACTIONS. The Fund may purchase put options on portfolio
securities in an attempt to provide a hedge against a decrease in the price of a
security held by the Fund. The Fund will not purchase options for speculative
purposes. Purchasing a put option gives the Fund the right to sell, and
obligates the writer to buy, the underlying security at the exercise price at
any time during the option period.
When the Fund purchases an option, it is required to pay a premium to the
party writing the option and a commission to the broker selling the option. If
the option is exercised by the Fund, the premium and the commission paid may be
greater than the amount of the brokerage commission charged if the security were
to be purchased or sold directly. See "Investment Objective, Policies and Risks"
in the Statement of Additional Information.
GENERAL. Except as noted above, the foregoing investment policies are not
fundamental and the Fund's Board of Directors may change such policies 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 objective of seeking
to produce capital gain 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 activities which cannot be changed without such a vote, appears in
the Statement of Additional Information. Under the 1940 Act, a "vote of a
majority of the outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (1) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares present at a shareholders' meeting if more than
50% of the outstanding shares are represented at the meeting in person or by
proxy.
MANAGEMENT SERVICES
THE MANAGER. The Board of Directors provides broad supervision over the
affairs 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
9
<PAGE>
are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund,
Inc., Seligman Henderson Global Fund Series, Inc., Seligman High Income Fund
Series, Seligman Income Fund, Inc., Seligman Municipal Fund Series, Inc.,
Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc.,
Seligman Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc., Seligman
Quality Municipal Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman
Value Fund Series, Inc., and Tri-Continental Corporation. The aggregate assets
of the Seligman Group were approximately $14.2 billion at March 31, 1997. The
Manager also provides investment management or advice to institutional accounts
having an aggregate value at March 31, 1997 of approximately $4.2 billion.
Mr. William C. Morris is Chairman of the Manager and Chairman of the Board
and Chief Executive Officer of the Fund. Mr. Morris owns a majority of the
outstanding voting securities of the Manager.
The Manager provides senior management for Seligman Data Corp., a
wholly-owned subsidiary of certain other investment companies in the Seligman
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, which was approved by shareholders on
February 7, 1996 and became effective on February 8, 1996, is equal to an annual
rate of .90% of the Fund's average daily net assets on the first $3 billion of
net assets, .85% of the Fund's average daily net assets on the next $3 billion
of net assets and .75% of the Fund's average daily net assets in excess of $6
billion. For the year ended December 31, 1996, the management fee paid by the
Fund was equal to .89% of the Fund's average daily net assets.
The Fund pays all its expenses other than those assumed by the Manager.
Total expenses of the Fund's Class A and Class D shares for the year ended
December 31, 1996 amounted to 1.68% and 2.43%, respectively, of the average
daily net assets of such class. The annualized total expenses of the Fund's
Class B shares for the period ended December 31, 1996 amounted to 2.44% of the
average daily net assets of such class.
THE SUBADVISER. The Subadviser provides investment management services to
the Fund with respect to all or a portion of the Fund's foreign investments, as
designated by the Manager ("Qualifying Assets"). The Fund has a non-fundamental
policy under which it may invest up to 10% of its total assets in foreign
securities that are held directly. The 10% limit does not apply to foreign
securities held through Depositary Receipts which are traded in the United
States or to commercial paper and certificates of deposit issued by foreign
banks. The Subadviser serves the Fund pursuant to a Subadvisory Agreement with
the Manager (the "Subadvisory Agreement"), dated June 1, 1994. Pursuant to the
Subadvisory Agreement, the Subadviser, with respect to the Qualifying Assets,
provides investment management services including investment research, advice
and supervision, determines which securities will be purchased or sold, makes
purchases and sales on behalf of the Fund and determines how voting and other
rights with respect to securities held by the Fund shall be exercised, subject
in each case to the control of the Board of Directors and in accordance with the
Fund's investment objectives, policies and principles. For this service, the
Subadviser receives a fee from the Manager, payable monthly. The subadvisory fee
rate, which is applied to the average monthly net Qualifying Assets of the Fund
(i.e., the Qualifying Assets less any related liabilities as designated by the
Manager), is the same as the overall rate paid to the Manager by the Fund. For
the year ended December 31, 1996, the Fund did not require the services of the
Subadviser and therefore, no fees were paid by the Manager to the Subadviser.
The Subadviser was founded in 1991 as a joint venture between the Manager
and Henderson International, Inc., a controlled affiliate of Henderson plc. The
Subadviser, headquartered in New York, was created
10
<PAGE>
to provide international and global investment advice to institutional and
individual investors and investment companies. The Subadviser currently serves
as subadviser to Seligman Capital Fund, Inc., Seligman Common Stock Fund, Inc.,
Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman Henderson
Global Fund Series, Inc., Seligman Income Fund, Inc., certain portfolios of
Seligman Portfolios, Inc., each series of Seligman Value Fund Series, Inc. and
Tri-Continental Corporation. The address of the Subadviser is 100 Park Avenue,
New York, NY 10017.
PORTFOLIO MANAGER. Paul H. Wick, a Managing Director of the Manager, is
Vice President and Portfolio Manager of the Fund and Vice President of Seligman
Portfolios, Inc. ("SPI") and Portfolio Manager of SPI's Seligman Communications
and Information Portfolio and Co-Portfolio Manager of SPI's Seligman Henderson
Global Technology Portfolio. Mr. Wick is also a Vice President of Seligman
Henderson Global Fund Series Inc., and Co-Portfolio Manager of its Seligman
Henderson Global Technology Fund. Mr. Wick became Portfolio Manager of the Fund
on January 18, 1990. Mr. Wick joined the Manager in 1987 as an Associate,
Investment Research. He was promoted to Managing Director on January 1, 1995.
Mr. Brian Ashford-Russell will be responsible for the Subadviser's
day-to-day investment activity with respect to the Fund to the extent there are
Qualifying Assets. Mr. Ashford-Russell has been a Portfolio Manager with
Henderson plc since February 1993. He was previously a Portfolio Manager with
Touche Remnant & Co.
The Manager's discussion of the Fund's performance as well as a line graph
illustrating comparative performance information between the Fund, the Standard
& Poor's 500 Composite Stock Price Index and the Lipper Science and Technology
Funds Average is included in the Fund's 1996 Annual Report to Shareholders.
Copies of the 1996 Annual Report may be obtained, without charge, by calling or
writing the Fund at the telephone numbers or address listed on the cover page of
this Prospectus.
PORTFOLIO TRANSACTIONS. The Management Agreement and Subadvisory Agreement
each recognize that in the purchase and sale of portfolio securities, the
Manager and the Subadviser will seek the most favorable price and execution,
and, consistent with that policy, may give consideration to the research,
statistical and other services furnished by brokers or dealers to the Manager
and Subadviser. 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
and Subadviser in connection with its services to other clients as well as to
the Fund. In over-the-counter markets, orders are placed with responsible
primary 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 may determine, the Manager
and Subadviser may consider sales of shares of the Fund and, if permitted by
applicable laws, may consider sales of shares of the other mutual funds in the
Seligman Group as a factor in the selection of brokers or dealers to execute
portfolio transactions for the Fund.
PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" which may result in the payment by the Fund of dealer
spreads or underwriting commissions and other transaction costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
Although it is the policy of the Fund to hold securities for investment, changes
in the securities held by the Fund will be made from time to time when the
Manager or Subadviser believe such changes will strengthen the Fund's portfolio.
The portfolio turnover of the Fund may exceed 100% and has done so in prior
years.
11
<PAGE>
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager,
acts as general distributor of the Fund's shares. Its address is 100 Park
Avenue, New York, NY 10017.
The Fund issues three classes of shares: Class A shares are sold to
investors choosing the initial sales load alternative; Class B shares are sold
to investors choosing to pay no initial sales load, a higher distribution fee
and a CDSL with respect to redemptions within six years of purchase and who
desire shares to convert automatically to Class A shares after eight years; 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.
Shares of the Fund may be purchased through any authorized investment
dealer. All orders will be executed at the net asset value per share next
computed 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 $2,500; 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 RETURN
INVESTMENTS WHICH DO NOT MEET THESE MINIMUMS. EXCEPTIONS TO THESE MINIMUMS ARE
AVAILABLE FOR ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK(R)
SERVICE. THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE SELIGMAN TIME
HORIZONSM ASSET ALLOCATION PROGRAM IS $10,000. FOR INFORMATION ABOUT THIS
PROGRAM, CONTACT YOUR FINANCIAL ADVISOR.
No purchase order may be placed for Class B shares for an amount of
$250,000 or more.
Orders received by an authorized dealer before the close of business on the
New York Stock Exchange ("NYSE") (normally, 4:00 p.m. Eastern time) and 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 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 the NYSE, or received by SFSI
after the close of business, will be executed at the Fund's net asset value as
next determined plus, in the case of Class A shares, any applicable sales load.
The authorized dealer through which a shareholder purchases shares is
responsible for forwarding the order to SFSI promptly.
Payment for dealer purchases may be made by check or by wire. To wire
payment, dealer orders must first be placed through SFSI's order desk and
assigned a purchase confirmation number. Funds in payment of the purchase may
then be wired to Mellon Bank, N.A., ABA #043000261, A/C Seligman Communications
& Information Fund, Inc. (A, B or D), A/C #1071011. WIRE TRANSFERS MUST INCLUDE
THE PURCHASE CONFIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT
NUMBER. Persons other than dealers who wish to wire payment should contact
Seligman Data Corp. for 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
3947, NEW YORK, NY 10008-3947. Checks for investment must be in U.S. dollars
drawn on a domestic bank. Credit card convenience checks and third party checks
(i.e., checks made payable to someone other than the "Seligman Group of Funds")
may not be used to open a new fund account or purchase additional shares of the
Fund. The check should be accompanied by an investment slip (provided at the
bottom of shareholder account statements) and include the shareholder's name,
address, account number, name of Fund and class of shares (A, B or D). If a
shareholder does not provide the required information, Seligman Data Corp. will
seek further clarification and may be forced to return the check to the
shareholder. Orders sent directly to Seligman Data Corp. will be executed
12
<PAGE>
at the Fund's net asset value next determined after the order is accepted plus,
in the case of Class A shares, any applicable sales load.
Seligman Data Corp. may charge a $10.00 service fee for checks returned to
it as uncollectable. This charge may be deducted from the shareholder's account.
For the protection of the Fund and its shareholders, no redemption proceeds will
be remitted to a shareholder with respect to shares purchased by check (unless
certified) until Seligman Data Corp. receives notice that the check has cleared,
which may be up to 15 days from the credit of the shares to the shareholder's
account.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Friday, as of the close of trading on the NYSE (normally, 4:00
p.m. Eastern time) on each day that the NYSE is open for business. Net asset
value is calculated 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 transactions are
valued based on quotations provided by primary market makers in such securities.
Any securities for which recent market quotations are not readily available are
valued at fair value determined in accordance with procedures approved by the
Fund's Board of Directors. Short-term holdings maturing in 60 days or less are
generally valued 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.
Although the legal rights of Class A, Class B and Class D shares are
substantially identical, the different expenses borne by each class will result
in different net asset values and dividends. The net asset values 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 fees 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 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
schedule below, and an annual service fee of up to .25% of the average daily net
asset value of Class A shares. See "Administration, Shareholder Services and
Distribution Plan" below.
- --------------------------------------------------------------------------------
CLASS A SHARES--SALES LOAD SCHEDULE
SALES LOAD AS A
PERCENTAGE OF REGULAR
-------------------- DEALER
NET AMOUNT DISCOUNT
INVESTED AS A % OF
OFFERING (NET ASSET OFFERING
AMOUNT OF PURCHASE PRICE VALUE) PRICE
------------------- ------- -------- --------
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
- ----------
*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
redeemed 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 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-
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<PAGE>
ating in an "eligible employee benefit plan" (as defined below under "Special
Programs") that are attributable to the particular broker/dealer. The shares
eligible for the fee are those on which an initial front-end sales load was not
paid because either the participating eligible employee benefit plan has at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. Class A shares representing only
an initial purchase of Seligman Cash Management Fund are not eligible for the
fee. Such shares will become eligible for the fee once they are exchanged for
shares of another Seligman Mutual Fund. The payment is based on cumulative sales
during a single calendar year, or portion thereof. The payment schedule, for
each calendar year, is as follows: 1.00% of sales up to but not including $2
million; .80% of sales from $2 million up to but not including $3 million; .50%
of sales from $3 million up to but not including $5 million; and .25% of sales
from $5 million and above.
REDUCED SALES LOADS. Reductions in sales loads apply to purchases of Class
A shares by a "single person," including an individual, members of a family unit
comprising husband, wife and minor children purchasing securities for their own
account, or a 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.
Class A shares purchased without an initial sales load in accordance with
the sales load schedule or pursuant to a Volume Discount, Right of Accumulation
or Letter of Intent are subject to a CDSL of 1% on redemptions within eighteen
months of purchase.
o 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 Seligman
Mutual Funds that are sold with an initial sales load reaches levels indicated
in the above sales load schedule.
o THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in shares of the Seligman Mutual Funds sold with an initial sales load
with the total net asset value of shares of those Seligman Mutual Funds already
owned that were sold with an initial sales load and the total net asset value of
shares of Seligman Cash Management Fund that were acquired by the investor
through an exchange of shares of another Seligman Mutual Funds on which there
was a front-end sales load to determine reduced sales loads in accordance with
the sales load schedule. An investor or a dealer purchasing shares on behalf of
an investor must indicate that the investor has existing accounts when making
investments or opening new accounts.
o 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
that 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 purchasing
shares on behalf of an investor must indicate that the investor has existing
accounts when making investments or opening new accounts. For more information
concerning terms of Letters of Intent, see "Terms and Conditions" on page 29.
SPECIAL PROGRAMS. 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.
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<PAGE>
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; to any registeredunit investment trust which is the issuer of
periodic payment plan certificates, the net proceeds of which are invested in
Fund shares; to separate accounts established and maintained by an insurance
company which are exempt from registration under Section 3(c)(11) of the 1940
Act; to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with SFSI; to shareholders of
mutual funds with objectives and policies similar to the Fund who purchase
shares with redemption proceeds of such funds (not to exceed the dollar value of
such redemption proceeds); to financial institution trust departments; to
registered investment advisers exercising discretionary investment authority
with respect to the purchase of Fund shares; to accounts of financial
institutions or broker/dealers that charge account management fees, provided the
Manager or one of its affiliates has entered into an agreement with respect to
such accounts; pursuant to sponsored arrangements with organizations which make
recommendations to or permit group solicitations of, its employees, members or
participants in connection with the purchase of shares of the Fund; to other
investment companies in the Seligman Group in connection with a deferred fee
arrangement for outside directors; and to "eligible employee benefit plans"
which have at least (i) $500,000 invested in the Seligman Group of Mutual Funds
or (ii) 50 eligible employees to whom such a 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.
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, on redemptions of shares purchased within
eighteen months prior to plan termination. Sales pursuant to a 401(k) alliance
program which has an agreement with SFSI are available at net asset value and
are not subject to a CDSL.
CLASS B SHARES. Class B shares are sold without an initial sales load but
are subject to a CDSL if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original purchase price, whichever is less.
YEARS SINCE PURCHASE CDSL
- -------------------- -----
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%
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 into Class A shares, which are subject to an annual
service fee of .25% but no distribution fee. Shares purchased through
reinvestment of dividends and distribution on Class B shares also will convert
automatically to Class A shares along with the underlying shares on which they
were earned.
Conversion occurs at the end of the month which precedes the eighth
anniversary of the purchase date. If Class B shares of the Fund are exchanged
for Class B shares of another Seligman Mutual Fund, the conversion period
applicable to the Class B shares acquired in the exchange will apply, and the
holding period of the shares exchanged will be tacked onto the holding period of
the shares acquired. Class B shareholders of the Fund 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 through the exchange
will be subject to the Fund's CDSL schedule if such schedule is higher or longer
than the CDSL schedule relating
15
<PAGE>
to the Class B shares of the 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 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 Class D shares. SFSI will make a 1% payment to
dealers in respect of purchases of Class D shares. Unlike Class B shares, Class
D shares do not automatically convert to Class A shares after eight years.
CONTINGENT DEFERRED SALES LOAD. A CDSL will be imposed on any redemption of
Class B or Class D shares which were purchased during the preceding six years
(for Class B shares) or twelve months (for Class D shares). The amount of any
CDSL will 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 Organization (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 pay any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on any redemption 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--Initial Sales Load." Employee benefit plans eligible for net asset 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 Dean Witter
Reynolds, Inc. ("Dean Witter") by certain Chilean institutional investors (i.e.,
pension plans, insurance companies and mutual funds). Upon redemption of such
shares wtihin an eighteen month period, Dean Witter will reimburse SFSI a pro
rata portion of the fee it received from SFSI at the time of sale of such
shares.
To minimize the application of a CDSL to a redemption, shares acquired
pursuant to the investment of dividends and distributions (which are not subject
to a CDSL) will be redeemed first; followed by shares held for a period of time
longer than the applicable CDSL period. Shares held for the longest period of
time within the applicable period will then be redeemed. Additionally, for those
shares determined to be subject to a CDSL, the CDSL will be assessed on the
current net asset value or original purchase price, whichever is less. No CDSL
will be imposed on shares acquired through the investment of dividends or
distributions from any Class A, Class B or Class D shares of Seligman Mutual
Funds.
For example, assume an investor purchased 100 Class D shares in January at
a price of $10.00 per share. During the first year, 5 additional Class D shares
were acquired through investment of dividends and distributions. In January of
the following year, an additional 50 Class D shares are 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 Class D shares with a total value
of $1,898.75 ($12.25 per share). The CDSL for this transaction would be
calculated as follows: 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
==========
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<PAGE>
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
redemption of shares.
The CDSL will be waived or reduced in the following instances:
(a) on redemptions following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended
(the "Code"); (b) in connection with (i) distributions from retirement plans
qualified under section 401(a) of the Code when such redemptions are necessary
to make distributions to plan participants (such payments include, but are not
limited to death, disability, retirement, or separation of service), (ii)
distributions from a custodial account under section 403(b)(7) of the Code or an
individual retirement account (an "IRA") due to death, disability, or attainment
of age 591/2, and (iii) a tax-fee return of an excess contribution to an IRA;
(c) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund; (d) in whole or in part, in connection with shares sold
to any state, county, or city or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable investment laws from paying a
sales load or commission in connection with the purchase of shares of any
registered investment management company; (e) pursuant to an automatic cash
withdrawal service; and (f) in connection with the redemption of shares of the
Fund if the Fund is combined with another mutual fund in the Seligman Group, or
another similar reorganization 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 notice
an amount equal to the payment or a portion of the payment made by SFSI at the
time of sale of such shares.
For the period from the date Seligman Global Horizon Funds (the "Offshore
Fund") commences offering its shares, until May 31, 1997, SFSI will reimburse
any CDSL charged upon the redemption of Class B or Class D shares of any
Seligman Mutual Fund by a non-U.S. resident alien investor who uses the
redemption proceeds to purchase Class B or Class A shares, respectively, of the
Offshore Fund through Merrill Lynch, Pierce, Fenner & Smith Incorporated, or any
of its affiliates (collectively, "Merrill Lynch"). Merrill Lynch will, in turn,
reimburse SFSI for the amount of CDSL so reimbursed by it over a period of four
years.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the mutual funds in the Seligman Group. SFSI may from time to time pay
a 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
representatives and members of their families to places within or outside the
United States. The cost of SFSI of such promotional activities and payments
shall be consistent with the Rules of the National Association of Securities
Dealers, Inc., as then in effect.
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER/DEALER REPRESENTATIVE, will have the ability to effect the following
transactions via telephone: (i) redemption of Fund shares, (ii) exchange of Fund
shares for shares of the same class of another Seligman Mutual Fund, (iii)
change of a dividend and/or capital gain distribution option, and (iv) change of
address. All telephone transactions are effected through Seligman Data Corp. at
(800) 221-2450.
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<PAGE>
FOR INVESTORS WHO PURCHASE SHARES BY COMPLETING AND SUBMITTING AN ACCOUNT
APPLICATION (EXCEPT THOSE ACCOUNTS REGISTERED AS TRUSTS (UNLESS THE TRUSTEE AND
SOLE BENEFICIARY ARE THE SAME PERSON), CORPORATIONS OR GROUP RETIREMENT PLANS):
UNLESS AN ELECTION IS MADE OTHERWISE ON THE ACCOUNT APPLICATION, A SHAREHOLDER
AND THE SHAREHOLDER'S BROKER/DEALER OF RECORD, AS DESIGNATED ON THE ACCOUNT
APPLICATION, WILL AUTOMATICALLY RECEIVE TELEPHONE SERVICES.
FOR INVESTORS WHO PURCHASE SHARES THROUGH A BROKER/DEALER: TELEPHONE
SERVICES FOR A SHAREHOLDER AND THE SHAREHOLDER'S REPRESENTATIVE MAY BE ELECTED
BY COMPLETING A SUPPLEMENTAL ELECTION APPLICATION AVAILABLE FROM THE
BROKER/DEALER OF RECORD.
FOR ACCOUNTS REGISTERED AS IRAS: TELEPHONE SERVICES WILL INCLUDE ONLY
EXCHANGES OR ADDRESS CHANGES.
FOR ACCOUNTS REGISTERED AS TRUSTS UNLESS THE TRUSTEE AND SOLE BENEFICIARY
ARE THE SAME PERSON), CORPORATIONS OR GROUP RETIREMENT PLANS: Telephone
redemptions are not permitted. 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 custodian or trustee, and
provide a telephone services election form signed by each plan participant.
Additionally group retirement plans are not permitted to change a dividend or
gain distribution option.
All Seligman Mutual Fund accounts with the same account number (i.e.,
registered exactly the same) as an existing account, including any new fund in
which the shareholder invests in the future, will automatically include
telephone services if the existing account has telephone services. Telephone
services may also be elected at any time on a supplemental telephone services
election form.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone transaction services, authorizes each of the other owners to effect
telephone transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares via telephone. In
these circumstances, the shareholder or the shareholder's representative should
consider using other redemption or exchange procedures. (See "Redemption of
Shares" below.) Use of these other redemption or exchange procedures may result
in the request being processed at a later time than if a telephone transaction
had been used, and the Fund's net asset value may fluctuate during such periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These will
include: recording all telephone calls requesting account activity, requiring
that the caller provide certain requested personal and/or account information at
the time of the call for the purpose of establishing the caller's identity, and
sending a written confirmation of redemptions, exchanges or address changes to
the address of record each time activity is initiated by telephone. As long as
the Fund and Seligman Data Corp. follow instructions communicated by telephone
that were reasonably believed to be genuine at the time of their receipt,
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 instructions
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 unauthorized 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
18
<PAGE>
SHAREHOLDER. Written acknowledgment of the addition of telephone services to an
existing account or of termination of telephone services will be sent to the
shareholder at the address of record.
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit ("uncertificated") form
without charge, except a CDSL, if applicable, at any time by sending a written
request to Seligman Data Corp., P.O. Box 3947, New York, NY 10008-3947; or if
the request is being sent by overnight delivery service to 100 Park Avenue, New
York, NY 10017. The 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 surrendering
certificates in proper form to the same address. Certificates should be sent by
registered mail. Share certificates must be endorsed for transfer or accompanied
by an endorsed stock power signed by all share owners exactly as their name(s)
appear(s) on the account registration. The shareholder's letter of instruction
or endorsed stock power should specify the Fund name, account number, class of
shares (A, B or D) and the number of shares or dollar amount to be redeemed. The
Fund cannot accept conditional redemption requests (i.e., requests to sell
shares at a specific price or on a future date).
If the redemption proceeds are (i) $50,000 or more, (ii) to be paid to
someone other than the shareholder of record (regardless of the amount) or (iii)
to be mailed to other than the address of record (regardless of the amount), the
signature(s) of the shareholder(s) must be guaranteed by an eligible financial
institution including, but not limited to, the following: banks, trust
companies, credit unions, securities brokers and dealers, savings and loan
associations and 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 necessary in
order to change the account registration. Notarization by a notary public is not
an acceptable signature guarantee. ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED
BY SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY A CORPORATION, EXECUTOR,
ADMINISTRATOR, TRUSTEE, CUSTODIAN 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
initial 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 receive the
net asset value per share next determined after receipt of a request in good
order, less a CDSL of 1% as described under "Purchase of Shares--Class A
shares--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 CDSL, as
described under "Purchase of Shares-Class B Shares" above. If Class D shares are
redeemed within one year of purchase, a shareholder will receive the net asset
value per share next determined after receipt of a request in good order, less a
CDSL of 1% as described under "Purchase of Shares --Class D Shares" above.
A shareholder also may "sell" shares to the Fund through an investment
dealer and, in that way, be certain, providing the order is timely, of receiving
the net asset value established at the end of the day on which the dealer is
given the repurchase order (less any applicable CDSL). The Fund makes no charge
for this
19
<PAGE>
transaction, but the dealer may charge you a service fee. "Sell" or repurchase
orders received from an authorized dealer before the close of the NYSE and
received by SFSI, the repurchase agent, before the close of business on the same
day will be executed at the net asset value per share determined as of the close
of the NYSE on that day, less any applicable CDSL. Repurchase orders received
from authorized dealers after the close of the NYSE or not received by SFSI
prior to the close of business, will be executed at the net asset value
determined as of the close of the NYSE on the next trading day. Shares held in a
"street name" account with a broker/dealer may be sold to the Fund only through
a broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares
payable to the address of record may be made once per day, up to $50,000 per
fund account. Telephone redemption requests received by Seligman Data Corp. at
(800) 221-2450 between 8:30 a.m. and 4:00 p.m. Eastern time, on any business day
will be processed as of the close of business on that day. Redemption requests
by telephone will not be accepted within 30 days following an address change.
Qualified Plans, IRAs or other retirement plans are not eligible for telephone
redemptions. The Fund reserves 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 a shareholder may bear the risk of loss for a fraudulent
transaction, see "Telephone Transactions" above.
GENERAL. With respect to shares redeemed, a check for the proceeds will be
sent to the shareholder's 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 purchased by the Fund,
a check for the proceeds will be sent to the investment dealer within seven
calendar days after acceptance of the repurchase order and will be made payable
to the investment dealer. The Fund will not permit redemptions of shares
purchased by check (unless certified) until Seligman Data Corp. receives notice
that the check has cleared, which may be up to 15 days from the credit of the
shares to the shareholder's account. The proceeds of a redemption or repurchase
may be more or less than the shareholder's cost.
The Fund reserves the right to redeem shares owned by a shareholder whose
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
Seligman 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
reinstate, free of an initial sales load, all or any part of the investment in
Class A shares of the Fund or any of the other mutual funds in the Seligman
Group. If a shareholder redeems shares and the redemption was subject to a CDSL,
the shareholder may reinstate all or any part of the investment in shares of the
same class of the Fund or in any of the other Seligman Mutual Funds within 120
calendar days of the date of redemption and receive a credit for the applicable
CDSL paid. Such investment will be reinstated at the net asset value per share
established as of the close of the NYSE on the day the request is received.
Seligman Data Corp. must be informed that the purchase represents a reinstated
investment. REINSTATED SHARES MUST BE REGISTERED EXACTLY AND BE OF THE SAME
CLASS AS THE SHARES PREVIOUSLY REDEEMED; 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
federal income tax status of any capital gain realized on a sale of Fund shares,
but to the extent that any shares are sold at a loss and the proceeds are
reinvested in shares of the same Fund, some
20
<PAGE>
or all of the loss will not be allowed as a deduction, depending upon the
percentage of the proceeds reinvested.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
Under the Fund's Administration, Shareholder Services and Distribution Plan
(the "Plan"), the Fund may pay to SFSI an administration, shareholder services
and distribution fee in respect of the Fund's Class A, Class B and Class D
shares. Payments under the Plan may include, but are not limited to: (i)
compensation to securities dealers and other organizations ("Service
Organizations") for providing distribution assistance with respect to assets
invested in the Fund, (ii) compensation to Service Organizations for providing
administration, accounting and other shareholder services with respect to Fund
shareholders, and (iii) otherwise promoting the sale of shares of the Fund,
including paying for the preparation of advertising and sales literature and the
printing and distribution of such promotional materials and prospectuses to
prospective investors and defraying 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 payment to SFSI from its own resources, which
may include the management fee that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
respect of Class A shares will be used primarily to compensate Service
Organizations 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 average daily net assets of Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors of the Fund.
The Plan, as it relates to Class A shares, was approved by shareholders on
November 23, 1992 and became effective on January 1, 1993. The Plan is reviewed
by the Directors annually. The total amount paid for the year ended December 31,
1996 in respect of the Fund's Class A shares pursuant to the Plan was equal to
.25% 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
average daily net asset value of the Class B and Class D shares. Proceeds from
the Class B and D distribution fees are used to pay Service Organizations a
continuing fee of up to .25% on 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 Service
Organizations at the time of the sale of Class B shares. In that connection,
SFSI has assigned FEP its interest in most of the fees payable to it in respect
of the Class B shares, other than the portion payable to Service Organizations
on a continuing basis. Proceeds from Class D distribution fees are used
primarily to compensate Service Organizations for administration, shareholder
services and distribution assistance (including a continuing fee of up to .25%
on an annual basis of the average daily net asset value of Class B and Class D
shares attributable to particular Service Organizations for providing personal
service and/or the maintenance of shareholder accounts) and will initially be
used by SFSI to 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 at the time of the sale. The amounts expended by SFSI in any one
year upon the initial purchase of Class B and Class D shares may exceed the
amounts received by it from Plan payments retained. Expenses of administration,
shareholder services and distribution of Class B and Class D shares 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 on 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 year ended
December 31, 1996 by the Fund's Class B and Class D shares pursuant to the Plan
was 1% per annum of the average daily net assets of Class 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 shall act as broker/dealer of record for most
shareholder accounts that do not have a designated broker/dealer of record,
including all such shareholder accounts established after April 1, 1995 and
receives 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
mutual funds in the Seligman Group. Exchanges may be made by mail, or by
telephone if the shareholder has telephone services.
Class A, Class B or Class D shares may be exchanged only for Class A, Class
B or Class D shares, respectively, of another Seligman Mutual Fund on the basis
of relative net asset value.
If shares that are subject to a CDSL are exchanged for shares of another
Seligman Mutual Fund, then for purposes of assessing the CDSL payable upon
disposition of the exchanged shares, the applicable holding period shall be
reduced by the holding period of the original shares.
Class B Shareholders of the Fund exercising the exchange privilege will
continue to be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL 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:
o SELIGMAN CAPITAL FUND, INC. seeks aggressive capital appreciation.
Current income is not an objective.
o SELIGMAN CASH MANAGEMENT FUND, INC. invests in high quality money
market instruments. Shares are sold at net asset value.
o 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.
o SELIGMAN FRONTIER FUND, INC. seeks to produce growth in capital value;
income may be considered but will only be incidental to the Fund's
investment objective.
o SELIGMAN GROWTH FUND, INC. seeks longer-term growth in capital value
and an increase in future income.
o SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. consists of the Seligman
Henderson International Fund, the Seligman Henderson Emerging Markets
Growth Fund, the Seligman Henderson Global Growth Opportunities Fund,
the Seligman Henderson Global Smaller Companies Fund and the Seligman
Henderson Global Technology Fund, which seek long-term capital
appreciation primarily by investing in companies either globally or
internationally.
o SELIGMAN HIGH INCOME FUND SERIES consists of the Seligman U.S.
Government Securities Series and the Seligman High-Yield Bond Series
which seek high current income by investing in debt securities.
o SELIGMAN INCOME FUND, INC. seeks high current income and the
possibility of improvement of future income and capital value.
