File No. 2-92487
811-4078
As filed with the Securities and Exchange Commission on January 26, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. __ |_|
Post-Effective Amendment No. 19 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 21 |X|
SELIGMAN FRONTIER FUND, INC.
(Exact name of registrant as specified in charter)
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or
Toll-Free 800-221-2450
THOMAS G. ROSE, Treasurer
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check the
appropriate box).
|_| immediately upon filing pursuant to paragraph (b) of rule 485
|X| on February 1, 1996 pursuant to paragraph (b) of rule 485
----------------
|_| 60 days after filing pursuant to paragraph (a)(i) of rule 485
|_| on (date) pursuant to paragraph (a)(i) of rule 485
|_| 75 days after filing pursuant to paragraph (a)(ii) of rule 485
|_| on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice was
filed by Registrant on November 22, 1995.
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
Post-Effective Amendment No. 19
Pursuant to Rule 481(a)
Item in Part A of Form N-1A Location in Prospectus
<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of the Registrant Cover Page; Organization And Capitalization
5. Management of the Fund Management Services
5a. Management's Discussion of Fund Management Services
Performance
6. Capital Stock and Other Securities Organization and Capitalization
7. Purchase of Securities Being Offered Alternative Distribution System; Purchases of Shares; Administration, Shareholder
Services and Distribution Plan
8. Redemption or Repurchase Telephone Transactions; Redemption of Shares; Exchange Privilege; Further
Information About Transactions In The Fund
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 Investment Objective, Policies and Risks;General Information; Appendix
13. Investment Objectives and Policies Investment Objectives, Policies And Risks; Investment Limitations
14. Management of the Fund Directors and Officers; Management and Expenses
15. Control Persons and Principal Holders Directors and Officers
of Securities
16. Investment Advisory and Other Services Management and Expenses; Distribution Services
17. Brokerage Allocations Administration, Shareholder Services and Distribution Plan; Portfolio Transactions
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing Purchase and Redemption of Fund shares; Valuation
of Securities being Offered
20. Tax Status Not Applicable
21. Underwriters Distribution Services
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
Seligman Frontier Fund, Inc.
100 Park Avenue o New York, N.Y. 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
February 1, 1996
Seligman Frontier Fund, Inc. (the "Fund") is a diversified, open-end
management investment company that invests to produce growth in capital value.
Income may be considered but will only be incidental to the Fund's investment
objective of growth in capital value. 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.
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.
The Fund offers two 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 1% of the average daily net asset value of the Class A
shares. Class D shares are sold without an initial sales load but are subject to
a contingent deferred sales load ("CDSL") of 1% imposed on certain redemptions
within one year of purchase, an annual distribution fee of up to .75 of 1% and
an annual service fee of up to .25 of 1% of the average daily net asset value of
the Class D 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 without charge by calling or writing the Fund at the
telephone numbers or 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 ...................................... 4
Investment Objective, Policies and Risks ............................. 5
Management Services .................................................. 7
Purchase Of Shares ................................................... 8
Telephone Transactions ............................................... 13
Redemption Of Shares ................................................. 14
Administration, Shareholder Services And
Distribution Plan .................................................. 15
Exchange Privilege ................................................... 16
Further Information About Transactions In The Fund ................... 18
Dividends And Distributions .......................................... 18
Federal Income Taxes ................................................. 19
Shareholder Information .............................................. 20
Advertising The Fund's Performance ................................... 22
Organization And Capitalization ...................................... 22
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
Class A Class D
Shares Shares
-------------- ---------------
(Initial Sales (Deferred Sales
Load Load
Alternative) Alternative)
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price) ............................................ 4.75% None
Sales Load on Reinvested Dividends ........................... None None
Deferred Sales Load (as a percentage of original ............. 1% during the
purchase price or redemption proceeds, ..................... first year;
whichever is lower) ........................................ None None thereafter
Redemption Fees .............................................. None None
Exchange Fees ................................................ None None
Class A Class D
------- -------
Annual Fund Operating Expenses for Fiscal 1995
(as a percentage of average net assets)
Management Fees ............................................. .95% .95%
12b-1 Fees .................................................. .16% 1.00%*
Other Expenses .............................................. .52% .54%
------- -------
Total Fund Operating Expenses ............................... 1.63% 2.49%
======= =======
The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of the Fund may 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 sales loads are available in certain
circumstances. The CDSL on Class D shares is a one-time charge paid only if
shares are redeemed within one year of purchase. The management fees for Class A
and Class D shares have been restated to reflect the increase in the management
fee rate payable by the Fund, which was approved by shareholders on December 12,
1995 and became effective January 1, 1996. For more information concerning
reduction 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.
Example 1 year 3 years 5 years 10 years
------ ------- ------- --------
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemp-
tion at the end of each time period ............. Class A $63 $96 $132 $232
Class D $35+ $78 $133 $283
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.
</TABLE>
- ----------
* Includes an annual distribution fee of up to .75 of 1% and an annual service
fee of up to .25 of 1%. Pursuant to the rules of the National Association of
Securities Dealers, Inc., the aggregate deferred sales loads and annual
distribution fees on Class D shares of the Fund may not exceed 6.25% of total
gross sales, subject to certain exclusions. The 6.25% limitation is imposed
on the Fund rather than on a per shareholder basis. Therefore, a long-term
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) 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 Fund's financial highlights for Class A and Class D shares 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 1995 Annual Report which may be obtained 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 the Fund'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 the Fund's performance assuming investors
purchased shares of the Fund at the 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 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.
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------------------------
Year Ended September 30
-----------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period ..................... $ 11.62 $ 12.83 $ 10.22 $ 10.71 $ 7.01 $ 8.99 $ 6.90 $ 9.35
------- ------- ------- ------- ------- ------- ------- -------
Net investment loss .......... (0.06) (0.08) (0.03) (0.07) (0.03) -- -- (0.02)
Net realized and unrealized
investment gain (loss) ..... 3.87 1.10 4.54 0.58 3.76 (1.98) 2.09 (1.44)
------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) from
investment operations ...... 3.81 1.02 4.51 0.51 3.73 (1.98) 2.09 (1.46)
Dividends paid ............... -- -- -- -- (0.01)** -- -- --
Distributions from net gain
realized ................... (1.39) (2.23) (1.90) (1.00) (0.02) -- -- (0.99)
------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease)
in net asset value ......... 2.42 (1.21) 2.61 (0.49) 3.70 (1.98) 2.09 (2.45)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 14.04 $ 11.62 $ 12.83 $ 10.22 $ 10.71 $ 7.01 $ 8.99 $ 6.90
======= ======= ======= ======= ======= ======= ======= =======
Total return based on
net asset value ............ 36.80% 9.79% 50.67% 4.91% 53.34% (22.02)% 30.29% (12.25)%
Ratios/Supplemental Data:
Expenses to average net
assets ..................... 1.43% 1.34% 1.25% 1.37% 1.28% 1.26% 1.32% 1.19%
Net investment income (loss)
to average net assets ...... (0.50)% (0.87)% (0.27)% (0.71)% (0.35)% -- 0.02% (0.20)%
Portfolio turnover ........... 71.52% 124.76% 129.13% 129.46% 38.56% 38.55% 50.60% 80.03%
Net assets, end of period
(000's omitted)............. $272,122 $58,478 $43,188 $27,178 $23,449 $17,127 $22,966 $19,205
</TABLE>
<TABLE>
<CAPTION>
Class A Class D
--------------------- ----------------------------
Year Year Ended
Ended September 30 September 30 5/3/93*
--------------------- --------------- to
1987 1986 1995 1994 9/30/93
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period ..................... $ 7.58 $ 5.90 $ 11.40 $ 12.80 $ 10.12
------- ------- ------- ------- -------
Net investment loss .......... -- --+ (0.15) (0.23) (0.04)
Net realized and unrealized
investment gain (loss) ..... 2.07 1.69 3.75 1.06 2.72
------- ------- ------- ------- -------
Increase (decrease) from
investment operations ...... 2.07 1.69 3.60 0.83 2.68
Dividends paid ............... -- (0.01) -- -- --
Distributions from net gain
realized ................... (0.30) -- (1.39) (2.23) --
------- ------- ------- ------- -------
Net increase (decrease)
in net asset value ......... 1.77 1.68 2.21 (1.40) 2.68
------- ------- ------- ------- -------
Net asset value, end of period $ 9.35 $ 7.58 $ 13.61 $ 11.40 $ 12.80
======= ======= ======= ======= =======
Total return based on
net asset value ............ 28.29% 28.64% 35.53% 8.06% 26.48%
Ratios/Supplemental Data:
Expenses to average net
assets ..................... 1.11% 1.06%+ 2.29% 2.72% 2.24%#
Net investment income (loss)
to average net assets ...... 0.03% --+ (1.35)% (2.25)% (1.94)%#
Portfolio turnover ........... 109.06% 89.14% 71.52% 124.76% 129.13%++
Net assets, end of period
(000's omitted)............. $22,534 $16,207 $145,443 $9,318 $967
</TABLE>
- ----------
All per share data for fiscal years 1986 through 1992 have been restated
to reflect the 2-for-1 stock split effected as a 100% stock dividend which
occurred on April 16,1992. For fiscal years 1994 and 1995, the above per share
amounts of net investment income and net realized and unrealized investment gain
(loss) have been calculated based upon average shares outstanding for the
periods.
* Commencement of distribution of Class D shares.
** Excess of taxable dividend over net investment income was charged against
paid-in capital.
+ During the year ended September 30, 1986, the Manager waived a portion of
its fees. Had the Manager, at its discretion, not done so, the net
investment loss per share, ratio of net investment income (loss) to average
net assets and ratio of expenses to average net assets would have been
$.01, (.06)%, and 1.12%, respectively.
++ For the year ended September 30, 1993.
# Annualized.
The data provided above reflects historical information and therefore has
not been adjusted to reflect, for the periods prior to its implementation, the
effect of the Administration, Shareholder Services and Distribution Plan
approved by shareholders on May 1, 1992 and effective June 1,1992 or the
increase in the management fee payable by the Fund, approved by shareholders on
December 12, 1995 and effective January 1, 1996.
3
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers two 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 charges. 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
charges, as discussed below, or to have the entire initial purchase price
invested in the Fund with the investment thereafter being subject to higher
ongoing charges and, for a one-year period, a CDSL.
Investors who qualify for reduced sales loads, as described under "Purchase
Of Shares" below, might choose to purchase Class A shares because Class A shares
would be subject to lower ongoing fees. The amount invested in the Fund,
however, is reduced by the initial sales load deducted at the time of purchase.
Investors who do not qualify for reduced initial sales loads but expect to
maintain their investment for an extended period of time might also choose to
purchase Class A shares because over time the accumulated continuing
distribution fee of Class D shares may exceed the initial sales load and lower
distribution fee of Class A shares. This consideration must be weighed against
the fact that the amount invested in the Fund will be reduced by the initial
sales load deducted at the time of purchase. Furthermore, the distribution fees
will be offset to the extent any return is realized on the additional funds
initially invested under the Class D alternative.
Alternatively, some investors might choose to have all of their funds
invested initially in Class D shares although remaining subject to a higher
continuing distribution fee and, for a 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 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 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.
The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and, 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 expenses to be paid by each class.
Class D shares bear higher distribution expenses, which will cause the Class D
shares to pay lower dividends than the Class A shares. The two classes also have
separate exchange privileges.
The Directors of the Fund believe that no conflict of interest currently
exists between the Class A 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 distinctions between Class A and
Class D shares are their sales load structures and ongoing expenses as set forth
below. Each class has advantages and disadvantages for different investors, and
investors should choose the class that best suits their circumstances and their
objectives.
4
<PAGE>
Annual 12b-1 Fees
(as a % of average
Sales Load daily net assets) Other Information
---------- ----------------- -----------------
Class A Maximum initial Service fee of Initial sales load
sales load of 4.75% .25%. waived or reduced
of the public for certain
offering price. purchases.
Class D None Service fee of CDSL of 1% on
.25%; Distribution redemptions within
fee of .75%. one year of
purchase.
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 1984.
The Fund seeks to produce growth in capital value; income may be considered
but will be only incidental to the Fund's investment objective. There can be no
assurance that the Fund will achieve its objective. The Fund seeks to achieve
its objective by investing in a portfolio consisting of securities of companies
selected for their growth prospects. The Fund invests primarily in common
stocks. It may also invest in securities that may be exchanged for or converted
into common stock, preferred stock and common stock purchase warrants believed
by the Manager to provide capital growth opportunities.
Stocks of companies believed by the Manager to have special characteristics
(such as a high growth rate of unit sales, an important opportunity in a
developing industry or a distinct competitive advantage) are favored. In
general, securities owned are likely to be those issued by companies of small to
medium size with annual revenues of $400 million or less. Except when investing
for temporary, defensive purposes, the Fund will invest at least 65% of its net
assets, exclusive of government securities, short-term notes, cash and cash
items, in securities of such companies. Securities of small or medium sized
companies may be subject to above average market price fluctuation and business
risk; however, the Manager will seek to temper such risks by diversification of
investments and by avoiding concentration of investments in any one industry.
Investments other than in securities of the companies discussed above will be
substantially in securities issued or guaranteed by the United States Government
(such as Treasury bills, notes and bonds), its agencies, instrumentalities or
authorities; highly-rated corporate debt securities (rated AA-, or better, by
Standard & Poor's Corporation ("Standard & Poor's") or Aa3, or better, by
Moody's Investors Service, Inc. ("Moody's")); prime commercial paper (rated
A-1+/A-1 by Standard & Poor's or P-1 by Moody's); and certificates of deposit of
the 100 largest (based on assets) banks that are subject to regulatory
supervision by the U.S. Government or state governments and the 50 largest
(based on assets) foreign banks with branches or agencies in the United States.
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 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
the Board of Directors make this determination, it will carefully monitor the
security (focusing on such factors, among others, as trading activity and
availability of information) to determine that the Rule 144A security continues
to be liquid. It is not possible to predict with assurance exactly how the
market for restricted securities offered and sold under Rule 144A will develop.
This investment practice could have the effect of increasing the level of
illiquidity in the Fund to the extent that qualified institutional buyers become
for a time uninterested in purchasing Rule 144A securities.
Foreign Securities. The Fund may invest in commercial paper and certificates
of deposit issued by foreign banks and may invest directly and through American
Depositary Receipts ("ADRs") in other securities of foreign issuers. 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
5
<PAGE>
be subject to reporting standards and requirements comparable to those
applicable to U.S. companies. Foreign securities may not be as liquid as U.S.
securities. Securities of foreign companies may involve greater market risk than
securities of U.S. companies, and foreign brokerage commissions and custody fees
are generally higher than those 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. ADRs, which are traded in
dollars on U.S. exchanges or over-the-counter, are issued by domestic banks and
evidence ownership of securities issued by foreign corporations. 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
ADRs or to commercial paper and certificates of deposit issued by foreign banks.
Repurchase Agreements. The Fund may enter into repurchase agreements with
commercial banks and broker/dealers as a short-term cash management tool. A
repurchase agreement is an agreement under which the Fund acquires a money
market instrument subject to resale at an agreed upon price and date. The resale
price reflects an agreed upon interest rate effective for the period of time the
instrument is held by the Fund. Repurchase agreements could involve certain
risks in the event of bankruptcy or other default by the seller, including
possible delays and expenses in liquidating the securities underlying the
agreement, decline in value of the underlying securities and loss of interest.
Repurchase agreements are typically entered into for periods of one week or
less. 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 invested in such agreements
and other illiquid securities.
Lending of Portfolio Securities. The Fund may lend portfolio securities to
broker/ dealers or other institutions, if, in the opinion of the Manager, such
loans would be beneficial to the Fund. 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 any dividend or interest paid on the securities. The Fund
may invest the cash collateral and earn additional income or receive an agreed
upon amount of interest income from the borrower.
Borrowing. The Fund may borrow money only from banks and only for temporary
or emergency purposes (but not for the purchase of portfolio securities) in an
amount not in excess of 15% of the value of its total assets. The Fund will not
purchase additional portfolio securities if the Fund has outstanding borrowings
in excess of 5% of the value of its total assets.
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 Board of Directors of the Fund may change them without the
vote of a majority of the Fund's outstanding voting securities. As a matter of
policy, the Board would not change the Fund's investment objective of seeking to
produce growth in capital value without such a vote. A more detailed description
of the Fund's investment policies, including a list of those restrictions of 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.
6
<PAGE>
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 sixteen other investment companies
which, together with the Fund, make up the "Seligman Group." The sixteen other
companies are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman High Income Fund Series, Seligman Income Fund, Inc., Seligman New
Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt Fund Series,
Seligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman
Select Municipal Fund, Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman
Tax-Exempt Series Trust and Tri-Continental Corporation. The aggregate assets of
the Seligman Group were approximately $11.1 billion at December 31, 1995. The
Manager also provides investment management or advice to individual and
institutional accounts having an aggregate value of more than $4.1 billion.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Fund. Mr. Morris owns a majority
of the outstanding voting securities of the Manager.
The Manager provides senior management for Seligman Data Corp., a
wholly-owned subsidiary of certain 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 Fund pays the Manager a management fee, calculated daily and payable
monthly. The management fee, which became effective on January 1, 1996, is equal
to an annual rate of .95% of the Fund's average daily net assets on the first
$750 million of net assets and .85% of the Fund's average daily net assets in
excess of $750 million. Although the management fee is higher than that paid by
most mutual funds, the Manager believes that such fee is comparable to the
management fee paid by a significant percentage of mutual funds with investment
objectives similar to that of the Fund. During the fiscal year ended September
30,1995, prior to effectiveness of the new management fee schedule, the
management fee was .75% of the average daily net assets of the Fund. The Fund
pays all of its expenses other than those assumed by the Manager. Total expenses
of the Fund's Class A and Class D shares for the year ended September 30, 1995
amounted to 1.43% and 2.29%, respectively, of the average daily net assets of
such class.
The Subadviser. Seligman Henderson Co. (the "Subadviser") serves as
Subadviser to the Fund with respect to all or a portion of the Fund's foreign
investments, as designated by the Manager (the "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 ADRs 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 provides, with respect to the Qualifying Assets, 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
objective, 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 fiscal
year ended September 30, 1995, the Fund did not require the services of the
Subadviser and therefore, no fees were paid by the Manager to the Subadviser.
7
<PAGE>
The Subadviser was founded in 1991 as a joint venture between the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. The Subadviser, headquartered in New York, was created
to provide international and global investment advice to institutional and
individual investors and investment companies in the United States. The
Subadviser also currently serves as subadviser to Seligman Capital Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman Income Fund, Inc., the Global Portfolio and Global Smaller Companies
Portfolio of Seligman Portfolios, Inc., Tri-Continental Corporation and the
International Equity Portfolio and International Small Cap Portfolio of American
Skandia Trust. The address of the Subadviser is 100 Park Avenue, New York, NY
10017.
Portfolio Manager. Mr. Arsen Mrakovcic is Vice President and Portfolio
Manager of the Fund, a position he has held since October 1, 1995. Mr.
Mrakovcic, who joined the Manager in 1992 as a Portfolio Assistant, was named
Vice President, Investment Officer on January 1, 1995 and Managing Director on
January 1, 1996.
Mr. Iain C. Clark is responsible for the Subadviser's day-to-day investment
activity with respect to the Qualifying Assets of the Fund. Mr. Clark is a
Managing Director and Chief Investment Officer of Seligman Henderson Co. He is
also a Director of Henderson Administration Group plc. He was previously a
Director of Henderson International, Ltd.; and Secretary, Treasurer and Vice
President of Henderson International, Inc.
The Manager's discussion of the Fund's performance as well as a line graph
illustrating comparative performance information between the Fund, the NASDAQ
Composite Index and the Lipper Small Company Growth Fund Index is included in
the Fund's 1995 Annual Report to Shareholders. Copies of the 1995 Annual Report
may be obtained, without charge, by calling or writing the Fund at the telephone
numbers or address listed on the cover page of this Prospectus.
Portfolio Transactions. The Management Agreement and Subadvisory Agreement
each recognize that in the purchase and sale of portfolio securities for the
Fund, 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 or the Subadviser. The use of brokers who provide supplemental
investment and market research and securities and economic analysis may result
in a higher brokerage charge to the Fund than the use of brokers selected on the
basis of seeking the most favorable price and execution and such research and
analysis received may be useful to the Manager or the Subadviser in connection
with their 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 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." Portfolio turnover may result in the payment by the Fund
of dealer spreads or underwriting commissions and other transactions costs from
the sale of securities held by the Fund and the reinvestment of the proceeds in
other securities. While it is the policy of the Fund to hold securities for
investment, changes in the securities held by the Fund will be made from time to
time when the Manager believes such changes will strengthen the Fund's
portfolio. The portfolio turnover of the Fund may exceed 100%.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager, acts
as general distributor of the Fund's shares. Its address is 100 Park Avenue, New
York, NY 10017.
8
<PAGE>
The Fund issues two classes of shares: Class A shares are sold to investors
choosing the initial sales load alternative; 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 $1,000; subsequent
investments must be in the minimum amount of $100 (except for investment of
dividends and capital gain distributions). The Fund reserves the right to return
investments that do not satisfy these minimums. Exceptions to these minimums are
available for accounts being established concurrently with the Invest-A-Check(R)
Service or the SeligmanSM Time HorizonSM Strategy, an asset allocation program.
Orders received by an authorized dealer before the close of the New York
Stock Exchange ("NYSE") (normally, 4:00 p.m. New York City time) and accepted by
SFSI before the close of business (5:00 p.m. New York City time) on the same day
will be executed at the Fund's net asset value determined as of the close of the
NYSE on that day plus, in the case of Class A shares, the applicable sales load.
Orders received by dealers after the close of the NYSE, or accepted by SFSI
after the close of business, will be executed at the Fund's net asset value as
next determined plus, in the case of Class A shares, the 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 SFSl'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 Frontier Fund,
Inc. (A or D), A/C #107-1011. WIRE TRANSFERS MUST INCLUDE THE PURCHASE
CONFIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT NUMBER. Persons
other than dealers who wish to wire payment should contact Seligman Data Corp.
for specific wire instructions. Although the Fund makes no charge for this
service, the transmitting bank may impose a wire service fee.
Current shareholders may buy additional shares at any time through any
authorized dealer or by sending a check payable to "Seligman Group of Funds"
directly to the Fund at Seligman Data Corp., P.O. Box 3936, New York, NY
10008-3936. Checks for investment must be in U.S. dollars drawn on a domestic
bank. The check should include the shareholder's name, address, account number
and class of shares. 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 at the net asset value next determined after the order is accepted
plus, in the case of Class A shares, the applicable sales load.
Seligman Data Corp. will charge a $10.00 service fee for checks returned to
it marked "unpaid." This fee may be debited from the shareholder's account. For
the protection of the Fund and its shareholders, no redemption of shares will be
permitted with respect to shares purchased by check (unless certified) until the
Fund receives notice that the check has cleared, which may be up to 15 days from
the credit of such shares to the shareholder's account.
Valuation. The net asset value of the Fund's shares is determined as of the
close of trading on the NYSE (normally, 4:00 p.m. New York City time) each day,
Monday through Friday, except on days that the NYSE is closed. The net asset
value is calculated separately for each class. Securities are valued at current
market prices or, in the absence thereof, at fair value as determined in
accordance with procedures approved by the 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 and securities purchased with
9
<PAGE>
maturities in excess of 60 days which currently have maturities of 60 days or
less are valued by amortizing their fair market value on the 61st day prior to
maturity.
Although the legal rights of Class A 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 value of Class D shares will
generally be lower than the net asset value of Class A shares as a result of the
larger distribution fee charged to Class D shares. In addition, net asset value
per share of the two classes will be affected to the extent any other class
expense differs among classes. It is expected, however, that the net asset value
per share of the two classes will tend to converge immediately after the
recording of dividends the amount of which will differ by approximately the
amount of the distribution expense accrual differential between the classes.
Class A Shares--Initial Sales Load. Class A shares are subject to an initial
sales load which varies with the size of the purchase as shown in the following
schedule, and an annual service fee of up to .25% of the average daily net 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- 3,999,999 1.00 1.01 .90
4,000,000- or more* 0 0 0
* Dealers may receive a fee of .15% on sales made without a sales load.
- --------------------------------------------------------------------------------
Referral Fee. SFSI shall pay broker/dealers, from its own resources, an
additional fee in respect of certain investments in Class A shares of the
Seligman Mutual Funds by an "eligible employee benefit plan" (as defined below
under "Special Programs") which 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 (i) the participating eligible
employee benefit plan has at least $1 million invested in the Seligman Mutual
Funds or (ii) the participating employer has at least 50 eligible employees to
whom such plan is made available. The fee, which is paid monthly, is a
percentage of the average daily net asset value of eligible shares based on the
length of time the shares have been invested in a Seligman Mutual Fund, as
follows: for shares held up to 1 year, .50% per annum; for shares held more than
1 year up to 2 years, .25% per annum; for shares held from 2 years up to 5
years, .10% per annum; and nothing thereafter.
Reduced Sales Loads. Reductions in sales loads apply to purchases of Class A
shares by a "single person," including an individual, members of a family unit
comprising husband, wife and minor children purchasing securities for their own
account, or a trustee or other fiduciary purchasing for a single fiduciary
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.
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 a front-end sales load reaches levels indicated in the
sales load schedule.
o The Right of Accumulation allows an investor to combine the amount being
invested in shares of the other Seligman Mutual Funds sold with a sales load
with the total net asset value of shares of those funds already owned that were
sold with a sales load and the total net asset value of shares of Seligman Cash
Management Fund that were acquired by the investor through an exchange of shares
of another Seligman Mutual Fund on which there was a sales load to determine
10
<PAGE>
reduced sales loads in accordance with the sales load schedule. An investor or a
dealer purchasing shares on behalf of an investor must indicate whether 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 sales loads, based upon the total amount of shares
the investor expresses an interest in purchasing plus the total net asset value
of shares of the other Seligman Mutual Funds already owned by such investor that
were sold with a sales load and the total net asset value of shares of Seligman
Cash Management Fund that were acquired by an investor through an exchange of
shares of another Seligman Mutual Fund on which there was a sales load. An
investor or a dealer purchasing Class A shares on behalf of an investor must
indicate whether 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 23.
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.
Class A shares also may be issued without a sales load in connection with the
acquisition of cash and securities owned by other investment companies and
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 similar to the Fund who purchase
shares with redemption proceeds of such funds; 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 solicitation of, its employees,
members or participants in connection with the purchase of shares of the Fund;
and to "eligible employee benefit plans" (i) which have at least $1 million
invested in the Seligman Group of Mutual Funds or (ii) of employers who have at
least 50 eligible employees to whom such plan is made available and, regardless
of the number of employees, if such plan is established and maintained by any
dealer that has a sales agreement with SFSI. An "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. Participants in such plans are
eligible for reduced sales loads based solely on their individual investments.
Class D Shares. Class D shares are sold without an initial sales load but are
subject to a CDSL if the shares are redeemed within one year, an annual
distribution fee of up to .75 of 1% and an annual service fee of up to .25 of
1%, of the average daily net asset value of the Class D shares. SFSI will make a
1% payment to dealers in respect of purchases of Class D shares.
A CDSL will be imposed on any redemption of Class D shares which were
purchased during the preceding twelve months; however, no such charge will be
11
<PAGE>
imposed on shares acquired through the investment of dividends or distributions
from any Class D shares within the Seligman Group. The amount of any CDSL will
be paid to and retained by SFSI.
To minimize the application of the 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 purchased at least one
year prior to the redemption. Shares held for the longest period of time within
the applicable one year period will then be redeemed. Additionally, for those
shares determined to be subject to the CDSL, the application of the 1% CDSL will
be made to the current net asset value or original purchase price, whichever is
less.
For example, assume an investor purchased 100 shares in January at a price of
$10.00 per share. During the first year, 5 additional shares were acquired
through investment of dividends and distributions. In January of the following
year, an additional 50 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 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 over 1 year old
(100 @ $12.25) 1,225.00
Shares less than 1 year old 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
=========
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-free return of an excess contribution
to an IRA; (c) in whole or in part, in connection with shares sold to current
and retired Directors of the Fund; (d) in whole or in part, in connection with
shares sold to any state, county, or city or any instrumentality, department,
authority, or agency thereof, which is prohibited by applicable investment laws
from paying a sales load or commission in connection with the purchase of shares
of any registered investment management company; (e) pursuant to an automatic
cash withdrawal service; (f) in connection with the redemption of Class D shares
of the Fund if the Fund is combined with another mutual fund in the Seligman
Group, or another similar reorganization transaction; and (g) in connection with
the Fund's right to redeem or liquidate an account that holds below a certain
minimum number or dollar amount of shares (currently $500).
If, with respect to a redemption of any 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 1%
payment or a portion of the 1% payment paid on such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
12
<PAGE>
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 to SFSI of such promotional activities and payments
shall be consistent with the rules of the National Association of Securities
Dealers, Inc., as then in effect.
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, and the shareholder's
broker/dealer representative, will have the ability to effect the following
transactions via telephone: (i) redemption of Fund shares, (ii) exchange of Fund
shares for shares of another Seligman Mutual Fund, (iii) change of a dividend
and/or capital gain distribution option, and (iv) change of address. All
telephone transactions are effected through Seligman Data Corp. at (800)
221-2450.
For investors who purchase shares by completing and submitting an Account
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 transaction privileges.
For investors who purchase shares through a broker/dealer: Telephone services
for a shareholder and the shareholder's broker/dealer 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 services
are not available.
All Seligman Mutual Fund accounts with the same account number (i.e.,
registered exactly the same), including any new Seligman Mutual 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 application.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone services, authorizes each of the other owners to effect telephone
transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares. In these
circumstances, the shareholder should consider using other redemption or
exchange procedures. Use of these other redemption or exchange procedures will
result in your redemption request being processed at a later time than if
telephone transactions 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
13
<PAGE>
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. Written
acknowledgment of termination of telephone transaction services will be sent to
the shareholder at the address of record.
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit form without charge,
except a CDSL, if applicable, at any time by sending a written request to
Seligman Data Corp., 100 Park Avenue, New York, NY 10017. The redemption request
must be signed by all persons in whose name the shares are registered. A
shareholder may redeem shares that are not in book credit form 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 the person(s) whose name(s) appear(s) on
the face of the certificate. The shareholder's letter of instruction or endorsed
stock power should specify the account number, class of shares (A or D) and the
number of shares or dollar amount to be redeemed. The Fund cannot accept
conditional redemption requests. 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 be required by Seligman Data Corp. in the event of
a redemption by corporations, executors, administrators, trustees, custodians or
retirement plans. 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 and in the case of
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 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 in the case of Class D shares).
The Fund makes no charge for this transaction, but the unaffiliated dealer may
charge 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
14
<PAGE>
executed at the net asset value determined as of the close of the NYSE on the
next trading day, less any applicable CDSL. Shares held in a "street name"
account with a broker/dealer may be sold to the Fund only through a
broker/dealer.
Telephone Redemptions. Telephone redemptions of uncertificated shares may be
made once per day, in an amount of up to $50,000. Telephone redemption requests
must be received by Seligman Data Corp. at (800) 221-2450 between 8:30 a.m. and
4:00 p.m. New York City time, on any business day and will be processed as of
the close of business on that day. Redemption requests by telephone will not be
accepted within 30 days following an address change. Keogh Plans, IRAs or other
retirement plans are not eligible for telephone redemptions. The Fund 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 shareholders may bear the risk of loss for a fraudulent transaction, see
"Telephone Transactions" above.
General. With respect to shares redeemed, a check for the proceeds will be
sent to the 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 repurchased by the
Fund, a check for the proceeds will be sent to the investment dealer within
seven calendar days after acceptance of the repurchase order and will be made
payable to the investment dealer. The Fund will not permit redemptions of shares
with respect to shares purchased by check (unless certified) until the Fund
receives notice that the check has cleared, which may be up to 15 days from the
credit of such shares to the shareholder's account. The proceeds of a redemption
or repurchase, of course, may be more or less than the investor's cost.