22
<PAGE>
o SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and
a National Series. The National Municipal Series seeks to provide maximum income
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, Georgia,
Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York,
Ohio, Oregon and South Carolina. (Does not currently offer Class B shares.)
o SELIGMAN MUNICIPAL SERIES TRUST includes the Seligman California
Municipal 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.)
o SELIGMAN NEW JERSEY MUNICIPAL FUND, INC. invests in investment grade New
Jersey municipal securities. (Does not currently offer Class B shares.)
o SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES invests in investment grade
Pennsylvania municipal securities. (Does not currently offer Class B shares.)
o 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
respective funds determined at the close of the NYSE on that day. Telephone
requests for exchanges received between 8:30 a.m. and 4:00 p.m. Eastern time, on
any business day, by Seligman Data Corp. at (800) 221-2450, will be processed as
of the close of business on that day. The registration of an account into which
an exchange is made must be identical to the registration of the account from
which shares are exchanged. When establishing a new account by an 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 Automatic
Cash Withdrawal Service will not be carried over to the new fund account unless
specifically requested and permitted by the new fund. Exchange orders may be
placed to effect an exchange of a specific number of shares, an exchange of
shares equal to a specific dollar amount or an exchange of all shares held.
Shares for which certificates have been issued may not be exchanged via
telephone and may be exchanged only upon receipt of a written exchange request
together with certificates representing shares to be exchanged in form for
transfer.
The Exchange Privilege via mail is generally applicable to investments in
group retirement plans, although some restrictions may apply. The terms of the
exchange offer described herein may be modified at any time; and not all of the
mutual funds in the Seligman Group are available to residents of all states.
Before making any exchange a shareholder should contact an authorized investment
dealer or Seligman Data Corp. to obtain prospectuses of any of the Seligman
Mutual Funds.
A broker/dealer representative of record will be able to effect exchanges
on behalf of a shareholder only if the shareholder has telephone services or if
the broker/dealer has entered into a Telephone Exchange Agreement with SFSI
wherein the broker/dealer must agree to indemnify SFSI and 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 listed on the account. SFSI reserves the right to
reject any telephone exchange request. Any rejected telephone exchange order may
be processed by mail. For more information about telephone exchange privileges,
which unless objected to, are assigned to most shareholders automatically, and
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<PAGE>
the circumstances under which shareholders may bear the risk of loss for a
fraudulent 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 previous patterns of
purchases and redemptions or exchanges have been considered excessive. Accounts
under common ownership or control, including those with the same taxpayer ID
number and those administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered one account for this
purpose. Additionally, the Fund reserves the right to refuse any order for the
purchase of shares.
DIVIDENDS AND DISTRIBUTIONS
The Fund's net investment income, if any, is paid to shareholders in
dividends in December. Payments vary in amount depending on income received from
portfolio securities and the costs of operations. The Fund distributes
substantially all of any taxable net long-term and short-term gain realized on
investments to shareholders at least annually; such distributions will generally
be taxable to shareholders in the year in which they are declared by the Fund if
paid before February 1 of the following year.
Shareholders may elect: (1) to receive both dividends and gain
distributions in shares; (2) to receive dividends in cash and gain distributions
in shares; (3) to receive both dividends and gain distributions in cash. Cash
dividends and gain distributions are paid by check. In the case of prototype
retirement plans, dividends and gain distributions are reinvested in additional
shares. Unless another election is made, dividends and capital gains
distributions will be credited to shareholder accounts in additional shares.
Shares acquired through a dividend or gain distribution and credited to a
shareholder's account are not subject to an initial sales load or a CDSL.
Dividends and gain distributions paid in shares are invested on the payable date
using the net asset value of the ex-dividend date. Shareholders may elect to
change their dividend and gain distribution options by writing Seligman Data
Corp. at the address listed 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 shareholder or the broker/dealer
of record on the account. For information about electing telephone services, see
"Telephone Transactions." These elections must be received by Seligman Data
Corp. before the record date for the dividend or distribution in order to be
effective for such dividend or distribution.
The per share dividends from net investment income on Class B and Class D
shares will be lower than the per share dividends on Class A shares as a result
of the higher distribution fee 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, transfers or exchanges all shares in an account between the
record date and the payable date, the value of dividends or gain distributions
declared will be paid in cash regardless of the existing election.
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<PAGE>
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 the shareholders, whether
received in cash or reinvested in additional shares, and, to the extent
designated as derived from the Fund's dividend income that would be eligible for
the dividends received deduction if the Fund were not a regulated investment
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
capital gains over any net short-term losses, are taxable as long-term capital
gain, whether received in cash or invested in additional shares, regardless of
how long shares have been held by the shareholders; such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Any gain or loss realized upon a sale or redemption of shares in the Fund
by a shareholder who is not a dealer in securities will generally be treated as
a long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less, any loss
realized will be treated as long-term capital loss to the extent that it offsets
the long-term capital gain distribution. In addition, no loss will be allowed on
the sale or other disposition of shares of the Fund if, within a 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
permitted to include in the tax basis attributable to such shares the sales load
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales load by reason of the Exchange or Reinstatement Privilege offered by
the Fund. Any sales load not taken into account in determining the tax basis of
shares sold or exchanged within 90 days after acquisition will be added to the
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
shareholders 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 federal income taxes in their individual circumstances.
UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
(SOCIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND
CERTIFIES THAT THE SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING, THE FUND IS
REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY A PORTION OF DISTRIBUTIONS
AND OTHER REPORTABLE PAYMENTS TO THE SHAREHOLDER. THE RATE OF BACKUP WITHHOLDING
IS 31%. SHAREHOLDERS SHOULD BE AWARE THAT, UNDER REGULATIONS PROMULGATED BY THE
INTERNAL REVENUE SERVICE, THE FUND MAY BE FINED $50 ANNUALLY FOR
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<PAGE>
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
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, NY 10017 or by telephoning the Corporate
Communications/Investor Relations Department toll-free at (800) 221-7844 from
all continental United States, except New York or (212) 850-1864 in New York
State and the Greater New York City area. Information about shareholder accounts
may be requested by writing Shareholder Services, Seligman Data Corp. at the
same address or by toll-free telephone by dialing (800) 221-2450 from all
continental United States, or (212) 682-7600 outside the continental United
States. Seligman Data Corp. may be telephoned Monday through Friday (except
holidays), between the hours of 8:30 a.m. and 6:00 p.m. Eastern time, and calls
will be answered by a service representative.
24-HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BALANCE,
MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS,
FORM 1099-DIV AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF
CHECKS, ACCOUNT STATEMENTS AND OTHER INFORMATION, SELIGMAN DATA CORP. SHOULD BE
NOTIFIED IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGE. ADDRESS CHANGES MAY BE
TELEPHONED TO SELIGMAN DATA CORP. IF THE SHAREHOLDER HAS TELEPHONE SERVICES. FOR
MORE INFORMATION ABOUT TELEPHONE SERVICES, SEE "TELEPHONE TRANSACTIONS" ABOVE.
ACCOUNT SERVICES. Shareholders are sent confirmation of financial
transactions in their Account. Other investor services are available. These
include:
o INVEST-A-CHECK(R) SERVICE enables a shareholder to authorize additional
purchases of Fund shares automatically by electronic funds transfer from the
shareholder's savings or checking account, if the bank that maintains the
account is a member of the Automated Clearing House ("ACH"), or by preauthorized
checks to be drawn on the shareholder's checking account at regular monthly
intervals in fixed amounts of $200 or more, or regular quarterly intervals in
fixed amounts of $500 or more, to purchase shares. Accounts may be established
concurrently with the Invest-A-Check(R) Service only if accompanied by a $200
minimum in conjunction with the monthly investment option, or a $500 minimum in
conjunction with the quarterly investment option. For investments in the
Seligman Time Horizon MatrixSM Asset Allocation Program, the minimum amount is
$500 at regular monthly intervals or $1,000 at regular quarterly intervals. (See
"Terms and Conditions" on page 29.)
o AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder of Seligman
Cash Management Fund to exchange a specified amount, 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, from shares of any class of
the Seligman Cash Management Fund into shares of the same class of any other
Seligman Mutual Fund registered in the same name. For exchanges into the
Seligman Time Horizon MatrixSM Asset Allocation Program, the minimum amount is
$500 at regular monthly intervals or $1,000 quarterly intervals. The
shareholder's Cash Management Fund account must have a value of at least $5,000
at the initiation of the service. Exchanges will be made at the public offering
price.
o DIVIDENDS FROM OTHER INVESTMENTS permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in additional
shares of the Fund or another Seligman Mutual Fund. (Dividend checks must meet
or exceed the required mini-
26
<PAGE>
mum purchase amount and include the shareholder's name, account number, the name
of the Fund and the class of shares in which the investment is to be made.)
o 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
maturity. Accordingly, it will not normally be advisable to liquidate a CD
before its maturity.
o AUTOMATIC CASH WITHDRAWAL SERVICE permits payments at regular intervals
to be made to a shareholder who owns or purchases shares worth $5,000 or more
held as book credits. Holders of Class A shares purchased at net asset value
because the purchase amount was $1,000,000 or more should bear in mind that
withdrawals will be subject to a 1% CDSL if made within eighteen months of
purchase of such shares. Holders of Class B shares may elect to use this service
immediately, although certain withdrawals may be subject to a CDSL. Holders of
Class D shares may elect to use this service with respect to shares that have
been held for at least one year. (See "Terms and Conditions" on page 29.)
o 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.
o OVERNIGHT DELIVERY to service shareholder requests is available for a
$15.00 fee which will be deducted from a shareholder's account, if requested.
o 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 1982 are available for a fee of $10.00 per
year, per account, with a maximum charge of $150 per account. Statement requests
should be forwarded, along with a check, to Seligman Data Corp.
TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for:
--Individual Retirement Accounts (IRAs);
--Savings Incentive Match Plans for Employees (SIMPLE IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and
certain non-profit organizations who wish to make deferred compensation
arrangements; and
--Money Purchase Pension and Profit Sharing Plans for sole proprietorships,
corporations and partnerships.
These types of plans may be established only upon receipt of a written
application 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 may also receive information through an
authorized 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
investment in shares of Class A, Class B or Class D of the Fund would have
earned over a specified period of time (for example, one, five and ten-year or
since inception periods) assuming the payment of the maximum sales load, if any
(or CDSL, upon redemption, if applicable), when the investment was made and that
all distributions and dividends paid by the Fund were reinvested on the
rein-
27
<PAGE>
vestment 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 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, which if
reflected would reduce the performance quoted. The total return and average
annual total return quoted from time to time for Class A and Class D shares for
periods prior to February 8, 1996 do not reflect the increase in the management
fee payable by the Fund effective on such date, which if reflected would reduce
the performance quoted. Total return and average annual total return may also be
presented without the effect of the initial sales load or CDSL, as applicable.
From time to time, reference may be made in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Service, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's Class A, Class B and Class D shares, the Lipper analysis assumes
investment of all dividends and distributions paid but does not take into
account applicable sales loads. The Fund may also refer in advertisements or in
other promotional material to articles, comments listings and columns in the
financial press pertaining to the Fund's performance. Examples of such financial
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, INDIVIDUAL INVESTOR,
INVESTMENT ADVISOR, INVESTORS BUSINESS DAILY, KIPLINGER'S, LOS ANGELES TIMES,
MONEY MAGAZINE, MORNINGSTAR, INC., PENSIONS AND INVESTMENTS, SMART MONEY, THE
NEW YORK TIMES, USA TODAY, U.S. NEWS AND WORLD REPORT, THE WALL STREET JOURNAL,
WASHINGTON POST, WORTH MAGAZINE and YOUR MONEY.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end diversified management investment company
incorporated under the laws of the state of Maryland in 1982. The Fund is
authorized to issue 1,000,000,000 shares of common stock, each with a par value
of $0.10, 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 specifically
allocated to such class. Shares have non-cumulative voting rights, do not have
preemptive or subscription rights and are transferable.
28
<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 shares is dishonored for any reason,
Seligman Data Corp. will cancel the purchase and may redeem additional shares,
if any, held in the 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 distributions
from gain realized on investments in shares or in cash according to the option
elected. Dividend and gain options may be changed by notifying Seligman 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 effective for such
dividend or distribution. Stock certificates will not be issued, unless
requested. Replacement Stock certificates will be subject to a surety fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The
application is subject to acceptance by the shareholder's bank and Seligman Data
Corp. The electronic funds 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
investment is scheduled and invested at the close of business on the same date.
After the initial investment, the value of shares held in the shareholder's
account must equal not less than two regularly scheduled investments. If an ACH
debit or preauthorized check is not honored by the shareholder's bank, or if the
value of shares held falls below the required minimum, the Invest-A-Check(R)
Service may be suspended. In the event that a check or ACH debit is returned as
uncollectable, Seligman Data Corp. will cancel the purchase, redeem shares held
in the shareholder's account for an amount sufficient to reimburse the Fund for
any loss it may have incurred as a result, and charge a $10.00 return check fee.
This fee may be deducted to 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 shareholder or Seligman Data Corp. at any time by written notice. The
shareholder agrees to hold the Fund and its agents free from all liability which
may result from acts done in good faith and pursuant to these terms.
Instructions for establishing Invest-A-Check(R) Service are given on the Account
Application. In the event a shareholder 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 has closed as a result of the
exchange 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 continued, subject to the above conditions, in the Seligman Mutual Fund from
which the exchange was made. Accounts established in conjunction with the
Invest-A-Check(R) Service must be accompanied by a minimum initial investment of
at least $200 in connection with the monthly investment option or $500 in
connection with the quarterly investment option. If a shareholder uses the
Invest-A-Check(R) Service to make an IRA investment, the purchase will be
credited as a current year contribution. If a shareholder uses the
Invest-A-Check(R) Service to make an investment in a pension or profit sharing
plan, the purchase will be credited as a current year employer contribution.
AUTOMATIC CASH WITHDRAWAL SERVICE
Automatic Cash Withdrawal Service is available to Class A shareholders, to
Class B shareholders and to Class D shareholders with respect to Class D shares
held for one year or more. A sufficient number of full and fractional shares
will be redeemed to provide the amount required for a scheduled payment and any
applicable CDSL. Redemptions will be made at the asset value at the close of
business on the specific day designated by the shareholder of each month (or on
the prior business day if the day specified falls on a weekend or holiday),
less, in the case of Class B shares, any applicable CDSL. Automatic withdrawals
of Class A shares which were purchased at net asset value because the purchase
amount was $1,000,000 or more will be subject to a CDSL if made within eighteen
months of purchase of such stock. Under this Service, a Class B shareholder who
reinvests both dividends and distributions in additional shares may withdraw up
to 12% of the value of the shareholder's fund account (at the time of election)
per annum, without the imposition of a CDSL. A shareholder may change the amount
of scheduled payments or may suspend payments by written notice to Seligman Data
Corp. at least ten days prior to the effective date of such a change or
suspension. Service may be terminated by the shareholder or Seligman Data Corp.
at any time by written notice. It will be terminated upon proper notification of
the death or legal incapacity of the shareholder. This Service is considered
terminated in the event a withdrawal of shares, other than to make scheduled
withdrawal payments, reduces the value of shares remaining on deposit to less
than $5,000. Continued payments in excess of dividend income invested will
reduce and ultimately exhaust capital. Withdrawals, concurrent with purchases of
shares of this or any other investment company, will be disadvantageous because
of the payment of duplicative sales loads, if applicable. For this reason,
additional purchases of Fund shares are discouraged when the Withdrawal Service
is in effect.
LETTER OF INTENT--CLASS A SHARES ONLY
Seligman Financial Services, Inc. will hold in escrow shares equal to 5% of
the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid to the shareholder or credited to the shareholder's
account. Upon completion of the specified minimum purchase within the
thirteen-month period, all shares held in escrow will be deposited into the
shareholder's account or delivered to the shareholder. A shareholder may include
toward completion of a Letter of Intent the total asset value of shares of the
Seligman 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
requested 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 the 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
exchange of shares of another Seligman Mutual Fund on which there is a front-end
sales load may be taken into account in completing a Letter of Intent, or for
Rights of Accumulation. However, shares of the Seligman Cash Management Fund
which have been purchased directly may not be used for purposes of determining
reduced sales loads on additional purchases of the other mutual funds in the
Seligman Group.
5/97
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30
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31
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SELIGMAN
COMMUNICATIONS
AND INFORMATION
FUND, INC.
- --------------------------------------------------------------------------------
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, New York 10017
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
EQCI1 5/97
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
SELIGMAN
COMMUNICATIONS
AND INFORMATION
FUND, INC.
- --------------------------------------------------------------------------------
May 1, 1997
[LOGO]
- --------------------------------------------------------------------------------
A CAPITAL GAIN FUND
IN ITS 15TH YEAR
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1997
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone (800) 221-2450 all continental United States
For Retirement Plan Information - Toll Free Telephone (800) 445-1777
This Statement of Additional Information expands upon and supplements
the information contained in the current Prospectus of Seligman Communications
and Information Fund, Inc., (the "Fund") dated May 1, 1997. It should be read in
conjunction with the Prospectus, which may be obtained by writing or calling the
Fund at the above address or telephone numbers. This Statement of Additional
Information, although not in itself a Prospectus, is incorporated by reference
into the Prospectus in its entirety.
The Fund offers three classes of shares. Class A shares may be
purchased at net asset value plus a sales load of up to 4.75%. Class A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
load but are subject to a contingent deferred sales load ("CDSL") of 1% (of the
current net asset value or original purchase price, whichever is less) if such
shares are redeemed within eighteen months of purchase. Class B shares may be
purchased at net asset value and are subject to a CDSL, if applicable, in the
following amount (as a percentage of the current net asset value or the original
purchase price, whichever is less), if redemption occurs within the indicated
number of years of purchase of such shares: 5% (less than 1 year), 4% (1 but
less than 2 years), 3% (2 but less than 4 years), 2% (4 but less than 5 years),
1% (5 but less than 6 years) and 0% (6 or more years). Class B shares
automatically convert to Class A shares after approximately eight years,
resulting in lower ongoing fees. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert automatically to
Class A shares along with the underlying shares on which they were earned. Class
D shares may be purchased at net asset value and are subject to a CDSL of 1% (of
the current net asset value or the original purchase price, whichever is less)
if redeemed within one year of purchase.
Each Class A, Class B and Class D share represents an identical legal
interest in the investment portfolio of the Fund and has the same rights except
for certain class expenses and except that Class B and Class D shares bear
higher ongoing fees that generally 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
<PAGE>
Page
Investment Objective, Policies and Risks.......... 2
Investment Limitations............................ 3
Directors and Officers............................ 4
Management and Expenses........................... 8
Administration, Shareholder Services and
Distribution Plan................................ 9
Portfolio Transactions........................... 10
Purchase and Redemption of Fund Shares........... 10
Distribution Services............................ 13
Valuation........................................ 13
Performance...................................... 14
General Information.............................. 16
Financial Statements............................. 16
Appendix ........................................ 17
EQCI1A
-1-
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund seeks to produce capital gain by investing in a portfolio consisting
of securities of domestic and foreign companies operating in virtually all
aspects of the communications, information and related industries.
Illustrative subsegments of these industries include:
o Advertising
o Broadcasting and Entertainment
o Cellular Radio
o Computer-Aided Design and Manufacturing
o Computer Graphics and Software
o Local Networking and Linkage of Word and Data Processing Systems
o Medical Technology
o Proprietary Databases
o Publishing and Print Media
o Semiconductors
o Specialized Information Services
The Fund may hold securities of smaller, less-seasoned companies. The
disposition of some of the securities held by the Fund may be restricted under
the federal securities laws. Generally, such "restricted securities" may be sold
only in privately negotiated transactions or in public offerings registered
under the Securities Act of 1933. As a result, the Fund may not be able to
dispose of such investments at a time when or at a price at which it desires to
do so and may have to bear expenses of registering these securities, if
necessary. Market value for these securities, if quotations are not readily
available, will be fair value as determined in good faith by the Fund's Board of
Directors. The Fund will not invest more than 15% of its net assets in illiquid
securities including restricted securities.
The following information regarding the Fund's investment policies
supplements the information contained in the Prospectus.
BORROWING. The Fund may from time to time borrow money from banks to increase
its portfolio of securities.
Borrowings are subject to any applicable limitations under regulations of
the Federal Reserve Board. Current asset value coverage of three times any
amount borrowed is required at all times. No borrowings occurred in 1996, 1995
and 1994.
Any gain in the value of securities purchased with money borrowed in excess
of the cost of amounts borrowed would cause the net asset value of the Fund's
shares to increase more than otherwise would be the case. Conversely, any
decline in the value of securities purchased with money borrowed or any gain in
value less than the cost of amounts borrowed would cause net asset value to
decline more than would otherwise be the case.
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.
-2-
<PAGE>
PURCHASING PUT OPTIONS ON SECURITIES. The Fund may purchase put options to
protect its portfolio holdings in an underlying security against a decline in
market value. This hedge protection is provided during the life of the put
option since the Fund, as holder of the put option, can sell the underlying
security at the put exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be profitable, the market
price of the underlying security must decline sufficiently below the exercise
price to cover the premium and transaction costs. By using put options in this
manner, the Fund will reduce any profit it might otherwise have realized in the
underlying security by the premium paid for the put option and by transaction
costs.
Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, the Fund would let the option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option. The cost of the put option is limited to the premium plus
commission paid. The Fund's maximum financial exposure will be limited to these
costs.
The Fund's ability to engage in option transactions may be limited by tax
considerations.
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 has no present intention of entering into repurchase agreements 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 4).
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 whose maturity or expiration date at the time of acquisition
were one year or less are excluded. The Fund's portfolio turnover rates for the
years ended December 31, 1996 and 1995 were 121.32% and 65.77% , respectively.
INVESTMENT LIMITATIONS
Under the Fund's fundamental policies, which cannot be changed except by
vote of a majority of its outstanding voting securities, the Fund may not:
o Borrow money, except in an amount not to exceed one-third of the value of its
total assets less liabilities other than such borrowing; or mortgage or
pledge any of its assets, except to the extent necessary to effect permitted
borrowings of up to 15% of its total assets on a secured basis;
o Purchase securities on "margin," or sell "short";
o 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 voting securities of any issuer,
or invest to control or manage any company;
o Invest more than 25% of the value of its total assets in any one industry,
except that the Fund will invest at least 25% of the value of its total
assets in securities of companies principally engaged in the communications,
information and related industries, except when investing for temporary
defensive purposes;
-3-
<PAGE>
o Invest in securities issued by other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;*
o Purchase or sell commodities and commodity contracts or purchase or hold real
estate;
o 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 issuer own in the aggregate more than 5% of such
securities;
o 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; or
o Make loans, except loans of portfolio securities and except to the extent the
purchase of notes, bonds or other evidences of indebtedness, or the entry
into repurchase agreements may be considered loans;
Under the Investment Company Act of 1940 (the "1940 Act"), a "vote of a
majority of the outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (l) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares present at a shareholders' meeting if more than
50% of the outstanding shares are represented at the meeting in person or by
proxy.
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years, are shown below. Each
Director who is an "interested person" of the Fund, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief
(59) Executive Officer and Chairman of
the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and Seligman
Advisors Inc., advisers; Chairman and Chief
Executive Officer, the Seligman Group of
Investment Companies; Chairman, Seligman
Financial Services, Inc., broker/dealer;
Seligman Holdings, Inc., holding company;
Seligman Services, Inc., broker/dealer; and
Carbo Ceramics Inc., ceramic proppants for oil
and gas industry; Director or Trustee, Seligman
Data Corp., shareholder service agent;
Kerr-McGee Corporation, diversified energy
company; and Sarah Lawrence College; and a
Member of the Board of Governors of the
Investment Company Institute; formerly,
President, J. & W. Seligman & Co. Incorporated;
Chairman, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust
Company, trust company; and Director, Daniel
Industries Inc., manufacturer of oil and gas
metering equipment.
BRIAN T. ZINO* Director, President and Member of the Executive
(44) 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; and Seligman Advisors, Inc.,
advisers; Chairman and President, Seligman Data
Corp., shareholder service agent; and Director,
Seligman Financial Services, Inc.,
broker/dealer; Seligman Services, Inc.,
broker/dealer; and Seligman Henderson Co.,
advisers; formerly, Director, Seligman
Securities, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company.
- -----------------
* The Fund has applied for, and expects to receive, an exemptive order form 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>
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy at
Tufts University; Director or Trustee, the
Seligman Group of Investment Companies;
Chairman, American Council on Germany; a
Governor of the Center for Creative Leadership;
Director, USLIFE Corporation, life insurance;
National Committee on U.S.-China Relations,
National Defense University; the Institute for
Defense Analysis; and Raytheon Co.,
electronics; formerly, Ambassador, U.S. State
Department; Distinguished Policy Analyst at
Ohio State University and Olin Distinguished
Professor of National Security Studies at the
United States Military Academy. From June, 1987
to June, 1992, he was the Supreme Allied
Commander, Europe and the Commander-in-Chief,
United States European Command. Tufts
University, Packard Avenue, Medford, MA 02155
ALICE S. ILCHMAN Director
(62)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment
Companies; Chairman, The Rockefeller
Foundation, charitable foundation; and
Director, NYNEX, telephone company; and the
Committee for Economic Development; formerly,
Trustee, The Markle Foundation, philanthropic
organization; and Director, International
Research
and Exchange Board, intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(64)
Director; various corporations; Director or
Trustee, the Seligman Group of Investment
Companies; Kimberly-Clark Corporation, consumer
products, Bank of Oklahoma Holding Company,
American Petroleum Institute, Oklahoma City
Chamber of Commerce, Baptist Medical Center,
Oklahoma Chapter of the Nature Conservancy,
Oklahoma Medical Research Foundation and United
Way Advisory Board; Chairman, Oklahoma City
Public Schools Foundation; and Member of the
Business Roundtable and National Petroleum
Council; formerly, Chairman of the Board and
Chief Executive Officer, Kerr-McGee
Corporation, energy and chemicals.
123 Robert S. Kerr Avenue, Oklahoma City,
OK 73102
JOHN E. MEROW* Director
(67)
Retired Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies;
Municipal Art Society of New York; Commonwealth
Aluminum Corporation; the U. S. Council for
International Business; and the U. S.-New
Zealand Council; Chairman, American Australian
Association; Member of the American Law
Institute and Council on Foreign Relations; and
Member of the Board of Governors of the Foreign
Policy Association and The New York Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(54)
Attorney; Director or Trustee, the Seligman
Group of Investment Companies; Trustee,
Geraldine R. Dodge Foundation, charitable
foundation; and Chairman of the Board of
Trustees of St. George's School (Newport, RI);
formerly, Director, the National Association of
Independent Schools (Washington, DC). St.
Bernard's Road, P.O. Box 449, Gladstone, NJ
07934
JAMES C. PITNEY Director
(70)
Retired Partner, Pitney, Hardin, Kipp & Szuch,
law firm; Director or Trustee, the Seligman
Group of Investment Companies; and Public
Service Enterprise Group, public utility. Park
Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
-5-
<PAGE>
JAMES Q. RIORDAN Director
(69)
Director, various corporations; Director or
Trustee, the Seligman Group of Investment
Companies; The Houston Exploration Company; The
Brooklyn Museum; The Brooklyn Union Gas
Company; the Committee for Economic
Development; Dow Jones & Co., Inc.; and Public
Broadcasting Service; formerly, Co-Chairman of
the Policy Council of the Tax Foundation;
Director and Vice Chairman, Mobil Corporation;
Director, Tesoro Petroleum Companies, Inc.; and
Director and President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY
10017
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(49)
Director, Managing Director and Chief
Investment Officer, Institutional, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Director or Trustee, the
Seligman Group of Investment Companies;
Director, Seligman Holdings, Inc., holding
company; Seligman Financial Services, Inc.,
broker/dealer; and Seligman Services, Inc.,
broker/dealer; formerly, President, the
Seligman Group of Investment Companies, except
Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.; and
Director, Seligman Data Corp., shareholder
service agent; Seligman Henderson Co.,
advisers; J. & W. Seligman Trust Company, trust
company; and Seligman Securities, Inc.,
broker/dealer.
ROBERT L. SHAFER Director
(64)
Director, various corporations; Director or
Trustee, the Seligman Group of Investment
Companies and USLIFE Corporation, life
insurance; formerly Vice President, Pfizer
Inc., pharmaceuticals. 235 East 42nd Street,
New York, NY 10017
JAMES N. WHITSON Director
(62)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises,
Inc.; Director or Trustee, the Seligman Group
of Investment Companies; Red Man Pipe and
Supply Company, piping and other materials; and
C-SPAN. 300 Crescent Court, Suite 700, Dallas,
TX 75201
PAUL H. WICK Vice President and Portfolio Manager
(34)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Vice President and Portfolio Manager, one other
open-end investment company in the Seligman
Group of Investment Companies; and Portfolio
Manager, Seligman Henderson Co., adviser.
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Seligman Financial
Services, Inc., broker/dealer; Seligman
Advisors, Inc., advisers; and Seligman Data
Corp., shareholder service agent; Vice
President, the Seligman Group of Investment
Companies; and Seligman Services, Inc.,
broker/dealer; and Treasurer, Seligman
Holdings, Inc., holding company; and Seligman
Henderson Co., advisers; formerly, Senior Vice
President, Seligman Securities, Inc.,
broker/dealer; and Senior Vice President, J. &
W. Seligman Trust Company, trust company.
-6-
<PAGE>
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation and
Corporate Secretary, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Corporate Secretary, the Seligman Group of
Investment Companies; and Seligman Advisors,
Inc., advisers; Seligman Financial Services,
Inc., broker/dealer; Seligman Henderson Co.,
advisers; Seligman Services, Inc.,
broker/dealer; Seligman Data Corp., shareholder
service agent; formerly, Secretary, J. & W.
Seligman Trust Company, trust company; and
attorney, Seward and Kissel, law firm.
THOMAS G. ROSE Treasurer
(39)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc. and the American
Investors Family of Funds.
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
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director** N/A N/A N/A
John R. Galvin, Director $6,203.91 N/A $65,000.00
Alice S. Ilchman, Director 6,239.62 N/A 66,000.00
Frank A. McPherson, Director 6,203.91 N/A 65,000.00
John E. Merow, Director 6,239.62(d) N/A 66,000.00(d)
Betsy S. Michel, Director 6,239.62 N/A 66,000.00
James C. Pitney, Director 6,203.91 N/A 65,000.00
James Q. Riordan, Director 6,239.62 N/A 66,000.00
Robert L. Shafer, Director 6,239.62 N/A 66,000.00
James N. Whitson, Director 6,239.62(d) N/A 66,000.00(d)
</TABLE>
- ----------------------
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1996.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
** Retired March 20, 1997.
(d) Deferred.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is accrued
on the deferred balances. The annual cost of such interest is included in the
directors' fees and expenses, and the accumulated balance thereof is included in
"Liabilities" in the Fund's financial statements. The total amounts of deferred
compensation (including interest) payable in respect of the Fund to Messrs.
Merow and Whitson as of December 31, 1996 were $49,679, and $14,478,
respectively. As of January 1, 1997, Mr. Merow no longer defers current
compensation. Mr. Pitney no longer defers current compensation; however, he has
accrued deferred compensation in the amount of $37,865 as of December 31, 1996.
The Fund has applied for, and expects to receive, exemptive relief that would
permit a director who has elected deferral of his or her fees to choose a rate
of return equal to either (i) the interest rate on short-term Treasury bills, or
(ii) the rate of return on the shares of any of the investment companies advised
by the
-7-
Manager, as designated by the director. The Fund may, but is not obligated to,
purchase shares of such investment companies to hedge its obligations in
connection with this deferral arrangement.
Directors and officers of the Fund are also directors or trustees and
officers of some or all of the other investment companies in the Seligman Group.