The Fund reserves the right to redeem shares of the Fund 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 are sent a notice before such redemption is processed stating that
the value of the 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 sales load, all or any part of the investment in shares of
the Fund or in shares of any of the other Seligman Mutual Funds. If a
shareholder redeems Class D shares and the redemption was subject to a CDSL, the
shareholder may reinstate the investment in shares of the same class of the Fund
or any of the other Seligman Mutual Funds within 120 calendar days of the date
of redemption and receive a credit for the CDSL paid. Such investment will be
reinstated at the net asset value per share established as of the close of the
NYSE on the day the request is received. Seligman Data Corp. must be informed
that the purchase represents a reinstated investment. Reinstated shares must be
registered exactly and be of the same class as the shares previously redeemed.
Generally, exercise of the Reinstatement Privilege does not alter the federal
income tax status of any capital gain realized on a sale of Fund shares, but to
the extent that any shares are sold at a loss and the proceeds are reinvested in
shares of the same fund, some or all of the loss will not be allowed as a
deduction, depending upon the percentage of the proceeds reinvested.
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 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
15
<PAGE>
(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 SFSl's costs incurred in connection with its marketing
efforts with respect to shares of the Fund. The Manager, in its sole discretion,
may also make similar payments to SFSI from its own resources, which may include
the management fee that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
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 the Directors on
March 19, 1992 and by the shareholders of the Fund at a special meeting held on
May 1,1992. The Plan became effective on June 1,1992. The Plan is reviewed by
the Directors annually. The total amount paid for the year ended September 30,
1995 in respect of the Fund's Class A shares pursuant to the Plan was equal to
.16% of the Class A shares' average daily net assets.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to the
Class D shares at an annual rate of up to 1% of the average daily net asset
value of the Class D shares. Proceeds from the Class D distribution fee 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 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 1% payment made by it to Service Organizations
at the time of the sale of Class D shares. The amounts expended by SFSI in any
one year upon the initial purchase of Class D shares may exceed the amounts
received by it from Plan payments retained. Expenses of administration,
shareholder services and distribution of Class D shares in one fiscal year of
the Fund may be paid from Class D Plan fees received from the Fund in any other
fiscal year.
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 Plan is reviewed by the
Directors annually. The total amount paid for the year ended September 30, 1995
by the Fund's Class D shares pursuant to the Plan was 1% per annum of the
average daily net assets of Class D shares.
Seligman Services, Inc. ("SSI"), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts as a broker/dealer of record for shareholder
accounts that do not have a designated broker/dealer of record and receives
compensation from the Fund pursuant to the Plan for providing personal services
and account maintenance to such accounts and other distribution services.
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 shares may be exchanged only for Class A shares, and Class D shares
may be exchanged only for Class D shares, of another mutual fund in the Seligman
Group. All exchanges will be made on the basis of relative net asset value.
If Class D shares that are subject to a CDSL are exchanged for Class D shares
of another fund, for purposes of assessing the CDSL payable upon disposition of
the exchanged Class D shares, the one year holding period shall be reduced by
the holding period of the original Class D shares.
16
<PAGE>
The mutual funds in the Seligman Group 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 Communications and Information Fund, Inc.: invests in shares of
companies in the communications, information and related industries to produce
capital gain. Income is not an objective.
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 Global Growth Opportunities Fund, the Seligman Henderson Global
Smaller Companies Fund, the Seligman Henderson Global Technology Fund and the
Seligman Henderson International Fund, all of which seek long-term capital
appreciation primarily through investing in companies either globally or
internationally.
o Seligman High Income Fund Series: seeks high current income by investing in
debt securities. The fund consists of the U.S. Government Securities Series and
the High-Yield Bond Series.
o Seligman Income Fund, Inc.: seeks high current income and the possibility
of improvement of future income and capital value.
o Seligman New Jersey Tax-Exempt Fund, Inc.: invests in investment grade New
Jersey tax-exempt securities.
o Seligman Pennsylvania Tax-Exempt Fund Series: invests in investment grade
Pennsylvania tax-exempt securities.
o Seligman Tax-Exempt Fund Series, Inc.: consists of several State Series and
a National Series. The National Tax-Exempt Series seeks to provide maximum
income exempt from Federal income taxes; individual state series, each seeking
to maximize income exempt from Federal income taxes and from personal income
taxes in designated states, are available for Colorado, Georgia, Louisiana,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon
and South Carolina.
o Seligman Tax-Exempt Series Trust: includes the California Tax-Exempt
Quality Series, California Tax- Exempt High-Yield Series, Florida Tax-Exempt
Series and North Carolina Tax-Exempt Series, each of which invests in tax-exempt
securities of its designated state.
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 must be received between 8:30 a.m. and 4:00 p.m. New York
City time on any business day, by Seligman Data Corp. at (800) 221-2450 and 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 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 an exchange request
together with certificates representing shares to be exchanged in form for
transfer.
Telephone exchanges are only available to shareholders whose accounts are
registered individually, jointly, or as IRAs. The Exchange Privilege via mail is
17
<PAGE>
generally applicable to investments in an IRA and other 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 the Seligman Group of 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 broker/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 exchanges, which, unless objected to, are assigned to certain
shareholders automatically, and 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
Dividends payable from the Fund's net investment income, if any, are
distributed annually. Payments vary in amount depending on income received from
portfolio securities and the cost 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; or
(3) to receive both dividends and gain distributions in cash. In the case of
prototype retirement plans, dividends and capital gain distributions are
reinvested in additional shares. Unless another election is made, dividends and
capital gain distributions will be credited to shareholder accounts in
additional shares of the Fund. 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 at the net asset value on the ex-dividend date. Shareholders may
elect to change their dividend and gain distribution options by writing Seligman
Data Corp. at the address listed below. If the shareholder has telephone
services, changes may also be telephoned to Seligman Data Corp. between 8:30
a.m. and 6:00 p.m. New York City time, by either the shareholder or the
broker/dealer of record on the account. For information about telephone
18
<PAGE>
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 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 D shares. Per share dividends
of the two classes may also differ as a result of differing class expenses, if
any. Distributions of net capital gains, if any, will be paid in the same amount
for Class A and Class D shares. See "Purchase Of Shares--Valuation."
Shareholders exchanging shares of a mutual fund for shares of another mutual
fund in the Seligman Group will continue to receive dividends and gains as
elected prior to such exchange unless otherwise specified. In the event that a
shareholder redeems all shares in an account between the record date and the
payable date, the value of dividends or gain distributions declared and payable
will be paid in cash regardless of the existing election.
FEDERAL INCOME TAXES
The Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended. 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 gains, i.e., the excess of net long-term capital
gains over any net short-term losses, are taxable as long-term capital gain,
whether received in cash or invested in additional shares, regardless of how
long shares have been held by the shareholders; such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Shareholders receiving distributions in the form of additional shares issued by
the Fund will be treated for Federal income tax purposes as having received a
distribution in an amount equal to the fair market value on the date of
distribution of the shares received.
Any gain or loss realized upon a sale or redemption of shares in the Fund by
a shareholder who is not a dealer in securities will generally be treated as a
long- term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. Individual shareholders
will be subject to Federal income tax on net capital gains at a maximum rate of
28%. Net capital gain of a corporate shareholder is taxed at the same rate as
ordinary income. However, if shares on which a long-term capital gain
distribution has been received are subsequently sold or redeemed and such shares
have been held for six months or less, any loss realized will be treated as
long-term capital loss to the extent that it offsets the long-term capital gain
distribution. In addition, no loss will be allowed on the sale or other
disposition of shares of 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
19
<PAGE>
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 by the Fund.
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 advisers 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 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 debited from the shareholder's account and offset against any
undistributed dividends and capital gain distributions. The Fund also reserves
the right to close any account which does not have a certified Taxpayer
Identification Number.
SHAREHOLDER INFORMATION
Shareholders will be sent reports quarterly regarding the Fund. General
information about the Fund may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, NY 10017 or telephoning the Corporate
Communications/Investor Relations Department toll-free by dialing (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 a shareholder
account (other than a retirement plan account), may be requested by writing the
Shareholder Services Department, Seligman Data Corp. at the same address or by
toll-free telephone by dialing (800) 221-2450 from all continental United
States. For information about a retirement account, call Pension Plan Services
toll-free by dialing (800) 445-1777 or write Pension Plan Services, Seligman
Data Corp. at the address above. Seligman Data Corp. may be telephoned Monday
through Friday (except holidays) between the hours of 8:30 a.m. and 6:00 p.m.
New York City 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
and Form 1099-DIV can be ordered. To insure prompt delivery of distribution
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.
Special investor services are available. These include:
20
<PAGE>
o Invest-A-Check(R) enables a shareholder to authorize checks to be drawn on
a regular checking account at regular monthly intervals in fixed amounts of $100
or more per Fund, or regular quarterly intervals in fixed amounts of $250 or
more per Fund, to purchase shares. Accounts may be established concurrently with
the Invest-A-Check(R) Service with a $100 minimum in conjunction with the
monthly investment option, or a $250 minimum in conjunction with the quarterly
investment option. Accounts established in conjunction with the
Invest-A-Check(R) Service must be accompanied by a minimum initial investment of
$100. (See "Terms and Conditions" on page 23.)
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 or quarterly intervals in
fixed amounts of $250 or more per Fund, into Class A shares of any other
Seligman Mutual Fund, including the Fund, registered in the same name. The
shareholder's Cash Management Fund account must have a dollar 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. (Dividend checks must meet or exceed the required minimum
purchase amount and include the shareholder's name, the name of the fund and the
class of shares in which the investment is to be made and the shareholder's fund
account number.)
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 Class A shares worth $5,000 or
more held as book credits. 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 23.)
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 and Class D shares may be
directed only to shares of the same class of another Seligman Mutual Fund. For
this purpose, shares of a fund offering only one class of shares sold with a
sales load will be treated as Class A shares.
o Overnight Delivery to service shareholder requests is available for a
$15.00 fee which may be debited 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 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 all
types of tax-deferred retirement plans. SFSI makes available plans, plan forms
and custody agreements for:
--Individual Retirement Accounts (IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and certain
non-profit organizations who wish to make deferred compensation arrangements;
and
--Pension and Profit Sharing Plans for sole proprietorships, corporations and
partnerships.
21
<PAGE>
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.
Information may be requested by writing Pension Plan Services, Seligman Data
Corp., 100 Park Avenue, New York, NY 10017 or telephoning toll-free (800)
445-1777 from all continental United States, or from 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 is calculated separately for Class A 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 and Class D of the Fund would have earned over a specified
period of time (for example, one, five and ten year periods or since inception)
assuming the payment of the maximum sales load, if any (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 reinvestment dates during the
period. The "average annual total return" is the annual rate required for the
initial payment to grow to the amount which would be received at the end of the
specified period (one, five and ten year periods or since inception); i.e., the
average annual compound rate of return. The total return and average annual
total return of Class A shares quoted from time to time including periods
through June 1,1992, do not 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 return quoted from time
to time for both Class A shares and Class D shares for periods prior to January
1, 1996 do not include the increase in the management fees payable by the Fund,
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 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/ Wiesenberger
Mutual Funds Investment Report, Christian Science Monitor, Financial Planning,
Financial Times, Financial World, Forbes, Fortune, Individual Investor,
Investment Advisor, Investors Business Daily, Kiplinger's, Los Angeles Times,
MONEY Magazine, Morningstar, Inc., Pension and Investments, Smart Money, The New
York Times, The Wall Street Journal, USA Today, U.S. News and World Report,
Worth Magazine, Washington Post and Your Money.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end investment company incorporated under the laws of the
state of Maryland on July 9, 1984. The Fund is authorized to issue 50,000,000
shares of capital stock, each with a par value of $0.10 divided into two
classes. Each share of the Fund's Class A 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 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. 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 Rule 18f-3 under the 1940 Act. All shares
have noncumulative voting rights for the election of directors. Each outstanding
share is fully paid and non-assessable, and each is freely transferable. There
are no liquidation, conversion or preemptive rights.
22
<PAGE>
TERMS AND CONDITIONS
General Account Information
Investments will be made in as many shares, including fractions to the third
decimal place, as can be purchased at the net asset value plus a sales load, if
applicable, at the close of business on the day payment is received. If a check
in payment of a purchase of Fund shares is dishonored for any reason, Seligman
Data Corp. will cancel the purchase and may redeem additional shares, if any,
held in a shareholder's account in an amount sufficient to reimburse the Fund
for any loss it may have incurred and charge a $10.00 return check fee.
Shareholders will receive dividends from investment income and any distributions
from gain realized on investments in shares or in cash according to the option
elected. Dividend and gain options may be changed by notice to Seligman Data
Corp. in writing. These option changes must be received by Seligman Data Corp.
on or before the record date for the dividend or distribution in order to be
effective for that dividend or distribution. Stock certificates will not be
issued, unless requested. Replacement stock certificates will be subject to a
surety fee.
Invest-A-Check(R) Service
The Invest-A-Check(R) Service is available to all shareholders. The
application is subject to acceptance by the shareholder's bank and Seligman Data
Corp. Checks in the amount specified will be invested in the shareholder's
account on the fifth day of each month unless otherwise specified (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 public offering price, if
applicable, 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 a check is not honored by the
shareholder's bank, or if the value of shares held falls below the required
minimum, the Service will be suspended. In the event that a check is returned
marked "unpaid," 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 debited to the shareholder's Account. Service will be
reinstated upon written request indicating that the cause of interruption has
been corrected. The 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 page 20. In the event a shareholder
exchanges all of the shares from one Seligman Mutual Fund to another, 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 $100. If the shareholder uses the
Invest-A-Check(R) Service to make an IRA investment, the purchase will be
credited as a current year contribution. If the shareholder uses the
Invest-A-Check(R) Service to make an investment in a pension or profit sharing
plan, the purchase will be credited as a current year employer contribution.
Automatic Cash Withdrawal Service
The Automatic Cash Withdrawal Service is available to Class A shareholders
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. 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). The 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. The service may be terminated by the shareholder or Seligman Data
Corp. at any time by written notice. It will be terminated upon proper
notification of the death or legal incapacity of the shareholder. 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 to you 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 in the
shareholder's account or delivered to the shareholder. A shareholder may include
the total asset value of shares of the Seligman Mutual Funds on which a sales
load was paid owned as of the date of a Letter of Intent toward the completion
of the Letter. If the total amount invested within the thirteen-month period
does not equal or exceed the specified minimum purchase, the 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
applicable. If, within 20 days following the mailing of a written request, the
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 shareholder's 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 shareholder's 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 and that the required additional escrowed shares are
being furnished by the shareholder.
Shares of Seligman Cash Management Fund, Inc. which have been acquired by an
exchange of shares of another Seligman Mutual Fund on which there is a sales
load may be taken into account in completing a Letter of Intent, or for Right of
Accumulation. However, shares of the 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 Seligman Mutual Fund.
2/96
23
<PAGE>
SELIGMAN
FRONTIER
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
EQFR1 2/96
- --------------------------
PROSPECTUS
SELIGMAN
FRONTIER
FUND, INC.
FEBRUARY 1, 1996
[logo]
- ---------------------------
A CAPITAL APPRECIATION FUND
IN ITS 12TH YEAR
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
THE SELIGMAN GROUP OF FUNDS
ACCOUNT APPLICATION
Please make your investment check payable to the
"Seligman Group of Funds" and mail it
with this completed Application to:
Seligman Data Corp. TO OPEN A SELIGMAN IRA, SEP OR PENSION/
100 Park Avenue/2nd Floor PROFIT SHARING PLAN, A SEPARATE ADOPTION
New York, NY 10017 AGREEMENT IS REQUIRED. PLEASE CALL
(800) 221-2450 RETIREMENT PLAN SERVICES FOR MORE
INFORMATION AT (800) 445-1777.
1. ACCOUNT REGISTRATION
TYPE OF ||INDIVIDUAL ||MULTIPLE OWNERS ||GIFT/TRANSFER TO MINOR ||OTHER (Corporations, Trusts, Organizations,
ACCOUNT Use Line 1 Use Lines 1, 2 & 3 Use Line 4 Use Line 5 Partnerships, etc.)
Multiple Owners will be registered as Joint Tenants with Right of Survivorship.
The first name and Social Security or Taxpayer ID Number on line 1, 4, or 5 below will be used for IRS reporting.
NAME (Minors cannot be legal owners)
PLEASE PRINT OR TYPE
1._______________________________________________________________ ___________________________ _________
First Middle Last Social Security Number Birthdate
2._______________________________________________________________ ___________________________ _________
First Middle Last Social Security Number Birthdate
3._______________________________________________________________ ___________________________ _________
First Middle Last Social Security Number Birthdate
4.______________________________, as custodian for ____________________ under the _______________
Custodian (one only) Minor (one only) State
Uniform Gift/Transfer to Minors Act_______________________________until age____________________ _________________
Minor's Social Security Number (Not more than 21) Minor's Birthdate
5._______________________________________________________________________ _____________________
Name of Corporation or Other Entity. If a Trust, also complete below. Taxpayer ID Number
TYPE OF TRUST ACCOUNT: ||Trust ||Guardianship ||Conservatorship ||Estate ||Other _________
Trustee/Fiduciary Name__________________________________ Trust Date__________________________
Trust Name ______________________________,for the benefit of (FBO)_______________________________
2. MAILING ADDRESS
ADDRESS TELEPHONE
___________________________________________ (_______)__________________(_______)_________________
Street Address or P.O. Box Daytime Evening
___________________________________________ U.S. CITIZEN? ||Yes ||No _________________________
City State Zip If no, indicate country
3. INVESTMENT SELECTION
Please indicate the dollar amount(s) you would like to invest in the space
provided below. Minimum initial investment is $1,000 per Fund ($2,500 for
Seligman Communications and Information Fund) except for accounts
established concurrently with the Invest-A-Check(R) Service (see section
6-J. of this application). IF MORE THAN ONE FUND IS SELECTED, ACCOUNTS MUST
HAVE IDENTICAL REGISTRATIONS AND CLASS OF SHARES (except for Seligman Cash
Management Fund).
PLEASE CHOOSE ONE: || Class A Shares || Class D Shares MAKE CHECK PAYABLE TO: SELIGMAN GROUP OF FUNDS
$_____________ TOTAL AMOUNT, INVESTED AS FOLLOWS:
$_____________ Seligman Communications $_____________ Seligman Common Stock Fund
and Information Fund $_____________ Seligman Income Fund
$_____________ Seligman Henderson $_____________ Seligman High-Yield Bond Fund
Global Technology Fund $_____________ Seligman U.S. Government Securities Fund
$_____________ Seligman Frontier Fund $_____________ Seligman National Tax-Exempt Fund
$_____________ Seligman Henderson Global $_____________ Seligman Tax-Exempt Fund (choose one):
Smaller Companies Fund CA-Qlty.|| FL|| MD|| MN|| NY|| OR||
$_____________ Seligman Capital Fund CA-Hy. || GA|| MA|| MO|| NC|| PA||
$_____________ Seligman Henderson Global CO || LA|| MI|| NJ|| OH|| SC||
$_____________ Growth Opportunities Fund
$_____________ Seligman Growth Fund
$_____________ Seligman Henderson
International Fund $_____________ Seligman Cash Management Fund (Class A only)
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.
<PAGE>
4. SIGNATURE AND CERTIFICATION
Under penalties of perjury I certify that the number shown on this form is
my correct Taxpayer Identification Number (Social Security Number) and that
I am not subject to backup withholding either because I have not been
notified that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or the Internal Revenue Service has
notified me that I am no longer subject to backup withholding. I certify to
my legal capacity to purchase or redeem shares of each Fund for my own
Account, or for the Account of the organization named below. I have
received and read the current Prospectus of each Fund in which I am
investing and appoint Seligman Data Corp. as my agent to act in accordance
with my instructions herein.
A. ________________________________________________________________________
Date Signature of Investor
B. ________________________________________________________________________
Date Signature of Co-Investor, if any
5. BROKER/DEALER OR FINANCIAL ADVISOR DESIGNATION
________________________________________ _____________________________
Firm Name Representative's Nam
________________________________________ _____________________________
Branch Office Address Representative's ID Number
________________________________________ (______)_____________________
City State Zip Representative's Telephone Number
________________________________________
Branch Number
6. ACCOUNT OPTIONS AND SERVICES
________________________________________________________________________________
A. DIVIDENDS AND GAIN DISTRIBUTION OPTIONS
I choose the following options for each Fund listed: OPTION
------
1 2 3
Option 1. Dividends in shares, gain distributions in shares. || || || FUND NAME
Option 2. Dividends in cash, gain distributions in shares. || || || FUND NAME
Option 3. Dividends in cash, gain distributions in cash. || || || FUND NAME
__________________________________________________________________________________________
NOTE: IF NO ELECTION IS MADE, OPTION 1. WILL AUTOMATICALLY BE PUT INTO EFFECT.
All dividend and/or gain distributions taken in shares will be invested at net asset value.
__________________________________________________________________________________________
________________________________________________________________________________
B. DIVIDEND DIRECTION OPTION
If you wish to have your dividend payments made to another
party or Seligman Fund, please complete the following. I
hereby authorize and request that my dividend payments from
the following Fund(s)
__________________ __________________ __________________ be made payable to:
Fund Name Fund Name Fund Name
Name______________________ Seligman Fund__________________
Address___________________ (If opening a new account, a minimum of $1,000 is required.)
City______________________ Account Number_________________
State, Zip________________ (For an existing account.)
________________________________________________________________________________
C. LETTER OF INTENT SERVICE (CLASS A ONLY)
I intend to purchase, although I am not obligated to do so,
additional shares of Seligman _________________________
Fund within a 13-month period which, together with the
total asset value of shares owned, will aggregate at least:
||$50,000 ||$100,000 ||$250,000 ||$500,000 ||$1,000,000
||$4,000,000
I AGREE TO THE ESCROW PROVISION LISTED UNDER "TERMS AND CONDITIONS"
IN THE BACK OF EACH PROSPECTUS.
________________________________________________________________________________
D. RIGHT OF ACCUMULATION (CLASS A ONLY)
Please identify any additional Seligman Fund accounts
eligible for the Right of Accumulation or to be used toward
completion of a Letter of Intent, and check applicable box:
|| I am a trustee for the following accounts, which are
held by the same trust, estate, or under the terms of a
pension, profit sharing or other employee benefit trust
qualified under section 401 of the Internal Revenue Code.
|| In calculating my holdings for Right of Accumulation or
Letter of Intent purposes, I am including the following
additional accounts which are registered in my name, in my
spouse's name, or in the name(s) of my child(ren) under
the age of 21.
Name______________ Fund______________ Account#_____________
Name______________ Fund______________ Account#_____________
Name______________ Fund______________ Account#_____________
<PAGE>
________________________________________________________________________________
E. AUTOMATIC CASH WITHDRAWAL SERVICE
(CLASS A, OR CLASS D ONLY AFTER CLASS D SHARES ARE HELD FOR ONE YEAR)
Please send a check for $_________ withdrawn from Seligman
________________________ Fund, beginning on the __ day of
______ 19__, and thereafter on the __ day specified of
every:
||Month ||3rd Month ||6th Month ||12th Month
Make payments to: Name___________________________________
Address________________________________
City___________State________Zip________
Shares having a current value at offering price of $5,000
or more must be held in the account at initiation of
Service, and all shares must be in "book credit" form.
________________________________________________________________________________
F. AUTOMATIC DOLLAR-COST-AVERAGING SERVICE
I authorize Seligman Data Corp. to withdraw $ _____________
(minimum: $100 monthly or $250 quarterly) from my Seligman
Cash Management Fund Class A account || Monthly or
|| Quarterly to purchase Class A shares of Seligman
________________________________ Fund, beginning on the
_____ day of __________ 19 ____. Shares in the Seligman
Cash Management Fund Class A account must have a current
value of $5,000 at the initiation of Service and all shares
must be in "book credit" form.
________________________________________________________________________________
G. EXPEDITED REDEMPTION SERVICE, FOR SELIGMAN CASH MGMT. FUND ONLY
I hereby authorize Seligman Data Corp. to honor telephone
or written instructions received from me without a
signature and believed by Seligman Data Corp. to be genuine
for redemption. Proceeds will be wired ONLY to the
commercial bank listed below for credit to my account, or
to my address of record. If Expedited Redemption Service is
elected, no certificates for shares will be issued. I also
understand and agree to the risks and procedures outlined
for all telephone transactions set forth in section 6-H. of
this Application.
Investment by ||Check ______________________________________________________________________
||Wire Name of Commercial Bank (Savings Bank May Not Be Used)
_________________________ ______________________ ______________________
Bank Account Name Bank Account No. Bank Routing No.
_______________________________________________________________________________________
Address of Bank City State Zip Code
X________________________________ X____________________________________________
Signature of Investor Date Signature of Co-Investor, if any Date
______________________________________________________________________________________________________________________
================================================================================
H. CHECK REDEMPTION SERVICE (CLASS A ONLY)
Available to shareholders who own or purchase shares having
a value of at least $25,000 invested in any of the
following: Seligman High-Yield Bond Fund, Seligman Income
Fund, Seligman U.S. Government Securities Fund, and any
Seligman Tax-Exempt Fund, or $2,000 invested in Seligman
Cash Management Fund.
IF YOU WISH TO USE THIS SERVICE, YOU MUST COMPLETE SECTION
4 AND THE SIGNATURE CARD BELOW. SHAREHOLDERS ELECTING THIS
SERVICE ARE SUBJECT TO THE CONDITIONS OF THE TERMS AND
CONDITIONS IN THE BACK OF EACH PROSPECTUS.
- --------------------------------------------------------------------------------
CHECK WRITING SIGNATURE CARD Authorized Signature(s)
___________________________________________ 1.______________________________
Name of Fund for Check Redemption Service
___________________________________________ 2.______________________________
Name of Fund for Check Redemption Service
___________________________________________ 3.______________________________
Name of Fund for Check Redemption Service
__________________________________________ 4.______________________________
Account Number (If known)
__________________________________________
Account Registration (Please Print)
|| Check here if only one signature is required on checks.
|| Check here if a combination of signatures is required and specify the number:___________________.
ACCOUNTS IN THE NAMES OF CORPORATIONS, TRUSTS, PARTNERSHIPS, ETC., MUST
INDICATE THE LEGAL TITLES OF ALL AUTHORIZED SIGNATORIES. SHAREHOLDERS
ELECTING THIS SERVICE ARE SUBJECT TO THE TERMS AND CONDITIONS LISTED IN THE
PROSPECTUS.
================================================================================
<PAGE>
I. TELEPHONE SERVICE ELECTION
AVAILABLE FOR ALL TYPES OF ACCOUNTS EXCEPT AS NOTED BELOW
Unless I check the box below, I understand that I or my
representative may place the following requests by
telephone:
o Redemptions up to $50,000 o Exchanges
o Address Changes o Dividend and/or Capital
Gain Distribution Option
changes
|| I DO NOT WANT TELEPHONE SERVICES FOR MYSELF OR MY
REPRESENTATIVE NAMED IN SECTION 5 OF THIS APPLICATION
AUTHORIZATION
I understand that the telephone services are optional and
that unless I checked the box above, I authorize the Funds,
all other Seligman Funds with the same account number and
registration which I currently own or in which I invest in
the future, and Seligman Data Corp. ("SDC"), to act upon
instructions received by telephone from me or any other
person (including the representative named in section 5 of
this application) in accordance with the provisions
regarding telephone services as set forth in the current
prospectus of each such Fund, as amended from time to time.
I understand that redemptions of uncertificated shares of
up to $50,000 will be sent only to my account address of
record, and only if such address has not changed within the
30 days preceding such request.
Any telephone instructions given in respect of this account
and any account into which exchanges are made are hereby
ratified and I agree that neither the Fund(s) nor SDC will
be liable for any loss, cost or expense for acting upon
such telephone instructions reasonably believed to be
genuine and in accordance with the procedures described in
each prospectus, as amended from time to time. Such
procedures include recording of telephone instructions,
requesting personal and/or account information to verify a
caller's identity and sending written confirmations of
transactions. As a result of this policy, I may bear the
risk of any loss due to unauthorized or fraudulent
telephone instructions; provided, however, that if the
Fund(s) or SDC fail to employ such procedures, the Fund(s)
and/or SDC may be liable.
Telephone services are not available for trusts (unless the
trustee and sole beneficiary are the same person),
corporations or group retirement plans. IRA telephone
services will include only exchanges and address changes.
J. INVEST-A-CHECK(R) SERVICE
To start your Invest-A-Check(R) Service, fill out the "Bank
Authorization to Honor Pre-Authorized Checks" below, and
forward it with an unsigned bank check from your regular
checking account (marked "void", if you wish). ACCOUNTS MAY
BE ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK(R)
SERVICE WITH A $100 MINIMUM ($200 minimum for Seligman
Communications and Information Fund) IF THE MONTHLY
INVESTMENT OPTION IS CHOSEN, OR WITH A $250 MINIMUM ($500
minimum for Seligman Communications and Information Fund)
IF THE QUARTERLY INVESTMENT OPTION IS CHOSEN. Please
arrange with my bank to draw pre-authorized checks and
invest the following dollar amounts (minimum: $200 monthly
or $500 quarterly for Seligman Communications and
Information Fund; $100 monthly or $250 quarterly for all
other Funds) in the designated Seligman Fund(s) as
indicated:
_______________ $_________ ||Monthly ||Quarterly
Fund Name
________________ $_________ ||Monthly ||Quarterly
Fund Name
________________ $_________ ||Monthly ||Quarterly
Fund Name
I understand that my checks will be drawn on the fifth day
of the month, or prior business day, for the period
designated. I have completed the "Bank Authorization to
Honor Pre-Authorized Checks" below and have read and agree
to the Terms and Conditions applicable to the
Invest-A-Check(R) Service as set forth in each Prospectus
and as set forth below in the Bank Authorization.
X__________________________________________________________________
Signature of Investor (Please also sign Bank Authorization below.)
X__________________________________________________________________
Signature of Co-Investor, if any
________________________________________________________________________________________
BANK AUTHORIZATION TO HONOR PRE-AUTHORIZED CHECKS
________________________________________________________________________________________
To:_____________________________________________________________________________________
(Name of Bank)
________________________________________________________________________________________
Address of Bank or Branch (Street, City, State and Zip)
Please honor pre-authorized checks drawn on my account by Seligman Data Corp.,
100 Park Avenue, New York, N.Y. 10017, to the order of the Fund(s) designated
below:
____________________________________ $ ___________ ||Monthly ||Quarterly
Fund Name
____________________________________ $ ___________ ||Monthly ||Quarterly
Fund Name
____________________________________ $ ___________ ||Monthly ||Quarterly
Fund Name
and charge them to my regular checking account. Your authority to do so shall
continue until you receive written notice from me revoking it. You may
terminate your participation in this arrangement at any time by written notice
to me. I agree that your rights with respect to each pre-authorized check
shall be the same as if it were a check drawn and signed by me. I further
agree that should any such check be dishonored, with or without cause,
intentionally or inadvertently, you shall be under no liability whatsoever.
___________________________________ _________________________________________________
Checking Account Number Name(s) of Depositor(s) -- Please Print
X__________________________________________________
Signature(s) of Depositor(s) -- As Carried by Bank
X__________________________________________________
<PAGE>
- --------------------------------------------------------------------------------
To the Bank Designated above:
Your depositor(s) named in the above form has instructed us to establish the
Invest-A-Check(R) Service for his convenience. Under the terms of the Service,
your depositor(s) has pre-authorized checks to be drawn against his account in
a specific amount at regular intervals to the order of the designated Fund(s).
Checks presented to you will be magnetic-ink coded and will otherwise conform
to specifications of the American Bankers Association.
A letter of indemnification addressed to you and signed by Seligman Financial
Services, Inc., general distributor of the Seligman Mutual Funds, appears
below.
If there is anything we can do to help you in giving your depositor(s) this
additional Service which he has requested, please let us know.
SELIGMAN DATA CORP.