Directors and officers of the Fund as a group owned less than 1% of the Fund's
Class A Capital Stock at March 31, 1997. As of that date, no Directors or
officers owned shares of the Fund's Class B or Class D Capital Stock.
As of March 31, 1997, 15,543,818 Class A shares of the Fund, or 11.13% of the
Fund's capital stock and 15.52% of the Fund's Class A capital stock then
outstanding; and 11,067,549 Class D shares of the Fund, or 7.92% of the Fund's
capital stock and 34.32% of the Fund's Class D capital stock then outstanding
were registered in the name of Merrill Lynch Pierce Fenner & Smith, P.O. Box
45286, Jacksonville, FL 32232-5286.
MANAGEMENT AND EXPENSES
Under the Management Agreement, dated December 29, 1988, as amended February
8, 1996, subject to the control of the Board of Directors, J. & W. Seligman &
Co. Incorporated, (the "Manager") manages the investment of the assets of the
Fund, including making purchases and sales of portfolio securities consistent
with the Fund's investment objectives and policies, and administers its business
and other affairs. The Manager provides the Fund with such office space,
administrative and other services and executive and other personnel as are
necessary for Fund operations. The Manager pays all of the compensation of
directors of the Fund who are employees or consultants of the Manager and of the
officers and employees of the Fund. The Manager also provides senior management
for Seligman Data Corp., the Fund's shareholder service agent.
The Fund pays the Manager a management fee for its services, calculated daily
and payable monthly. Effective February 8, 1996, the management fee is equal to
.90% of the Fund's average daily net assets on the first $3 billion of net
assets, .85% of the Fund's average daily net assets on the next $3 billion of
net assets and .75% of the Fund's average daily net assets in excess of $6
billion. For the year ended December 31, 1996 the Fund paid management fees
equal to .89% per annum of its average daily net assets or $25,710,954; for the
years ended December 31, 1995 and 1994, the Fund paid management fees equal to
.75% per annum of its average daily net assets or $14,159,819 and $1,547,256,
respectively.
The Fund pays all its expenses other than those assumed by the Manager or
Seligman Henderson Co. (the "Subadviser"), including brokerage commissions,
administration, shareholder services and distribution fees, fees and expenses of
independent attorneys and auditors, taxes and governmental fees, 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 including fees and expenses for qualifying the Fund and its shares
under Federal and state securities laws, 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 serve 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 effective February 8, 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 February 7, 1996. The Management Agreement will continue
in effect until December 31 of each year if (1) such continuance is approved in
the manner required by 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.
-8-
<PAGE>
Under the Subadvisory Agreement, dated June 1, 1994, as amended February 1,
1996, the Subadviser supervises and directs a portion of the Fund's investment
in foreign securities and Depositary Receipts, as designated by the Manager,
consistent with the Fund's investment objectives, policies and principles. For
these services, the Subadviser is paid a fee, by the Manager, as described in
the Fund's Prospectus. The Subadvisory Agreement was initially approved by the
Board of Directors at a meeting held on January 20, 1994 and by the shareholders
of the Fund on May 19, 1994. The amendments to the Subadvisory Agreement,
effective February 8, 1996, to increase the subadvisory fee rate payable by the
Manager to the Subadviser, were approved by the Board of Directors on September
21, 1995 and by the shareholders at a special meeting held on February 7, 1996.
The Subadvisory Agreement will continue in effect until December 31 of each
year, if (1) such continuance is approved in the manner required by the 1940 Act
(by a vote of a majority of the Board of Directors or of the outstanding voting
securities of the Fund and by a vote of a majority of the Directors who are not
parties to the Subadvisory Agreement or interested persons of any such party)
and (2) the Subadviser shall not have notified the Manager in writing at least
60 days prior to December 31 of any year that it does not desire such
continuance. The Subadvisory Agreement may be terminated at any time by the
Fund, on 60 days written notice to the Subadviser. The Subadvisory Agreement
will terminate automatically in the event of its assignment or upon the
termination of the Management Agreement.
For the years ended December 31, 1996 and 1995, and for the period June 1,
1994 through December 31, 1994, the Fund did not require the services of the
Subadviser.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson plc.
Henderson plc, headquartered in London, is one of the largest independent money
managers in Europe. The Firm managed approximately $18.1 billion in assets as of
December 31, 1996 and is recognized as a specialist in global equity investing.
Officers, directors and employees of the Manager are permitted to engage in
personal securities transactions, subject to the Manager's Code of Ethics (the
"Ethics Code"). The Ethics Code proscribes certain practices with regard to
personal securities transactions and personal dealings, provides a framework for
the reporting and monitoring of personal securities transactions by the
Manager's Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The Ethics
Code prohibits each of the officers, directors and employees (including all
portfolio managers) of the Manager from purchasing or selling any security that
the officer, director or employee knows or believes (i) was recommended by the
Manager for purchase or sale by any client, including the Fund, within the
preceding two weeks, (ii) has been reviewed by the Manager for possible purchase
or sale within the preceding two weeks, (iii) is being purchased or sold by any
client, (iv) is being considered by a research analyst, (v) is being acquired in
a private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest they
may have in the securities or issuers that they recommend for purchase by any
client.
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may not
be purchased due to a possible conflict with clients. All officers, directors
and employees are also required to disclose all securities beneficially owned by
them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
The Fund has adopted an Administration, Shareholder Services and Distribution
Plan for each Class (the "Plan") in accordance with Section 12(b) of the 1940
Act and Rule 12b-1 thereunder.
The Plan was approved on July 16, 1992 by the Board of Directors of the Fund,
including a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan (the "Qualified Directors") and was approved by shareholders of the
Fund at a Special Meeting of Shareholders held on November 23, 1992. The Plan
became effective in respect of the Class A shares on January 1, 1993. The Plan
was approved in respect of the Class B shares on March 21, 1996 by the Board of
Directors of the Fund, including a majority of the Qualified Directors, and
became effective in respect of the Class B shares on April 22, 1996. The Plan
was approved in respect of the Class D shares on March 18, 1993 by the
-9-
<PAGE>
Board of Directors of the Fund, including a majority of the Qualified Directors,
and became effective in respect of 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, 1996, Seligman Financial Services, Inc.
("SFSI") received payments of $5,387,056 under the Plan in respect of Class A
shares, or 0.25% per annum of the average daily net assets of Class A shares.
This amount was used primarily to pay Service Organizations on a continuing
basis for providing personal services and/or maintenance of shareholder
accounts. For the period ended December 31, 1996, fees incurred by the Fund in
respect of Class B shares amounted to $432,778, or 1.00% per annum of the
average daily net assets of Class B shares. Of this amount, 0.725% per annum was
paid directly to FEP Capital, L.P. ("FEP") to compensate it for having funded,
at the time of sale (i) the 4% commission paid to selling brokers and (ii) a
payment of 0.25% of sales to SFSI; 0.025% per annum was paid to SFSI; and the
remaining 0.25% per annum was paid to SFSI which, in turn, made an equal payment
to Service Organizations for providing personal services and/or maintenance of
shareholder accounts. For the year ended December 31, 1996, fees incurred in
respect of Class D shares amounted to $6,699,234, or 1.00% per annum of the
average daily net assets of Class D shares. This amount was paid to SFSI and, in
the first twelve months after a sale, reimbursed it primarily for the 1% payment
made to dealers at the time of sale and for certain other direct distribution
costs. After the first twelve months, fees paid to SFSI are used to pay a
continuing fee to Service Organizations.
The Plan requires that the Treasurer of the Fund shall provide to the
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
PORTFOLIO TRANSACTIONS
The Management and Subadvisory Agreements recognize that in the purchase and
sale of portfolio securities the Manager and Subadviser will seek the most
favorable price and execution, and, consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager and Subadviser for their use, as well as to
the general attitude toward and support of investment companies demonstrated by
such brokers or dealers. Such services include supplemental investment research,
analysis and reports concerning issuers, industries and securities deemed by the
Manager and Subadviser to be beneficial to the Fund. In addition, the Manager
and Subadviser are authorized to place orders with brokers who provide
supplemental investment and market research and statistical and economic
analysis although the use of such brokers may result in a higher brokerage
charge to the Fund than the use of brokers selected solely on the basis of
seeking the most favorable price and execution and although such research and
analysis may be useful to the Manager and Subadviser in connection with its
services to clients other than the Fund.
In over-the-counter markets, the Fund deals with primary market makers unless
a more favorable execution or price is believed to be obtainable. The Fund may
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 advisory clients of the Manager and Subadviser desire to buy or sell
the same security at the same time the securities purchased or sold are
allocated by the Manager and Subadviser in a manner believed to be equitable to
each. There may be possible advantages or disadvantages of such transactions
with respect to price or the size of positions readily obtainable or saleable.
Total brokerage commissions paid to others for the execution, research and
statistical services for the Fund for the years ended December 31, 1996, 1995
and 1994 were $4,496,690, $1,862,874 and $266,940, 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
-10-
<PAGE>
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 a 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, 1996, the maximum offering price of the Fund's
shares is as follows:
Class A
Net asset value per Class A share................................. $23.51
Maximum sales load (4.75% of offering price)..................... 1.17
----
Offering price to public.......................................... $24.68
======
Class B
Net asset value and offering prices per share*.................. $22.62
======
Class D
Net asset value and offering prices per share*.............. $22.61
======
- ------------
* 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 Sale Loads
REDUCTIONS AVAILABLE. Shares of any Seligman Mutual Fund sold with an initial
sales load in a continuous offering will be eligible for the foregoing
reductions.
VOLUME DISCOUNTS are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other Seligman
Mutual Funds which are sold with an initial sales load, reaches levels indicated
in the sales load schedule set forth in the Prospectus.
THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in Class A shares of the Fund and shares of the other Seligman Mutual
Funds sold with a front-end sales load with the total net asset value of shares
of those mutual funds already owned that were sold with an initial sales load
and the total net asset value of shares of Seligman Cash Management Fund which
were acquired through an exchange of shares of another Seligman Mutual Fund on
which there was an initial sales load at the time of purchase to determine
reduced sales loads in accordance with the schedule in the Prospectus. The value
of the shares owned, including the value of shares of Seligman Cash Management
Fund acquired in an exchange of shares of another Seligman Mutual Fund on which
there was an initial sales load at the time of purchase, will be taken into
account in orders placed through a dealer, however, only if SFSI is notified by
an investor or a dealer of the amount owned by the investor at the time the
purchase is made and is furnished sufficient information to permit confirmation.
A LETTER OF INTENT allows an investor to purchase Class A shares over a
13-month period at reduced initial sales loads in accordance with the sales load
schedule in the Prospectus, based on the total amount of Class A shares of the
Fund that the letter states the investor intends to purchase plus the total net
asset value of shares sold with an initial sales load of the other Seligman
Mutual Funds already owned and the total net asset value of shares of Seligman
Cash Management Fund which were acquired through an exchange of shares of
another Seligman Mutual Fund on which there was an initial sales load at the
time of purchase. Reduced initial sales loads also may apply to purchases made
within a 13-month period starting up to 90 days before the date of execution of
a letter of intent. For more information concerning the terms of the letter of
intent see "Terms and Conditions-Letter of Intent-Class A Shares Only" in the
back of the Prospectus.
-11
<PAGE>
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, tax-exempt organizations under Section 501 (c)(3) or (13), and
non-qualified employee benefit plans that satisfy uniform criteria are
considered "single persons" for this purpose. The uniform criteria are as
follows:
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
prospectus, reports and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
ELIGIBLE EMPLOYEE BENEFIT PLANS. The table of sales loads in the Prospectus
applies to sales to "eligible employee benefit plans" (as defined in the Fund's
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
the 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 (l) to increase its holdings in a portfolio
security, or (2) if the Manager determines that the offered securities are a
suitable investment for the Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that the
Fund would not accept securities with a value of less than $100,000 per issue in
payment for shares. The Fund may reject in whole or in part offers to pay for
Fund shares with securities, may require partial payment in cash for applicable
sales loads, and may discontinue accepting securities as payment for Fund shares
at any time without notice. The Fund will not accept restricted securities in
payment for shares. The Fund will value accepted securities in the manner
provided for valuing portfolio securities of the Fund. Any securities accepted
by the Fund in payment for Fund shares will have an active and substantial
market and have a value which is readily ascertainable (See "Valuation").
FURTHER TYPES OF REDUCTIONS. . Class A shares also may be issued without an
initial sales load in connection with the acquisition of cash and securities
owned by other investment companies and personal holding companies; to any
registered unit investment trust which is the issuer of periodic payment plan
certificates, the net proceeds of which are invested in fund shares; to separate
accounts established and maintained by an insurance company which are exempt
from registration under Section 3(c)(11) of the 1940 Act; to registered
representatives and employees (and their spouses and minor children) of any
dealer that has a sales agreement with SFSI; to shareholders of mutual funds
with objectives and policies similar to the Fund who purchase shares with
redemption proceeds of such funds (not to exceed the dollar value of such
redemption proceeds); to financial institution trust departments; to registered
investment advisers exercising discretionary investment authority with respect
to the purchase of Fund shares; to accounts of financial institutions or
broker/dealers that charge account management fees, provided the manager or one
of its affiliates has entered into an agreement with respect to such accounts;
pursuant to sponsored arrangements with organizations which make recommendations
to or permit group solicitations of, its employees, members or participants in
connection with the purchase of shares of the Fund; to other investment
companies in the Seligman Group in connection with a deferred fee arrangement
for outside directors; and to "eligible employee benefit plans" which have at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. "Eligible employee benefit plan"
means any plan or arrangement, whether or not tax qualified,
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<PAGE>
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 be made in securities, subject to the review of some state
securities commissions. If payment is made in securities, a shareholder may
incur brokerage expenses in converting these securities into cash.
DISTRIBUTION SERVICES
SFSI, an affiliate of the Manager, acts as general distributor of the
shares of the Fund and of the other Seligman Mutual Funds. The Fund and SFSI are
parties to a Distributing Agreement, dated January 1, 1993. As general
distributor of the Fund's Capital Stock, SFSI allows commissions to all dealers,
as indicated in the Prospectus. Pursuant to agreements with the Fund, certain
dealers may also provide sub-accounting and other services for a fee. SFSI
receives the balance of sales loads and any CDSLs paid by investors. The balance
of sales loads paid by investors and received by SFSI in respect of Class A
shares amounted to $3,145,037 in 1996, after allowance of $25,669,252 as
commissions to dealers; $7,741,414 in 1995, after allowance of $63,320,055 as
commissions to dealers; and $693,835 in 1994, after allowance of $5,926,699 as
commissions to dealers. For the years ended December 31, 1996, 1995 and 1994,
SFSI retained CDSL charges from Class D shares amounting to $581,998, $590,507
and $34,431, 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 substantially all of the distribution fees with respect of Class B shares
received by it pursuant to the Plans (other than the portion of such fees used
to make ongoing shareholder servicing payments to Service Organizations as
described in the Prospectus) to FEP, which provides funding to SFSI to enable it
to pay commissions to dealers at the time of the sale of the related Class B
shares. In connection with the assignment of its rights to collect any CDSL and
the distribution fees with respect to Class B shares, SFSI receives payments
from FEP based on the value of Class B shares sold. The aggregate amounts of
such payments from FEP and the Class B distribution fees retained by SFSI for
the period ended December 31, 1996 was $287,656.
Effective April 1, 1995, Seligman Services, Inc. ("SSI"), an affiliate of
the Manager, became eligible to receive commissions from certain sales of Fund
shares, as well as distribution and service fees pursuant to the Plan. For the
year ended December 31, 1996 and for the period April 1, 1995 through December
31, 1995, SSI received commissions of $772,408 and $4,030,095, respectively,
from sales of Fund shares. SSI also received distribution and service fees of
$714,490 and $291,225, respectively, pursuant to the Plan.
VALUATION
Net asset value per share of each class of the Fund is determined as of the
close of trading on the NYSE, (normally, 4:00 p.m. Eastern time), each day that
the NYSE is open. The NYSE is currently closed on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. The Fund will also determine net asset value for each class
on each day in which there is a sufficient degree of trading in the Fund's
portfolio securities that the net asset value of Fund shares might be materially
affected. Net asset value per share for a class is computed by dividing such
class' share of the value of the net assets of the Fund (i.e., the value of its
assets less liabilities) by the total number of outstanding shares of such
class. All expenses of the Fund, including the Manager's fee, are accrued daily
and taken into account for the purpose of determining net asset value. The net
asset value of Class B and Class D
-13-
<PAGE>
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 for which there are not 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 for which recent market quotations are not
readily available, including restricted securities, are valued at fair value as
determined in accordance with procedures approved by the Board of Directors.
Short-term obligations with less than sixty days remaining to maturity are
generally valued at amortized cost. Short-term obligations with more than sixty
days remaining to maturity will be valued at current market value until the
sixtieth day prior to maturity, and will then be valued on an amortized cost
basis based on the value on such date unless the Board determines that this
amortized cost value does not represent fair market value. Expenses and fees,
including the investment management fee, are accrued daily and taken into
account for the purpose of determining the net asset value of Fund shares.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of the shares of the
Fund are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the value of such securities and such exchange rates may occur between
the times at which they are determined and the close of the NYSE, which will not
be reflected in the computation of net asset value. If during such periods
events occur which materially affect the value of such securities, the
securities will be valued at their fair market value as determined in accordance
with procedures approved by the Board of Directors.
For purposes of determining the net asset value per share of the Fund, all
assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a pricing service
that takes into account the quotes provided by a number of such major banks.
PERFORMANCE
The Fund's average annual total returns of Class A shares for the one-year,
five-year and ten-year periods ended December 31, 1996 were 6.60%, 26.80% and
21.92%, respectively. These returns were computed by subtracting the maximum
sales load of 4.75% of public offering price and assuming that all of the
dividends and distributions 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 returns were then calculated by
calculating the annual rate required for the initial investment to grow to the
amount which would have been received upon redemption (i.e., the average annual
compound rate of return). The total return for Class B shares of the Fund for
the period April 22, 1996 (inception) through December 31, 1996 was 5.30%. This
return was computed assuming that all of the dividends and distributions paid by
the Fund's Class B shares, if any, were reinvested over the relevant time
period. It was then assumed that at the end of the period the entire amount was
redeemed, subtracting the 5% CDSL. The average annual total returns for Class D
shares of the Fund for the one-year period ended December 31, 1996 and since
inception through December 31, 1996 were 10.07% and 33.16%, respectively. These
returns were computed assuming that all of the dividends and distributions paid
by the Fund's Class D shares, if any, were reinvested over the relevant time
period. It was then assumed that at the end of each period, the entire amount
was redeemed, subtracting the 1% CDSL, if applicable..
Table A below illustrates the total return (income and capital) on Class A
shares of the Fund with dividends, if any, invested and gain distributions taken
in shares. It shows that a $1,000 investment in Class A shares, assuming payment
of the 4.75% sales load, made on January 1, 1987 had a value of $7,254 on
December 31, 1996, resulting in an aggregate total return of 625.40%. Table B
illustrates the total return (income and capital) on Class B shares of the Fund
with dividends, if any, invested and gain distributions taken in shares. It
shows that a $1,000 investment in Class B made on April 22, 1996 (commencement
of offering of Class B shares) had a value of $1,053 on December 31, 1996,
resulting in an aggregate total return of 5.30%. Table C illustrates the total
return (income and capital) on Class D shares of the Fund with dividends, if
any, invested and gain distributions 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 $2,857 on December 31, 1996 resulting in an
aggregate total return of 185.70%. 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.
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<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 (3)
- --------- ---------------- ------------ -------- --------------- ----------
<S> <C> <C> <C> <C> <C>
1987 $ 852 $ 243 $ -- $ 1,095
1988 845 334 -- 1,176
1989 844 684 -- 1,529
1990 741 619 -- 1,360
1991 967 1,140 -- 2,107
1992 1,028 1,444 -- 2,472
1993 1,123 2,217 -- 3,340
1994 1,392 3,128 -- 4,520
1995 1,838 4,642 -- 6,480
1996 1,966 5,288 -- 7,254 625.40%
</TABLE>
TABLE B - CLASS B SHARES
<TABLE>
<CAPTION>
Value of
Year/Period Value of Initial Value of Gain Dividend Total
Ended (1) Investment (2) Distribution Invested Total Value (2) Return (3)
- --------- ---------------- ------------ -------- --------------- ----------
<C> <C> <C> <C> <C> <C>
1996 $ 1,002 $ 51 $ -- $ 1,053 5.30%
</TABLE>
TABLE C - CLASS D SHARES
<TABLE>
<CAPTION>
Value of
Year/Period Value of Initial Value of Gain Dividend Total
Ended (1) Investment (2) Distribution Invested Total Value (2) Return (3)
- --------- ---------------- ------------ -------- --------------- ----------
<S> <C> <C> <C> <C> <C>
1993 $ 1,088 $ 261 $ -- $ 1,349
1994 1,333 474 -- 1,807
1995 1,744 828 -- 2,572
1996 1,847 1,010 -- 2,857 185.70%
</TABLE>
(1) For the ten years ended December 31, 1996; from commencement of offering of
Class B shares on April 22, 1996; and from commencement of offering of
Class D shares on May 3, 1993.
(2) The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load, assumes that all dividends and capital
gains distributions were taken in cash and reflect changes in the net asset
value of the shares purchased with they 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.
The total return and average annual total return of the Class A shares
quoted from time to time through December 31, 1992 do not reflect the deduction
of the administration, shareholder services and distribution fee, effective
January 1, 1993; and for Class A and Class D shares through February 7, 1996, do
not reflect the increase in management fee approved by the shareholders on
February 7, 1996 and became effective February 8, 1996, which fees if reflected
would reduce the performance quoted.
-15-
<PAGE>
The Fund may also include its aggregate total return over a specified
period in advertisements or in information furnished to present or prospective
shareholders.
GENERAL INFORMATION
It is the intention of the Fund not to hold Annual Meetings of
Shareholders. The Directors may call Special Meetings of Shareholders for action
by shareholder vote as may be required by the 1940 Act or the Articles of
Incorporation.
CAPITAL STOCK. The Board of Directors is authorized to classify or reclassify
and issue any unissued Capital Stock of the Fund into any number of other
classes without further action by shareholders. The 1940 Act requires that where
more than one class exists, each class must be preferred over all other classes
in respect of assets specifically allocated to such class.
CUSTODIAN. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105 serves as custodian of the Fund. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for the Fund.
AUDITORS. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York, New
York 10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the year ended December 31, 1996 is
incorporated by reference into this Statement of Additional Information. The
Annual Report contains a schedule of the investments as of December 31, 1996, as
well as certain other financial information as of that date. The Annual Report
will be furnished, without charge, to investors who request copies of the Fund's
Statement of Additional Information.
-16-
<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
o Helps finance America's fledgling railroads through underwritings
o 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.
o Becomes a prominent underwriter of corporate securities, including New
York Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
... 1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o 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.
o Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion
in assets, and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
o Establishes Investment Advisory Service.
-17
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o 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.
o Assumes management of National Investors Corporation, today Seligman
Growth Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund and Seligman Quality
Municipal Fund, two closed-end funds that invest in high-quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson plc, of London,
known as Seligman Henderson Co., to offer global and international
investment products.
o Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
o 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.
o Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap
Value Fund.
<PAGE>
- -------------------------------------------------------------------------------
SELIGMAN
SELIGMAN
COMMUNICATIONS
AND INFORMATION
FUND, INC.
================================================================================
SEEKING CAPITAL GAIN BY INVESTING IN COMPANIES OPERATING IN ALL ASPECTS OF
COMMUNICATIONS, INFORMATION, AND RELATED INDUSTRIES.
DECEMBER 31, 1996 . 14th ANNUAL REPORT
<PAGE>
================================================================================
J. & W. SELIGMAN & CO. INCORPORATED
OVER THE
LONG TERM
1986...
"Your Fund's broad charter allows it to participate in all aspects of the
INFORMATION EXPLOSION. During the year, portfolio policy focused on providing a
broadly diversified base of companies with unique products and services and
dominant positions in their niches of the marketplace."
-- FRED E. BROWN,
FUND CHAIRMAN
1983-1988
1996...
"Today, we are on the cutting edge of a new world of technology and have entered
into an incredible information revolution that has far-reaching potential. The
explosive growth of personal computers in the home, advances in microprocessor
circuitry, the Internet and its proliferating services, and the expansion of
networking capabilities are among the exciting developments offering new
investment opportunities."
-- WILLIAM C. MORRIS,
FUND CHAIRMAN
1989-PRESENT
TIME IS THE TEST
In an industry that has changed dramatically in recent years, it's comforting to
know that stability, tradition, and consistent professional service can still be
found in an investment management firm.
J. & W. Seligman & Co. Incorporated has been providing financial services for
more than 130 years. From its beginning, Seligman has followed a long-term
approach to making money for its clients, by managing investment products and
services of the highest quality. Today, Seligman manages the Seligman Group of
Funds, which offers investors more than 40 investment options.
A PLACE IN HISTORY
Established in 1864, Seligman played a major role in the geographical expansion
and industrial development of the United States. The firm helped finance the
westward path of the railroads and the building of the Panama Canal. In the late
1800s and early 1900s, the firm was instrumental in financing the fledgling
automobile and steel industries. Seligman also participated in the original
underwritings for some of the nation's most prominent companies, including
General Motors, Victor Talking Machine, United Artists Theater Circuit, and
Maytag. In 1929, Seligman introduced Tri-Continental Corporation -- which today
is the nation's largest diversified closed-end investment company.
SELIGMAN COMMUNICATIONS
AND INFORMATION FUND
Seligman Communications and Information Fund, established June 23, 1983, seeks
capital gain by investing primarily in the securities of companies operating in
all aspects of the communications, information, and related industries. Since
its inception, Seligman Communications and Information Fund has helped investors
pursue their financial goals.
[Photo]
[Photo Caption]
JAMES, JESSE, AND JOSEPH SELIGMAN
<PAGE>
================================================================================
FELLOW
SHAREHOLDERS
In 1996, Seligman Communications and Information Fund noticeably underperformed
the Standard & Poor's 500 Composite Stock Price Index and its peers, as measured
by the Lipper Science and Technology Funds Average. Much of the difficulty was
encountered in the first half of the year; investment performance in the third
and fourth quarters improved dramatically. The Fund's investment results as of
December 31, 1996, begin on page 4.
In the market for technology stocks, as in equity markets generally, the
largest companies were the strongest performers in 1996. The first two quarters
of 1996 were generally disappointing for technology stocks because the
semiconductor and semiconductor capital equipment industries experienced reduced
product demand after a rapid inventory build-up. This particularly affected the
Fund because of its weighting in these areas. In the second half of the year,
the growing strength of the global personal computer market helped improve
market psychology, and quelled fears of reduced future earnings in the
technology sector. Strong third quarter earnings reports also contributed to
positive investor sentiment. Further, excessive memory chip inventories, which
had lingered for most of the year, ended in the fourth quarter.
This year, your Fund's Manager, J. & W. Seligman & Co. Incorporated, has
taken several steps to increase the resources available to the Fund, including
the addition of senior investment personnel. Two seasoned technology investment
professionals, Storm Boswick and Paul Krieger, were added to the Seligman
Technology Team in New York; they provide specialized knowledge in the
telecommunications, media, newspaper, cellular services, cable television,
computer services, networking, and communications equipment sectors. A third new
team member, Carolyn Rogers, is based in Silicon Valley to provide the
Technology Team with closer access to key corporate officers in the
semiconductor and semiconductor capital equipment industries. These additions to
your Fund's team should help meet the challenges of investing in the growing
technology-based industries.
Though 1996 was a difficult year, we remain positive about the long-term
outlook for the technology market and for your Fund. We believe that long-term
capital appreciation opportunities remain in the technology sector. As 1996
illustrates, however, there can be short-term volatility. Accordingly, we
believe the best strategy for growth of capital is long-term investing. A
professional financial advisor can help you formulate a long-term investment
plan to help you seek your financial goals, as it is time, not timing, that
counts when it comes to investing.
A discussion with your Portfolio Manager and the Fund's portfolio of
investments follow this letter.
We thank you for your continued interest in Seligman Communications and
Information Fund, and look forward to serving your investment needs in the many
years to come.
By order of the Board of Directors,
/s/ William C. Morris /s/ Brian T. Zino
- --------------------------- -----------------
William C. Morris Brian T. Zino
Chairman President
January 31, 1997
-----
1
<PAGE>
================================================================================
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
[Photo]
{Photo Caption]
SELIGMAN TECHNOLOGY TEAM: (FROM LEFT) PAUL KRIEGER, SHANEAN AUSTIN
(ADMINISTRATIVE ASSISTANT), CAROLYN ROGERS, LAWRENCE ROSSO, (SEATED) PAUL WICK
(PORTFOLIO MANAGER), STORM BOSWICK
A TEAM APPROACH
SELIGMAN COMMUNICATIONS AND INFORMATION FUND IS MANAGED BY THE SELIGMAN
TECHNOLOGY TEAM, HEADED BY PAUL WICK. MR. WICK AND HIS TEAM OF SEASONED RESEARCH
PROFESSIONALS VISIT WITH THE MANAGEMENT OF HUNDREDS OF TECHNOLOGY COMPANIES EACH
YEAR TO IDENTIFY THOSE THAT OFFER THE GREATEST POTENTIAL FOR GROWTH. STOCKS
PURCHASED FOR THE FUND ARE CONTINUALLY MONITORED BY THE TEAM, AND DISCIPLINED
BUY AND SELL POLICIES ARE FOLLOWED.
INTERVIEW WITH PAUL WICK, PORTFOLIO MANAGER
Q. HOW DID SELIGMAN COMMUNICATIONS AND INFORMATION FUND PERFORM IN THE LAST 12
MONTHS?
A. Seligman Communications and Information Fund's total return, based on the
net asset value of Class A shares, was 11.94% for the year. Overall, the
Fund lagged its peers and the broad market indices in 1996. In the first
half of the year, the Fund underperformed primarily due to its weighting in
semiconductors and semiconductor-related stocks, which suffered from a
lengthy inventory correction. However, the Fund's results improved in the
second half of the year, and particularly so in the fourth quarter -- the
semiconductor and semiconductor capital equipment sectors rebounded, and
the strength of the global personal computer (PC) market became evident.
The Fund was also strengthened by its increased sector diversification,
particularly by the performance of personal computer and peripheral stocks.
The Fund posted a total return in excess of 38% based on the net asset
value of Class A shares, from its July 23, 1996, low through December 31,
1996.
Q. WHAT INFLUENCE DID THE PC MARKET HAVE ON TECHNOLOGY STOCKS IN GENERAL IN
1996?
A. The resilience of the PC market was a major factor in the resurgence of US
technology stocks late in 1996. PC unit sales expanded roughly 18% to
approximately 75 million units in 1996, with much of the growth taking
place in the second half of the year. Moreover, American companies like
Compaq Computer gained market share throughout the world, increasing their
rates of growth. The strength in the PC market also extended to suppliers,
benefiting manufacturers of disk drives and semiconductors in particular.
Q. HOW COULD THE PC MARKET HAVE BEEN SO STRONG IF US RETAILERS GENERALLY
REPORTED POOR SALES TO CONSUMERS IN 1996?
A. The US retail PC market is only 15% of the total world market. Strong sales
to US corporations and excellent international sales growth compensated for
any weakness seen at US retail stores. In addition, the average purchase
price for retail PCs was down approximately 12%, or $400, due to the 80%
decline in Dynamic Random Access Memory (DRAM) circuit prices. This drop in
retail prices hurt sales figures for retailers, but had little effect on
the profits of PC manufacturers. Finally, direct marketers of PCs, such as
Gateway 2000, took significant market share away from the retail computer
chains in the US.
Q. WHAT OTHER FACTORS INFLUENCED THE RECOVERY OF TECHNOLOGY STOCKS IN THE
SECOND HALF OF 1996?