INDEMNIFICATION AGREEMENT
To the Bank designated above:
SELIGMAN FINANCIAL SERVICES, INC., distributor of the shares of the Seligman
Mutual Funds, hereby agrees:
(1) To indemnify and hold you harmless against any loss, damage, claim or
suit, and any costs or expenses reasonably incurred in connection therewith,
either (a) arising as a consequence of your actions in connection with the
execution and issuance of any check or draft, whether or not genuine,
purporting to be executed by Seligman Data Corp. and received by you in the
regular course of business for the purpose of payment, or (b) resulting from
the dishonor of any such check or draft, with or without cause and
intentionally or inadvertently, even though such dishonor results in
suspension or termination of the Invest-A-Check(R) Service pursuant to which
such checks or drafts are drawn.
(2) To refund to you any amount erroneously paid by you on any such check or
draft, provided claim for any such payment is made within 12 months after the
date of payment.
SELIGMAN FINANCIAL SERVICES, INC.
/S/Stephen J. Hodgdon
President
________________________________________________________________________________
<PAGE>
MANAGED BY
[J&W SELIGMAN LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
Investment Managers and Advisors
ESTABLISHED 1864
</TABLE>
<PAGE>
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
February 1, 1996
SELIGMAN FRONTIER 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 Frontier Fund,
Inc. (the "Fund"), dated February 1, 1996. It should be read in conjunction with
the Prospectus, which may be obtained by writing or calling the Fund at the
above address or telephone numbers. This Statement of Additional Information,
although not in itself a Prospectus, is incorporated by reference into the
Prospectus in its entirety.
The Fund offers two classes of shares. Class A shares may be purchased
at net asset value plus a sales load of up to 4.75%. Class D shares may be
purchased at net asset value and are subject to a contingent deferred sales load
("CDSL") of 1% if redeemed within one year.
Each Class A 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 D shares bear a higher distribution
fee that generally will cause the Class D shares to have a higher expense ratio
and pay lower dividends than Class A shares. Each Class has exclusive voting
rights with respect to its distribution plan. Although holders of Class A 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 two classes
also have different exchange privileges.
TABLE OF CONTENTS
Page
Investment Objective, Policies and Risks............. 2
Investment Limitations............................... 2
Directors And Officers............................... 3
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 Information.............................. 14
General Information.................................. 16
Financial Statements................................. 16
Appendix............................................. 16
EQFR1A
1
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund seeks to produce growth in capital value. Income may be considered
but will only be incidental to the Fund's investment objective of growth in
capital value. The following information regarding the Fund's investment
policies supplements the information contained in the Prospectus.
Lending of Portfolio Securities. The Fund may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash collateral
and obtain additional income or receive an agreed upon amount of interest from
the borrower. Loans made by the Fund will generally be short-term. 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.
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.
Except as otherwise specifically noted above, the Fund's 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.
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 of the 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 from the calculation. The Fund's
portfolio turnover rates for the fiscal years ended September 30, 1994 and
September 30, 1995 were 124.76% and 71.52%, 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 from banks for temporary or emergency purposes (but not
for the purchase of portfolio securities) in an amount not to exceed 15% of
the value of its total assets. The Fund will not purchase additional
portfolio securities if the Fund has outstanding borrowings in excess of 5%
of the value of its total assets;
o Purchase securities on "margin," or sell "short", or write or purchase put,
call, straddle or spread options, except that the Fund may make margin
deposits on future contracts, and may purchase put options solely for the
purpose of hedging against a decline in the price of securities held in the
Fund's portfolio;
o Invest more than 5% of its total assets, at market value, 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 5% of the value of its total assets, at market value, in
securities of any company which, with their predecessors, have been in
operation less than three continuous years, provided, however, that
securities guaranteed by a company that (including predecessors) has been in
operation at least three continuous years shall be excluded from this
calculation;
o Invest more than 25% of the value of its total assets in any one industry;
2
<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 other than stock index
futures 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 (which loans would be fully
collateralized and marked to market daily) 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.
Although not fundamental policies subject to shareholder vote, as long as the
Fund's shares are registered in certain states, it may not (l) mortgage, pledge
or hypothecate its assets to the extent that the value of such encumbered assets
exceeds 10% of the per share offering price (net asset value) of shares of the
Fund and (2) invest in interests in oil, gas or other mineral exploration or
development programs. The Fund may not invest more than 5% of the value of its
net assets, valued at the lower of cost or market, in warrants, of which no more
than 2% of net assets may be invested in warrants not listed on the New York or
American Stock Exchanges.
Under the Investment Company Act of 1940 (the "1940 Act"), a "vote of a
majority of the outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (l) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares present at a shareholders' meeting if more than
50% of the outstanding shares are represented at the meeting in person or by
proxy.
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years are shown below. Each
Director who is an "interested person" of the Fund, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
<TABLE>
<CAPTION>
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer and Chairman of the
(57) Executive Committee
<S> <C>
Managing Director, Chairman and President, J. & W. Seligman & Co.
Incorporated, investment managers and advisors; and Seligman Advisors, Inc.,
advisors; Chairman and Chief Executive Officer, the Seligman Group of
Investment Companies; Chairman, Seligman Financial Services, Inc.,
distributor; 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;
Daniel Industries, Inc., manufacturer of oil and gas metering equipment;
Kerr-McGee Corporation, diversified energy company; and Sarah Lawrence
College; and a Member of the Board of Governors of the Investment Company
Institute; formerly, Chairman, J. & W. Seligman Trust Company, trust company
and Seligman Securities, Inc., broker/dealer.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(43)
Director and Managing Director
(formerly, Chief Administrative and
Financial Officer), J. & W. Seligman &
Co. Incorporated, investment managers
and advisors; and Seligman Advisors,
Inc., advisors; Director or Trustee, the
Seligman Group of Investment Companies;
President, the Seligman Group of
Investment Companies, except Seligman
Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.;
Chairman, Seligman Data Corp.,
shareholder service agent; Director,
Seligman Financial Services, Inc.,
distributor; Seligman Services, Inc.,
broker/dealer; Senior Vice President,
Seligman Henderson Co., advisors;
formerly, Director and Secretary, Chuo
Trust - JWS Advisors, Inc., advisors;
and Director, J. & W. Seligman Trust
Company, trust company and Seligman
Securities, Inc., broker/dealer.
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief Investment Officer, Institutional, J. &
W. Seligman & Co. Incorporated, investment managers and advisors; and Seligman
Advisors, Inc., advisors; Director or Trustee, the Seligman Group of
Investment Companies; Director, Seligman Holdings, Inc., holding company;
Seligman Financial Services, Inc., distributor; Seligman Henderson Co.,
advisors; and Seligman Services, Inc., broker/dealer; formerly, President, the
Seligman Group of Investment Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund, Inc.; and Director, J. & W.
Seligman Trust Company, trust company; Seligman Data Corp., shareholder
service agent; and Seligman Securities, Inc., broker/dealer.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W.
Seligman & Co. Incorporated, investment
managers and advisors; Director or
Trustee, the Seligman Group of
Investment Companies; Seligman Financial
Services, Inc., distributor; Seligman
Services, Inc., broker/dealer; Trudeau
Institute, Inc., non-profit biomedical
research organization; Lake Placid
Center for the Arts, cultural
organization; and Lake Placid Education
Foundation, education foundation;
formerly, Director, J. & W. Seligman
Trust Company, trust company; and
Seligman Securities, Inc.,
broker/dealer.
JOHN R. GALVIN Director
(66)
Dean, Fletcher School of Law and
Diplomacy at Tufts University; Director
or Trustee, the Seligman Group of
Investment Companies; Chairman of the
American Council on Germany; a Governor
of the Center for Creative Leadership;
Director of USLIFE, insurance; National
Committee on U.S.-China Relations,
National Defense University and the
Institute for Defense Analysis; and
Consultant of Thomson CSF, 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
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or Trustee, the Seligman Group of Investment
Companies; Chairman, The Rockefeller Foundation, charitable foundation; and Director, NYNEX,
telephone company; and the Committee for Economic Development; formerly, Trustee, The Markle
Foundation, philanthropic organization; and Director, International Research and Exchange
Board, intellectual exchanges. Sarah Lawrence College, Bronxville, New York 10708
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive Officer, Kerr-McGee Corporation,
energy and chemicals; Director or Trustee, the Seligman Group of Investment
Companies; Director of 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 of Oklahoma City Public Schools Foundation; and Member of the
Business Roundtable and National Petroleum Council.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan & Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies; The Municipal Art Society of New York; Commonwealth
Aluminum Corporation, the U.S. Council for International Business and the U.S.-New Zealand
Council; Chairman, American Australian Association; Member of the American Law Institute and
Council on Foreign Relations; Member of the Board of Governors of Foreign Policy Association
and New York Hospital. 125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(53)
Attorney; Director or Trustee, the Seligman Group of Investment Companies and
National Association of Independent Schools (Boston), education; Chairman of
the Board of Trustees of St. George's School (Newport, RI).
St. Bernard's Road, Gladstone, NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law firm; Director or Trustee, the
Seligman Group of Investment Companies and Public Service Enterprise Group,
public utility.
Park Avenue at Morris County, P.O. Box 1945, Morristown, NJ 07962-1945
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
JAMES Q. RIORDAN Director
(68)
Director, Various Corporations; Director or Trustee, the Seligman Group of
Investment Companies; The Brooklyn Museum; The Brooklyn Union Gas Company; The
Committee for Economic Development; Dow Jones & Co. Inc. and Public
Broadcasting Service; formerly, Co-Chairman of the Policy Council of the Tax
Foundation; Director and Vice Chairman, Mobil Corporation; Director and
President, Bekaert Corporation; and Director, Tesoro Petroleum Companies, Inc.
675 Third Avenue, Suite 3004, New York, NY 10017
ROBERT L. SHAFER Director
(63)
Director, Various Corporations; Director or Trustee, the Seligman Group of Investment
Companies; and USLIFE Corporation, life insurance. 235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(60)
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 and C-SPAN. 300 Crescent Court, Suite 700, Dallas, TX 75202
ARSEN MRAKOVCIC Vice President and Portfolio Manager
(31)
Managing Director (formerly, Vice President, Investment Officer), J. & W.
Seligman & Co. Incorporated, investment managers and advisors; formerly,
Portfolio Assistant, J. & W. Seligman & Co. Incorporated.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W. Seligman & Co. Incorporated,
investment managers and advisors; Seligman Financial Services, Inc.,
distributor; and Seligman Advisors, Inc., advisors; Vice President (formerly,
Treasurer), the Seligman Group of Investment Companies; Senior Vice President,
Finance (formerly, Treasurer), Seligman Data Corp., shareholder service agent;
Treasurer, Seligman Holdings, Inc., holding company; and Seligman Henderson
Co., advisors; formerly, Senior Vice President, Seligman Securities, Inc.,
broker/dealer; and Vice President, Finance, J. & W. Seligman Trust Company.
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation and Secretary, J. & W. Seligman & Co.
Incorporated, investment managers and advisors; Secretary, the Seligman Group of Investment
Companies, Seligman Financial Services, Inc., distributor; Seligman Henderson Co., advisors;
Seligman Services, Inc., broker/dealer; Chuo Trust - JWS Advisors, Inc., advisors; and
Seligman Data Corp., shareholder service agent; formerly, attorney, Seward & Kissel.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment Companies and Seligman Data Corp.,
shareholder service agent; formerly, Treasurer, American Investors Advisors,
Inc. and the American Investors Family of Funds.
</TABLE>
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund for
which no market valuation is available and to elect or appoint officers of the
Fund to serve until the next meeting of the Board.
<TABLE>
<CAPTION>
Compensation Table
Pension or Total Compensation
Aggregate Retirement Benefits from Registrant and
Name and Compensation Accrued as part of Fund Complex Paid
Position with Registrant from Registrant (1) Fund Expenses to Directors (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 $1,516.02 N/A $41,252.75
Alice S. Ilchman, Director 2,497.36 N/A 68,000.00
Frank A. McPherson, Director 1,516.02 N/A 41,252.75
John E. Merow, Director 2,425.94(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,675.94 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 909.92 N/A 24,747.25
James C. Pitney, Director 2,497.36 N/A 68,000.00
James Q. Riordan, Director 2,783.08 N/A 70,000.00
Herman J. Schmidt, Director* 909.92 N/A 24,747.25
Robert L. Shafer, Director 2,783.07 N/A 70,000.00
James N. Whitson, Director 2,711.66(d) N/A 68,000.00(d)
</TABLE>
(1) For the year ended December 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
* Retired May 18, 1995.
(d) Deferred.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest will be
accrued on the deferred balances. The annual cost of such interest will be
included in the directors' fees and expenses, and the accumulated balance
thereof at September 30, 1995, of $41,407, is included in "Other Liabilities" in
the Fund's financial statements.
Directors and officers of the Fund are also directors 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 Class
A shares of the Fund at January 12, 1996. No Directors or officers of the Fund
owned Class D shares of the Fund at that date.
7
<PAGE>
As of January 23, 1996, 4,407,687 Class A shares, or 11% of the Fund's
capital stock then outstanding, and 6,801,256 class D shares, or 16% of the
Fund's 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 January
1, 1996, subject to the control of the Board of Directors, the Manager manages
the investment of the assets of the Fund, including making purchases and sales
of portfolio securities consistent with the Fund's investment objectives and
policies, and administers its business and other affairs. The Manager provides
the Fund with such office space, administrative and other services and executive
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of directors of the Fund who are employees or consultants of
the Manager and of the officers and employees of the Fund. The Manager also
provides senior management for Seligman Data Corp., the Fund's shareholder
service agent.
The Fund pays the Manager a management fee for its services, calculated daily
and payable monthly. Effective January 1, 1996, pursuant to amendments to the
Management Agreement approved by shareholders on December 12, 1995, the
management fee is equal to .95% per annum of the Fund's average daily net assets
on the first $750 million of net assets and .85% per annum of the Fund's average
daily net assets in excess of $750 million. Prior to such amendments, the
management fee was equal to .75% per annum of the daily net assets of the Fund.
For the fiscal years ended September 30, 1993, 1994 and 1995, the Fund paid the
full management fee of .75% per annum of its average daily net assets or
$259,663, $390,476 and $1,260,769, respectively.
Under the Subadvisory Agreement, dated June 1, 1994, Seligman Henderson Co.
(the "Subadviser") provides management services (as described in the Prospectus)
with respect to all or a portion of the Fund's foreign investments, as
designated by the Manager ("Qualifying Assets"). For this service, the
Subadviser receives a fee from the Manager, payable monthly. The subadvisory fee
rate is the same as the overall rate paid to the Manager by the Fund, and is
applied to the average net Qualifying Assets of the Fund (i.e., the Qualifying
Assets less liabilities, as designated by the Manager). For the period ended
September 30, 1994 and the year ended September 30, 1995, the Fund did not
require the services of the Subadviser.
The Fund pays all its expenses other than those assumed by the Manager and
Subadviser, including brokerage commissions, administration, shareholder
services and distribution fees, fees and expenses of independent attorneys and
auditors, taxes and governmental fees, including fees and expenses of qualifying
the Fund and its shares under Federal and State securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder record keeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees and expenses of
directors of the Fund not employed by or serving as a Director of the Manager or
its affiliates, insurance premiums and extraordinary expenses such as litigation
expenses. The Fund may be subject to certain state expense limitations, the most
stringent of which currently requires reimbursement of total expenses (including
the management fee, but excluding interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses) in any year that they exceed 2
1/2% of the first $30 million of average net assets, 2% of the next $70 million
of average net assets and 1 1/2% thereafter.
The Management Agreement provides that the Manager will not be liable to the
Fund for any error of judgment or mistake of law, or for any loss arising out of
any investment, or for any act or omission in performing its duties under the
Agreement, except for willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties under the Agreement.
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.
8
<PAGE>
The Management Agreement, dated December 29, 1988, amended January 1, 1996,
was unanimously approved by the Board of Directors at a Meeting held on October
11, 1988. The amendments to the Management Agreement, to increase the fee rate
payable to the Manager by the Fund, were approved by the Board of Directors on
September 21, 1995. The Management Agreement was approved by the shareholders at
a meeting held on December 15, 1988, and as amended, on December 12, 1995. The
Management Agreement will continue in effect until December 31 of each year if
(1) such continuance is approved in the manner required by the 1940 Act, by a
vote of a majority of the Board of Directors or of the outstanding voting
securities of the Fund and by a vote of a majority of the Directors who are not
parties to the Management Agreement or interested persons of any such party and
(2) if the Manager shall not have notified the Fund at least 60 days prior to
December 31 of any year that it does not desire such continuance. The Management
Agreement may be terminated by the Fund or by the Manager, without penalty, on
60 days' written notice to the Manager and will terminate automatically in the
event of its assignment. The Fund has agreed to change its name upon termination
of the Management Agreement if continued use of the name would cause confusion
in the context of the Manager's business.