A. Among the most significant factors were the following:
o In the third quarter, computer and other electronic systems companies began
to rebuild inventories, which helped stabilize both prices and lead times
in the semiconductor, capacitor, and circuit board markets.
o The rebound in semiconductor orders, which was due to the rebuilding of
inventories, also breathed new life into semiconductor capital equipment
stocks. While capital spending in the chip industry will likely be reduced
15% in 1997 from 1996 levels, orders now appear to have stabilized to
levels that are still profitable for most equipment companies. We believe
the favorable order outlook in the chip industry increases the likelihood
of a sustained recovery in the semiconductor capital equipment industry.
o DRAM circuit prices began to stabilize after falling 80% in the first eight
months of 1996. The demand for increased memory per PC and production
cutbacks by DRAM manufacturers were the two key catalysts for this change.
- -----
2
<PAGE>
o Microsoft's WindowsNT operating system was adopted by businesses much more
quickly than expected. This spurred a corporate upgrade cycle to more
powerful PCs, which also benefited software vendors selling applications
for WindowsNT.
o The Initial Public Offering (IPO) frenzy, so apparent in the first half of
1996, cooled dramatically. Not only were fewer new issues brought to
market, but speculative offerings of unprofitable companies were rare.
Q. HOW DID THE PORTFOLIO CHANGE IN THE FOURTH QUARTER OF 1996?
A. The portfolio became more fully invested, and now holds very little of its
assets in cash. In addition, the Fund's weighting in the computer
hardware/peripherals area, particularly in the disk drive industry, was
increased. New holdings here include Quantum and Read-Rite. Finally, in
early January, the Fund's weighting in software stocks was reduced. Profits
were taken in Informix, Oracle Systems, Sterling Software, and Microsoft,
primarily due to high valuations.
Q. WHAT IS YOUR INVESTMENT STRATEGY WITH REGARD TO THE INTERNET?
A. Internet service providers and Internet-related software vendors have been
notably unprofitable, extraordinarily richly valued, or both. Therefore, we
generally have avoided most Internet-related stocks with few exceptions.
Many of the Fund's investments in the communications infrastructure area,
however, are closely linked to the build-out of the Internet.
Q. WHAT IS YOUR OUTLOOK FOR MEDIA AND TECHNOLOGY STOCKS IN 1997?
A. We believe that the best growth opportunities remain in the technology
sector, as the fundamentals of most media companies are uninspiring. The
exception lies in the US radio broadcasting industry, where strong
same-station cash flow growth, favorable deregulatory trends, economies of
scale, and reasonable valuations combine to offer an appealing backdrop for
investment.
In the technology sector, we expect that major trends seen in 1996 will
persist in 1997: PC unit growth in the mid-teens, continued explosive
growth of the Internet, steady expansion of network bandwidth around the
world, and escalating business adoption of the WindowsNT operating system.
In addition, we are quite optimistic about the recovery in the electronic
component markets, in particular for semiconductors. While valuations on
forward earnings estimates for semiconductor stocks are not inexpensive, we
believe that profit margins are poised to expand significantly over the
next year.
Q. WHAT OTHER DEVELOPMENTS ARE TAKING PLACE IN THE TECHNOLOGY MARKET?
A. Several developments in the technology market, which were discussed in last
year's Annual Report, have provided us with reasons for an optimistic
outlook going forward. Many of the new products are now being shipped.
o 64-bit video game systems are just starting to ship in quantity to the US,
invigorating the depressed video game hardware and software markets.
o Digital Video Disk (DVD) players are expected to finally hit US markets
early in 1997 after unexpected delays. These new machines can play audio
CDs, video game disks, and full-length movies on a single, small disk at
high resolution.
o Personal Communications Services (PCS) wireless networks are being built
all over America, with activity accelerating in 1997. As part of this
service offering, pagers will be capable of storing voice mail messages for
the first time.
o The direct broadcast satellite (DBS) industry continues to grow at
explosive rates in the US and around the world.
o Intel's early 1997 launch of its multimedia extension (MMX) technology will
greatly improve the on-screen graphics of PC games, helping augment PC
sales to consumers.
-----
3
<PAGE>
================================================================================
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
PERFORMANCE COMPARISON CHART
DECEMBER 31, 1996
This chart compares a $10,000 hypothetical investment made in Seligman
Communications and Information Fund Class A shares, with and without the maximum
initial sales charge of 4.75%, for the 10-year period ended December 31, 1996,
to a $10,000 hypothetical investment made in the Standard & Poor's 500 Composite
Stock Price Index (S&P 500) and the Lipper Science and Technology Funds Average
(Lipper Science & Technology Average) for the same period. The performances of
Seligman Communications and Information Fund Class B and D shares are not shown
in this chart, but are included in the table on page 5. It is important to keep
in mind that the S&P 500 excludes the effect of any fees or sales charges and
the Lipper Science & Technology Average excludes the effect of sales charges.
[The following table represents points that appear in the line chart in the
printed version]
SELIGM COMMUNICATIONS AND INFORMATION FUND - CLASS A
Lipper Science
With Without S&P 500 & Technology
Sales Charge Sales Charge Index Average
------------ ------------ ----- -------
12/31/86 ...... 9,523.41 10,000.00 10,000.00 10,000.00
12,349.49 12,967.51 12,135.00 13,021.31
12,717.39 13,353.82 12,744.18 13,109.90
13,887.95 14,582.97 13,585.29 14,212.87
12/31/87 ...... 10,953.15 11,501.28 10,524.53 10,589.32
11,275.61 11,839.88 11,123.37 11,130.10
12,060.28 12,663.82 11,864.19 12,157.88
11,318.60 11,885.03 11,904.53 11,224.20
12/31/88 ...... 11,756.32 12,334.66 12,272.38 11,280.61
12,725.31 13,362.15 13,142.49 11,680.13
13,927.80 14,624.81 14,302.97 12,622.27
15,643.96 16,426.86 15,834.82 13,865.82
12/31/89 ...... 15,297.10 16,062.64 16,161.01 13,845.09
16,129.28 16,936.47 15,674.57 14,490.77
17,445.65 18,318.71 16,660.50 16,131.28
12,013.74 12,614.97 14,371.35 11,908.70
12/31/90 ...... 13,603.70 14,284.50 15,659.02 13,824.22
18,388.76 19,309.03 17,934.27 17,661.88
16,241.62 17,054.43 17,893.03 16,312.26
18,634.15 19,566.70 18,850.30 18,240.11
12/31/91 ...... 21,072.75 22,127.34 20,429.96 20,558.91
21,764.86 22,854.08 19,913.08 20,700.57
19,561.05 20,539.98 20,291.43 19,323.89
19,633.91 20,616.48 20,930.61 20,193.68
12/31/92 ...... 24,721.09 25,958.25 21,983.42 23,894.90
25,062.77 26,317.02 22,944.09 24,441.31
28,198.13 29,609.29 23,056.52 26,638.46
32,559.49 34,188.92 23,651.38 29,376.74
12/31/93 ...... 33,404.16 35,075.86 24,200.09 29,709.51
34,871.65 36,616.79 23,282.91 30,321.10
32,185.39 33,796.10 23,380.69 28,428.60
41,761.41 43,851.35 24,524.01 32,847.74
12/31/94 ...... 45,195.94 47,457.76 24,519.11 34,775.85
51,551.62 54,131.51 26,907.27 37,162.91
66,897.59 70,245.47 29,476.91 44,648.98
75,724.92 79,514.57 31,820.32 51,750.32
12/31/95 ...... 64,804.29 68,047.42 33,735.91 48,839.07
61,326.84 64,395.94 35,547.53 49,141.77
61,415.25 64,488.78 37,140.06 52,546.25
65,187.40 68,449.70 38,287.68 55,817.24
12/31/96 ...... 72,539.59 76,169.81 41,480.88 58,471.33
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The rates of
return will vary and principal value of an investment will fluctuate. Shares, if
redeemed, may be worth more or less than their original cost. Past performance
is not indicative of future investment results.
- -----
4
<PAGE>
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS*
FOR PERIODS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------
CLASS B CLASS D
SINCE SINCE
INCEPTION THREE ONE FIVE 10 INCEPTION
4/22/96 MONTHS YEAR YEARS YEARS 5/3/93
---------- ---------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
With Sales Charge n/a 6.01% 6.60% 26.80% 21.92% n/a
Without Sales Charge n/a 11.28 11.94 28.05 22.51 n/a
CLASS B
With 5% CDSL 5.30% 6.07 n/a n/a n/a n/a
Without CDSL 10.30 11.07 n/a n/a n/a n/a
CLASS D
With 1% CDSL n/a 10.07 10.07 n/a n/a n/a
Without CDSL n/a 11.07 11.07 n/a n/a 33.16%
S&P 500** 15.00+ 8.34 22.96 15.22 15.27 18.29++
LIPPER SCIENCE &
TECHNOLOGY AVERAGE*** 7.37+ 4.75 19.72 23.22 19.30 27.80++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
DECEMBER 31, 1996 SEPTEMBER 30, 1996 JUNE 30, 1996 MARCH 31, 1996 DECEMBER 31, 1995
----------------- ------------------ ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A $23.51 $22.12 $20.84 $20.81 $21.99
CLASS B 22.62 21.36 20.16 21.51+++ n/a
CLASS D 22.61 21.35 20.16 20.16 21.35
</TABLE>
CAPITAL GAIN INFORMATION
FOR YEAR ENDED DECEMBER 31, 1996
CAPITAL GAIN
-----------------------------------------------------
PAID REALIZED UNREALIZED0
---- -------- -----------
CLASS A $1.055 $1.088 $2.532
CLASS B 1.055 1.088 2.532
CLASS D 1.055 1.088 2.532
A fund that concentrates its investments in one economic sector may be subject
to greater share price fluctuations than a more diversified fund.
The performances of Class B and D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
- --------------------------------------------------------------------------------
* Return figures reflect any change in price per share and assume the
investment of capital gain distributions. Return figures for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Class A share returns reflect the effect of the
0.25% Administration, Shareholder Services and Distribution Plan after
January 1, 1993, only. Returns for Class B shares are calculated with and
without the effect of the maximum 5% contingent deferred sales load
("CDSL"), charged only on certain redemptions made within one year of the
date of purchase, declining to 1% in the sixth year and 0% thereafter.
Returns for Class D shares are calculated with and without the effect of
the 1% CDSL, charged only on redemptions made within one year of the date
of purchase. The rates of return will vary and the principal value of an
investment will fluctuate. Shares, if redeemed, may be worth more or less
than their original cost. Past performance is not indicative of future
investment results.
** The S&P 500 is an unmanaged index that assumes reinvestment of estimated
dividends, and does not reflect fees and sales charges. Investors may not
invest directly in an index.
*** The Lipper Science & Technology Average is an average of 40 science and
technology funds and does not reflect sales charges that may be incurred
in connection with purchases or sales. The monthly performance is used in
the Performance Comparison Chart and the Investment Results per Share.
Investors may not invest directly in an average.
+ From April 30, 1996.
++ From April 30, 1993.
+++ As of April 22, 1996.
0 Represents the per share amount of net unrealized appreciation of
portfolio securities as of December 31, 1996.
-----
5
<PAGE>
================================================================================
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
FEDERAL TAX STATUS OF 1996 GAIN DISTRIBUTION FOR TAXABLE ACCOUNTS
The distribution of $1.055 per share, consisting of $0.861 from net long-term
gain and $0.194 from net short-term gain, realized on investments from November
1995 to October 1996, was paid on November 22, 1996, to Class A, B, and D
shareholders.
The long-term gain distribution is designated a "capital gain dividend" for
federal income tax purposes and is taxable to shareholders in 1996 as a
long-term gain from the sale of capital assets, no matter how long you may have
owned your shares, or whether the distribution was received in shares or in
cash. However, if shares on which a capital gain distribution was received are
subsequently sold, and such shares have been held for six months or less from
the date of purchase, any loss on the sale would be treated as long-term to the
extent that it offsets the long-term gain distribution. The net short-term gain
is taxable as ordinary income whether paid to you in shares or in cash.
If the distribution was received in shares, the per share cost basis for
federal income tax purposes is $22.45 for Class A shares, and $21.61 and $21.60
for Class B and D shares, respectively.
A year-end statement of account showing activity for 1996, a Form 1099-DIV,
and if applicable, a Form 1099-B has been mailed to each shareholder. Form
1099-B shows the proceeds of any redemptions paid to the shareholder during the
year and reported to the Internal Revenue Service as required by federal
regulations. Form 1099-DIV shows the amount of the distribution from gain on
investments paid to the shareholder during the year.
DIVERSIFICATION OF ASSETS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
----------------
ISSUES COST VALUE 1996 1995
-------- ------- -------- ------ -------
<S> <C> <C> <C> <C> <C>
NET CASH AND SHORT-TERM HOLDINGS 1 $ 17,540,783 $ 17,540,783 0.5 1.6
--- -------------- -------------- ----- -----
COMMON STOCKS:
Broadcasting -- -- -- -- 1.7
Communications Infrastructure 10 525,090,188 593,616,375 18.1 9.1
Computer Hardware/Peripherals 14 669,944,554 840,106,250 25.7 14.5
Computer Software 16 450,743,918 482,383,437 14.7 16.0
Contract Manufacturing/Circuit Boards 5 78,044,187 89,258,750 2.7 2.9
Information Services 4 116,537,811 114,606,250 3.5 --
Internet/On Line 1 66,536,997 59,850,000 1.8 --
Media 4 114,433,325 116,446,000 3.6 --
Publishing -- -- -- -- 1.8
Semiconductors 12 506,973,590 646,393,750 19.8 31.9
Semiconductor Capital Equipment 8 290,006,488 243,353,750 7.4 18.1
Telecommunications 2 24,747,110 19,493,750 0.6 --
Miscellaneous 2 56,615,876 50,450,000 1.6 2.4
--- -------------- -------------- ----- -----
78 2,899,674,044 3,255,958,312 99.5 98.4
--- -------------- -------------- ----- -----
NET ASSETS 79 $2,917,214,827 $3,273,499,095 100.0 100.0
=== ============== ============== ===== =====
</TABLE>
- -----
6
<PAGE>
================================================================================
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
LARGEST PORTFOLIO CHANGES
DURING PAST THREE MONTHS
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/96
- --------- --------- ---------
C-Cube Microsystems ...................... 1,300,000 1,300,000
Computer Associates
International .......................... 950,000 950,000
Computer Sciences ........................ 600,000 600,000
Compuware ................................ 950,000 950,000
Electronics for Imaging .................. 450,000 900,000
Etec Systems ............................. 850,000 1,150,000
Evergreen Media (Class A) ................ 1,632,000 1,632,000
Gateway 2000 ............................. 650,000 1,450,000
Structural Dynamics
Research ............................... 1,400,000 2,600,000
U.S. Robotics ............................ 600,000 1,300,000
SHARES
-------------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/96
- ---------- --------- ---------
Analog Devices ........................... 1,000,000 --
Bay Networks ............................. 1,500,000 --
Hadco .................................... 510,000 540,000
Informix ................................. 1,300,000 --
Microsoft ................................ 375,000(1) 150,000
News Corp. (ADRs-Voting
Preference Shares) ..................... 2,000,000 --
Oracle Systems ........................... 1,200,000 --
Western Digital .......................... 500,000 --
Xerox .................................... 900,000 --
Xilinx ................................... 2,400,000 --
Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
(1)Includes 175,000 shares received as a result of a 3-for-2 stock split.
LARGEST PORTFOLIO HOLDINGS
ATDECEMBER 31, 1996
SECURITY VALUE
- ---------- ------------
Intel ...................................................... $170,218,750
EMC ........................................................ 165,625,000
Cisco Systems .............................................. 140,112,500
Seagate Technology ......................................... 110,600,000
3Com ....................................................... 95,306,250
U.S. Robotics .............................................. 93,681,250
Parametric Technology ...................................... 87,443,750
Lattice Semiconductor ...................................... 87,162,500
Maxim Integrated Products .................................. 82,293,750
Gateway 2000 ............................................... 77,665,625
-----
7
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
SHARES VALUE
------ -----
COMMON STOCKS 99.5%
COMMUNICATIONS
INFRASTRUCTURE 18.1%
ASPECT TELECOMMUNICATIONS*
Automated call
distribution equipment 151,000 $ 9,550,750
CABLETRON SYSTEMS*
Manufacturer of computer
interconnection equipment 2,100,000 69,825,000
CIDCO*
Caller identification systems
and telephones 1,500,000 26,062,500
CISCO SYSTEMS*
Computer network routers 2,200,000 140,112,500
ECI TELECOMMUNICATIONS
Provider of digital
telecommunications and data
transmissions systems 2,250,000 47,671,875
GLENAYRE TECHNOLOGIES*
Manufacturer of paging
infrastructure equipment 2,000,000 43,125,000
NETWORK GENERAL*
Developer of network
diagnostic software 1,500,000 45,281,250
OAK INDUSTRIES*
Manufacturer of cable
television connectors 1,000,000 23,000,000
3COM*
Supplier of adapter cards, hubs,
and routers for local area
computer networks 1,300,000 95,306,250
U.S. ROBOTICS*
Modems and remote access
routers 1,300,000 93,681,250
--------------
593,616,375
--------------
COMPUTER HARDWARE/
PERIPHERALS 25.7%
ADAPTEC*
Computer input/output
systems 800,000 32,050,000
COMPAQ COMPUTER*
Global PC manufacturer 900,000 66,825,000
ELECTRONICS FOR IMAGING*
Peripherals for color copiers 900,000 73,687,500
EMC*
Enterprise storage equipment 5,000,000 165,625,000
GATEWAY 2000*
Manufacturer and direct
marketer of personal computers 1,450,000 77,665,625
IN FOCUS SYSTEMS*
Liquid crystal display systems 700,000 15,006,250
KOMAG*
Manufacturer of thin film
magnetic media for hard-
disk drives 2,550,000 69,009,375
LEXMARK INTERNATIONAL GROUP (CLASS A)*
Manufacturer of laser and
inkjet printers and cartridges 2,650,000 73,206,250
MYLEX*
Data storage management
devices 1,750,000 21,875,000
QUANTUM*
Storage products for computer
platforms 600,000 17,100,000
READ-RITE*
Manufacturer of thin film
magnetic read-write heads
for hard disk drives 400,000 10,050,000
SEAGATE TECHNOLOGY*
Storage products for computer
platforms 2,800,000 110,600,000
STORAGE TECHNOLOGY*
Enterprise storage equipment 1,450,000 69,056,250
VERIFONE*
Transaction automation systems
and Internet commerce solutions 1,300,000 38,350,000
--------------
840,106,250
--------------
COMPUTER SOFTWARE 14.7%
ACTIVISION*
Entertainment software 1,000,000 12,625,000
ANSYS*
Engineering analysis software 850,000 11,368,750
APPLIX*
Applixware family of software
applications for "real time"
decision making 225,000 4,879,687
BMC SOFTWARE*
Developer of utility software 800,000 33,250,000
CADENCE DESIGN SYSTEMS*
Electronic design
automation software 1,400,000 55,650,000
COMPUTER ASSOCIATES INTERNATIONAL*
Software utilities and databases 950,000 47,262,500
COMPUWARE*
Mainframe software and
consulting services 950,000 47,618,750
GEMSTAR INTERNATIONAL*
VCR programming software 345,000 5,994,375
INFINITY FINANCIAL TECHNOLOGY*
Client/server software for
financial trading 200,000 3,400,000
MENTOR GRAPHICS*
Electronic design
automation software 3,400,000 33,362,500
MICROSOFT*
Personal computer software 150,000 12,403,125
PARAMETRIC TECHNOLOGY*
Developer of mechanical
design software 1,700,000 87,443,750
PURE ATRIA*
Automated Software Quality
(ASQ) diagnostic products 400,000 9,825,000
- -----
8
<PAGE>
SHARES VALUE
------ -----
COMPUTER SOFTWARE (Continued)
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechanical
design software 2,600,000 $ 51,512,500
SYNOPSYS*
Integrated circuit
design software 1,200,000 55,200,000
3DO*
Developer of video game
software and game platforms 2,200,000 10,587,500
--------------
482,383,437
--------------
CONTRACT MANUFACTURING/
CIRCUIT BOARDS 2.7%
ADFLEX SOLUTIONS*
Flexible circuit boards 750,000 7,500,000
ALTRON*
Printed circuit boards 900,000 19,012,500
HADCO*
Printed circuit boards 540,000 26,358,750
PRAEGITZER INDUSTRIES*
Printed circuit boards 500,000 5,062,500
SCI SYSTEMS*
Assembler of electronic
circuit boards 700,000 31,325,000
--------------
89,258,750
--------------
INFORMATION SERVICES 3.5%
COMPUTER SCIENCES*
Computer services 600,000 49,275,000
ELECTRONIC DATA SYSTEMS
Computer systems and services 700,000 30,275,000
FIRST USA PAYMENTECH*
Credit card transaction
processing services 550,000 18,631,250
METROMAIL*
Direct mail marketing
information services 900,000 16,425,000
--------------
114,606,250
--------------
INTERNET/ON LINE 1.8%
AMERICA ONLINE*
Interactive/Internet services 1,800,000 59,850,000
--------------
MEDIA 3.6%
COX RADIO*
Operator of radio stations 900,000 15,750,000
EVERGREEN MEDIA (CLASS A)*
Operator of radio stations 1,632,000 40,596,000
INFINITY BROADCASTING (CLASS A)*
Operator of radio stations 1,700,000 57,162,500
YOUNG BROADCASTING (CLASS A)*
Network-affiliated TV stations 100,000 2,937,500
--------------
116,446,000
--------------
SEMICONDUCTORS 19.8%
ADVANCED MICRO DEVICES*
Microprocessors and
FLASH memory circuits 600,000 15,450,000
ALTERA*
Field programmable logic
devices 300,000 21,806,250
ATMEL*
Manufacturer of non-volatile
memory circuits 1,200,000 39,900,000
C-CUBE MICROSYSTEMS*
Video compression circuits 1,300,000 48,018,750
ESS TECHNOLOGY*
Mixed-signal semiconductor
audio solutions 1,425,000 40,078,125
INTEL
Producer of microprocessor
circuits for PCs 1,300,000 170,218,750
INTERNATIONAL RECTIFIER*
Power semiconductors 2,100,000 32,025,000
LATTICE SEMICONDUCTOR*
Programmable logic devices 1,900,000 87,162,500
MAXIM INTEGRATED PRODUCTS*
Linear and mixed-signal
integrated circuits 1,900,000 82,293,750
MICROCHIP TECHNOLOGY*
Field programmable
microcontrollers 1,325,000 67,409,375
S3*
Supplier of multi-media
acceleration solutions for PCs 2,350,000 38,334,375
TOWER SEMICONDUCTOR
Semiconductor foundry services 350,000 3,696,875
--------------
646,393,750
--------------
SEMICONDUCTOR CAPITAL
EQUIPMENT 7.4%
ASYST TECHNOLOGIES*
Miniature clean-room
environment devices for the
manufacture of silicon wafers 500,000 8,500,000
CREDENCE SYSTEMS*
Semiconductor test equipment 1,800,000 35,887,500
ETEC SYSTEMS*
Photomask manufacturing
systems 1,150,000 43,412,500
FUSION SYSTEMS*
Photo-resist strip systems 590,000 12,685,000
INTEGRATED PROCESS EQUIPMENT*
Chemical mechanical
planarization equipment 400,000 7,175,000
NOVELLUS SYSTEMS*
Chemical vapor
deposition equipment 1,000,000 54,187,500
TENCOR INSTRUMENTS*
Wafer inspection devices 2,100,000 55,518,750
ULTRATECH STEPPER*
Photolithography systems
for the manufacture of
semiconductors and thin
film recording heads 1,100,000 25,987,500
--------------
243,353,750
--------------
-----
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
DECEMBER 31, 1996
SHARES VALUE
------ -----
TELECOMMUNICATIONS 0.6%
METROMEDIA INTERNATIONAL GROUP*
Wireless cable TV and
telephone services in
Eastern Europe 1,000,000 $ 9,875,000
MILLICOM INTERNATIONAL CELLULAR*
Cellular telephone service in
developing countries 300,000 9,618,750
--------------
19,493,750
--------------
MISCELLANEOUS 1.6%
COGNEX*
Manufacturer of machine
vision systems 1,600,000 29,500,000
ELECTRO SCIENTIFIC INDUSTRIES*
Capacitor production systems
and memory chip repair devices 800,000 20,950,000
--------------
50,450,000
--------------
VALUE
-------
TOTAL COMMON STOCKS
(Cost $2,899,674,044) $3,255,958,312
SHORT-TERM HOLDINGS 1.7%
(Cost $56,000,000) 56,000,000
--------------
TOTAL INVESTMENTS 101.2%
(Cost $2,955,674,044) 3,311,958,312
OTHER ASSETS
LESS LIABILITIES (1.2)% (38,459,217)
--------------
NET ASSETS 100.0% $3,273,499,095
==============
- --------------------------------------------------------------------------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
- -----
10
<PAGE>
================================================================================
STATEMENT OF ASSETS
AND LIABILITIES
DECEMBER 31, 1996
ASSETS:
Investments, at value:
Common stocks (cost $2,899,674,044) $3,255,958,312
Short-term holdings (cost $56,000,000) 56,000,000 $ 3,311,958,312
--------------
Cash 22,895,875
Receivable for Capital Stock sold 8,597,025
Receivable for securities sold 12,697,424
Expenses prepaid to shareholder service agent 1,213,991
Receivable for interest and dividends 55,111
Other 85,201
--------------
TOTAL ASSETS 3,357,502,939
--------------
LIABILITIES:
Payable for securities purchased 65,404,198
Payable for Capital Stock repurchased 13,373,204
Accrued expenses, taxes, and other 5,226,442
--------------
TOTAL LIABILITIES 84,003,844
--------------
NET ASSETS $3,273,499,095
==============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.10 par value; 1,000,000,000 shares
authorized; 140,690,745 shares outstanding):
Class A $ 10,270,199
Class B 534,336
Class D 3,264,540
Additional paid-in capital 2,839,708,388
Accumulated net investment loss (102,022)
Undistributed net realized gain 63,539,386
Net unrealized appreciation of investments 356,284,268
--------------
NET ASSETS $3,273,499,095
==============
NET ASSET VALUE PER SHARE:
CLASS A ($2,414,671,963 / 102,701,987 SHARES) $23.51
======
CLASS B ($120,848,251 / 5,343,362 SHARES) $22.62
======
CLASS D ($737,978,881 / 32,645,396 SHARES) $22.61
======
- --------------
See Notes to Financial Statements.
-----
11
<PAGE>
================================================================================
STATEMENT OF
OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 1996
INVESTMENT INCOME:
Interest $ 10,694,818
Dividends 4,208,864
Other 66,502
------------
TOTAL INVESTMENT INCOME $ 14,970,184
EXPENSES:
Management fee 25,710,954
Distribution and service fees 12,519,068
Shareholder account services 11,841,402
Shareholder reports and communications 1,449,324
Registration 896,964
Custody and related services 741,000
Shareholders' meeting 500,353
Auditing and legal fees 124,893
Directors' fees and expenses 62,253
Miscellaneous 78,411
------------
TOTAL EXPENSES 53,924,622
------------
NET INVESTMENT LOSS (38,954,438)
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments 153,061,653
Net change in unrealized appreciation
of investments 238,743,809
------------
NET GAIN ON INVESTMENTS 391,805,462
------------
INCREASE IN NET ASSETS FROM OPERATIONS $352,851,024
============
- -------------
See Notes to Financial Statements.
- ----
12
<PAGE>
================================================================================
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (38,954,438) $ (28,171,024)
Net realized gain on investments 153,061,653 286,492,658
Net change in unrealized appreciation of investments 238,743,809 57,543,372
--------------- ---------------
Increase in net assets from operations 352,851,024 315,865,006
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A (105,584,145) (154,214,314)
Class B (4,686,401) --
Class D (33,293,284) (50,053,285)
--------------- ---------------
Decrease in net assets from distributions (143,563,830) (204,267,599)
--------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995
--------------- ---------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares:
Class A 34,422,498 76,561,941 749,537,882 1,737,333,556
Class B 5,362,644 -- 113,021,809 --
Class D 11,596,458 25,510,043 243,586,540 562,173,487
Exchanged from associated Funds:
Class A 37,176,372 13,483,088 814,655,013 330,495,561
Class B 94,188 -- 1,982,642 --
Class D 3,580,521 2,341,411 75,837,958 56,510,269
Shares issued in payment of gain distributions:
Class A 4,368,020 6,353,670 98,062,037 142,362,980
Class B 201,358 -- 4,351,357 --
Class D 1,434,633 2,144,837 30,988,033 46,674,570
------------- ------------- -------------- --------------
Total 98,236,692 126,394,990 2,132,023,271 2,875,550,423
------------- ------------- -------------- --------------
Cost of shares repurchased:
Class A (21,671,916) (11,847,319) (474,588,279) (290,139,169)
Class B (126,718) -- (2,780,813) --
Class D (7,424,660) (3,422,232) (156,046,056) (83,392,097)
Exchanged into associated Funds:
Class A (39,839,103) (14,791,476) (874,567,022) (372,155,193)
Class B (188,110) -- (4,005,480) --
Class D (5,088,386) (3,918,130) (105,848,538) (95,078,586)
------------- ------------- -------------- --------------
Total (74,338,893) (33,979,157) (1,617,836,188) (840,765,045)
------------- ------------- -------------- --------------
Increase in net assets from capital
share transactions 23,897,799 92,415,833 514,187,083 2,034,785,378
============= ============= -------------- --------------
Increase in net assets 723,474,277 2,146,382,785
NET ASSETS:
Beginning of year 2,550,024,818 403,642,033
-------------- --------------
End of year (including accumulated net
investment loss o $102,022 and
$84,925, respectively) $3,273,499,095 $2,550,024,818
============== ==============
</TABLE>
- ----------------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
-----
13
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Seligman Communications and Information Fund, Inc. (the "Fund") offers three
classes of shares. All shares existing prior to May 3, 1993, the commencement of
Class D shares, were classified as Class A shares. The Fund began offering Class
B shares on April 22, 1996. Class A shares are sold with an initial sales charge
of up to 4.75% and a continuing service fee of up to 0.25% on an annual basis.
Class A shares purchased in an amount of $1,000,000 or more are sold without an
initial sales charge but are subject to a contingent deferred sales load
("CDSL") of 1% on redemptions within eighteen months of purchase. Class B shares
are sold without an initial sales charge but are subject to a distribution fee
of up to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSL,
if applicable, of 5% on redemptions in the first year after purchase, declining
to 1% in the sixth year and 0% thereafter. Class B shares will automatically
convert to Class A shares on the last day of the month that precedes the eighth
anniversary of their date of purchase. Class D shares are sold without an
initial sales charge but are subject to a distribution fee of up to 0.75% and a
service fee of up to 0.25% on an annual basis, and a CDSL of 1% imposed on
certain redemptions made within one year of purchase. The three classes of
shares represent interests in the same portfolio of investments, have the same
rights and are generally identical in all respects except that each class bears
its separate distribution and certain other class expenses, and has exclusive
voting rights with respect to any matter on which a separate vote of any class
is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in convertible securities and common stocks are valued at
current market values or, in their absence, at fair values determined in
accordance with procedures approved by the Board of Directors. Securities
traded on national exchanges are valued at last sales prices or, in their
absence and in the case of over-the-counter securities, a mean of bid and
asked prices. Short-term holdings maturing in 60 days or less are valued at
amortized cost.
b. There is no provision for federal income or excise tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income
tax purposes. Dividends receivable and payable are recorded on ex-dividend
dates. Interest income is recorded on an accrual basis.
d. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares
based upon the relative value of shares of each class. Class-specific
expenses, which include distribution and service fees and any other items
that are specifically attributed to a particular class, are charged
directly to such class. For the year ended December 31, 1996, distribution
and service fees were the only class-specific expenses.
e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, or realized capital gain 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 portfolio securities, excluding US Government
obligations and short-term investments, for the year ended December 31, 1996,
amounted to $3,675,226,964 and $3,320,787,027, respectively.
At December 31, 1996, the cost of investments for federal income tax
purposes was $2,970,854,990 and the tax basis gross unrealized appreciation and
depreciation of portfolio securities amounted to $577,562,542 and $236,459,220,
respectively.
4. At December 31, 1996, the Fund owned short-term investments which matured in
less than 7 days.
5. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
all officers of the Fund, all directors of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager is
paid by the Manager. Effective February 8, 1996, the Manager receives a fee,
calculated daily and payable monthly, equal to 0.90% of the first $3 billion of
the Fund's average daily net assets, 0.85% per annum of the next $3 billion of
the Fund's average daily net assets and 0.75% per annum of the Fund's average
daily net assets in excess of $6 billion. Prior to February 8, 1996, the
management fee rate was 0.75% per annum of the Fund's average daily net assets.
The management fee reflected in the Statement of Operations represents 0.89% per
annum of 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 $3,145,037 from sales of Class A shares, after commissions of
$25,669,252 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
- ----
14
<PAGE>
- --------------------------------------------------------------------------------
services and/or the maintenance of shareholder accounts. The Distributor charges
such fees to the Fund pursuant to the Plan. For the year ended December 31,
1996, fees incurred aggregated $5,387,056 or 0.25% 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 share only, fees for providing other distribution
assistance of up to 0.75% on an annual basis of such average daily net assets.
Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
of this fee to a third party (the "Purchaser"), which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the year ended December 31, 1996, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $432,778 and $6,699,234, respectively. The Distributor is
entitled to retain any CDSL imposed on certain redemptions of Class D shares
occurring within one year of purchase. For the year ended December 31, 1996,
such charges amounted to $581,998.
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 Bshares sold. The aggregate amount of such payments
and the Class B share distribution fees retained by the Distributor for the year
ended December 31, 1996, was $287,656.
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive commissions from certain sales of shares of the Fund, as well as
distribution and service fees pursuant to the Plan. For the year ended December
31, 1996, Seligman Services, Inc. received commissions of $772,408 from the
sales of shares of the Fund. Seligman Services, Inc. also received distribution
and service fees of $714,490, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $11,833,406 for shareholder account
services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
Fees of $60,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses and the accumulated balance thereof at December 31, 1996, of
$102,022 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
6. Effective July 31, 1996, the Fund entered into a $280 million committed line
of credit facility with a group of banks. Borrowings pursuant to the credit
facility are subject to interest at a rate equal to the federal funds rate plus
0.75% per annum. The Fund incurs a commitment fee of 0.10% per annum on the
unused portion of the credit facility. The credit facility may be drawn upon
only for temporary purposes and is subject to certain other customary
restrictions. The credit facility commitment expires one year from the date of
the agreement but is renewable with the consent of the participating banks. The
Fund made no borrowings during the period ended December 31, 1996.
-----
15
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from each Class's beginning net asset value
to the ending net asset value so that they can understand what effect the
individual items have on their investment assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts. The total return based on net asset value
measures each Class's performance assuming investors purchased Fund shares at
net asset value as of the beginning of the period, reinvested dividends and
capital gains paid at net asset value, and then sold their shares at the net
asset value per share on the last day of the period. The total return
computations do not reflect any sales charges investors may incur in purchasing
or selling shares of the Fund. The total returns for periods of less than one
year are not annualized. Average commission rate paid represents the average
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 CLASS B CLASS D
----------------------------------------------- --------- -------------------------
YEAR ENDED DECEMBER 31, 4/22/96* YEAR ENDED DECEMBER 31, 5/3/93*
----------------------------------------------- TO ------------------------- TO
19960 19950 19940 1993 1992 12/31/960 19960 19950 19940 12/31/93
------ ------ ------ ------ ------ --------- ----- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $21.99 $16.64 $13.43 $12.30 $11.57 $21.51 $21.35 $16.31 $13.32 $12.24
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment loss (0.26) (0.33) (0.19) (0.14) (0.12) (0.28) (0.40) (0.50) (0.33) (0.05)
Net realized and
unrealized
investment gain 2.84 7.59 4.86 4.37 2.09 2.45 2.72 7.45 4.78 4.23
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Increase from investment
operations 2.58 7.26 4.67 4.23 1.97 2.17 2.32 6.95 4.45 4.18
Distributions from
net gain realized (1.06) (1.91) (1.46) (3.10) (1.24) (1.06) (1.06) (1.91) (1.46) (3.10)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase in net
asset value 1.52 5.35 3.21 1.13 0.73 1.11 1.26 5.04 2.99 1.08
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $23.51 $21.99 $16.64 $13.43 $12.30 $22.62 $22.61 $21.35 $16.31 $13.32
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE: 11.94% 43.39% 35.30% 35.13% 17.31% 10.30% 11.07% 42.37% 33.94% 34.89%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average net
assets 1.68% 1.61% 1.65% 1.63% 1.51% 2.44%+ 2.43% 2.37% 2.50% 2.56%+
Net investment loss to
average net assets (1.16)% (1.31)% (1.27)% (1.39)% (1.18)% (1.96)%+ (1.91)% (2.07)% (2.20)% (2.33)%+
Portfolio turnover 121.32% 65.77% 104.08% 137.10% 110.42% 121.32%++ 121.32% 65.77% 104.08% 137.10%+++
Average commission
rate paid $.0531 $.0531++ $.0531
Net assets, end
of period
(000s omitted) $2,414,672 $1,940,693 $307,542 $92,987 $57,001 $120,848 $737,979 $609,332 $96,100 $7,833
</TABLE>
- ------------------
* Commencement of offering of shares.
0 Per share amounts for the periods ended December 31, 1996, 1995, and 1994,
are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
See Notes to Financial Statements.
- ----
16
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT
AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Communications and Information Fund,
Inc. as of December 31, 1996, the related statements of operations for the year
then ended and of changes in net assets for each of the years in the two-year
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, 1996, 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
Communications and Information Fund, Inc. as of December 31, 1996, the results
of its operations, the changes in its net assets, and the financial highlights
for the respective stated periods in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
January 31, 1997
- --------------------------------------------------------------------------------
- ----
17
<PAGE>
BOARD OF
DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
SENIOR PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
DIRECTOR OR TRUSTEE,
Various Organizations
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RONALD T. SCHROEDER 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
ROBERT L. SHAFER 3
DIRECTOR OR TRUSTEE, Various Organizations
JAMES N. WHITSON 2
EXECUTIVE VICE PRESIDENT AND DIRECTOR, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT AND MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
CHAIRMAN AND PRESIDENT, Seligman Data Corp.
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- --------------------------------------------------------------------------------
- -----
18
<PAGE>
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
PAUL H. WICK
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
- --------------------------------------------------------------------------------
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder
Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour
Automated
Telephone Access
Service
- --------------------------------------------------------------------------------
-----
19
<PAGE>
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
[Logo]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF SHAREHOLDERS OR THOSE
WHO HAVE RECEIVED THE OFFERING PROSPECTUS COVERING SHARES OF CAPITAL STOCK OF
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC., WHICH CONTAINS INFORMATION
ABOUT THE SALES CHARGES, MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING OR SENDING MONEY.
[LOGO]
EQCI2 12/96 Printed on Recycled Paper
<PAGE>
File no. 2-80168
811-3596
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements and Schedules:
Part A - Financial Highlights for Class A shares for ten years ended
December 31, 1996; Financial Highlights for Class B Shares from
April 22, 1996 (commencement of offering) to December 31, 1996;
Financial Highlights for Class D shares from the period May 3,
1993 (commencement of offering) to December 31, 1996.
Part B - Required Financial Statements are included in the Fund's Annual
Report to Shareholders, dated December 31, 1996, which are
incorporated by reference in the Statement of Additional
Information. These include: Portfolio of Investments as of
December 31, 1996; Statement of Assets and Liabilities as of
December 31, 1996; Statement of Operations for the year ended
December 31, 1996; Statements of Changes in Net Assets for the
years ended December 31, 1996 and 1995; Notes to Financial
Statements; Financial Highlights for the five years ended
December 31, 1996 for the Fund's Class A shares; for the period
April 22, 1996 (commencement of offering) through December 31,
1996 for the Fund's Class B shares; and for the period May 3,
1993 (commencement of offering) through December 31, 1996 for
the Fund's Class D shares; Report of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed except
Exhibits marked with an asterisk (*) which are incorporated
herein.
(1) Restated Articles of Amendment of Registrant.*
(2) By-laws of the Corporation.*
(3) Not applicable.
(4) Specimen 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. 14 filed on April 29, 1993.)
(5) Copy of new Management Agreement between Registrant and J. & W. Seligman
& Co. Incorporated. (Incorporated by reference to Post-Effective
Amendment No. 17, filed on April 19, 1996.)
(5a) Copy of Subadvisory Agreement between the Manager and Seligman Henderson
Co. (Incorporated by reference to Post-Effective Amendment No. 17, filed
on April 19, 1996.)
(6) Copy of the new Distributing Agreement between Registrant and Seligman
Financial Services, Inc.*
(6a) Copy of amended Sales Agreement between Seligman Financial Services, Inc.
and Dealers. (Incorporated by reference to Post-Effective Amendment No.
17, filed on April 19, 1996.)
(6b) 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.)
(6c) 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.)
(6d) Form of Dealer Agreement between Seligman Financial Services, Inc. and
Smith Barney Inc. (Incorporated by reference to Exhibit 6d of
Registration Statement No. 2-33566, Post-Effective Amendment No. 53,
filed on April 28, 1997.)
(7) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to Exhibit 7 of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29, 1997.)
(7a) Deferred Compensation Plan for Directors of Seligman Group of Funds.
(Incorporated by Reference to Exhibit 7a of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29, 1997.)
(8) Copy of Amended Custodian Agreement between Registrant and Investors
Fiduciary Trust Company.*
(9) Not applicable.
(10) Opinion and Consent of Counsel.*
(11) Report and Consent of Independent Auditors.*
(12) Not applicable.
<PAGE>
File No. 2-80168
811-3596
PART C. OTHER INFORMATION (continued)
-----------------
Item 24. Financial Statements and Exhibits (continued)
---------------------------------
(13) Purchase Agreement for Initial Capital between Registrant's Class B
shares and J. & W. Seligman & Co. Incorporated. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 17, April 19,
1996.)
(13a) Purchase Agreement for Initial Capital between Registrant's Class D
Shares and J. & W. Seligman & Co. Incorporated.*
(14) The Seligman IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(14a) The Seligman Simple IRA Plan Set-Up Kit.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(14b) The Seligman Simple IRA Plan Agreement.
(Incorporated by reference to Exhibit 14 of Registration Statement No.
333-20621, Pre-Effective Amendment No. 2, filed on April 17, 1997.)
(15) Form of Administration, Shareholder Services and Distribution Plan of
Registrant (Incorporated by reference to Registrant's Post-Effective
Amendment No. 17, filed April 19, 1996.)
(15a) Form of Administration, Shareholder Services and Distribution Agreement
between Seligman Financial Services, Inc. and Dealers. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 17, filed April
19, 1996.)
(16 ) Schedule of Computation of Performance Data provided in Registration
Statement in response to Item 22.*
(17) Financial Data Schedules meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule 18f-3
under the Investment Company Act of 1940. (Incorporated by reference to
Post-Effective Amendment No. 17, filed on April 19, 1996.)
Item 25. Persons Controlled by or Under Common Control with Registrant - None.
- -------- ---------------------------------------------------------------------
Item 26. Number of Holders of Securities
- -------- -------------------------------
(1) (2)
Number of Record
Title of Class Holders as of March 31, 1997
-------------- ----------------------------
Class A Common Stock 243,895
Class B Common Stock 12,678
Class D Common Stock 54,019
Item 27. Indemnification
- -------- ---------------
Reference is made to the provisions of Articles Twelfth and
Thirteenth of Registrant's Amended and Restated Articles of
Incorporation filed as Exhibit 24(b)(1) and Article IV of
Registrant's Amended and Restated By-laws filed as Exhibit 24(b)(2)
to this Post-Effective Amendment No. 18 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.
<PAGE>
File No. 2-80168
811-3596
PART C. OTHER INFORMATION (continued)
-----------------
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER - J. & W.
- ------- Seligman & Co. Incorporated, a Delaware corporation ("Manager"), is
the Registrant's investment manager. 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 Frontier Fund, Inc.,
Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series,
Inc., Seligman High Income Fund Series, Seligman Income Fund, Inc.,
Seligman Municipal Fund Series, Inc., Seligman Municipal Series
Trust, Seligman New Jersey Municipal Fund, Inc., Seligman
Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc.,
Seligman Quality Municipal Fund, Inc., Seligman Select Municipal
Fund, Inc., Seligman Value Fund Series, Inc. and Tri-Continental
Corporation.
The Subadviser also serves as subadviser to nine other associated
investment companies. They are Seligman Capital Fund, Inc. Seligman
Common Stock Fund, Inc., Seligman Growth Fund, Inc., Seligman
Frontier Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman Income Fund, Inc., certain portfolios of Seligman
Portfolios, Inc., Seligman Value Fund Series, Inc. and
Tri-Continental Corporation.
The Manager and Subadviser have investment advisory service divisions
which provide investment management or advice to private clients. The
list required by this Item 28 of officers and directors of the
Manager and the Subadviser, respectively, together with information
as to any other business, profession, vocation or employment of a
substantial nature engaged in by such officers and directors during
the past two years, is incorporated by reference to Schedules A and D
of Form ADV, filed by the Manager and the Subadviser, respectively,
pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-15798 and SEC File No. 801-40670, filed on August 7, 1996 and
October 2, 1996, respectively).
Item 29. Principal Underwriters
- ------- ----------------------
(a) The names of each investment company (other than the Registrant)
for which Registrant's principal underwriter currently distributing
securities of the Registrant also acts as a principal underwriter,
depositor or investment adviser follow:
Seligman Capital Fund, Inc.
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.
Seligman Value Fund Series, Inc.
(b) Name of each director, officer or partner of Registrant's principal
underwriter named in response to Item 21:
Seligman Financial Services, Inc.
As of March 31, 1997
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board
and Chief Executive
Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director Director
FRED E. BROWN* Director None
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
</TABLE>
<PAGE>
File No. 2-80168
811-3596
PART C. OTHER INFORMATION (continued)
-----------------
Seligman Financial Services, Inc.
As of March 31, 1997
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
DAVID F. STEIN* Director None
STEPHEN J. HODGDON* President 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, National None
Sales Manager
GERALD I. CETRULO, III Senior Vice President of Sales, None
140 West Parkway Regional Sales Manager
Pompton Plains, NJ 07444
BRADLEY F. HANSON Senior Vice President of Sales, None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
BRADLEY W. LARSON Senior Vice President of Sales, None
367 Bryan Drive Regional Sales Manager
Danville, CA 94526
D. IAN VALENTINE Senior Vice President of Sales, None
307 Braehead Drive Regional Sales Manager
Fredericksburg, VA 22401
HELEN SIMON* Vice President, Sales None
Administration Manager
KAREN J. BULLOT* Vice President, Retirement Plans None
JOHN CARL* Vice President, Marketing None
MARSHA E. JACOBY* Vice President, National Accounts None
Manager
WILLIAM W. JOHNSON* Vice President, Order Desk None
JAMES R. BESHER Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
RICHARD B. CALLAGHAN Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
BRADFORD C. DAVIS Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
ANDREW DRALUCK Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
JONATHAN G. EVANS Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
MICHAEL C. FORGEA Regional Vice President None
32 W. Anapamu Street #186
Santa Barbara, CA 93101
DAVID L. GARDNER Regional Vice President None
2504 Clublake Trail
McKinney, TX 75070
</TABLE>
<PAGE>
File No. 2-80168
811-3596
PART C. OTHER INFORMATION (continued)
-----------------
Seligman Financial Services, Inc.
As of March 31, 1997
--------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine
Houston, TX 77077
MARK LIEN Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
JUDITH L. LYON Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
DAVID MEYNCKE Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
TIM O'CONNELL Regional Vice President None
14872 Summerbreeze Way
San Diego, CA 92128
JULIANA PERKINS Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
DAVE PETZKE Regional Vice President None
1673 Montelena Court
Carson City, NV 89703
ROBERT H. RUHM Regional Vice President None
167 Derby Street
Melrose, MA 02176
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
BRUCE TUCKEY Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
ANDREW VEASEY Regional Vice President None
14 Woodside
Rumson, NJ 07760
KELLI A. WIRTH-DUMSER Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
JEFFREY S. DEAN* Assistant Vice President, None
Annuity Product Manager
SANDRA FLORIS* Assistant Vice President, Order Desk None
KEITH LANDRY* Assistant Vice President, Order Desk None
GAIL S. CUSHING* Assistant Vice President, National None
Accounts Manager
FRANK P. MARINO* Assistant Vice President, Mutual
Fund Product Manager None
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>
<PAGE>
File No. 2-80168
811-3596
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
127 West 10th Street
Kansas City, Missouri 64105 AND
(2) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Item 31. MANAGEMENT SERVICES - Seligman Data Corp. ("SDC") the
- ------- Registrant's shareholder service agent, has an agreement with First
Data Investor Services Group ("FDISG") pursuant to which FDISG
provides a data processing system for certain shareholder accounting
and recordkeeping functions performed by SDC, which commenced in July
1990. For the years ended December 31, 1996, 1995 and 1994, the
approximate cost of these services were:
1996 1995 1994
---- ---- ----
Class A Shares $1,260,000 $446,000 $88,546
Class B Shares 28,600 -- --
Class D Shares 317,000 297,000 22,890
Item 32. UNDERTAKINGS - The Registrant undertakes, (1) to furnish a copy of
the Registrant's latest annual report, upon request and without
charge, to every person to whom a prospectus is delivered and (2) if
requested to do so by the holders of at least ten percent of its
outstanding shares, to call a meeting of shareholders for the purpose
of voting upon the removal of a director or directors and to assist
in communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
<PAGE>
File No. 2-80168
811-3596
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 of this Post-Effective Amendment pursuant to Rule 485(b) under
the Securities Act of 1993 and has duly caused this Post-Effective Amendment No.
18 to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
28th day of April, 1997.
SELIGMAN COMMUNICATIONS AND INFORMATION 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. 18 has been
signed below by the following persons in the capacities indicated on April 28,
1997.
Signature Title
--------- -----
/s/ William C. Morris Chairman of the Board (Principal
- ------------------------------------ executive officer) and Director
William C. Morris*
/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 )
James C. Pitney, Director ) /s/ Brian T. Zino
) ------------------------------------
James Q. Riordan, Director ) * Brian T. Zino, Attorney-in-fact
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
Post-Effective Amendment No. 18 to the
Registration Statement of Form N-1A
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
Form N-1A Item No. Description
24(b)(1) Amended and Restated Articles of Incorporation
24(b)(2) Amended and Restated By-laws
24(b)(6) Distributing Agreement
24(b)(8) Form of Custody Agreement
24(b)(10) Opinion and Consent of Counsel
24(b)(11) Consent of Independent Auditors
24(b)(13) Form of Purchase Agreement for the Fund's Class D Shares
24(b)(16) Performance Data Schedules
24(b)(17) Financial Data Schedules
Other Exhibits Power of Attorney
</TABLE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
of
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
FIRST: I, the subscriber, John T. Bostelman, whose post office address
is 125 Broad Street, New York, New York 10004 being at least twenty-one years of
age, do, under and by virtue of the General Laws of the State of Maryland
authorizing the formation of corporations, form a corporation.
SECOND: NAME. The name of the corporation (which is hereinafter called
the "Corporation") is
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
THIRD: PURPOSES AND POWERS. The purposes for which the Corporation is
formed and the business or objects to be carried on or promoted by it are to
engage in the business of holding, investing and reinvesting its funds in
securities, and in connection therewith, to hold part or all of its funds in
cash, to acquire by purchase, subscription, contract, exchange or otherwise, and
to own, hold for investment, resale or otherwise, sell, assign, negotiate,
exchange, transfer or otherwise dispose of, or turn to account or realize upon,
and generally to deal in and with, all forms of stocks, bonds, debentures,
notes, evidences of interest, evidences of indebtedness, warrants, and other
securities, irrespective of their form, the name by which they may be described,
or the character or form of the entities by which they are issued or created
(hereinafter sometimes called "Securities"); and, subject to the provisions of
these Articles of Incorporation, to make payment therefor by any lawful means;
to exercise any and all rights, powers and privileges of individual ownership or
interest in respect of any and all such Securities, including the right to vote
thereon and to consent and otherwise act with respect thereto; to do any and all
acts and things for the preservation, protection, improvement and enhancement in
value of any and all such Securities; to acquire or become interested in any
such Securities as aforesaid, irrespective of whether or not such Securities be
fully paid or subject to further payments, and to make payments thereon as
called for or in advance of calls or otherwise;
And, in general, to do any or all such other things in connection with
the objects and purposes of the Corporation hereinbefore set forth, as are, in
the opinion of the Board of Directors of the Corporation, necessary, incidental,
relative or conducive to the attainment of such objects and purposes; and to do
such acts and things, and to exercise any and all such powers to the same extent
as a natural person might or could lawfully do to the full extent authorized or
permitted to a corporation under any laws that may be now or hereafter
applicable or available to the Corporation.
In addition, the Corporation may issue, sell, acquire through purchase,
exchange, or otherwise, hold, dispose of, resell, transfer, reissue or cancel
shares of its capital stock in any manner and to the extent now or hereafter
permitted by the laws of Maryland and by these Articles of Incorporation.
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<PAGE>
The foregoing matters shall be construed as purposes, objects and
powers, and none of such matters shall be in anywise limited by reference to, or
inference from, any other of such matters or any other Article of these Articles
of Incorporation, but shall be regarded as independent purposes, objects and
powers and the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms or the
general powers of the Corporation now or hereafter conferred by the laws of the
State of Maryland, nor shall the expression of one thing be deemed to exclude
another, although it be of like nature, not expressed.
Nothing herein contained shall be construed as giving the Corporation
any rights, powers or privileges not permitted to it by law.
FOURTH: PRINCIPAL OFFICE. The post office address of the principal
office of the Corporation in this State is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. The resident agent of
the Corporation is The Corporation Trust Incorporated, the post office address
of which is 32 South Street, Baltimore, Maryland 21202. Said resident agent is a
corporation of the State of Maryland.
FIFTH: CAPITAL STOCK. A. The total number of shares of capital stock of
all classes which the Corporation has authority to issue is 1,000,000,000 shares
of capital stock (par value $.10 per share), amounting to an aggregate par value
of $100,000,000. All such shares are intitially classified as "Common Stock."
The Board of Directors of the Corporation may classify or reclassify any
unissued shares of capital stock (which classes shall share ownership of
specifically allocated assets but may have differing dividend, distribution, anf
other rights, as hereinafter contemplated) whether or not such shares have been
previously classifed or reclassified from time to time by setting or changing in
any one or more respects the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock.
B. No holder of shares of the capital stock of the Corporation shall be
entitled as such, as a matter or right, to purchase or subscribe for any part of
any new or additional issue of stock or securities of the Corporation..
C. All shares of the capital stock of the Corporation now or hereafter
authorized shall be "subject to redemption" and "redeemable," in the sense used
in the General Laws of the State of Maryland authorizing the formation of
corporations. In the absence of any contrary specification as to the purpose for
which shares of the capital stock of the Corporation are redeemed or repurchased
by it, all shares of any class so redeemed or repurchased shall thereafter have
the status of authorized but unissued capital stock of the Corporation.
D. All classes of the Common Stock of the Corporation shall represent
the same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights with any other shares of capital stock; provided,
however, that not withstanding anything in the charter of the Corporation to the
contrary:
1. Each class of shares may be subject to such front-end sales
charges as may be established by the Board of Directors from time
to time in accordance with the
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<PAGE>
Investment Company Act of 1940, as amended, and applicable rules
and regulations of the National Association of Securities Dealers,
Inc.
2. Each class of shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board
of Directors in accordance with the Investment Company Act of
1940, as amended, and applicable rules and regulations of the
National Association of Securities Dealers, Inc.
3. Expenses related solely to a particular class (including,
without limitation, distribution expenses under a Rule 12b-1 plan
and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which
may differ amoung the various classes) shall be borne by that
class and shall be appropriately reflected (in the manner
determined by the Board of Directors) in the net asset value,
dividend, distributions and liquidation rights of the shares of
that class.
4. At such time as may be determined by the Board of Directors and
reflected in Articles Supplementary establishing a class, shares
of a particular class shall be automatically converted to shares
of another class; provided, however that such conversion shall be
subject to the continuing availability of an opinion of counsel to
the effect that such conversion of the shares does not constitute
a taxable event under federal income tax law. The Board of
Directors, in its sole discretion, may suspend any conversion
provision if such opinion is no longer available.
5. As to any matter with respect to which a separate vote of any
class is required by the Investment Company Act of 1940, as
amended, or by the Maryland General Corporation Law (including,
without limitation, approval of any plan, agreement or other
arrangement referred to in subsection (3) above), such requirement
as to a separate vote by that class shall apply in lieu of single
class voting. As to any matter that does not affect the interest
of a particular class, only the holders of shares of the affected
classes hall be entitled to vote.
E. The terms of the common stock as further set by the Board of
Directors are as follows:
(a) The Common Stock of the Corporation shall have three classes of
shares, which shall be designated Class A Common Stock, Class B Common Stock and
Class D Common Stock. The number of authorized shares of Class A Common Stock,
of Class B Common Stock and of Class D Common Stock shall each consist of the
sum of x and y, where x equals the issued and outstanding shares of such class
and y equals one-third of the authorized but unissued shares of Common Stock of
all classes; provided that at all times the aggregate authorized number of
shares of Common Stock (i.e., 500,000,000 shares of Common Stock until changed
by further action of the Board of Directors in accordance with Section 2-208.1
of the Maryland General Corporation Law, or any successor provision); and, in
the event application of the formula above would result, at any time, in
fractional shares, the applicable number of authorized shares of each class
shall be rounded down to the nearest whole number of shares of such class. Any
class of Common Stock shall be referred to herein
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<PAGE>
individually as a "Class" and collectively, together with any further class or
classes from time to time established, as the "Classes."
(b) All classes shall represent the same interest in the Corporation
and have identical voting, dividend, liquidation, and other rights; provided
however, that notwithstanding anything in the charter of the Corporation to the
contrary:
(1) Class A shares may be subject to such front-end sales
loads as may be established by the Board of Directors from time to
time in accordance with the Investment Company Act and applicable
rules and regulations of the National Association of Securities
Dealers, Inc. (the "NASD").
(2) Class B shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board
of Directors in accordance with the Investment Company Act and
applicable rules and regulations of the NASD. Subject to
subsection (e) below, each Class B share shall convert
automatically into Class A shares on the last business day of the
month that precedes the eighth anniversary of the date of issuance
of such Class B share; such conversion shall be effected on the
basis of the relative net asset values of Class B and Class A
shares as determined by the Corporation on the date of conversion.
(3) Class D shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board
of Directors in accordance with the Investment Company Act and
applicable rules and regulations of the NASD.
(4) Expenses related solely to a particular Class (including,
without limitation, distribution expenses under a Rule 12b-1 plan
and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which
may differ between the Classes) shall be borne by that Class and
shall be appropriately reflected (in the manner determined by the
Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that Class.
(5) At such time as shall be permitted under the Investment
Company Act, any applicable rules and regulations thereunder and
the provision of any exemptive order applicable to the
Corporation, and as may be determined by the Board of Directors
and disclosed in the then current prospectus of the Corporation,
shares of a particular Class may be automatically converted into
shares of another Class; provided, however, that such conversion
shall be subject to the continuing availability of an opinion of
counsel to the effect that such conversion does not constitute a
taxable event under Federal income tax law. The Board of
Directors, in its sole discretion, may suspend any conversion
rights if such opinion is no longer available.
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<PAGE>
(6) As to any matter with respect to which a separate vote of
any Class is required by the Investment Company Act or by the
Maryland General Corporation Law (including, without limitation,
approval of any plan, agreement or other arrangement referred to
in subsection (4) above), such requirement as to a separate vote
by the Class shall apply in lieu of single Class voting, and, if
permitted by the Investment Company Act or any rules, regulations
or orders thereunder and the Maryland General Corporation Law, the
Classes shall vote together as a single Class on any such manner
that shall have the same effect on each such Class. As to any
matter that does not affect the interest of a particular Class,
only the holders of shares of the affected Class shall be entitled
to vote.
SIXTH: DIRECTORS. The number of directors of the Corporation shall
initially be ten and the names of the directors who shall act as such until the
first annual meeting or until their successors are elected and qualify are as
follows:
Lane W. Adams Douglas R. Nichols, Jr.
Fred E. Brown Robert G. Olmsted
Stanley R. Currie James C. Pitney
William McBride Love Ronald T. Schroeder
John E. Merow Robert L. Shafer
The number of directors in office may be changed from time to time in such
manner as the By-Laws of the Corporation shall provide.
SEVENTH: PROVISIONS FOR DEFINING, LIMITING AND REGULATING THE POWERS OF
THE CORPORATION, DIRECTORS AND SHAREHOLDERS.
A. BOARD OF DIRECTORS. The Board of Directors shall have the general
management and control of the business and property of the Corporation, and may
exercise all the powers of the Corporation, except such as are by law or by
these Articles of Incorporation or by the By-Laws conferred upon or reserved to
the shareholders. In furtherance and not in limitation of the powers conferred
by law, the Board of Directors is hereby empowered:
1. To authorize the issuance and sale, from time
to time, of shares of the capital stock of the
Corporation, whether for cash at not less than the par
value thereof or for such other consideration as the
Board of Directors may deem advisable, in the manner and
to the extent now or hereafter permitted by the laws of
Maryland; provided, however, that the consideration (or
the value thereof as determined by the Board of
Directors) per share to be received by the Corporation
upon the sale of any shares of its capital stock
(including treasury shares) shall not be less than the
net asset value (determined as provided in Article
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<PAGE>
NINTH hereof) per share of such capital stock outstanding
at the time (determined by the Board of Directors) as of
which the computation of such net asset value shall be
made.
2. To authorize the execution and performance by
the Corporation of an agreement or agreements, which may
be exclusive contracts, with J. & W. Seligman and Co.
Marketing, Inc., a Delaware corporation, or any other
person, as distributor, providing for the distribution of
shares of the capital stock of the Corporation.
3. To specify, in instances in which it may
be desirable, that shares of the capital stock of
the Corporation repurchased by it are not
repurchased for retirement and to specify the
purposes for which such shares are repurchased.
4. To authorize the execution and
performance by the Corporation of an agreement or
agreements with J. & W. Seligman & Co. Incorporated
("Seligman") or any other person whereby, subject to
the control of the Board of Directors, the
investment and other operations of the Corporation
shall be managed by Seligman or such other person.
The Corporation may in its By-Laws confer powers on the Board of
Directors in addition to the foregoing and in addition to the powers expressly
conferred by statute.
B. VOTING POWERS. The presence in person or by proxy of the holders of
one-third of the shares of the capital stock of the Corporation outstanding and
entitled to vote thereat shall constitute a quorum at any meeting of the
shareholders. If at any meeting of the shareholders there be less than a quorum
present, the shareholders present at such meeting may, without further notice,
adjourn the same from time to time until a quorum shall attend, but no business
shall be transacted at any such adjourned meeting, except such as might have
been lawfully transacted had the meeting not been adjourned. Notwithstanding any
provision of law requiring any action to be taken or authorized by the holders
of a greater proportion than a majority of the shares of capital stock of the
Corporation entitled to vote thereon, such action shall be valid and effective
if taken or authorized by the affirmative vote of the holders of a majority of
the shares of the capital stock of the Corporation outstanding and entitled to
vote thereon.