The Manager is a successor firm to an investment banking business founded in
1864 which has thereafter provided investment services to individuals, families,
institutions and corporations. See Appendix for further history of the Manager.
Under the Subadvisory Agreement, dated June 1, 1994 and amended January 1,
1996, the Subadviser supervises and directs a portion of the Fund's investment
in foreign securities and ADRs consistent with the Fund's investment objectives,
policies and principles. For these services, the Subadviser is paid a fee as
described in the Fund's Prospectus. The Subadvisory Agreement was approved by
the Board of Directors at a meeting held on January 20, 1994. The amendments
were approved by the Board of Directors on September 21, 1995. The Subadvisory
Agreement was approved by the shareholders on May 19, 1994, and as amended on
December 12, 1995. The Subadvisory Agreement will continue in effect until
December 31, 1995, and from year to year thereafter if 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) if the Subadviser
shall not have notified the Manager in writing at least 60 days prior to
December 31 of any year that it does not desire such continuance. The
Subadvisory Agreement may be terminated at any time by the Fund, on 60 days
written notice to the Subadviser. The Subadvisory Agreement will terminate
automatically in the event of its assignment or upon the termination of the
Management Agreement.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The firm
currently manages approximately $19 billion in assets and is recognized as a
specialist in global equity investing.
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 Act and
Rule 12b-1 thereunder.
The Plan was approved on March 19, 1992 by the Directors, including a
majority of the Directors who are not "interested persons" (as defined in the
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
the Shareholders held on May 1, 1992. The Plan became effective in respect of
the Class A shares on June 1, 1992. The Plan was approved in respect of the
Class D shares on March 18, 1993 by the Directors, including a majority of the
Qualified Directors, and became effective with respect to the Class D shares on
May 1, 1993. The Plan will continue in effect until December 31 of each year so
long as such continuance is approved annually by a majority vote of both the
Directors of the Fund and the Qualified Directors, 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 and no material amendment to the Plan may be made except
by a majority of both the Directors and the Qualified Directors.
9
<PAGE>
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 of the Fund, 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 its use, as well as the
general attitude toward and support of investment companies demonstrated by such
brokers or dealers. Such services include supplemental investment research,
analysis and reports concerning issuers, industries and securities deemed by the
Manager and Subadviser to be beneficial to the Fund. In addition, the Manager
and Subadviser is authorized to place orders with brokers who provide
supplemental investment and market research and security and economic analysis
although the use of such brokers may result in a higher brokerage charge to the
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 responsible 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 desire to buy or sell the same
security at the same time, the securities purchased or sold are allocated by the
Manager in a manner believed to be equitable to each. There may be possible
advantages or disadvantages of such transactions with respect to price or the
size of positions readily obtainable or saleable.
The total brokerage commissions paid to others for execution and research
and statistical services for the fiscal years ended September 30, 1995, 1994 and
1993, respectively were $ 337,655, $86,871 and $54,608, of which Seligman
Securities, Inc. received $13,878 in 1993. Seligman Securities, Inc. ceased
functioning as a broker for the Fund and its other clients on March 31, 1993.
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund issues two 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 D shares may be purchased at a price equal to the next determined net
asset value without an initial sales load, but 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 load of 4.75% and Class
D shares are sold at net asset value*. Using the Fund's net asset value at
September 30, 1995, the maximum offering price of the Fund's shares is as
follows:
<TABLE>
<CAPTION>
<S> <C>
Class A
Net asset value and redemption price per Class A share................. $ 14.04
Maximum sales load (4.75% of offering price)........................... .70
-------
Offering price to public............................................... $ 14.74
=======
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Class D
Net asset value to public per Class D share*........................... $ 13.61
=======
</TABLE>
- --------------
* Class D shares are subject to a CDSL of 1% on redemptions within one year
of purchase. See "Redemption Of Shares" in the Fund's Prospectus.
Class A Shares - Reduced Sales Loads
Reductions Available. Shares of any Seligman Mutual Fund sold with a sales load
in a continuous offering will be eligible for the following reductions:
Volume Discounts are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other Funds in
the Seligman Group which are sold with a 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 Seligman Capital Fund,
Seligman Common Stock Fund, Seligman Communications and Information Fund,
Seligman Growth Fund, Seligman Henderson Global Fund Series, Seligman High
Income Fund Series, Seligman Income Fund, Seligman New Jersey Tax-Exempt Fund,
Seligman Pennsylvania Tax-Exempt Fund Series, Seligman Tax-Exempt Fund Series,
or Seligman Tax-Exempt Series Trust that were sold with a sales load with the
total net asset value of shares of those Seligman Mutual Funds already owned
that were sold with a sales load and the total net asset value of shares of
Seligman Cash Management Fund which were acquired through an exchange of shares
of another Mutual Fund in the Seligman Group on which there was a sales load at
the time of purchase to determine reduced sales loads in accordance with the
schedule in the Prospectuses. The value of the shares owned, including the value
of shares of Seligman Cash Management Fund acquired in an exchange of shares of
another Mutual Fund in the Seligman Group on which there was a sales load at the
time of purchase will be taken into account in orders placed through a dealer,
however, only if Seligman Financial Services, Inc. ("SFSI") is notified by an
investor or a dealer of the amount owned at the time 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 sales loads in accordance with the schedule in the
Prospectus, based on the total amount of Class A shares of the Fund that the
letter states the investor intends to purchase plus the total net asset value of
shares that were sold with a sales load of Seligman Capital Fund, Seligman
Common Stock Fund, Seligman Communications and Information Fund, Seligman Growth
Fund, Seligman Henderson Global Fund Series, Seligman High Income Fund Series,
Seligman Income Fund, Seligman New Jersey Tax-Exempt Fund, Seligman Pennsylvania
Tax-Exempt Fund Series, Seligman Tax-Exempt Fund Series, or Seligman Tax-Exempt
Series Trust already owned and the total net asset value of shares of Seligman
Cash Management Fund which were acquired through an exchange of shares of
another Mutual Fund in the Seligman Group on which there was a sales load at the
time of purchase. Reduced sales loads also may apply to purchases made within a
13-month period starting up to 90 days before the date of execution of a letter
of intent. For more information concerning the terms of the letter of intent see
"Terms and Conditions - Letter of Intent - Class A Shares Only" accompanying the
Account Application in the Prospectus.
Persons Entitled To Reductions. Reductions in sales loads apply to purchases of
Class A shares by a "single person," including an individual; members of a
family unit comprising husband, wife and minor children; or a trustee or other
fiduciary purchasing for a single fiduciary account. Employee benefit plans
qualified under Section 401 of the Internal Revenue Code, organizations tax
exempt under Section 501 (c)(3) or (13), and non-qualified employee benefit
plans that satisfy uniform criteria are considered "single persons" for this
purpose. The uniform criteria are as follows:
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
Prospectus, reports and other shareholder communications.
11
<PAGE>
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
Eligible Employee Benefit Plans. The table of sales loads in the Prospectus
applies to sales to "eligible employee benefit plans" (as defined in the
Prospectus), except that the Fund may sell shares at net asset value to
"eligible employee benefit plans," which have at least $1 million invested in
the Seligman Group of Mutual Funds or (ii) of employers who have at least 50
eligible employees to whom such plan is made available or, regardless of the
number of employees, if such plan is established or maintained by any dealer
which has a sales agreement with SFSI. Such sales must be made in connection
with a payroll deduction system of plan funding or other systems acceptable to
Union Data Service Center, 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 Union Data 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 and, if applicable, any 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. (See "Valuation"). In
accordance with Texas securities regulations, should the Fund accept securities
in payment for shares, such transactions would be limited to a bona fide
reorganization, statutory merger, or to other acquisitions of portfolio
securities (except for municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) which meet the investment
objectives and policies of the investment company; are acquired for investment
and not for resale; are liquid securities which are not restricted as to
transfer either by law or liquidity of market; and have a value which is readily
ascertainable (and not established only by evaluation procedures) as evidenced
by a listing on the American Stock Exchange, the New York Stock Exchange or
NASDAQ.
Further Types of Reductions. Class A shares may be issued without a sales load
in connection with the acquisition of cash and securities owned by other
investment companies and other personal holding companies to financial
institution trust departments, to registered investment advisers exercising
investment discretionary authority with respect to the purchase of Fund shares,
or pursuant to sponsored arrangements with organizations which make
recommendations to, or permit group solicitation of, its employees, members or
participants in connection with the purchase of shares of the Fund, to separate
accounts established and maintained by an insurance company which are exempt
from registration under Section 3(c)(11) of the Investment Company Act of 1940,
to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with SFSI and shareholders of
mutual funds with investment objectives similar to the Fund's who purchase
shares with redemption proceeds of such funds and to certain unit investment
trusts as described in the Prospectus.
Class A shares may be 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.
12
<PAGE>
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 New York Stock
Exchange during periods of emergency, or such other periods as ordered by the
Securities and Exchange Commission. Under these circumstances, redemption
proceeds may be made in securities, 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 to cash.
DISTRIBUTION SERVICES
SFSI, an affiliate of the Manager, acts as general distributor of the
shares of the Fund and of the other mutual funds in the Seligman Group. As
general distributor of the Fund's Capital Stock, SFSI allows commissions on
sales of Fund shares to all dealers of up to 4.25% on purchases of Class A
Shares to which the 4.75% sales load applies. The Fund and SFSI are parties to a
Distributing Agreement dated January 1, 1993. Total sales loads paid by
shareholders of Class A shares of the Fund for the fiscal years ended September
30, 1993, 1994 and 1995, respectively, amounted to $96,613, $254,283 and
$5,489,668, respectively, of which $86,097, $225,716 and $4,882,246,
respectively, was paid as commissions to dealers. SFSI receives the balance of
sales loads and any CDSLs paid by investors. For the fiscal years ended
September 30, 1994 and 1995, SFSI retained CDSL charges amounting to $1,240 and
$22,116, respectively.
Effective April 1, 1995, Seligman Services, Inc. ("SSI"), an affiliate of
the Manager, became eligible to receive commissions from certain sales of Fund
shares, as well as distribution and service fees pursuant to the Plan. For the
period ended September 30, 1995, SSI received commissions of $104,682 from sales
of Fund shares. SSI also received distributions and service fees of $11,821,
pursuant to the Plan.
Class A shares may be sold at net asset value to present and retired
Directors, trustees, officers, employees (and family members, as defined in the
Prospectus) of the Fund, the other investment companies in the Seligman Group,
the Manager and other companies affiliated with the Manager. Such sales also may
be made to employee benefit 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.
VALUATION
Net asset value per share of each class of the Fund is determined as of the
close of the New York Stock Exchange ("NYSE") (normally, 4:00 p.m. New York City
time), on each day that the NYSE is open for business. The NYSE is currently
closed on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Fund will
also determine net asset value for each class on each day in which there is a
sufficient degree of trading in the Fund's portfolio securities that the net
asset value of Fund shares might be materially affected. Net asset value per
share for a class is computed by dividing such class' share of the value of the
net assets of the Fund (i.e., the value of its assets less liabilities) by the
total number of outstanding shares of such class. All expenses of the Fund,
including the Manager's fee, are accrued daily and taken into account for the
purpose of determining net asset value. The net asset value of Class D shares
will generally be lower than the net asset value of Class A shares as a result
of the higher distribution fee with respect to Class D 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 not listed on
an exchange or securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked price,
except in the case of open short positions where the asked price is available.
Any securities or other assets for which recent market quotations are not
readily available 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
13
<PAGE>
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.
Any stock index futures contracts in which the Fund may invest and for which
market quotations are readily available are valued at the current market value,
or, in their absence, at fair value determined by the Board of Directors. Thus,
changes in the value of stock index futures contracts owned by the Fund will be
recognized daily through an unrealized gain (loss) account.
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 INFORMATION
The average annual total returns for the Fund's Class A shares for the
one-year, five-year, and ten-year periods through September 30, 1995 were
30.29%, 28.23%, and 17.71%, respectively. These returns were computed assuming a
hypothetical initial payment of $1,000, subtracting the maximum sales load of
$47.50 (4.75% of public offering price) and assuming that all of the dividends
and distributions paid by the Fund over the relevant time period were
reinvested. It was then assumed that at the end of each period, the entire
amount was redeemed. The average annual total return was then calculated by
calculating the annual rate required for the initial payment to grow to the
amount which would have been received upon such redemption (i.e., the average
annual compound rate of return).
The average annual total returns for the Fund's Class D shares for the
one-year period ended September 30, 1995 and since inception through September
30, 1995 were 34.53% and 29.14%, respectively. These returns were computed
assuming a hypothetical initial payment of $1,000 and that all of the dividends
and distributions paid by the Fund's Class D shares, if any, were reinvested
over the relevant time period. It was then assumed that at the end of each
period, the entire amount was redeemed, subtracting the 1% CDSL, if applicable.
Table A below illustrates the total return (income and capital) on Class A
shares of the Fund with dividends invested and gain distributions taken in
shares. It shows that a $1,000 investment in Class A shares, assuming payment of
the 4.75% sales load, made on October 1, 1985 had a value of $5,105 on September
30, 1995 resulting in an aggregate total return of 410.48%. Table B illustrates
the total return (income and capital) on Class D shares of the Fund with
dividends invested and gain distributions taken in shares. It shows that a
$1,000 investment in Class D shares made on May 1, 1993 (commencement of
operations of Class D shares) had a value of $1,852 on September 30, 1995
resulting in an aggregate total return of 85.24%. 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.
14
<PAGE>
<TABLE>
<CAPTION>
TABLE A - CLASS A SHARES
Value of Capital Value Total Value
Year Initial Gain of of Total
Ended Investment 2 Distributions Dividends Investment2 Return1,3
- ----- ------------ ------------- --------- ----------- ---------
<C> <C> <C> <C> <C> <C>
9/30/86 $ 1,124 $ - $ 2 $ 1,226
9/30/87 1,510 61 2 1,573
9/30/88 1,115 264 1 1,380
9/30/89 1,452 344 2 1,798
9/30/90 1,133 268 1 1,402
9/30/91 1,730 416 4 2,150
9/30/92 1,622 630 4 2,256
9/30/93 2,073 1,321 5 3,399
9/30/94 1,878 1,850 4 3,732
9/30/95 2,269 2,831 5 5,105 410.48%
</TABLE>
<TABLE>
<CAPTION>
TABLE B - CLASS D SHARES
Value of Capital Value Total Value
Period Initial Gain of of Total
Ended 1 Investment 2 Distributions Dividends Investment2 Return3
- ------- ------------ ------------- --------- ----------- -------
<S> <C> <C> <C> <C>
9/30/93 $1,265 $ - - $1,265
9/30/94 1,127 240 - 1,367
9/30/95 1,344 508 - 1,852 85.24%
</TABLE>
1 For the ten-year period ended September 30, 1995 for Class A shares; and
from commencement of operations of Class D shares on May 3, 1993.
2 The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load, assumes that all dividends and capital
gain distributions were taken in cash and reflects changes in the net asset
value of the shares purchased with the hypothetical initial investment.
"Total Value of Investment" reflects the effect of the CDSL, if applicable,
assumes investment of all dividends and capital gain distributions and
reflects changes in the net asset value.
3 Total return for each Class of shares of the Fund is calculated by assuming
a hypothetical initial investment of $1,000 at the beginning of the period
specified; subtracting the maximum sales load for Class A shares;
determining total value of all dividends and distributions that would have
been paid during the period on such shares assuming that each dividend or
distribution was invested in additional shares at net asset value;
calculating the total value of the investment at the end of the period;
subtracting the CDSL on Class D shares, if applicable; and finally, by
dividing the difference between the amount of the hypothetical initial
investment at the beginning of the period and its total value at the end of
the period by the amount of the hypothetical initial investment.
The Fund's total return and average annual total return of Class A shares
quoted from time to time through June 1, 1992 does not reflect the deduction of
the administration, shareholder services and distribution fee, which if
reflected would reduce the performance quoted.