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<PAGE>
EIGHTH: REDEMPTIONS AND REPURCHASES.
A. The Corporation shall under some circumstances redeem, and may under
other circumstances repurchase, shares of its capital stock as follows:
1. OBLIGATION OF THE CORPORATION TO REDEEM SHARES: Each
holder of shares of any class shall be entitled at his
option to require the Corporation to redeem all or any part
of the shares of capital stock of that class owned by such
holder, upon written or telegraphic request to the
Corporation or its designated agent, accompanied by
surrender of the certificate or certificates for such
shares, or such other evidence of ownership as shall be
specified by the Board of Directors, for the proportionate
interest per share in the assets of the Corporation
belonging to that class, or the cash equivalent thereof
(being the net asset value per share of that class
determined as provided in Article NINTH hereof, less the
amount of any applicable contingent deferred sales charge
payable on such redemption), subject to and in accordance
with the provisions of paragraph B of this Article.
2. RIGHT OF THE CORPORATION TO REPURCHASE SHARES: In
addition the Board of Directors may, from time to time in
its discretion, authorize the officers of the Corporation to
repurchase shares of its capital stock, either directly or
through an agent, subject to and in accordance with the
provisions of paragraph B of this Article. The price to be
paid by the Corporation upon any such repurchase shall be
determined, in the discretion of the Board of Directors, in
accordance with any provision of the Investment Company Act
of 1940 or any rule or regulation or order of the Securities
and Exchange Commission thereunder.
3. REDEMPTION OF ACCOUNTS. In addition the Board of
Directors may, from time to time in its discretion,
authorize the Corporation to require the redemption of all
or any part of the outstanding Shares of any Class or all or
any part of the outstanding Shares of any shareholder, for
the proportionate interest per Share in the assets of the
Corporation belonging to that Class or shareholder, or the
cash equivalent thereof (being the net asset value per Share
of that Class determined as provided in Article NINTH
hereof), subject to and in accordance with the provisions of
paragraph B of this Article, upon the sending of written
notice thereof to each shareholder any of whose Shares are
so redeemed and on such terms and conditions as the Board of
Directors shall deem advisable.
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<PAGE>
B. The following provisions shall be applicable with respect to
redemptions and repurchases of shares of the capital stock of the Corporation
pursuant to paragraph A hereof:
1. Certificates for shares of capital stock to be redeemed
or repurchased shall be surrendered in proper form for
transfer, together with such proof of the authenticity of
signatures as may be required by resolution of the Board of
Directors.
2. Payment of the redemption or repurchase price by the
Corporation or its designated agent shall be made in cash
within seven days after the time used for determination of
the redemption or repurchase price, but in no event prior to
delivery to the Corporation, or its designated agent, of the
certificate or certificates for the shares of capital stock
so redeemed or repurchased or of such other evidence of
ownership as shall be specified by the Board of Directors;
except that any payment may be made in whole or in part in
securities or other assets of the Corporation, if, in the
event of the closing of the New York Stock Exchange or the
happening of any event at any time prior to actual payment
which makes the liquidation of Securities in orderly fashion
impractical or impossible, the Board of Directors shall
determine that payment in cash would be prejudicial to the
best interests of the remaining shareholders of the
Corporation. In making any such payment in whole or in part
in Securities or other assets of the Corporation, the
Corporation shall, as nearly as may be practicable, deliver
Securities or other assets of a gross value (determined in
the manner provided in Article NINTH hereof) representing
the same proportionate interest in the Securities and other
assets of the Corporation as is represented by the shares so
to be paid for. Delivery of the Securities included in any
such payment shall be made as promptly as any necessary
transfers on the books of the several corporations whose
Securities are to be delivered may be made.
3. The right of the holder of shares of capital stock
redeemed or repurchased by the Corporation, as provided in
this Article, to receive dividends thereon and all other
rights of such holder with respect to such shares shall
forthwith cease and terminate from and after the time as of
which the redemption or repurchase price of such shares has
been determined (except the right of such holder to receive
(a) the redemption or repurchase price of such shares from
the Corporation or its designated agent, and cash and/or in
Securities or other assets of the Corporation, and (b) any
dividend to which such holder had previously become entitled
as the record holder of such shares on the record date for
such dividend and with respect to shares of capital stock
otherwise entitled to
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<PAGE>
vote, except the right of such holder to vote at a meeting
of shareholders such shares owned of record by him on the
record date for such meeting).
NINTH: DETERMINATION OF NET ASSET VALUE. For the purposes referred to
in Articles SEVENTH and EIGHTH hereof the net asset value of shares of the
capital stock of the Corporation shall be determined by or pursuant to the
direction of the Board of Directors in accordance with the following provisions:
A. Such net asset value on any day shall be computed as follows:
The net asset value of each share of such stock shall be the
quotient obtained by dividing the "net value of the assets"
of the Corporation by the total number of shares at the time
deemed to be outstanding (including shares sold whether paid
for and issued or not, and excluding shares redeemed or
repurchased on the basis of previous determined values,
whether paid for, received and held in treasury, or not).
The "net value of the assets" shall be the "gross
value" after deducting the amount of all expenses incurred
and accrued and unpaid, such reserves as may be set up to
cover taxes and any other liabilities, and such other
deductions as in the opinion of the officers of the
Corporation are in accordance with accepted accounting
practice.
The "gross value" of the assets shall be the amount of all
cash and receivables and the market value of all Securities
and other assets held by the Corporation at the time as of
which the determination is made. Securities held shall be
valued at market value or, in the absence of readily
available market quotations, at fair value, both as
determined pursuant to methods approved by the Board of
Directors and in accordance with applicable statutes and
regulations.
B. The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are deemed by it to be necessary or desirable and are consistent with
any provision of the Investment Company Act of 1940 or any rule or regulation or
order of the Securities and Exchange Commission thereunder. The time or times as
of which the net asset value of shares of the capital stock of the Corporation
shall be computed shall be such time or times as may be determined by or
pursuant to the direction of the Board of Directors.
TENTH: DETERMINATION BINDING. Any determination made by or pursuant to
the direction of the Board of Directors in good faith and in accordance with
accepted accounting practice, as to the amount of the assets, obligations or
liabilities of the Corporation, as to the amount of the net income of the
Corporation for any period or amounts at any time legally available for the
payment of dividends, as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose
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<PAGE>
for creating any reserves or charges, as to the use, alteration or cancellation
of any reserves or charges (whether or not any obligation or liability for which
such reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or discharged), as
to the price or closing bid or asked price of any Security owned or held by the
Corporation, as to the market value of any Security or fair value of any other
asset owned by the Corporation, as to the number of shares of the Corporation
issued or issuable, as to the impracticability or impossibility of liquidating
Securities in orderly fashion, as to the extent to which it is practicable to
deliver the proportionate interest in the Securities and other assets of the
Corporation represented by any shares redeemed or repurchased in payment for any
such shares, as to the method of payment for any such shares, redeemed or
repurchased, or as to any other matters relating to the issue, sale, redemption,
repurchase, and/or other acquisition or disposition of Securities or shares of
capital stock of the Corporation shall be final and conclusive and shall be
binding upon the Corporation and all holders of shares of its capital stock,
past, present and future, and shares of the capital stock of the Corporation are
issued and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid. No provision of these Articles of
Incorporation shall be effective to (a) bind any person to waive compliance with
any provision of the Securities Act of 1933 or the Investment Company Act of
1940 or of any valid rule, regulation or order of the Securities and Exchange
Commission thereunder, or (b) protect or purport to protect any director or
officer of the Corporation against any liability to the Corporation or its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ELEVENTH: AMENDMENTS. The Corporation reserves the right to take any
lawful action and to make any amendment of these Articles of Incorporation,
including the right to make any amendment which changes the terms of any shares
of the capital stock of the Corporation of any class now or hereafter authorized
by classification, reclassification, or otherwise, and to make any amendment
authorizing any sale, lease, exchange or transfer of the property and assets of
the Corporation as an entirety, or substantially as an entirety, with or without
its good will and franchise, if a majority of all the shares of the capital
stock of the Corporation at the time issued and outstanding and entitled to
vote, vote in favor of any such action or amendment, or consent thereto in
writing, and reserves the right to make any amendment of these Articles of
Incorporation in any form, manner or substance now or hereafter authorized or
permitted by law.
TWELFTH: LIABILITY. A director or officer of the Corporation shall not
be liable to the Corporation or its shareholders for monetary damages for breach
of fiduciary duty as a Director or Officer, except to the extent such exemption
from liability or limitation thereof is not permitted by law (including the
Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended).
No amendment, modification or repeal of this Article Twelfth shall
adversely affect any right or protection of a Director or Officer that exists at
the time of such amendment, modification or repeal.
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<PAGE>
THIRTEENTH: INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The
Corporation shall indemnify to the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended) any person made or threatened to be made a party to any
action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a Director, Officer or employee of the Corporation or
serves or served at the request of the Corporation any other enterprise as a
Director, Officer or employee. To the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended), expenses incurred by any such person in defending any
such action, suit or proceeding shall be paid or reimbursed by the Corporation
promptly upon receipt by it of an undertaking of such person to repay such
expenses if it shall ultimately be determined that such person is not entitled
to be indemnified by the Corporation. The rights provided to any person by this
Article shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a Director,
Officer or employee as provided above. No amendment of this Article Thirteenth
shall impair the rights of any person arising at any time with respect to events
occurring prior to such amendment. For purposes of this Article Thirteenth, the
term "Corporation" shall include any predecessor of the Corporation and any
constituent corporation (including any constituent of a constituent) absorbed by
the Corporation in a consolidation or merger; the term "other enterprise" shall
include any corporation, partnership, joint venture, trust or employee benefit
plan; service "at the request of the Corporation" shall include service as a
Director, Officer or employee of the Corporation which imposes duties on, or
involves services by, such Director, Officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed to
be indemnifiable expenses; and action by a person with respect to any employee
benefit plan which such person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be deemed to be action not
opposed to the best interests of the Corporation.
I acknowledge this document to be my act, and state under the penalties
of perjury that with respect to all matters and facts therein, to the best of my
knowledge, information and belief such matters and facts are true in all
material respects.
October 6, 1982
/s/ John T. Bostelman
-----------------------------
John T. Bostelman
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RESTATEMENT
of the
BY-LAWS
of
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
<PAGE>
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
BY-LAWS
ARTICLE I.
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF HOLDING MEETINGS. Each meeting of shareholders
shall be held at the office of the Corporation in the City of Baltimore,
Maryland, or at such other place within the United States as may be fixed by the
Board of Directors.
SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders of
the Corporation shall be held du ring the 31-day period commencing April 15 of
each year on such day and at such hour as may from time to time be designated by
the Board of Directors and stated in the notice of such meeting, for the
transaction of such business as may properly be brought before the meeting;
provided, however, that an annual meeting of shareholders shall not be required
to be held in any year in which none of the following is required to be acted on
by shareholders pursuant to the Investment Company Act of 1940: election of
directors; approval of the investment advisory agreement; ratification of the
selection of independent public accountants and approval of a distribution
agreement.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders for
any purpose or purposes may be called by the Chairman of the Board, the
President, a majority of the Board of Directors or a majority of the Executive
Committee and shall be called by the Secretary upon the written request of the
holders of shares entitled to not less than twenty-five percent of all the votes
entitled to be cast at such meeting. Such request shall state the purpose or
purposes of such meeting and the matters proposed to be acted on thereat. The
Secretary shall inform such shareholders of the reasonably estimated cost of
preparing and mailing such notice of meeting, and upon payment to the
Corporation of such costs the Secretary shall give notice stating the purpose or
purposes of the meeting, as required in this Article and by law, to all
shareholders entitled to notice of such meeting. No special meeting need be
called upon the request of the holders of shares entitled to cast less than a
majority of all votes entitled to be cast at such meeting, to consider any
matter which is substantially the same as a matter voted upon at any special
meeting of shareholders held during the preceding twelve months.
SECTION 4. NOTICE OF SHAREHOLDERS' MEETINGS. Not less than ten days nor
more than ninety days before the date of every shareholders' meeting, the
Secretary shall give to each shareholder entitled to vote at or to notice of
such meeting, written or printed notice stating the time and place of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, either by mail or presenting it to him personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the shareholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
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SECTION 5. QUORUM. At any meeting of shareholders, the presence in
person or by proxy of shareholders entitled to cast one-third of the votes
thereat shall constitute a quorum. If at any meeting of the shareholders there
shall be less than a quorum present, the holders of a majority of the shares
present at such meeting may, without further notice, adjourn the same from time
to time until a quorum shall attend, but no business shall be transacted at any
such adjourned meeting, except such as might have been lawfully transacted had
the meeting not been adjourned.
SECTION 6. VOTING. A majority of the votes cast at a meeting of
shareholders, at which a quorum is present, shall be sufficient to take or
authorize action upon any matter which may properly come before the meeting,
unless more than a majority of votes cast is required by law or by the Articles
of Incorporation.
With respect to all shares having voting rights (a) a shareholder may
vote the shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, provided
that no proxy be shall valid after eleven months from its date unless otherwise
provided in the proxy and (b) in all elections for directors every shareholder
shall have the right to vote, in person or by proxy, the shares owned of record
by him, for as many persons as there are directors to be elected and for whose
election he has a right to vote.
SECTION 7. CONDUCT OF SHAREHOLDERS' MEETINGS. Each meeting of
shareholders shall be presided over by the Chairman of the Board, or if he is
not present, by the President or a Vice-President of the Corporation designated
by the Chairman of the Board to act as Chairman of the meeting, or if none of
the foregoing is present, by a Chairman to be elected at the meeting. The
Secretary of the Corporation, or if he is not present, an Assistant Secretary,
or if neither is present, a secretary to be named at the meeting, shall act as
secretary of the meeting.
ARTICLE II.
BOARD OF DIRECTORS.
SECTION 1. NUMBER; TERM. The business and affairs of the Corporation
shall be managed under the direction of a Board of ten members, but from time to
time such number may be increased to not more than twenty or decreased to not
less than three, by vote of a majority of the entire Board of Directors,
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors so made by the Board.
At each annual meeting of shareholders the shareholders shall elect
directors to hold office until the next annual meeting or until their successors
are elected and qualify, subject to the right of removal granted by law.
Directors need not be shareholders.
SECTION 2. VACANCIES. Any vacancy occurring in the Board of Directors
for any cause other than by reason of an increase in the number of directors may
be filled by the vote of a majority of the remaining directors, although such
majority is less than a quorum. Any vacancy occurring by reason of an increase
in the number of directors may be filled by action of a majority of the entire
Board of
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Directors. A director elected by the Board of Directors to fill a vacancy shall
be elected to hold office until the next annual meeting of shareholders or until
his successor is elected and qualifies.
SECTION 3. MEETINGS. Meetings of the Board of Directors, regular or
special, may be held at any place in or out of the State of Maryland as the
Board may from time to time determine or as shall be specified or filed in the
respective notices or waivers of notice thereof.
Regular meetings of the Board shall be held at such time as the Board
may from time to time determine. No notice need be given of regular meetings of
the Board.
Special meetings of the Board may be held at any time upon call of the
Chairman of the Board, at the request of the Executive Committee or of a
majority of the directors, by the Secretary, by oral, telegraphic or written
notice duly served on or sent or mailed to each director not less than two days
before such meeting. Such notice need not include a statement of the business to
be transacted at, or the purpose of, such special meeting. A written waiver of
notice, signed by the director entitled to such notice and filed with the
records of the meeting, whether before or after the holding thereof, or actual
attendance at the meeting, shall be deemed equivalent to the giving of notice to
such director.
At all meetings of the Board, a majority of the entire Board, but not
less than two directors, shall constitute a quorum for the transaction of
business. If there be less than a quorum present at any meeting of the Board, a
majority of those present may adjourn the meeting from time to time.
The action of a majority of the directors present at a meeting at which
a quorum is present shall be the action of the Board unless the concurrence of a
greater proportion is required for such action by statute, the Articles of
Incorporation or these By-Laws.
SECTION 4. AUDIT COMMITTEE. The Board of Directors may by the
affirmative vote of a majority of the entire Board appoint from its members an
Audit Committee composed of two or more directors, who are not "interested
persons" (as defined in the Investment Company Act of 1940) of the Corporation
as the Board may from time to time determine. The Audit Committee shall (a)
recommend independent public accountants for selection by the Board, (b) review
the scope of audit, accounting and financial internal controls and the quality
and adequacy of the Corporation's accounting staff with the independent public
accountants and such other persons as may be deemed appropriate, (c) review with
the accounting staff and independent public accountants the compliance of
transactions of the Corporation with J. & W. Seligman & Co. Incorporated or any
other manager of the affairs of the Corporation and with any affiliate of such
firm or manager with the financial terms of applicable agreements, (d) and
review reports of the independent public accountants and comment to the Board
when warranted, (e) report to the Board at least once each year and at such
other times as the committee deems desirable, and (f) be directly available at
all times to the independent public accountants and responsible officers of the
Corporation for consultation on audit, accounting and related financial matters.
SECTION 5. DIRECTOR NOMINATING COMMITTEE. The Board of Directors may by
the affirmative vote of a majority of the entire Board appoint from its members
Director Nominating
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Committee composed of two or more directors, who are not "interested persons" of
the Corporation as the Board may from time to time determine. The Director
Nominating Committee shall recommend to the Board a slate of persons to be
nominated for election as directors by the shareholders at each annual meeting
of shareholders and a person to be elected to fill any vacancy occurring for any
reason in the Board.
SECTION 6. PORTFOLIO TRANSACTIONS COMMITTEE. The Board of Directors may
appoint from its members a Portfolio Transactions Committee, such committee to
be composed of two or more directors, who are not "interested persons" of the
Corporation as the Board may from time to time determine. The Portfolio
Transactions Committee shall maintain familiarity with, report to the Board
concerning, and make such recommendations to the Board as it may deem
appropriate with respect to, the practices followed in the handling of orders to
buy and sell portfolio securities for the Corporation and the commissions or
other compensation paid in respect of portfolio transactions.
SECTION 7. EXECUTIVE COMMITTEE. The Board of Directors may appoint from
its members an Executive Committee composed of two or more directors, as the
Board may from time to time determine of which committee the Chairman of the
Board shall be a member. In the intervals between meetings of the Board, the
Executive Committee shall have the power of the Board to (a) determine the value
of securities and assets owned by the Corporation, (b) elect or appoint officers
of the Corporation to serve until the next meeting of the Board and (c) take
such action as may be necessary to manage the portfolio security loan business
of the Corporation.
All action by the Executive Committee shall be recorded and reported to
the Board at its meeting next succeeding such action.
SECTION 8. OTHER COMMITTEES. The Board of Directors may appoint from
among its members other committees composed of two or more directors which shall
have such powers as may be delegated or authorized by the resolution appointing
them.
SECTION 9. COMMITTEE PROCEDURES. The Board of Directors may at any
time, in conformity with the recommendations of the Board Operations Committee,
change the members of any committee, fill vacancies or discharge any committee.
In the absence of any member of any committee, the member or members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an interested person (as
defined in the Investment Company Act of 1940) of the Corporation.
Each committee may fix its own rules of procedure and may meet as and
when provided by those rules.
A majority of the members of the Board Operations Committee, and two or
more members of any other committee, shall constitute a quorum unless the Board
shall otherwise provide.
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Copies of the minutes of all meetings of committees other than the
Nominating Committee and the Executive Committee shall be distributed to the
Board unless the Board shall otherwise provide.
SECTION 10. TELEPHONE MEETINGS. Members of the Board of Directors or a
committee of the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time. Participation
in a meeting by these means constitutes presence in person at the meeting.
SECTION 11. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent to such action is signed by
all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
SECTION 12. COMPENSATION OF DIRECTORS. The Board of Directors shall
have the authority to fix the compensation of the directors for services in any
capacity.
ARTICLE III.
OFFICERS.
SECTION 1. OFFICERS. The executive officers of the Corporation shall be
elected by the Board of Directors and shall be a Chairman of the Board, who
shall be the chief executive officer of the Corporation, a President, one or
more Vice-Presidents, a Secretary and a Treasurer. The Chairman of the Board
shall be selected from among the directors. The Board may also appoint such
other officers, employees and agents as it may deem appropriate. Any two or more
offices, except those of President and Vice-President, may be held by the same
person but no person shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law, the Articles of
Incorporation or these By-Laws to be executed, acknowledged or verified by two
or more officers.
SECTION 2. TERM. Officers shall serve for one year and until their
successors are elected and shall qualify, but any officer may be removed (except
as a director) by action of a majority of the entire Board of Directors
whenever, in the judgment of the Board, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
SECTION 3. AUTHORITY AND DUTIES. All officers and agents of the
Corporation shall have such authority and perform such duties in the management
of the property and affairs of the Corporation as generally pertain to their
respective offices, as well as such authority and duties as may be determined by
resolution of the Board of Directors.
Without limiting the generality of the foregoing and subject to the
provisions of the Articles of Incorporation of the Corporation and to the order
of the Board of Directors, the Treasurer shall be the chief financial and
accounting officer of the Corporation and as such shall receive, or cause to be
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received, and give, or cause to be given, receipt for all funds and securities
paid or delivered to, or for the account of the Corporation; shall cause such
funds and securities to be deposited for the account of the Corporation; with
such custodians as may be designated by the Board of Directors; shall pay or
cause to be paid out of the funds of the Corporation all just debts of the
Corporation upon their maturity; shall maintain, or cause to be maintained,
accurate records of all receipts, disbursements, assets, liabilities and
transactions of the Corporation; shall see that adequate audits thereof are
regularly made; and shall, when required by the Board of Directors, render
accurate statements of the condition of the Corporation.
SECTION 4. COMPENSATION OF OFFICERS. The Board of Directors may
determine what, if any, compensation shall be paid to officers of the
Corporation.
ARTICLE IV.
INDEMNIFICATION.
The Corporation shall indemnify directors, officers, employees and
agents of the Corporation against judgments, fines, settlements, penalties and
expenses to the fullest extent authorized, and in the manner permitted, by
applicable federal and state laws.
ARTICLE V.
CAPITAL STOCK.
SECTION 1. CERTIFICATES OF STOCK. Each shareholder shall be entitled to
a certificate or certificates which shall represent and certify the number of
whole shares of stock owned by him in the Corporation. Each certificate shall be
signed by the Chairman of the Board, President or a Vice-President and
countersigned by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer and shall be sealed with the corporate seal. The signatures
may be either manual or facsimile signatures and the seal may be either
facsimile or any other form of seal. In case any officer who has signed any
certificate ceases to be an officer of the Corporation before the certificate is
issued, the certificate may nevertheless be issued by the Corporation with the
same effect as if the officer had not ceased to be such officer as of the date
of its issue.
SECTION 2. LOST CERTIFICATES. The Board of Directors may determine the
conditions upon which a new certificate of stock may be issued in place of a
certificate which is alleged to have been lost, destroyed or stolen. It may, in
its discretion, require the owner of such certificate to give bond, with
sufficient surety, to the Corporation to indemnify it against any loss or claim
which may arise by reason of the issuance of a new certificate.
SECTION 3. RECORD DATES; CLOSING OF TRANSFER BOOKS. The Board of
Directors may fix, in advance, a date as the record date for the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders, or shareholders entitled to receive payment of any dividend or the
allotment of any rights, or in order to make a determination of shareholders for
any other proper purpose.
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Such date in any case shall be not more than ninety days, and in the case of a
meeting of shareholders, not less than ten days, prior to the date of the action
that requires such determination.
SECTION 4. STOCK LEDGER. An original or duplicate stock ledger
containing the names and addresses of all shareholders and the number of shares
of each class held by each shareholder, shall be kept by the Secretary at the
office of the Corporation in the City of New York, or in Jersey City, New
Jersey, or at such other office or agency of the Corporation in the City of New
York and Jersey City, as the Board of Directors may from time to time by
resolution determine.
ARTICLE VI.
CHECKS, NOTES, ETC.
All checks and drafts on the Corporation's bank accounts and all bills
of exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers, or agent or agents, as shall be thereunto authorized from time to time
by the Board of Directors.
ARTICLE VII.
BOOKS AND RECORDS.
The books of the Corporation other than the original or duplicate stock
ledger may be kept at such place or places in or out of the State of Maryland as
the Board of Directors may from time to time determine.
ARTICLE VIII.
SEAL.
The Board of Directors shall provide a suitable corporate seal, in such
form and bearing such inscriptions as they may determine.
ARTICLE IX.
FISCAL YEAR.
The fiscal year of the Corporation shall be the calendar year, subject,
however, to change from time to time by the Board of Directors.
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ARTICLE X.
CUSTODIAN.
All securities and funds of the Corporation shall be held by one or
more custodians each of which shall be a bank or trust company having not less
than $50,000,000 aggregate capital, surplus and undivided profits, as shown by
its last published report, provided any such custodian can be found ready and
willing to act.
The terms of custody of such securities and funds shall include
provisions to the effect that the custodian shall deliver securities owned by
the Corporation only (a) upon sales of such securities for the account of the
Corporation and receipt by the custodian of payment therefor, (b) when such
securities are called, redeemed or retired or otherwise become payable, (c) in
exchange for or upon conversion into other securities alone or other securities
and cash, whether pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (d) upon conversion of such
securities pursuant to their terms into other securities, (e) upon exercise of
subscription, purchase or other similar rights represented by such securities,
(f) for the purpose of exchanging interim receipts or temporary securities for
definitive securities, (g) for the purpose of redeeming in kind shares of the
capital stock of the Corporation, (h) for loans of securities by the
Corporation, or (i) for other proper corporate purposes.
Such terms of custody shall also include provisions to the effect that
the custodian shall deliver funds of the Corporation only (a) upon the purchase
of securities for the portfolio of the Corporation and the delivery of such
securities to the custodian, (b) for the repurchase or redemption of shares of
the capital stock of the Corporation, (c) for the payment of dividends, taxes,
management or supervisory fees or operating expenses, (d) for payments in
connection with the conversion, exchange or surrender of securities owned by the
Corporation, (e) for payments in connection with the return of securities loaned
by the Corporation or the reduction of cash collateral, or (f) for other proper
corporate purposes.
Upon the resignation or inability of any such custodian to serve, the
Corporation shall (a) use its best efforts to obtain a successor custodian, (b)
require the funds and securities of the Corporation held by the custodian to be
delivered to the successor custodian, and (c) in the event that no successor
custodian can be found, submit to the shareholders of the Corporation, before
permitting delivery of such funds and securities to anyone other than a
successor custodian, the question whether the Corporation shall be dissolved or
shall function without a custodian; provided however, that nothing herein
contained shall prevent the termination of any agreement between the Corporation
and any such custodian by the affirmative vote of the holders of a majority of
the outstanding shares of the capital stock of the Corporation entitled to vote.
Such terms of custody shall further provide that, pending appointment
of a successor custodian or a vote of the shareholders to function without a
custodian, a custodian shall not deliver funds and other property of the
Corporation to the Corporation, but may deliver them to a bank or trust company
of its own selection having not less than $50,000,000 aggregate capital,
surplus, and undivided profits, as shown by its last published report, as
custodian for the Corporation to be held under terms similar to those under
which they were held by the retiring custodian.
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Subject to such rules, regulations and orders as the Securities and
Exchange Commission may adopt, the Corporation may authorize or direct a
custodian to deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
custodian.
The Corporation may also have such transfer agents and registrars of
the shares of its capital stock as the Board of Directors shall from time to
time determine. The Board of Directors may employ and fix the powers, rights,
duties, responsibilities, privileges, immunities, and compensation of any such
custodian, transfer agent, or registrar, subject however, in the case of any
such custodian, to the foregoing provision of this paragraph.
As used herein, the term "receipt by the custodian of payment" shall
include the receipt of (a) a certified or official bank check, (b) any advice
that funds have been or will be credited to the account of the custodian at a
clearing agency registered under the Securities Exchange Act of 1934, or (c) a
bank wire from a correspondent bank of the custodian. As used herein, the term
"delivery of such securities to the custodian" shall include the receipt of (a)
securities in bearer form or in proper form for transfer, or (b) any advice that
securities have been credited to the account of the custodian at a clearing
agency registered under the Securities Exchange Act of 1934, or at the Federal
Reserve Bank of New York.
ARTICLE XI.
AMENDMENTS.
The Board of Directors is authorized and empowered to make, alter or
repeal the By-Laws of the Corporation, in any manner not inconsistent with the
laws of the State of Maryland or the Articles of Incorporation of the
Corporation.
DISTRIBUTING AGREEMENT
DISTRIBUTING AGREEMENT, dated as of January 1, 1993, between SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC., a Maryland corporation (the "Fund"),
and SELIGMAN FINANCIAL SERVICES, INC., a Delaware corporation ("Seligman
Financial Services").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. EXCLUSIVE DISTRIBUTOR. The Fund hereby agrees that Seligman Financial
Services shall be for the period of this Agreement exclusive agent for
distribution within the United States and its territories, and Seligman
Financial Services agrees to use its best efforts during such period to
effect such distribution of shares of Capital Stock ("Shares") of the
Fund; PROVIDED, HOWEVER, that nothing herein shall prevent the Fund, if
it so elects, from selling or otherwise distributing its Shares
directly to any persons other than dealers. The Fund understands that
Seligman Financial Services also acts as agent for distribution of the
shares of capital stock or beneficial interest of other open-end
investment companies which have entered into management agreements with
J. & W. Seligman & Co. Incorporated (the "Manager").
2. SALES OF SHARES. Seligman Financial Services is authorized, as agent
for the Fund and not as principal, (a) to sell Shares of the Fund to
such dealers as Seligman Financial Services may select pursuant to the
terms of written sales agreements (which may also relate to sales of
shares of capital stock or shares of beneficial interest of other
open-end investment companies which have entered into management
agreements with the Manager), in form or forms approved by the Fund,
and (b) to sell Shares of the Fund to other purchasers on such terms as
may be provided in the then current prospectus of the Fund relating to
such Shares; PROVIDED, HOWEVER, that no sales of Shares shall be
confirmed by Seligman Financial Services at any time when, according to
advice received by Seligman Financial Services from the Fund, the
officers of the Fund have for any reason sufficient to them temporarily
or permanently suspended or discontinued the sale and issuance of the
Shares. Each sale of Shares shall be effected by Seligman Financial
Services only at the applicable price determined by the Fund in the
manner prescribed in its then current prospectus relating to such
Shares. Seligman Financial Services shall comply with all applicable
laws, rules and regulations including, without limiting the generality
of the foregoing, all rules or regulations made or adopted pursuant to
Section 22 of the Investment Company Act of 1940 (the "1940 Act") by
the
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Securities and Exchange Commission or any securities association
registered under the Securities Exchange Act of 1934.
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The Fund agrees, as long as its Shares may legally be issued, to fill
all orders confirmed by Seligman Financial Services in accordance with
the provisions of this Agreement.
3. REPURCHASE AGENT. Seligman Financial Services is authorized, as agent
for the Fund and not as principal, to accept offers for resale to the
Fund and to repurchase on behalf of the Fund Shares of the Fund at net
asset values determined by the Fund in conformity with its then current
prospectus relating to such Shares.
4. COMPENSATION. As compensation for the services of Seligman Financial
Services under this Agreement, Seligman Financial Services shall be
entitled to receive the sales charge, determined in conformity with the
Fund's then current prospectus relating to such Shares, on all sales of
Shares of the Fund confirmed by Seligman Financial Services hereunder
and for which payment has been received, less the dealers' concession
allowed in respect of such sales. In addition, in accordance with the
terms of the Fund's Administration, Shareholder Services and
Distribution Plan (the "Plan"), the Fund may make payments from time to
time to Seligman Financial Services in accordance with the terms and
limitations of, and for the purposes set forth in the Plan.
5. EXPENSES. Seligman Financial Services agrees promptly to pay or
reimburse the Fund for all expenses (except expenses incurred by the
Fund in connection with the preparation, printing and distribution of
any prospectus or report or other communication to shareholders, to the
extent that such expenses are incurred to effect compliance with any
Federal or State law or to enable such distribution to shareholder(s)
(a) of printing and distributing copies of any prospectus and of
preparing, printing and distributing any other material used by
Seligman Financial Services in connection with offering Shares of the
Fund for sale, and (b) of advertising in connection with such offering.
The Fund agrees to pay all expenses in connection with the registration
of Shares of the Fund under the Securities Act of 1933 (the "Act"), all
fees and related expenses which may be incurred in connection with the
qualification of Shares of the Fund for sale in such States (as well as
the District of Columbia, Puerto Rico and other territories) as
Seligman Financial Services may designate, and all expenses in
connection with maintaining facilities for the issue and transfer of
its Shares, of supplying information, prices and other data to be
furnished by it hereunder, and through Union Data Service Center, Inc.,
of all data processing and related services related to the share
distribution activity contemplated hereby.
The Fund agrees to execute such documents and to furnish such
information as may be reasonably necessary, in the discretion of the
Directors of the Fund, in
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connection with the qualification of Shares of the Fund for sale in
such States (as well as the District of Columbia, Puerto Rico and other
territories) as Seligman Financial Services may designate. Seligman
Financial Services also agrees to pay all fees and related expenses
connected with its own qualification as a broker or dealer under
Federal or State laws and, except as otherwise specifically provided in
this Agreement or agreed to by the Fund, all other expenses incurred by
Seligman Financial Services in connection with the sale of Shares of
the Fund as contemplated in this Agreement (including the expenses of
qualifying the Fund as a dealer or broker under the laws of such States
as may be designated by Seligman Financial Services, if deemed
necessary or advisable by the Fund).
It is understood and agreed that any payments made to Seligman
Financial Services pursuant to the Plan may be used to defray some or
all of the expenses incurred by Seligman Financial Services pursuant to
this Agreement.
6. PROSPECTUS AND OTHER INFORMATION. The Fund represents and warrants
to and agrees with Seligman Financial Services that:
(a) A registration statement, including one or more prospectuses
relating to the Shares, has been filed by the Fund under the
Act and has become effective. Such registration statement, as
now in effect and as from time to time hereafter amended, and
also any other registration statement relating to the Shares
which may be filed by the Fund under the Act which shall
become effective, is herein referred to as the "Registration
Statement", and any prospectus or prospectuses filed by the
Fund as a part of the Registration Statement, as the
"Prospectus".
(b) At all times during the term of this Agreement, except when
the officers of the Fund have suspended or discontinued the
sale and issuance of Shares of the Fund as contemplated by
Section 2 hereof, the Registration Statement and Prospectus
will conform in all respects to the requirements of the Act
and the rules and regulations of the Securities and Exchange
Commission, and neither of such documents will include any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statement therein not misleading, except that the
foregoing does not apply to any statements or omissions in
either of such documents based upon written information
furnished to the Fund by Seligman Financial Services
specifically for use therein.
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The Fund agrees to prepare and furnish to Seligman Financial Services
from time to time a copy of its Prospectus, and authorizes Seligman
Financial Services to use such Prospectus, in the form furnished to
Seligman Financial Services from time to time, in connection with the
sale of the Fund's Shares. The Fund also agrees to furnish Seligman
Financial Services from time to time, for use in connection with the
sale of such Shares, such information with respect to the Fund and its
Shares as Seligman Financial Services may reasonably request.
7. REPORTS. Seligman Financial Services will prepare and furnish to the
Directors of the Fund at least quarterly a written report complying
with the requirements of Rule 12b-1 under the 1940 Act setting forth
all amounts expended under the Plan and the purposes for which such
expenditures were made.
8. INDEMNIFICATION. (a) The Fund will indemnify and hold harmless Seligman
Financial Services and each person, if any, who controls Seligman
Financial Services within the meaning of the Act against any losses,
claims, damages or liabilities to which Seligman Financial Services or
such controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Fund's
Registration Statement or Prospectus or any other written sales
material prepared by the Fund which is utilized by Seligman Financial
Services in connection with the sale of Shares or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or (in the case of the Registration
Statement and Prospectus) necessary to make the statements therein not
misleading or (in the case of such other sales material) necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse Seligman
Financial Services and each such controlling person for any legal or
other expenses reasonably incurred by Seligman Financial Services or
such controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Fund will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus in
conformity with written information furnished to the Fund by Seligman
Financial Services specifically for use therein; and provided, further,
that nothing herein shall be so construed as to protect Seligman
Financial Services against any liability to the Fund or its security
holders to which Seligman Financial Services would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence, in the
performance of its duties, or by reason of the reckless disregard by
Seligman Financial Services of its obligations and duties under this
Agreement. This indemnity agreement will be in addition to any
liability which the Fund may otherwise have.
(b) Seligman Financial Services will indemnify and hold harmless
the Fund, each of its Directors and officers and each person,
if any, who controls the Fund within the meaning of the Act,
against any losses, claims, damages or liabilities to which
the Fund or any such Director, officer or controlling person
may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus or any
sales material not prepared by the Fund which is utilized in
connection with the sale of Shares or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or (in
the case of the Registration Statement and Prospectus)
necessary to make the statements therein not misleading or (in
the case of such other sales material) necessary to make the
statements therein not misleading in the light of the
circumstances under which they were made, in the case of the
Registration Statement and Prospectus to the extent, but only
to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in
conformity with written information furnished to the Fund by
Seligman Financial Services specifically for use therein; and
Seligman Financial Services will reimburse any legal or other
expenses reasonably incurred by the Fund or any such Director,
officer or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any
liability which Seligman Financial Services may otherwise
have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section, notify
the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve
it from liability which it may have to any indemnified party
otherwise than under this Section. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein
and, to the extent that it may wish, to assume the defense
thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such
indemnified party of its election to assume the defense
thereof, the indemnifying party will not
6
<PAGE>
be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
9. EFFECTIVE DATE. This Agreement shall become effective upon its
execution by an authorized officer of the respective parties to this
Agreement, but in no event prior to shareholder approval of the Plan.
10. TERM OF AGREEMENT. This Agreement shall continue in effect until
December 31 of the year in which it is first effective and through
December 31 of each year thereafter if such continuance is approved in
the manner required by the 1940 Act and the rules thereunder and
Seligman Financial Services shall not have notified the Fund in writing
at least 60 days prior to the anniversary date of the previous
continuance that it does not desire such continuance. This Agreement
may be terminated at any time, without payment of penalty on 60 days'
written notice to the other party by vote of a majority of the
Directors of the Fund who are not interested persons (as defined in the
1940 Act) of the Fund and have no direct or indirect financial interest
in the operation of the Plan or any agreement related thereto, or by
vote of a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act). This Agreement shall automatically terminate
in the event of its assignment (as defined in the 1940 Act).
11. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to
the contrary notwithstanding, this Agreement shall not be construed to
require, or to impose any duty upon, either of the parties to do
anything in violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and Seligman Financial Services have
caused this Agreement to be executed by their duly authorized officers as of the
date first above written.
SELIGMAN COMMUNICATIONS AND
INFORMATION FUND, INC.
By:
-----------------------------------
Ronald T. Schroeder, President
7
<PAGE>
SELIGMAN FINANCIAL SERVICES, INC.
By:
-----------------------------------
Donald R. Pitti, President
CUSTODY AGREEMENT
THIS AGREEMENT made the --------- day of ----------, 19 , by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the
laws of the state of Missouri, having its trust office located at 127 West 10th
Street, Kansas City, Missouri 64105 ("Custodian"), and SELIGMAN COMMUNICATIONS
AND INFORMATION FUND, INC., a Maryland corporation, having its principal office
and place of business at One Bankers Trust Plaza, New York, New York 10006
("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian and Recordkeeper of the securities and monies of Fund and its now
existing and future established portfolios (individually referred to herein as
Portfolio); and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints
Custodian as custodian of the Fund which is to include:
A. Appointment as custodian of the securities and monies at any
time owned by each Portfolio of the Fund; and
B. Appointment as agent to perform certain accounting and
recordkeeping functions required of a duly registered
investment company in compliance with applicable provisions of
federal, state, and local laws, rules and regulations
including, as may be required:
1
<PAGE>
1. Providing information necessary for Fund and each
Portfolio to file required financial reports;
maintaining and preserving required books, accounts
and records as the basis for such reports; and
performing certain daily functions in connection with
such accounts and records, and
2. Calculating daily net asset value of each Portfolio
of the Fund, and
3. Acting as liaison with independent auditors.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Board of Directors of Fund appointing
Custodian as custodian hereunder and approving the form of
this Agreement; and
B. Resolutions of the Board of Directors of Fund designating
certain persons to give instructions on behalf of Fund to
Custodian and authorizing Custodian to rely upon such
instructions.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
------------------
Fund will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as
practicable, and from time to time thereafter, all portfolio
securities acquired by it and monies then owned by it (except
as permitted by the Investment Company Act of 1940) or from
time to time coming into its possession during the time this
Agreement shall continue in effect. Custodian shall have no
responsibility or liability whatsoever for or on account of
securities or monies not so delivered. All securities so
delivered to Custodian (other than bearer securities) shall be
registered in the name of Fund or its nominee, or of a nominee
of Custodian, or shall be properly endorsed and in form for
transfer satisfactory to Custodian.
2
<PAGE>
B. Delivery of Accounts and Records
--------------------------------
Fund shall turn over to Custodian all of the Fund's relevant
accounts and records previously maintained by it. Custodian
shall be entitled to rely conclusively on the completeness and
correctness of the accounts and records turned over to it by
Fund, and Fund shall indemnify and hold Custodian harmless of
and from any and all expenses, damages and losses whatsoever
arising out of or in connection with any error, omission,
inaccuracy or other deficiency of such accounts and records or
in the failure of Fund to provide any portion of such or to
provide any information needed by the Custodian knowledgeably
to perform its function hereunder.
C. Delivery of Assets to Third Parties
-----------------------------------
Custodian will receive delivery of and keep safely the assets
of Fund delivered to it from time to time and the assets of
each Portfolio segregated in a separate account. Custodian
will not deliver, assign, pledge or hypothecate any such
assets to any person except as permitted by the provisions of
this Agreement or any agreement executed by it according to
the terms of section 3.S. of this Agreement. Upon delivery of
any such assets to a subcustodian pursuant to Section 3.S. of
this agreement, Custodian will create and maintain records
identifying those assets which have been delivered to the
subcustodian as belonging to the applicable Portfolio of the
Fund. The Custodian is responsible for the safekeeping of the
securities and monies of Fund only until they have been
transmitted to and received by other persons as permitted
under the terms of this Agreement, except for securities and
monies transmitted to United Missouri Bank of Kansas City,
N.A. (UMBKC), United Missouri Trust Company of New York
(UMBTC), First National Bank of Chicago (FNBC) for which
Custodian remains responsible. Custodian shall also be
responsible for the monies and securities of Fund(s) held by
eligible foreign subcustodians to the extent the domestic
custodian with which the Custodian contracts is responsible to
Custodian. Custodian may participate directly or indirectly
through a subcustodian in the Depository Trust
3
<PAGE>
Company, Treasury/Federal Reserve Book Entry System,
Participant Trust Company or other depository approved by the
Fund (as such entities are defined at 17 CFR Section
270.17f-4(b)).
4
<PAGE>
D. Registration of Securities
--------------------------
Custodian will hold stocks and other registerable portfolio
securities of Fund registered in the name of Fund or its
nominee or in the name of any nominee of Custodian for whose
fidelity and liability Custodian will be fully responsible, or
in street certificate form, so-called, with or without any
indication of fiduciary capacity. Unless otherwise instructed,
Custodian will register all such portfolio securities in the
name of its authorized nominee, as defined in the Internal
Revenue Code and any Regulations of the Treasury Department
issued thereunder or in any provision of any subsequent
Federal tax law exempting such transaction from liability for
stock transfer taxes. All securities, and the ownership
thereof by a Portfolio of the Fund, which are held by
Custodian hereunder, however, shall at all times be
identifiable on the records of the Custodian. The Fund agrees
to hold Custodian and its nominee harmless for any liability
as a record holder of securities held in custody.
E. Exchange of Securities
----------------------
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of the applicable
Portfolio of the Fund for other securities or cash issued or
paid in connection with any reorganization, recapitalization,
merger, consolidation, split-up of shares, change of par
value, conversion or otherwise, and will deposit any such
securities in accordance with the terms of any reorganization
or protective plan. Without instructions, Custodian is
authorized to exchange securities held by it in temporary form
for securities in definitive form, to effect an exchange of
shares when the par value of the stock is changed, and, upon
receiving payment therefor, to surrender bonds or other
securities held by it at maturity or when advised of an
earlier mandatory call for redemption, except that Custodian
shall receive instructions prior to surrendering any
convertible security. Pursuant to this paragraph, the
Custodian will inform the Fund of such corporate
5
<PAGE>
actions and capital changes when it is informed of them
through the publications it subscribes to.
F. Purchases of Investments of the Fund
------------------------------------
Fund will, on each business day on which a purchase of
securities shall be made by it, deliver to Custodian
instructions which shall specify with respect to each such
purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the
security;
3. The number of shares or the principal amount
purchased, and accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage
commission, taxes and other expenses payable in
connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or
dealer through whom the purchase was made.
In accordance with such instructions, Custodian will pay for
out of monies held for the account of such named Portfolio,
but only insofar as monies are available therein for such
purpose, and receive the portfolio securities so purchased by
such named Portfolio, except that Custodian may in its sole
discretion advance funds to the Fund which may result in an
overdraft because the monies held by the Custodian on behalf
of the Fund are insufficient to pay the total amount payable
upon such purchase. Such payment will be made only upon
receipt by Custodian of the securities so purchased in form
for transfer satisfactory to Custodian. Custodian agrees to
promptly inform Fund of any failures by sellers to make proper
deliveries of securities purchased by the Fund.
6
<PAGE>
G. SALES AND DELIVERIES OF INVESTMENTS OF THE FUND - OTHER THAN
OPTIONS AND FUTURES Fund will, on each business day on which a
sale of investment securities of Fund has been made, deliver
to Custodian instructions specifying with respect to each such
sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the
securities;
3. The number of shares or principal amount sold, and
accrued interest, if any;
4. The date on which the securities sold were purchased
or other information identifying the securities sold
and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission,
taxes or other expenses payable in connection with
such sale;
8. The total amount to be received by Fund upon such
sale; and
9. The name and address of the broker or dealer through
whom or person to whom the sale was made.
In accordance with such instructions, Custodian will deliver
or cause to be delivered the securities thus designated as
sold for the account of such Portfolio to the broker or other
person specified in the instructions relating to such sale,
such delivery to be made only upon receipt of payment therefor
in such form as is satisfactory to Custodian, with the
understanding that Custodian may deliver or cause to be
delivered securities for payment in accordance with the
customs prevailing among dealers in securities. Custodian
agrees to promptly inform Fund of any failures of purchasers
to make proper payment for securities sold by Fund.
7
<PAGE>
H. Purchasesor Sales of Security Options, Options on Indices and
Security Index Futures Contracts
--------------------------------------------------------------
Fund will, on each business day on which a purchase or sale of
the following options and/or futures shall be made by it,
deliver to Custodian instructions which shall specify with
respect to each such purchase or sale:
1. The name of the Portfolio making such purchase or
sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or
call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer
through whom the sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening,
exercising, expiring or closing transaction;
h. Whether the transaction involves a put or
call;
i. Whether the option is written or purchased;
8
<PAGE>
j. The name and address of the broker or dealer
through whom the sale or purchase was made,
or other applicable settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the
contract and, when available, the closing
level, thereof;
b. The index level on the date the contract is
entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in
addition to instructions, and if not already
in the possession of Custodian, Fund shall
deliver a substantially complete and
executed custodial safekeeping account and
procedural agreement which shall be
incorporated by reference into this Custody
Agreement); and
f. The name and address of the futures
commission merchant through whom the sale or
purchase was made, or other applicable
settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or
call;
h. Whether the option is written or purchased;
and
i. The market on which the option is traded.
9
<PAGE>
I. Securities Pledged or Loaned
----------------------------
If specifically allowed for in the prospectus of the
applicable Portfolio of the Fund:
1. Upon receipt of instructions, Custodian will release
or cause to be released securities held in custody to
the pledgee designated in such instructions by way of
pledge or hypothecation to secure any loan incurred
by a Portfolio of the Fund; provided, however, that
the securities shall be released only upon payment to
Custodian of the monies borrowed, except that in
cases where additional collateral is required to
secure a borrowing already made, further securities
may be released or caused to be released for that
purpose upon receipt of instructions. Upon receipt of
instructions, Custodian will pay, but only from funds
available for such purpose, any such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note
or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated
in such instructions; provided, however, that the
securities will be released only upon deposit with
Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the
right to any dividends, interest or distribution on
such loaned securities. Upon receipt of instructions
and the loaned securities, Custodian will release the
cash collateral to the borrower.
J. Routine Matters
---------------
Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
securities or other property of Fund except as may be
otherwise provided in this Agreement or directed from time to
time by the Board of Directors of Fund.
10
<PAGE>
K. Deposit Account
---------------
Custodian will open and maintain a special purpose deposit
account(s) in the name of Custodian on behalf of each
Portfolio (Accounts), subject only to draft or order by
Custodian upon receipt of instructions. All monies received by
Custodian from or for the account of a Portfolio shall be
deposited in said Accounts. Barring events not in the control
of the Custodian such as strikes, lockouts or labor disputes,
riots, war or equipment or transmission failure or damage,
fire, flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond its
control, at 9:00 a.m., Kansas City time, on the second
business day after deposit of any check into Fund's Account,
Custodian agrees to make Fed Funds available to the
appropriate Portfolio of the Fund in the amount of the check.
Deposits made by Federal Reserve wire will be available to the
Fund immediately and ACH wires will be available to the Fund
on the next business day. Income earned on the portfolio
securities will be credited to the applicable Portfolio of the
Fund based on the schedule attached as Exhibit A, except that
income earned on portfolio securities held by domestic
subcustodians other than UMBKC, UMBTC, Bank of New York
(previously Irving Trust Company and hereinafter referred to
as BONY) and Morgan Guaranty and Trust Company (MGT) will be
credited when received. The Custodian will be entitled to
reverse any credited amounts where credits have been made and
monies are not finally collected. If monies are collected
after such reversal, the Custodian will credit the applicable
Portfolio in that amount. Custodian may open and maintain an
Account in such other banks or trust companies as may be
designated by it and by properly authorized resolution of the
Board of Directors of Fund, such Account, however, to be in
the name of Custodian on behalf of the applicable portfolio of
the Fund and subject only to its draft or order.
L. Income and other Payments to Fund
---------------------------------
Custodian will:
11
<PAGE>
1. Collect, claim and receive and deposit for the
Account of each Portfolio of the Fund all income and
other payments which become due and payable on or
after the effective date of this Agreement with
respect to the securities deposited under this
Agreement, and credit the account of the applicable
Portfolio of the Fund in accordance with the schedule
attached hereto as Exhibit A, except that income
earned on portfolio securities held by domestic
subcustodians other than UMBKC, UMBTC, BONY, and MGT
will be credited when received. Income from foreign
securities and assets held by eligible foreign
subcustodians shall be credited by Custodian upon
receipt of income from the domestic subcustodian
contracting with the foreign eligible subcustodians.
If, for any reason, the Fund is credited with income
that is not subsequently collected, Custodian may
reverse that credited amount;
2. Execute ownership and other certificates and
affidavits for all federal, state and local tax
purposes in connection with the collection of bond
and note coupons; and
3. Take such other action as may be necessary or proper
in connection with:
a. the collection, receipt and deposit of such
income and other payments, including but not
limited to the presentation for payment of:
1. all coupons and other income items
requiring presentation; and
2. all other securities which may
mature or be called, redeemed,
retired or otherwise become payable
and regarding which the Custodian
has actual knowledge, or notice of
which is contained in publications
of the type to which a custodian
for investment companies normally
subscribes for such purpose; and
12
<PAGE>
b. the endorsement for collection, in the name
of the applicable Portfolio of the Fund, of
all checks, drafts or other negotiable
instruments.
Custodian, however, will not be required to institute suit or
take other extraordinary action to enforce collection except
upon receipt of instructions and upon being indemnified to its
satisfaction against the costs and expenses of such suit or
other actions. Custodian will receive, claim and collect all
stock dividends, rights and other similar items and will deal
with the same pursuant to instructions. Unless prior
instructions have been received to the contrary, Custodian
will, without further instructions, sell any rights held for
the account of Fund on the last trade date prior to the date
of expiration of such rights.
M. Payment of Dividends and other Distributions
--------------------------------------------
On the declaration of any dividend or other distribution on
the shares of Capital Stock of any Portfolio ("Portfolio
Shares") by the Board of Directors of Fund, Fund shall deliver
to Custodian instructions with respect thereto, including a
copy of the Resolution of said Board of Directors certified by
the Secretary or an Assistant Secretary of Fund wherein there
shall be set forth the record date as of which shareholders
entitled to receive such dividend or other distribution shall
be determined, the date of payment of such dividend or
distribution, and the amount payable per share on such
dividend or distribution. Except if the ex-dividend date and
the reinvestment date of any dividend are the same, in which
case funds shall remain in the Custody Account, on the date
specified in such Resolution for the payment of such dividend
or other distribution, Custodian will pay out of the monies
held for the account of the applicable Portfolio of the Fund,
insofar as the same shall be available for such purposes, and
wire to the account of the Dividend Disbursing Agent for Fund,
such amount as may be necessary to pay the amount per share
payable in cash on Portfolio Shares issued and outstanding on
the record date established by such Resolution.
13
<PAGE>
N. Shares of Fund Purchased by Fund
--------------------------------
Whenever any Portfolio Shares are repurchased or redeemed by
Fund, Fund or its agent shall advise Custodian of the
aggregate dollar amount to be paid for such shares and shall
confirm such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the
Account of Portfolio and either deposit the same in the
account maintained for the purpose of paying for the
repurchase or redemption of Portfolio Shares or deliver the
same in accordance with such advice. Custodian shall not have
any duty or responsibility to determine that Fund Shares have
been removed from the proper shareholder account or accounts
or that the proper number of such shares have been canceled
and removed from the shareholder records.
O. Shares of Fund Purchased from Fund
----------------------------------
Whenever Portfolio Shares are purchased from Fund, Fund will
deposit or cause to be deposited with Custodian the amount
received for such shares. Custodian shall not have any duty or
responsibility to determine that Portfolio Shares purchased
from Fund have been added to the proper shareholder account or
accounts or that the proper number of such shares have been
added to the shareholder records.
P. Proxies and Notices
-------------------
Custodian will promptly deliver or mail or have delivered or
mailed to Fund all proxies properly signed, all notices of
meetings, all proxy statements and other notices, requests or
announcements affecting or relating to securities held by
Custodian for Fund and will, upon receipt of instructions,
execute and deliver or cause its nominee to execute and
deliver or mail or have delivered or mailed such proxies or
other authorizations as may be required. Except as provided by
this Agreement or pursuant to instructions hereafter received
by Custodian, neither it nor its nominee will exercise any
power inherent in any such securities, including
14
<PAGE>
any power to vote the same, or execute any proxy, power of
attorney, or other similar instrument voting any of such
securities, or give any consent, approval or waiver with
respect thereto, or take any other similar action.
Q. Disbursements
-------------
Custodian will pay or cause to be paid insofar as funds are
available for the purpose, bills, statements and other
obligations of Fund (including but not limited to obligations
in connection with the conversion, exchange or surrender of
securities owned by Fund, interest charges, dividend
disbursements, taxes, management fees, custodian fees, legal
fees, auditors' fees, transfer agents' fees, brokerage
commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting
forth the name of the person to whom payment is to be made,
the amount of the payment, and the purpose of the payment.
R. Daily Statement of Accounts
---------------------------
Custodian will, within a reasonable time, render to Fund as of
the close of business on each day, a detailed statement of the
amounts received or paid and of securities received or
delivered for the account of Fund during said day. Custodian
will, from time to time, upon request by Fund, render a
detailed statement of the securities and monies held for Fund
under this Agreement, and Custodian will maintain such books
and records as are necessary to enable it to do so and will
permit such persons as are authorized by Fund including Fund's
independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded,
will permit federal and state regulatory agencies to examine
the securities, books and records. Upon the written
instructions of Fund or as demanded by federal or state
regulatory agencies, Custodian will instruct any subcustodian
to give such persons as are authorized by Fund including
Fund's independent public accountants, access to such records
or confirmation of the contents of such records; and if
demanded, to
15
<PAGE>
permit federal and state regulatory agencies to examine the
books, records and securities held by subcustodian which
relate to Fund. Fund will be entitled to receive reports
produced by the Custodian's portfolio accounting system,
including without limitation, those listed on Exhibit C
hereof.
S. Appointment of Subcustodians
----------------------------
1. Notwithstanding any other provisions of this
Agreement, all of or any of the monies or securities
of Fund may be held in Custodian's own custody or in
the custody of one or more other banks or trust
companies selected by Custodian and approved by the
Fund's Board of Directors. Any such subcustodian must
have the qualifications required for custodian under
the Investment Company Act of 1940, as amended. The
subcustodian may participate directly or indirectly
in the Depository Trust Company, Treasury/Federal
Reserve Book Entry System, Participant Trust Company
or other depository approved by the Fund (as such
entities are defined at 17 CFR Sec. 270.17f-4(b)).
The appointment of UMBKC or any other subcustodian,
depository or clearing agency used by the Custodian
and approved by the Fund will not relieve Custodian
of any of its obligations hereunder except as
provided in Section 3.C hereof. The Custodian will
comply with Section 17f-4 of the Investment Company
Act of 1940, as amended, as to depositories and
clearing agencies used by Custodian and approved the
Fund. The Custodian will not be entitled to
reimbursement by Fund for any fees or expenses of any
subcustodian, depository or clearing agency.
2. Notwithstanding any other provisions of this
Agreement, Fund's foreign securities (as defined in
Rule 17f-5(c)(1) under the Investment Company Act of
1940) and Fund's cash or cash equivalents, in amounts
reasonably necessary to effect Fund's foreign
securities transactions, may be held in the custody
of one or more banks or trust companies acting as
16
<PAGE>
subcustodians, according to Section 3.S.1; and
thereafter, pursuant to a written contract or
contracts as approved by Fund's Board of Directors,
may be transferred to an account maintained by such
subcustodian with an eligible foreign custodian, as
defined in Rule 17f-5(c)(2), provided that any such
arrangement involving a foreign custodian shall be in
accordance with the provisions of Rule 17f-5 under
the Investment Company Act of 1940 as that Rule may
be amended from time to time.
T. Accounts and Records
--------------------
Custodian, with the direction and as interpreted by the Fund,
Fund's accountants and/or other tax advisors, will prepare and
maintain as complete, accurate and current all accounts and
records required to be maintained by Fund under the Internal
Revenue Code of 1986 ("Code") as amended and under the general
Rules and Regulations under the Investment Company Act of 1940
("Rules") as amended, and as agreed upon between the parties
and will preserve said records in the manner and for the
periods prescribed in said Code and Rules, or for such longer
period as is agreed upon by the parties.
Custodian relies upon Fund to furnish, in writing, accurate
and timely information to complete Fund's records and perform
daily calculation of the Fund's net asset value, as provided
in Section 3.W. below.
Custodian shall incur no liability and Fund shall indemnify
and hold harmless Custodian from and against any liability
arising from any failure of Fund to furnish such information
in a timely and accurate manner, even if Fund subsequently
provides accurate but untimely information. It shall be the
responsibility of Fund to furnish Custodian with the
declaration, record and payment dates and amounts of any
dividends or income and any other special actions required
concerning each of its securities when such information is not
readily available from generally accepted securities industry
services or publications.
17
<PAGE>
U. Accounts and Records Property of Fund
-------------------------------------
Custodian acknowledges that all of the accounts and records
maintained by Custodian pursuant to this Agreement are the
property of Fund, and will be made available to Fund for
inspection or reproduction within a reasonable period of time,
upon demand. Custodian will assist Fund's independent
auditors, or upon approval of Fund, or upon demand, any
regulatory body having jurisdiction over the Fund or
Custodian, in any requested review of Fund's accounts and
records but shall be reimbursed for all expenses and employee
time invested in any such review outside of routine and normal
periodic reviews. Upon receipt from Fund of the necessary
information, Custodian will supply necessary data for Fund's
completion of any necessary tax returns, questionnaires,
periodic reports to Shareholders and such other reports and
information requests as Fund and Custodian shall agree upon
from time to time.
V. Adoption of Procedures
----------------------
Custodian and Fund may from time to time adopt procedures as
they agree upon, and Custodian may conclusively assume that no
procedure approved by Fund, or directed by Fund, conflicts
with or violates any requirements of its prospectus, "Articles
of Incorporation", Bylaws, or any rule or regulation of any
regulatory body or governmental agency. Fund will be
responsible to notify Custodian of any changes in statutes,
regulations, rules or policies which might necessitate changes
in Custodian's responsibilities or procedures.
W. Calculation of Net Asset Value
------------------------------
Custodian will calculate Fund's net asset value, in accordance
with Fund's prospectus, once daily. Custodian will prepare and
maintain a daily evaluation of securities for which market
quotations are available by the use of outside services
normally used and contracted for this purpose; all other
securities will be evaluated in accordance with Fund's
instructions. Custodian will have no
18
<PAGE>
responsibility for the accuracy of the prices quoted by these
outside services or for the information supplied by Fund or
upon instructions.
X. Overdrafts
----------
If Custodian shall in its sole discretion advance funds to the
account of the Fund which results in an overdraft because the
monies held by Custodian on behalf of the Fund are
insufficient to pay the total amount payable upon a purchase
of securities as specified in Fund's instructions or for some
other reason, the amount of the overdraft shall be payable by
the Fund to Custodian upon demand and shall bear an interest
rate determined by Custodian from the date advanced until the
date of payment. Custodian shall have a lien on the assets of
the Fund in the amount of any outstanding overdraft.
19
<PAGE>
4. INSTRUCTIONS.
-------------
A. The term "instructions", as used herein, means written or
facsimile instructions or advice to Custodian from two
designated representatives of Fund. Certified copies of
resolutions of the Board of Directors of Fund naming two or
more designated representatives to give instructions in the
name and on behalf of Fund, may be received and accepted from
time to time by Custodian as conclusive evidence of the
authority of any two designated representatives to act for
Fund and may be considered to be in full force and effect (and
Custodian will be fully protected in acting in reliance
thereon) until receipt by Custodian of notice to the contrary.
Unless the resolution delegating authority to any person to
give instructions specifically requires that the approval of
anyone else will first have been obtained, Custodian will be
under no obligation to inquire into the right of the person
giving such instructions to do so. Notwithstanding any of the
foregoing provisions of this Section 4. no authorizations or
instructions received by Custodian from Fund, will be deemed
to authorize or permit any director, trustee, officer,
employee, or agent of Fund to withdraw any of the securities
or similar investments of Fund upon the mere receipt of such
authorization or instructions from such director, trustee,
officer, employee or agent.
Notwithstanding any other provision of this Agreement,
Custodian, upon receipt (and acknowledgement if required at
the discretion of Custodian) of the instructions of any two
designated representatives of Fund, will undertake to deliver
for Fund's account monies, (provided such monies are on hand
or available) in connection with Fund's transactions and to
wire transfer such monies to such broker, dealer,
subcustodian, bank or other agent specified in such
instructions.