The Fund may also include its aggregate total return over a specified period
in advertisements or in information furnished to present or prospective
shareholders.
15
<PAGE>
GENERAL INFORMATION
Capital Stock. The Board of Directors is authorized to classify or reclassify
and issue any unissued Capital Stock of the Fund into any number of other
classes without further action by shareholders. The 1940 Act requires that where
more 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 fiscal year ended September 30,
1995 is incorporated by reference into this Statement of Additional Information.
The Annual Report contains a schedule of the investments of the Fund as of
September 30, 1995, as well as certain other financial information as of that
date. The Annual Report will be furnished without charge to investors who
request copies of the Fund's Statement of Additional Information.
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.
16
<PAGE>
...1920s
o Participates in hundreds of successful underwritings including those for
some of the Country's largest companies: Briggs Manufacturing, Dodge
Brothers, General Motors, Minneapolis-Honeywell Regulatory Company, Maytag
Company United Artists Theater Circuit and Victor Talking Machine Company.
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.
...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, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
o Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global
investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today offers
four separate series: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund and Seligman Henderson Global Growth Opportunities Fund.
17
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
We are pleased to update you on Seligman Frontier Fund with this 1995
Annual Report. We are also happy to report that your Fund's outstanding
performance continued through its fiscal fourth quarter, resulting in another
stellar year. Specific performance information, including a discussion with your
Portfolio Managers, and a chart and table that analyze longer-term performance
follow this letter.
Your Fund's gain information is as follows: for Class A and D shares, net
realized gain per share from investment transactions for the year totaled $0.49.
At September 30, net unrealized gain per share totaled $2.04. The realized gain
distribution for 1995 will be paid on November 17.
Third quarter reports and statistics suggest that the U.S. economy is
maintaining its pattern of slow growth; for example, factory orders for consumer
goods rose at a tepid rate, as retailers continued to hold down inventories. In
addition, inflation remained benign and low interest rates prevailed, supported
by growing prospects for a deficit reduction plan that will curb government
spending in areas previously off limits -- such as entitlements. In the past, an
environment marked by such modest but sustained economic growth and subdued
inflation has proven very positive for financial markets.
Equity markets continued to be supported by increases in corporate
earnings, and demand for the types of companies your Fund invests in should
remain strong. Overall, we remain optimistic about the prospects for the
small-cap market. In particular, the possibility of a decrease in capital gains
tax bodes well for your Fund. A lower capital gains tax coupled with moderate
economic growth and low interest rates has in the past encouraged small-cap
investing.
For more information about Seligman Frontier Fund, or your investment in
its shares, please write or call the toll-free telephone numbers listed below.
By order of the Board of Directors,
/S/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
November 3, 1995
- --------------------------------------------------------------------------------
Important Telephone Numbers
SHAREHOLDER RETIREMENT PLAN 24-HOUR AUTOMATED
SERVICES SERVICES TELEPHONE ACCESS SERVICE
(800) 221-2450 (800) 445-1777 (800) 622-4597
<PAGE>
================================================================================
PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
The following are biographies of your Portfolio Managers, a discussion with them
regarding Seligm an Frontier Fund, and a chart and tabl e comparing your Fund's
performance to the per formance of the NASDAQ Composite Index and the Lipper
Small Company Growth Fund Index.
[PHOTO OF MESSRS. WICK AND MRAKOVCIC GOES HERE]
PORTFOLIO MANAGEMENT
The Portfolio Managers of Seligman Frontier Fund this past year were Paul H.
Wick and Arsen Mrakovcic. On September 21, 1995, Mr. Mrakovcic became the sole
Portfolio Manager of your Fund. He began working with Seligman Frontier Fund in
1992 as a portfolio assistant and became co-Portfolio Manager in 1995. In
addition, Mr. Mrakovcic is Portfolio Manager of the U.S. portion of Seligman
Henderson Global Smaller Companies Fund. Mr. Wick began managing the Fund in
1991 and is also the Portfolio Manager of Seligman Communications and
Information Fund and of the U.S. portion of Seligman Henderson Global
Technologies Fund. Messrs. Wick and Mrakovcic are assisted by a team of seasoned
research professionals who are responsible for identifying small companies in
specific industry groups that offer the greatest potential for growth.
ECONOMIC FACTORS AFFECTING SELIGMAN FRONTIER FUND
"Over the past 12 months, the overall economic environment of moderate inflation
and low interest rates presented a positive backdrop for equity investing.
Furthermore, economic growth and consumer demand in 1995, although slightly
slower than last year's pace, remained strong for the companies in your Fund,
leading to its superior returns as shown in the chart and table on page 3."
INDIVIDUAL SECTOR PERFORMANCE
"During the past quarter, retail sales slowed, which prompted retailers to
adjust inventories. These adjustments, in turn, had a negative impact on the
trucking industry as the need for new shipments and deliveries abated.
Consequently, both the retail and trucking industries had a difficult year, and
while we took action as quickly as possible, the Fund experienced some losses in
these areas.
"On the up side, the continued demand for personal computers, pagers, computer
networking, and electronics in automobiles, created strong growth in earnings
and share prices for the companies in the technology segment of your portfolio.
"Also, the ongoing trend in business outsourcing resulted in superior returns
for the business services sector of your portfolio. Many corporations are
becoming aware of the economic benefits of contracting outside firms to manage a
diverse range of business demands such as fulfilling payroll, tax reporting,
computer management, and telemarketing needs, and are consequently `outsourcing'
to specialized firms.
"Finally, the financial sector also performed well as it benefited from the
benign interest rate environment and strong demand for new loans. In addition,
the media/broadcasting sector did well, due to growing advertising rates and
increasing cash flows."
LOOKING AHEAD
"The outlook for 1996 is similar to what we have seen thus far in 1995. Moderate
inflation and low interest rates make for a favorable investment environment.
Valuations in the small-cap universe are reasonable. This is especially true of
the stocks in your portfolio. Corporate earnings continue to look good, and the
managements of the corporations in your portfolio continue to express positive
outlooks for the coming year."
2
<PAGE>
================================================================================
PERFORMANCE COMPARISON CHART AND TABLE September 30, 1995
- --------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman Frontier
Fund Class A shares, with and without the maximum initial sales charge of 4.75%,
for the 10-year period ended September 30, 1995, to a $10,000 investment made in
the NASDAQ Composite Index and Lipper Small Company Growth Fund Index for the
same period. The performance of Seligman Frontier Fund Class D shares is not
shown in this chart but is included in the table below. It is important to keep
in mind that the indices exclude the effects of any fees or sales charges.
(The following table is the source data for the line chart which appears
at this point in the printed document. This table is not part of the
original printed document and is shown for reference only. The same is
also true for this descriptive paragraph.)
SELIGMAN FRONTIER FUND (CLASS A)
without with NASDAQ Lipper Small
sales sales Composite Company Growth
charge charge Index Fund Index
Sep-85 $10,000 $9,532 $10,000 $10,000
Dec-85 $11,599 $11,056 $11,592 $11,439
Mar-86 $14,272 $13,603 $13,369 $12,953
Jun-86 $15,969 $15,221 $14,466 $13,531
Sep-86 $12,863 $12,261 $12,509 $11,923
Dec-86 $13,405 $12,777 $12,443 $12,164
Mar-87 $16,308 $15,544 $15,340 $14,528
Jun-87 $16,044 $15,292 $15,148 $14,357
Sep-87 $16,503 $15,729 $15,849 $15,032
Dec-87 $12,372 $11,793 $11,789 $11,488
Mar-88 $14,083 $13,423 $13,364 $13,140
Jun-88 $15,363 $14,643 $14,078 $14,115
Sep-88 $14,482 $13,803 $13,831 $13,820
Dec-88 $14,440 $13,763 $13,605 $13,876
Mar-89 $15,657 $14,923 $14,509 $14,937
Jun-89 $16,601 $15,824 $15,528 $15,913
Sep-89 $18,868 $17,984 $16,870 $17,285
Dec-89 $18,501 $17,634 $16,225 $16,762
Mar-90 $17,945 $17,104 $15,537 $16,409
Jun-90 $19,204 $18,304 $16,491 $17,365
Sep-90 $14,712 $14,023 $12,290 $13,450
Dec-90 $16,830 $16,042 $13,336 $14,442
Mar-91 $20,769 $19,796 $17,205 $17,850
Jun-91 $20,348 $19,395 $16,977 $17,671
Sep-91 $22,560 $21,503 $18,795 $19,445
Dec-91 $25,183 $24,004 $20,916 $21,427
Mar-92 $25,427 $24,235 $21,538 $21,747
Jun-92 $22,926 $21,852 $20,105 $19,951
Sep-92 $23,667 $22,558 $20,807 $20,614
Dec-92 $29,211 $27,843 $24,149 $23,912
Mar-93 $29,267 $27,895 $24,619 $24,218
Jun-93 $31,379 $29,909 $25,112 $24,944
Sep-93 $35,659 $33,989 $27,210 $27,212
Dec-93 $36,894 $35,166 $27,710 $27,961
Mar-94 $36,423 $34,716 $26,521 $26,950
Jun-94 $33,997 $32,404 $25,183 $25,495
Sep-94 $39,152 $37,317 $27,264 $27,873
Dec-94 $39,481 $37,632 $26,824 $27,837
Mar-95 $42,571 $40,577 $29,152 $29,398
Jun-95 $46,996 $44,794 $33,299 $32,121
Sep-95 $53,557 $51,048 $37,227 $36,137
The table below shows the average annual total returns for the one-, five-, and
10-year periods ended September 30, 1995, for Seligman Frontier Fund Class A
shares, with and without the maximum initial sales charge of 4.75%, for the
NASDAQ Composite Index and the Lipper Small Company Growth Fund Index. Also
included in the table are the average annual total returns for the one-year and
since-inception periods through September 30, 1995, for Seligman Frontier Fund
Class D shares, with and without the effect of the 1% contingent deferred sales
load ("CDSL") imposed on shares redeemed within one year of purchase, for the
NASDAQ Composite Index and the Lipper Small Company Growth Fund Index.
AVERAGE ANNUAL TOTAL RETURNS
ONE FIVE 10
YEAR YEARS YEARS
---- ----- -----
Seligman Frontier Fund
Class A with Sales Charge 30.29% 28.23% 17.71%
Class A without Sales Charge 36.80 29.49 18.27
NASDAQ Composite Index 36.54 24.81 14.05
Lipper Small Company
Growth Fund Index 29.65 21.86 13.71
SINCE
ONE INCEPTION
YEAR 5/3/93
---- ---------
Seligman Frontier Fund
Class D with CDSL 34.53% n/a
Class D without CDSL 35.53 29.14%
NASDAQ Composite Index 36.54 20.74*
Lipper Small Company
Growth Fund Index 29.65 19.58*
* From April 30, 1993.
No adjustment was made to performance for periods prior to June 1, 1992, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. THE PERFORMANCE OF CLASS D SHARES WILL BE GREATER THAN OR LESS THAN THE
PERFORMANCE SHOWN FOR CLASS A SHARES, BASED ON THE DIFFERENCES IN SALES CHARGES
AND FEES PAID BY SHAREHOLDERS. Performance data quoted represent changes in
prices and assume that all distributions within the periods are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
SELIGMAN FRONTIER FUND, INC. Largest Portfolio Changes* During Past Three Months
3
<PAGE>
================================================================================
SELIGMAN FRONTIER FUND, INC.