B. If oral instructions are permitted pursuant to Section 4.A.
hereunder, no later than the next business day immediately
following such oral instruction the Fund will send Custodian
written confirmation of such oral instruction. At Custodian's
sole
20
<PAGE>
discretion, Custodian may record on tape, or otherwise, any
oral instruction whether given in person or via telephone,
each such recording identifying the parties, the date and the
time of the beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall hold harmless and indemnify Fund from and
against any loss or liability arising out of Custodian's
failure to comply with the terms of this Agreement or arising
out of Custodian's negligence or bad faith. Custodian may
request and obtain the advice and opinion of counsel for Fund,
or of its own counsel with respect to questions or matters of
law, and it shall be without liability to Fund for any action
taken or omitted by it in good faith, in conformity with such
advice or opinion. If Custodian reasonably believes that it
could not prudently act according to the instructions of the
Fund or the Fund's counsel, it may in its discretion, with
notice to the Fund, not act according to such instructions.
B. Custodian may rely upon the advice of Fund and upon statements
of Fund's public accountants and other persons believed by it
in good faith, to be expert in matters upon which they are
consulted, and Custodian shall not be liable for any actions
taken, in good faith, upon such statements.
C. If Fund requires Custodian in any capacity to take, with
respect to any securities, any action which involves the
payment of money by it, or which in Custodian's opinion might
make it or its nominee liable for payment of monies or in any
other way, Custodian, upon notice to Fund given prior to such
actions, shall be and be kept indemnified by Fund in an amount
and form satisfactory to Custodian against any liability on
account of such action.
D. Custodian shall be protected in acting as custodian hereunder
upon any instructions, advice, notice, request, consent,
certificate or other instrument or paper reasonably appearing
to it to be genuine and to have been properly executed and
shall, unless otherwise specifically provided herein, be
entitled to receive as
21
<PAGE>
conclusive proof of any fact or matter required to be
ascertained from Fund hereunder, a certificate signed by the
Fund's President, or other officer specifically authorized for
such purpose.
E. Without limiting the generality of the foregoing, Custodian
shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any securities purchased
by or for Fund, the legality of the purchase thereof
or evidence of ownership required by Fund to be
received by Custodian, or the propriety of the
decision to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for
Fund, or the propriety of the amount for which the
same are sold;
3. The legality of the issue or sale of any shares of
the Capital Stock of Fund, or the sufficiency of the
amount to be received therefor;
4. The legality of the repurchase or redemption of any
Fund Shares, or the propriety of the amount to be
paid therefor; or
5. The legality of the declaration of any dividend by
Fund, or the legality of the issue of any Fund Shares
in payment of any stock dividend.
F. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft, wire
transfer, clearing house funds, uncollected funds, or
instrument for the payment of money received by it on behalf
of Fund, until Custodian actually receives such money,
provided only that it shall advise Fund promptly if it fails
to receive any such money in the ordinary course of business,
and use its best efforts and cooperate with Fund toward the
end that such money shall be received.
G. Custodian shall not be responsible for loss occasioned by the
acts, neglects, defaults or insolvency of any broker, bank,
trust company, or any other person with whom Custodian may
deal in the absence of negligence, or bad faith on the part of
Custodian, except as provided in Section 3.S.1 hereof.
22
<PAGE>
H. Notwithstanding anything herein to the contrary, Custodian
may, and with respect to any foreign subcustodian appointed
under Section 3.S.2. must, provide Fund for its approval,
agreements with banks or trust companies which will act as
subcustodians for Fund pursuant to Section 3.S of this
Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is stated
in the Fee Schedule attached hereto as Exhibit B which may be changed
from time to time as agreed to in writing by Custodian and Fund.
Custodian may charge such compensation against monies held by it for
the account of Fund. Custodian will also be entitled, notwithstanding
the provisions of Sections 5.C. or 5.D. hereof, to charge against any
monies held by it for the account of Fund the amount of any loss,
damage, liability, advance, or expense for which it shall be entitled
to reimbursement under the provisions of this Agreement including fees
or expenses due to Custodian for other services provided to the Fund by
the Custodian. Custodian will not be entitled to reimbursement by Fund
for any loss or expenses of any subcustodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other
party hereto and received not less than ninety (90) days prior to the
date upon which such termination will take effect. If the Custodian
terminates this Agreement, the Fund may extend the effective date of
the termination ninety (90) days by written request to the Custodian
thirty (30) days prior to the end of the initial ninety (90) days
notice period unless the Custodian in good faith could not perform the
duties hereunder. Upon termination of this Agreement, Fund will pay to
Custodian such compensation for its reimbursable disbursements, costs
and expenses paid or incurred to such date and Fund will use its best
efforts to obtain a successor custodian. Unless the holders of a
majority of the outstanding shares of "Capital Stock" of Fund vote to
have the securities, funds and other properties held under this
Agreement delivered and paid over to some other person, firm or
corporation specified in the vote, having not less the Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided profits,
as shown by its last published report, and meeting
23
<PAGE>
such other qualifications for custodian as set forth in the Bylaws of
Fund, the Board of Directors of Fund will, forthwith upon giving or
receiving notice of termination of this Agreement, appoint as successor
custodian a bank or trust company having such qualifications. Custodian
will, upon termination of this Agreement, deliver to the successor
custodian so specified or appointed, at Custodian's office, all
securities then held by Custodian hereunder, duly endorsed and in form
for transfer, all funds and other properties of Fund deposited with or
held by Custodian hereunder, or will co-operate in effecting changes in
book-entries at the Depository Trust Company or in the Treasury/Federal
Reserve Book-Entry System pursuant to 31 CFR Sec. 306.118. In the event
no such vote has been adopted by the stockholders of Fund and no
written order designating a successor custodian has been delivered to
Custodian on or before the date when such termination becomes
effective, then Custodian will deliver the securities, funds and
properties of Fund to a bank or trust company at the selection of
Custodian and meeting the qualifications for custodian, if any, set
forth in the Bylaws of Fund and having not less that Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided profits,
as shown by its last published report. Upon either such delivery to a
successor custodian, Custodian will have no further obligations or
liabilities under this Agreement. Thereafter such bank or trust company
will be the successor custodian under this Agreement and will be
entitled to reasonable compensation for its services. In the event that
no such successor custodian can be found, Fund will submit to its
shareholders, before permitting delivery of the cash and securities
owned by Fund to anyone other than a successor custodian, the question
of whether Fund will be liquidated or function without a custodian.
Notwithstanding the foregoing requirement as to delivery upon
termination of this Agreement, Custodian may make any other delivery of
the securities, funds and property of Fund which is permitted by the
Investment Company Act of 1940, Fund's Certificate of Incorporation and
Bylaws then in effect or apply to a court of competent jurisdiction for
the appointment of a successor custodian.
24
<PAGE>
8. NOTICES. Notices, requests, instructions and other writings received by
Fund at One Bankers Trust Plaza, New York, New York 10006 such other
address as Fund may have designated to Custodian in writing, will be
deemed to have been properly given to Fund hereunder; and notices,
requests, instructions and other writings received by Custodian at its
offices at 127 West 10th Street, Kansas City, Missouri 64105, or to
such other address as it may have designated to Fund in writing, will
be deemed to have been properly given to Custodian hereunder.
9. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by
the respective successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in
any manner except by a written agreement properly authorized
and executed by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
E. This Agreement shall become effective at the close of business
on the --------- day of --------------, 19--.
F. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all
of which together will constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall be
considered severable and not be affected, and the rights and
obligations of
25
<PAGE>
the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
H. Custodian will not release the identity of Fund to an issuer
which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct
communications between such issuer and Fund unless the Fund
directs the Custodian otherwise.
I. This Agreement may not be assigned by either party without
prior written consent of the other party.
J. If any provision of the Agreement, either in its present form
or as amended from time to time, limits, qualifies, or
conflicts with the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, such statutes,
rules and regulations shall be deemed to control and supersede
such provision without nullifying or terminating the remainder
of the provisions of this Agreement.
26
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
-------------------------------
Gerard P. Dipoto, Jr.
Senior Vice President
ATTEST:
- --------------------------
Cheryl J. Naegler
Assistant Secretary
SELIGMAN COMMUNICATIONS AND
INFORMATION FUND, INC.
By:
-------------------------------
Title:
-------------------------------
ATTEST:
- --------------------------
Secretary
27
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
April 13, 1983
Seligman Communications
and Information Fund, Inc.
One Bankers Trust Plaza
New York, New York 10006
Dear Sirs:
You have requested our opinion in connection with Pre-Effective
Amendment No. 2 to your Registration Statement on Form N-1 (File No. 2-80168)
which you expect to file under the Securities Act of 1933 with respect to shares
of your capital stock, $.10 par value.
As your counsel, we are familiar with your organization and corporate
status and the legality of your capital stock. We are also familiar with the
forms of Distributing Agreement and Letter Agreement between you and J. & W.
Seligman & Co. Marketing, Inc. being filed as exhibits to such Pre-Effective
Amendment.
We advise you that, in our opinion, shares of the capital stock of
Seligman Communications and Information Fund, Inc., when issued for at least the
par value thereof in accordance with such Distributing Agreement and Letter
Agreement and as authorized by the Board of Directs, will be legally and validly
issued, fully paid and nonassessable.
We consent to the filing of this opinion to the Securities and Exchange
Commission as an exhibit to the Pre-Effective Amendment referred to above. In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
SULLIVAN & CROMWELL
CONSENT OF INDEPENDENT AUDITORS
Seligman Communications & Information Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 18 to Registration
Statement No. 2-80168 of our report dated January 31, 1997, appearing in the
Annual Report to Shareholders for the year ended December 31, 1996, incorporated
by reference in the Statement of Additional Information, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is also
part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 25, 1997
INVESTMENT LETTER
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
Seligman Communications and Information Fund, Inc. (the "Fund"), and open-ended
diversified management investment company, and the undersigned ("Purchase"),
intending to be legally bound, hereby agree as follows:
1. The Fund hereby sells to Purchaser and Purchaser purchases 1 Class D
share (the "Share") of Capital Stock (par value $.10) of the Fund at a
price equivalent to the net asset value of one share of the Fund as of
the close of business on April 30, 1993. The Fund hereby acknowledges
receipt from Purchaser of funds in such amount in full payment for the
Share.
2. Purchaser represents and warrants to the Fund that the Share is being
acquired for investment and not with a view to distribution thereof,
and that Purchaser has no present intention to redeem or dispose of the
Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the ---------
day of -------------, 1993 ("Purchase Date").
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
By:
-----------------------------------------------
Name:
Title:
J. & W. SELIGMAN & CO. INCORPORATED
By:
-----------------------------------------------
Name:
Title:
<TABLE>
<CAPTION>
SELIGMAN COMMUNICATIONS & INFORMATION FUND, INC. - CLASS A
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN COMPUTATION FOR THE 10.00 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 4.75% MAXIMUM OFFERING PRICE EQUALS $11.96
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
---- ----- --- --- --- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C>
31-Dec-86 11.39 83.612 83.612 $952.34
31-Mar-87 14.77 0.247 0.000 83.612 1,234.95
30-Jun-87 15.21 0.496 0.000 83.612 1,271.74
30-Sep-87 16.61 0.748 0.000 83.612 1,388.80
22-Dec-87 2.830000 G 9.91 0.975 23.877 107.489 1,065.22
31-Dec-87 10.19 1.000 0.000 107.489 1,095.31
31-Mar-88 10.49 1.249 0.000 107.489 1,127.56
30-Jun-88 11.22 1.499 0.000 107.489 1,206.03
30-Sep-88 10.53 1.751 0.000 107.489 1,131.86
23-Dec-88 0.850000 G 9.87 1.981 9.257 116.746 1,152.28
31-Dec-88 10.07 2.003 0.000 116.746 1,175.63
31-Mar-89 10.90 2.249 0.000 116.746 1,272.53
30-Jun-89 11.93 2.499 0.000 116.746 1,392.78
30-Sep-89 13.40 2.751 0.000 116.746 1,564.40
22-Dec-89 2.910000 G 9.83 2.978 34.561 151.307 1,487.35
31-Dec-89 10.11 3.003 0.000 151.307 1,529.71
31-Mar-90 10.66 3.249 0.000 151.307 1,612.93
30-Jun-90 11.53 3.499 0.000 151.307 1,744.57
21-Sep-90 0.000000 8.17 3.726 0.000 151.307 1,236.18
30-Sep-90 7.94 3.751 0.000 151.307 1,201.38
28-Dec-90 0.120000 G 8.81 3.995 2.061 153.368 1,351.17
31-Dec-90 8.87 4.003 0.000 153.368 1,360.37
31-Mar-91 11.99 4.249 0.000 153.368 1,838.88
30-Jun-91 10.59 4.499 0.000 153.368 1,624.17
30-Sep-91 12.15 4.751 0.000 153.368 1,863.42
26-Dec-91 2.050000 G 10.93 4.989 28.765 182.133 1,990.71
31-Dec-91 11.57 5.003 0.000 182.133 2,107.28
31-Mar-92 11.95 5.252 0.000 182.133 2,176.49
30-Jun-92 10.74 5.501 0.000 182.133 1,956.11
21-Sep-92 0.000000 11.26 5.729 0.000 182.133 2,050.82
30-Sep-92 10.78 5.753 0.000 182.133 1,963.39
28-Dec-92 1.240000 G 11.98 5.997 18.852 200.985 2,407.80
31-Dec-92 12.30 6.005 0.000 200.985 2,472.12
01-Jan-93 0.000000 12.30 6.008 0.000 200.985 2,472.12
31-Mar-93 0.000000 12.47 6.252 0.000 200.985 2,506.28
30-Apr-93 0.000000 12.07 6.334 0.000 200.985 2,425.89
30-Jun-93 0.000000 14.03 6.501 0.000 200.985 2,819.82
30-Sep-93 0.000000 16.20 6.753 0.000 200.985 3,255.96
28-Dec-93 3.100000 G 13.05 6.997 47.744 248.729 3,245.91
31-Dec-93 0.000000 13.43 7.005 0.000 248.729 3,340.43
30-Mar-94 0.000000 13.99 7.249 0.000 248.729 3,479.72
31-Mar-94 0.000000 14.02 7.252 0.000 248.729 3,487.18
29-Jun-94 0.000000 12.98 7.499 0.000 248.729 3,228.50
30-Jun-94 0.000000 12.94 7.501 0.000 248.729 3,218.55
15-Sep-94 0.000000 16.55 7.712 0.000 248.729 4,116.46
21-Sep-94 0.000000 16.38 7.729 0.000 248.729 4,074.18
30-Sep-94 0.000000 16.79 7.753 0.000 248.729 4,176.16
14-Dec-94 1.460000 G 15.87 7.959 22.882 271.611 4,310.47
31-Dec-94 0.000000 16.64 8.005 0.000 271.611 4,519.61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
31-Jan-95 0.000000 16.06 8.090 0.000 271.611 4,362.07
28-Feb-95 0.000000 17.50 8.167 0.000 271.611 4,753.19
31-Mar-95 0.000000 18.98 8.252 0.000 271.611 5,155.18
28-Apr-95 0.000000 20.60 8.329 0.000 271.611 5,595.19
31-May-95 0.000000 21.62 8.419 0.000 271.611 5,872.23
30-Jun-95 0.000000 24.63 8.501 0.000 271.611 6,689.78
31-Jul-95 0.000000 27.71 8.586 0.000 271.611 7,526.34
22-Aug-95 0.000000 27.97 8.647 0.000 271.611 7,596.96
28-Aug-95 0.000000 26.85 8.663 0.000 271.611 7,292.76
31-Aug-95 0.000000 27.20 8.671 0.000 271.611 7,387.82
21-Sep-95 0.000000 28.59 8.729 0.000 271.611 7,765.36
30-Sep-95 0.000000 27.88 8.753 0.000 271.611 7,572.51
22-Dec-95 1.905000 G 22.41 8.981 23.089 294.700 6,604.23
31-Dec-95 0.000000 21.99 9.005 0.000 294.700 6,480.45
29-Feb-96 0.000000 22.34 9.170 0.000 294.700 6,583.60
31-Mar-96 0.000000 20.81 9.255 0.000 294.700 6,132.71
24-May-96 0.000000 23.25 9.403 0.000 294.700 6,851.78
31-May-96 0.000000 23.46 9.422 0.000 294.700 6,913.66
05-Jun-96 0.000000 23.21 9.436 0.000 294.700 6,839.99
30-Jun-96 0.000000 20.84 9.504 0.000 294.700 6,141.55
15-Jul-96 0.000000 18.07 9.545 0.000 294.700 5,325.23
16-Jul-96 0.000000 18.09 9.548 0.000 294.700 5,331.12
31-Jul-96 0.000000 19.04 9.589 0.000 294.700 5,611.09
06-Aug-96 0.000000 20.29 9.605 0.000 294.700 5,979.46
31-Aug-96 0.000000 20.55 9.674 0.000 294.700 6,056.09
30-Sep-96 0.000000 22.12 9.756 0.000 294.700 6,518.76
31-Oct-96 0.000000 21.92 9.841 0.000 294.700 6,459.82
15-Nov-96 1.055000 G 22.45 9.882 13.849 308.549 6,926.93
30-Nov-96 0.000000 24.05 9.923 0.000 308.549 7,420.60
31-Dec-96 0.000000 23.51 10.008 0.000 308.549 7,253.99
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)^N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - 21.92%
N = NUMBER OF YEARS - 10
ERV = ENDING REDEEMABLE VALUE $7,253.99
TOTAL RETURN FOR PERIOD 625.40%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELIGMAN COMMUN & INFO. FUND, INC. - CLASS B
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN (LESS CDSL) FOR THE 0.69 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 0.00% MAXIMUM OFFERING PRICE - $21.5100
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
---- ----- --- --- --- -------- ------ -----
<S> <C> <C> <C> <C> <C>
22-Apr-96 0.000000 21.5100 46.490 46.490 $1,000.00
31-May-96 0.000000 22.7100 0.107 0.000 46.490 1,055.79
30-Jun-96 0.000000 20.1600 0.189 0.000 46.490 937.24
31-Jul-96 0.000000 18.4000 0.274 0.000 46.490 855.42
31-Aug-96 0.000000 19.8500 0.359 0.000 46.490 922.83
30-Sep-96 0.000000 21.3600 0.441 0.000 46.490 993.03
31-Oct-96 0.000000 21.1500 0.526 0.000 46.490 983.26
15-Nov-96 1.055000 G 21.6100 0.567 2.270 48.760 1,053.70
30-Nov-96 0.000000 23.1400 0.608 0.000 48.760 1,128.31
31-Dec-96 0.000000 22.6200 0.693 0.000 48.760 1,102.95
LESS CDSL 50.00
==========
1,052.95
==========
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)^N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - N/A
N = NUMBER OF YEARS - 0.693
ERV=ENDING REDEEMABLE VALUE $1,052.95
TOTAL RETURN (LESS CDSL) 5.30%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELIGMAN COMMUN & INFO FUND, INC. - CLASS D
AVERAGE ANNUAL TOTAL RETURN OF AN ASSUMED INVESTMENT OF $1,000.00
RETURN COMPUTATION FOR THE 3.67 YEAR PERIOD ENDED 31-Dec-96
LOAD RATE EQUALS 0.00% MAXIMUM OFFERING PRICE EQUALS $12.240
DVD PER # OF SHARES CUMUL
DATE SHARE D/G NAV YRS ACQUIRED SHARES VALUE
---- ----- --- --- --- -------- ------ -----
<C> <C> <C> <C> <C> <C> <C> <C>
03-May-93 0.000000 12.24 81.699 81.699 $1,000.00
31-May-93 0.000000 13.43 0.077 0.000 81.699 1,097.22
30-Jun-93 0.000000 14.04 0.159 0.000 81.699 1,147.05
31-Jul-93 0.000000 13.88 0.244 0.000 81.699 1,133.98
31-Aug-93 0.000000 15.74 0.329 0.000 81.699 1,285.94
30-Sep-93 0.000000 16.14 0.411 0.000 81.699 1,318.62
31-Oct-93 0.000000 15.26 0.496 0.000 81.699 1,246.73
30-Nov-93 0.000000 14.98 0.578 0.000 81.699 1,223.85
28-Dec-93 3.100000 G 12.94 0.655 19.572 101.271 1,310.45
31-Dec-93 0.000000 13.32 0.663 0.000 101.271 1,348.93
31-Jan-94 0.000000 14.40 0.748 0.000 101.271 1,458.30
28-Feb-94 0.000000 14.94 0.825 0.000 101.271 1,512.99
30-Mar-94 0.000000 13.83 0.907 0.000 101.271 1,400.58
31-Mar-94 0.000000 13.86 0.910 0.000 101.271 1,403.62
30-Apr-94 0.000000 14.14 0.992 0.000 101.271 1,431.97
31-May-94 0.000000 13.64 1.077 0.000 101.271 1,381.34
29-Jun-94 0.000000 12.98 1.156 0.000 101.271 1,314.50
30-Jun-94 0.000000 12.76 1.159 0.000 101.271 1,292.22
31-Jul-94 0.000000 13.42 1.244 0.000 101.271 1,359.06
31-Aug-94 0.000000 15.28 1.329 0.000 101.271 1,547.42
15-Sep-94 0.000000 16.30 1.370 0.000 101.271 1,650.72
30-Sep-94 0.000000 16.53 1.411 0.000 101.271 1,674.01
31-Oct-94 0.000000 17.65 1.496 0.000 101.271 1,787.43
30-Nov-94 0.000000 17.46 1.578 0.000 101.271 1,768.19
14-Dec-94 1.460000 G 15.56 1.616 9.502 110.773 1,723.63
31-Dec-94 0.000000 16.31 1.663 0.000 110.773 1,806.71
31-Jan-95 0.000000 15.73 1.748 0.000 110.773 1,742.46
28-Feb-95 0.000000 17.13 1.825 0.000 110.773 1,897.54
31-Mar-95 0.000000 18.57 1.910 0.000 110.773 2,057.05
10-Apr-95 0.000000 18.74 1.937 0.000 110.773 2,075.89
11-Apr-95 0.000000 18.82 1.940 0.000 110.773 2,084.75
13-Apr-95 0.000000 19.46 1.945 0.000 110.773 2,155.64
28-Apr-95 0.000000 20.14 1.986 0.000 110.773 2,230.97
30-Apr-95 0.000000 20.14 1.992 0.000 110.773 2,230.97
31-May-95 0.000000 21.12 2.077 0.000 110.773 2,339.53
30-Jun-95 0.000000 24.05 2.159 0.000 110.773 2,664.09
31-Jul-95 0.000000 27.04 2.244 0.000 110.773 2,995.30
31-Aug-95 0.000000 26.53 2.329 0.000 110.773 2,938.81
30-Sep-95 0.000000 27.18 2.411 0.000 110.773 3,010.81
31-Oct-95 0.000000 27.08 2.496 0.000 110.773 2,999.73
30-Nov-95 0.000000 25.65 2.578 0.000 110.773 2,841.33
22-Dec-95 1.905000 G 21.75 2.638 9.702 120.475 2,620.33
31-Dec-95 0.000000 21.35 2.663 0.000 120.475 2,572.14
31-Jan-96 0.000000 20.81 2.748 0.000 120.475 2,507.08
29-Feb-96 0.000000 21.66 2.827 0.000 120.475 2,609.49
31-Mar-96 0.000000 20.16 2.912 0.000 120.475 2,428.78
30-Apr-96 0.000000 22.68 2.995 0.000 120.475 2,732.37
31-May-96 0.000000 22.70 3.079 0.000 120.475 2,734.78
30-Jun-96 0.000000 20.16 3.162 0.000 120.475 2,428.78
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <C> <C> <C> <C> <C> <C> <C>
31-Jul-96 0.000000 18.40 3.247 0.000 120.475 2,216.74
31-Aug-96 0.000000 19.84 3.332 0.000 120.475 2,390.22
30-Sep-96 0.000000 21.35 3.414 0.000 120.475 2,572.14
31-Oct-96 0.000000 21.14 3.499 0.000 120.475 2,546.84
15-Nov-96 1.055000 G 21.60 3.540 5.884 126.359 2,729.35
30-Nov-96 0.000000 23.13 3.581 0.000 126.359 2,922.68
31-Dec-96 0.000000 22.61 3.666 0.000 126.359 2,856.98
CALCULATION OF
AVERAGE ANNUAL TOTAL RETURN
P*(1+T)^N = ERV
P = INITIAL PAYMENT - $1,000.00
T = AVG. ANNUAL TOTAL RETURN - 33.16%
N = NUMBER OF YEARS - 3.666
ERV = ENDING REDEEMABLE VALUE $2,856.98
TOTAL RETURN FOR PERIOD 185.70%
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELIGMAN COMMUNICATIONS & INFORMATION FUND, INC. CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2955674
<INVESTMENTS-AT-VALUE> 3311958
<RECEIVABLES> 22564
<ASSETS-OTHER> 22981
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3357503
<PAYABLE-FOR-SECURITIES> 65404
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18600
<TOTAL-LIABILITIES> 84004
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2853778
<SHARES-COMMON-STOCK> 102702<F1>
<SHARES-COMMON-PRIOR> 88246<F1>
<ACCUMULATED-NII-CURRENT> (102)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63539
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 356284
<NET-ASSETS> 2414672<F1>
<DIVIDEND-INCOME> 3178<F1>
<INTEREST-INCOME> 8074<F1>
<OTHER-INCOME> 50<F1>
<EXPENSES-NET> (36606)<F1>
<NET-INVESTMENT-INCOME> (25304)<F1>
<REALIZED-GAINS-CURRENT> 153061
<APPREC-INCREASE-CURRENT> 238744
<NET-CHANGE-FROM-OPS> 352851
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (105584)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 71599<F1>
<NUMBER-OF-SHARES-REDEEMED> (61511)<F1>
<SHARES-REINVESTED> 4368<F1>
<NET-CHANGE-IN-ASSETS> 723474
<ACCUMULATED-NII-PRIOR> (85)
<ACCUMULATED-GAINS-PRIOR> 54042
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 19381<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 36606<F1>
<AVERAGE-NET-ASSETS> 2186285<F1>
<PER-SHARE-NAV-BEGIN> 21.99<F1>
<PER-SHARE-NII> (0.26)<F1>
<PER-SHARE-GAIN-APPREC> 2.84<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (1.06)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 23.51<F1>
<EXPENSE-RATIO> 1.68<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>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> SELIGMAN COMMUNICATIONS & INFORMATION FUND, INC. CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-22-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2955674
<INVESTMENTS-AT-VALUE> 3311958
<RECEIVABLES> 22564
<ASSETS-OTHER> 22981
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3357503
<PAYABLE-FOR-SECURITIES> 65404
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18600
<TOTAL-LIABILITIES> 84004
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2853778
<SHARES-COMMON-STOCK> 5343<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> (102)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63539
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 356284
<NET-ASSETS> 120848<F1>
<DIVIDEND-INCOME> 58<F1>
<INTEREST-INCOME> 147<F1>
<OTHER-INCOME> 1<F1>
<EXPENSES-NET> (1054)<F1>
<NET-INVESTMENT-INCOME> (848)<F1>
<REALIZED-GAINS-CURRENT> 153061
<APPREC-INCREASE-CURRENT> 238744
<NET-CHANGE-FROM-OPS> 352851
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (4687)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5457<F1>
<NUMBER-OF-SHARES-REDEEMED> (315)<F1>
<SHARES-REINVESTED> 201<F1>
<NET-CHANGE-IN-ASSETS> 723474
<ACCUMULATED-NII-PRIOR> (85)
<ACCUMULATED-GAINS-PRIOR> 54042
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 393<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1054<F1>
<AVERAGE-NET-ASSETS> 62607<F1>
<PER-SHARE-NAV-BEGIN> 21.51<F1>
<PER-SHARE-NII> (0.28)<F1>
<PER-SHARE-GAIN-APPREC> 2.45<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (1.06)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 22.62<F1>
<EXPENSE-RATIO> 2.44<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>
<ARTICLE> 6
<SERIES>
<NUMBER> 004
<NAME> SELIGMAN COMMUNICATIONS & INFORMATION FUND, INC. CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2955674
<INVESTMENTS-AT-VALUE> 3311958
<RECEIVABLES> 22564
<ASSETS-OTHER> 22981
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3357503
<PAYABLE-FOR-SECURITIES> 65404
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18600
<TOTAL-LIABILITIES> 84004
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2853778
<SHARES-COMMON-STOCK> 32645<F1>
<SHARES-COMMON-PRIOR> 28547<F1>
<ACCUMULATED-NII-CURRENT> (102)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63539
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 356284
<NET-ASSETS> 737979<F1>
<DIVIDEND-INCOME> 973<F1>
<INTEREST-INCOME> 2474<F1>
<OTHER-INCOME> 15<F1>
<EXPENSES-NET> (16264)<F1>
<NET-INVESTMENT-INCOME> (12802)<F1>
<REALIZED-GAINS-CURRENT> 153061
<APPREC-INCREASE-CURRENT> 238744
<NET-CHANGE-FROM-OPS> 352851
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> (33293)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 15177<F1>
<NUMBER-OF-SHARES-REDEEMED> (12513)<F1>
<SHARES-REINVESTED> 1434<F1>
<NET-CHANGE-IN-ASSETS> 723474
<ACCUMULATED-NII-PRIOR> (85)
<ACCUMULATED-GAINS-PRIOR> 54042
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5937<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16265<F1>
<AVERAGE-NET-ASSETS> 669923<F1>
<PER-SHARE-NAV-BEGIN> 21.35<F1>
<PER-SHARE-NII> (0.40)<F1>
<PER-SHARE-GAIN-APPREC> 2.72<F1>
<PER-SHARE-DIVIDEND> 0<F1>
<PER-SHARE-DISTRIBUTIONS> (1.06)<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 22.61<F1>
<EXPENSE-RATIO> 2.43<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
</TABLE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ John R. Galvin (L.S.)
-------------------------------
John R. Galvin
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, her attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in her name and stead, in her capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Alice S. Ilchman (L.S.)
-------------------------------
Alice S. Ilchman
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Frank A. McPherson (L.S.)
-------------------------------
Frank A. McPherson
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ John E. Merow (L.S.)
-------------------------------
John E. Merow
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, her attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in her name and stead, in her capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Betsy S. Michel (L.S.)
-------------------------------
Betsy S. Michel
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 1st day of April, 1997.
/s/ William C. Morris (L.S.)
-------------------------------
William C. Morris
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION 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 31st day of April, 1997.
/s/ James C. Pitney (L.S.)
-------------------------------
James C. Pitney
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ James Q. Riordan (L.S.)
-------------------------------
James Q. Riordan
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 1st day of April, 1997.
/s/ Ronald T. Schroeder (L.S.)
-------------------------------
Ronald T. Schroeder
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ Robert L. Shafer (L.S.)
-------------------------------
Robert L. Shafer
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 20th day of March, 1997.
/s/ James N. Whitson (L.S.)
-------------------------------
James N. Whitson
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
COMMUNICATIONS AND INFORMATION FUND, INC. a Maryland corporation, which proposes
to file with the Securities and Exchange Commission an Amendment to Registration
Statement on Form N-1A and further amendments thereto, as necessary, under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
hereby constitutes and appoints William C. Morris and Brian T. Zino, and each of
them individually, his attorneys-in-fact and agent, with full power of
substitution and resubstitution, for in his name and stead, in his capacity as
such director, to sign and file such Amendment to Registration Statement or
further amendments thereto, and any and all applications or other documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform all acts and things requisite and
necessary to be done on the premises.
Executed this 1st day of April, 1997.
/s/ Brian T. Zino (L.S.)
-------------------------------
Brian T. Zino