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 9/30/95
- --------- -------- --------
Alliance Semiconductor ............ 150,000 150,000
Carbide/Graphite Group ............ 300,000 300,000
Ceridian .......................... 155,000 155,000
Corporate EXPRESS ................. 215,000 215,000
Jayhawk Acceptance ................ 325,000 325,000
Minerals Technologies ............. 120,000 120,000
Tencor Instruments ................ 115,000 115,000
ThermoLase ........................ 250,000 250,000
UCAR International ................ 200,000 200,000
US Office Products ................ 325,000 325,000
HOLDINGS
REDUCTIONS DECREASE 9/30/95
- ---------- -------- -------
Benson Eyecare .................... 199,200 --
Cypress Semiconductor ............. 55,000 --
EZ Communications (Class A) ....... 80,700 13,300
Equity Inns ....................... 150,000 --
T. Rowe Price ..................... 40,000 100,000
ProNet ............................ 35,000 100,000
Storemedia ........................ 112,000 --
Trigen Energy ..................... 75,000 --
Werner Enterprises ................ 105,000 --
World Acceptance .................. 150,000** --
MAJOR PORTFOLIO HOLDINGS
AT SEPTEMBER 30, 1995
SECURITY VALUE
- -------- -----
Electronics for Imaging ............. $10,743,750
California Energy ................... 8,200,000
Electroglas ......................... 7,126,875
Ceridian ............................ 6,878,125
Lam Research ........................ 6,856,875
Cognex .............................. 6,846,125
SITEL ............................... 6,806,250
Nu-Kote Holdings (Class A) .......... 6,781,250
Vicor ............................... 6,755,000
Credence Systems .................... 6,610,875
- -----------
* Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
** Includes 100,000 shares received as a result of a 3-for-1 stock split. Major
Portfolio Holdings at September 30, 1995
4
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS September 30, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCKS 91.4%
ADVERTISING 2.7%
DIMAC*
Direct marketing services ............. 175,000 $3,303,125
Heritage Media (Class A)*
Broadcasting, in-store media .......... 168,000 5,061,000
Katz Media Group*
Advertising broker .................... 150,000 3,056,250
-----------
11,420,375
-----------
AEROSPACE AND DEFENSE 1.4%
BDM International*
Information systems software
and services .......................... 208,000 5,720,000
-----------
APPAREL 1.8%
Nautica Enterprises*
Manufacturer of men's
sportswear ............................ 87,000 3,001,500
St. John Knits
Manufacturer of high-end
women's apparel ....................... 88,500 4,314,375
-----------
7,315,875
-----------
Broadcasting 2.3%
Evergreen Media (Class A)*
Radio broadcasting .................... 130,000 3,672,500
EZ Communications (Class A)*
Radio broadcasting .................... 13,300 251,038
Jacor Communications*
Radio broadcasting .................... 180,000 2,857,500
United Video Satellite
Group (Class A)*
Media programming
and services .......................... 90,000 2,767,500
-----------
9,548,538
-----------
BUSINESS GOODS AND SERVICES 16.6%
Barefoot
Lawncare service ...................... 290,000 3,842,500
Bell & Howell Holdings*
Publishing and information
services .............................. 236,800 6,038,400
Bisys Group*
Data processing service to
banks ................................. 220,000 5,555,000
Ceridian*
Data processing services .............. 155,000 6,878,125
Corporate EXPRESS*
Supplier of office products ........... 215,000 5,213,750
HFS Group*
Hotel and motel franchises ............ 85,000 4,451,875
Holophane*
Manufacturer of lighting
systems/fixtures ...................... 127,000 3,524,250
Interim Services*
Temporary employment
services .............................. 100,000 2,675,000
Inter-Tel*
Manufacturer of electronic
telecommunications
equipment ............................. 250,000 4,375,000
National Data
Transaction processor ................. 200,000 5,362,500
Nu-Kote Holdings (Class A)*
Manufacturer of copier
toner supplies ........................ 310,000 6,781,250
SITEL*
Outsourcer of outbound
telemarketing ......................... 275,000 6,806,250
SPS Transaction Services*
Transaction processing
services .............................. 100,000 2,900,000
US Office Products*
Supplier of office products ........... 325,000 4,895,312
-----------
69,299,212
-----------
CAPITAL GOODS 6.9%
Carbide/Graphite Group*
Producer of graphite
electrodes ............................ 300,000 4,350,000
DT Industries
Manufacturer of custom
machines and metal products ........... 190,000 2,588,750
Fusion Systems*
Manufacturer of ultraviolet
curing systems ........................ 110,000 3,190,000
Greenfield Industries
Manufacturer of expendable
cutting tools ......................... 100,000 3,050,000
Kennametal
Tungsten-base carbide
products .............................. 100,000 3,625,000
Oak Industries*
Manufacturer of electrical
controls .............................. 115,000 3,464,375
5
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
CAPITAL GOODS (continued)
UCAR International*
Provider of graphite
electrodes ............................ 200,000 $ 5,450,000
Wolverine Tube*
Manufacturer of copper and
copper-alloy tube ..................... 80,000 3,020,000
-----------
28,738,125
-----------
COMMUNICATIONS 6.2%
Arch Communications Group*
Provider of nationwide
paging services ...................... 145,000 3,806,250
Aspect Telecommunications*
Manufacturer of telephone
processing systems ................... 230,000 6,210,000
Cellular Communications Intl.*
Operator of cellular telephone
services ............................. 15,000 813,750
CIDCO*
Designer and developer of
network service equipment ............. 126,000 4,425,750
Lannet Data Communications*
Computer network switches
and hubs .............................. 135,000 3,510,000
MobileMedia (Class A)*
Provider of paging services ........... 150,000 4,087,500
ProNet*
Telecommunications services ........... 100,000 2,900,000
-----------
25,753,250
-----------
Computer Hardware Peripherals 3.6%
Electronics for Imaging*
Color-copier peripherals .............. 150,000 10,743,750
Planar System*
Manufacturer of electro-
luminescent displays .................. 219,500 4,390,000
-----------
15,133,750
-----------
COMPUTER SOFTWARE AND SERVICES 5.1%
Mentor Graphics*
Integrated circuit design
software .............................. 255,000 5,291,250
Netmanage*
Manufacturer of connectivity
software .............................. 250,000 5,921,875
SunGard Data Systems*
Provider of data processing
services .............................. 150,000 4,350,000
Synopsys*
Developer of integrated circuit
design software ....................... 180,000 5,580,000
-----------
21,143,125
-----------
CONSUMER GOODS AND SERVICES 3.3%
Custom Chrome*
Wholesaler of Harley-Davidson
products .............................. 70,000 1,570,625
Martin Industries
Manufacturer of gas fireplaces ........ 290,000 3,008,750
ThermoLase*
Developer of hair removal
systems ............................... 250,000 5,109,375
USA Detergents*
Manufacturer of low priced
brand detergent ....................... 200,000 4,150,000
-----------
13,838,750
-----------
DRUGS AND HEALTH CARE 6.1%
AmeriSource Health*
Distributor of pharmaceutical
supplies .............................. 193,500 5,151,937
Clintrials Research*
Contract drug research
organization .......................... 150,000 3,009,375
Community Psychiatric Centers
Owner/operator of acute
psychiatric hospitals ................. 290,000 3,407,500
Lincare Holdings*
In-home respiratory services .......... 120,000 3,067,500
Living Centers of America*
Operator of long-term health
care centers .......................... 110,000 3,657,500
Omnicare
Long-term care pharmacy
services .............................. 120,000 4,680,000
Protein Design Labs*
Antibody technology research
and development ....................... 132,000 2,598,750
-----------
25,572,562
-----------
ELECTRONICS 15.3%
Alliance Semiconductor*
Designer of high speed
memory circuits ....................... 150,000 5,981,250
Cognex*
Manufacturer of machine
vision systems ........................ 143,000 6,846,125
6
<PAGE>
================================================================================
September 30, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Credence Systems*
Automated semiconductor
testing equipment ..................... 183,000 $ 6,610,875
Electro Scientific Industries*
Computer controlled laser
systems ............................... 120,000 4,215,000
Electroglas*
Manufacturer of semiconductor
wafer probing equipment ............... 105,000 7,126,875
Information Storage Device*
Audio recording circuits .............. 200,000 4,500,000
Lam Research*
Manufacturer of plasma
etching equipment ..................... 115,000 6,856,875
Lattice Semiconductor*
Manufacturer of programmable
logic devices ......................... 110,000 4,455,000
Sanmina*
Manufacturer of electronic
circuit boards and back planes ........ 120,000 5,700,000
Tencor Instruments*
Wafer inspection devices .............. 115,000 5,074,375
Vicor*
Manufacturer of modular power
converters ............................ 280,000 6,755,000
-----------
64,121,375
-----------
FARM EQUIPMENT 1.1%
AGCO
Manufacturer and distributor
of farm equipment ..................... 105,000 4,777,500
-----------
FINANCIAL SERVICES 6.0%
Commerce Bancorp
Commercial bank ....................... 115,000 2,724,063
Jayhawk Acceptance*
Consumer finance company .............. 325,000 4,692,187
Leasing Solutions*
Lessor of processing and
communications equipment .............. 180,000 2,576,250
T. Rowe Price
Investment management ................. 100,000 5,137,500
Roosevelt Financial Group
Savings bank .......................... 250,000 4,437,500
Sirrom Capital
Business specialty lender ............. 250,000 4,468,750
WFS Financials*
Consumer finance company .............. 40,000 920,000
-----------
24,956,250
-----------
FOOD AND BEVERAGES 0.8%
Canandaigua Wine (Class A)*
Domestic wine producer ................ 70,000 $ 3,412,500
-----------
GAMING 0.6%
GTECH Holdings*
Operator of state/local
lottery systems ....................... 90,000 2,711,250
-----------
MEDICAL PRODUCTS AND TECHNOLOGY 2.3%
Dentsply International
Manufacturer of dental and
medical x-ray equipment ............... 150,000 5,175,000
Patterson Dental*
Distributor of dental supplies
and equipment ......................... 60,000 1,575,000
Sybron International*
Laboratory and dental
supplies .............................. 75,000 3,018,750
-----------
9,768,750
-----------
OIL AND GAS 1.9%
Falcon Drilling*
Lessor of oil and gas drilling
equipment ............................. 300,000 3,787,500
Pogo Producing
Oil and gas exploration,
production, and development ........... 175,000 3,981,250
-----------
7,768,750
-----------
RESTAURANTS 1.8%
Consolidated Products*
Owner/operator of restaurants ......... 140,000 2,073,750
International House of Pancakes*
Operator of International
House of Pancake restaurants .......... 80,000 2,070,000
Longhorn Steaks*
Operator of full-service
restaurants ........................... 200,000 3,500,000
-----------
7,643,750
-----------
RETAIL TRADE 1.3%
Casey's General Store
Operator of convenience store ......... 220,000 4,950,000
Central Tractor Farm & Country*
Building products and retail
agriculture hardware and related ...... 28,900 328,738
-----------
5,278,738
-----------
7
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued) September 30, 1995
- --------------------------------------------------------------------------------
SHARES OR
PRIN. AMT. VALUE
---------- -----
SPECIALTY CHEMICALS 1.9%
Minerals Technologies
Manufactures specialty
minerals and products ................. 120,000shs $ 4,515,000
Sealed Air*
Manufacturer of protective
packaging ............................. 60,000 3,307,500
-----------
7,822,500
-----------
TRANSPORTATION 0.4%
US Xpress Enterprises (Class A)*
Trucking operator ..................... 200,000 1,812,500
-----------
UTILITIES 2.0%
California Energy*
Developer of geothermal
energy power .......................... 400,000 8,200,000
-----------
TOTAL COMMON STOCKS
(Cost $320,362,774 ) .......... 381,757,425
-----------
SHORT-TERM HOLDINGS 12.1%
First National Bank of Chicago,
Grand Cayman Fixed Time
Deposit 61/2%, 10/2/1995 .............. $17,000,000 17,000,000
National Westminster Bank,
Grand Cayman Fixed Time
Deposit 61/2%, 10/2/1995 .............. 16,253,000 16,253,000
State Street Bank and Trust,
Grand Cayman Fixed Time
Deposit 63/8%, 10/2/1995 .............. 17,000,000 17,000,000
-----------
TOTAL SHORT-TERM HOLDINGS
(Cost $50,253,000) .......................... 50,253,000
TOTAL INVESTMENTS 103.5%
(Cost $370,615,774) ......................... 432,010,425
OTHER ASSETS LESS
LIABILITIES (3.5)% .................................. (14,445,403)
------------
NET ASSETS 100.0% ................................... $417,565,022
============
- ---------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
8
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES September 30, 1995
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value:
Common stocks (cost $320,362,774) ......... $381,757,425
Short-term holdings (cost $50,253,000) .... 50,253,000
------------
$432,010,425
Cash ........................................ 777,871
Receivable for Capital Stock sold ........... 6,243,598
Receivable for securities sold .............. 1,046,218
Receivable for dividends and interest ....... 69,106
Expenses prepaid to shareholder service
agent .................................... 50,520
Other ....................................... 35,207
------------
TOTAL ASSETS ................................ 440,232,945
------------
LIABILITIES:
Payable for securities purchased ............ 21,643,454
Payable for Capital Stock repurchased ....... 369,702
Accrued expenses, taxes, and other .......... 654,767
------------
TOTAL LIABILITIES ........................... 22,667,923
------------
NET ASSETS .................................. $417,565,022
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.10 par value;
50,000,000 shares authorized; 30,074,456
shares outstanding):
Class A ................................... $ 1,938,681
Class D ................................... 1,068,764
Additional paid-in capital .................. 341,830,746
Accumulated net investment loss ............. (41,407)
Undistributed net realized gain ............. 11,373,587
Net unrealized appreciation of investments .. 61,394,651
------------
Net Assets .................................. $417,565,022
============
NET ASSET VALUE PER SHARE
CLASS A ($272,121,727 + 19,386,810 SHARES) $14.04
======
CLASS D ($145,443,295 + 10,687,646 SHARES) $13.61
======
- ----------------
See notes to financial statements.
9
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended September 30, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ........................................... $ 1,219,691
Dividends .......................................... 307,097
Other income ....................................... 44,190
------------
Total investment income ............................ $ 1,570,978
EXPENSES:
Management fee ..................................... 1,260,769
Distribution and service fees ...................... 690,067
Shareholder account services ....................... 583,110
Registration ....................................... 167,174
Shareholder reports and communications ............. 51,859
Auditing and legal fees ............................ 41,595
Directors| fees and expenses ....................... 26,372
Custody and related services ....................... 13,518
Miscellaneous ...................................... 6,112
------------
Total expenses ..................................... 2,840,576
------------
NET INVESTMENT LOSS ................................ (1,269,598)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ................... 14,852,097
Net change in unrealized appreciation of investments 51,312,770
------------
Net gain on investments ............................ 66,164,867
------------
Increase in net assets from operations ............. $ 64,895,269
============
- ---------------
See notes to financial statements.
10
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------
1995 1994
---- ----
OPERATIONS:
Net investment loss ................................ $ (1,269,598) $ (511,703)
Net realized gain on investments ................... 14,852,097 7,083,185
Net change in unrealized appreciation of investments 51,312,770 (1,269,713)
------------ -----------
Increase in net assets from operations ............. 64,895,269 5,301,769
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A .................................... (7,039,282) (7,595,277)
Class D .................................... (1,338,879) (243,455)
------------ -----------
Decrease in net assets from distributions .......... (8,378,161) (7,838,732)
------------ -----------
<TABLE>
<CAPTION>
CAPITAL SHARE TRANSACTIONS:
SHARES
--------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------
1995 1994
---------- ---------
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A ................................ 14,343,047 1,149,853 176,507,457 12,717,598
Class D ................................ 9,799,966 753,094 116,142,280 8,168,738
Exchanged from associated Funds:
Class A ................................ 2,239,426 422,026 27,111,701 4,766,454
Class D ................................ 977,881 41,042 11,153,674 436,688
Shares issued in payment of gain
distributions:
Class A ................................ 630,353 694,769 6,606,096 7,302,029
Class D ................................ 125,619 21,147 1,286,339 221,199
---------- --------- ----------- ----------
Total .................................... 28,116,292 3,081,931 338,807,547 33,612,706
---------- --------- ----------- ----------
Cost of shares repurchased:
Class A ................................ (1,348,459) (419,801) (16,084,996) (4,586,161)
Class D ................................ (261,304) (15,175) (3,189,105) (161,528)
Exchanged into associated Funds:
Class A ................................ (1,508,671) (181,131) (17,704,056) (2,054,292)
Class D ................................ (771,800) (58,422) (8,577,404) (633,007)
---------- --------- ----------- ----------
Total .................................... (3,890,234) (674,529) (45,555,561) (7,434,988)
---------- --------- ----------- ----------
Increase in net assets from capital
share transactions ..................... 24,226,058 2,407,402 293,251,986 26,177,718
========== ========= ----------- ----------
Increase in net assets ................... 349,769,094 23,640,755
NET ASSETS:
Beginning of year ........................ 67,795,928 44,155,173
------------- -------------
End of year .............................. $ 417,565,022 $ 67,795,928
============= =============
- --------------
See notes to financial statements.
</TABLE>
11
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Frontier Fund, Inc. (the "Fund") offers two classes of shares. All
shares existing prior to May 3, 1993, were classified as Class A shares. Class A
shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class D shares are sold without
an initial sales charge but are subject to a distribution fee of up to 0.75% and
a service fee of up to 0.25% on an annual basis, and a contingent deferred sales
load ("CDSL") of 1% imposed on certain redemptions made within one year of
purchase. The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with ge nerally
accepted accounting principles, are given below:
a. Investments in stocks are valued at current market values or, in their
absence, at fair value determined in accordance with procedures approved by
the Board of Directors. Securities traded on national exchanges are valued at
last sales prices or, in their absence and in the case of over-the-counter
securities, a mean of bid and asked prices. Short-term holdings maturing in
60 days or less are valued at amortized cost.
b. 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 the shares of each class. Class-specific expenses,
which include distribution and service fees and any other items that can be
specifically attributed to a particular class, are charged directly to such
class.
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, and 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 short-term
investments, for the year ended September 30, 1995, amounted to $367,165,577 and
$109,596,144, respectively.
At September 30, 1995, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, aNd the tax basis gross unrealized appreciation and depreciation of
portfolio securities amounted to $64,019,403 and $2,624,752, respectively.
4. 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
12
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
paid by the Manager. The Manager receives a fee, calculated daily and payable
monthly, equal to 0.75% per annum of the Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares, and an affiliate of the Manager, received
concessions of $607,423 from sales of Class A shares after commissions of
$4,882,246 were paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of average daily net assets
of Class A shares attributable to the particular service organizations for
providing personal services and/or the maintenance of shareholder accounts. The
Distributor charges such fees to the Fund pursuant to the Plan. For the year
ended September 30, 1995, fees paid aggregated $182,395, or 0.16% per annum of
average daily net assets of Class A shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the year ended September 30, 1995,
fees paid amounted to $507,672, or 1% per annum of the average daily net assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended September
30, 1995, such charges amounted to $22,116.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became eligible to receive commissions from certain sales of shares of
the Fund, as well as distribution and service fees pursuant to the Plan. For the
period ended September 30, 1995, Seligman Services, Inc. received commissions of
$104,682 from sales of shares of the Fund. Seligman Services, Inc. also received
distribution and service fees of $11,821, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $583,110 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, Seligman Financial Services, Inc., Seligman Services, Inc., and/or
Seligman Data Corp.
Fees of $15,500 were incurred by the Fund for the 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 cost of such fees and interest is included in directors' fees and
expenses, and the accumulated balance thereof at September 30, 1995, of $41,407
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.
5. Class-specific expenses charged to Class A and Class D during the year
ended September 30, 1995, which are included in the corresponding captions of
the Statement of Operations, were as follows:
CLASS A CLASS D
------- -------
Distribution and service fees ...... $182,395 $507,672
Registration ....................... 22,531 17,232
Shareholder reports and
communications .................. 3,007 1,720
13
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item as disclosed in the financial statements
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased shares at net asset value as of the beginning of
the period, reinvested dividends and capital gains paid at net asset value, and
then sold their shares at the net asset value per share on the last day of the
period. The total return computations do not reflect any sales charges investors
may incur in purchasing or selling shares of the Fund. The total returns for
periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
------------------------------------------------ -------------------------
YEAR ENDED
YEAR ENDED SEPTEMBER 30 SEPTEMBER 30 5/3/93*
------------------------------------------------ -------------- to
1995 1994 1993 1992 1991 1995 1994 9/30/93
---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $11.62 $12.83 $10.22 $10.71 $ 7.01 $11.40 $12.80 $10.12
Net investment loss (0.06) (0.08) (0.03) (0.07) (0.03) (0.15) (0.23) (0.04)
Net realized and unrealized investment gain 3.87 1.10 4.54 0.58 3.76 3.75 1.06 2.72
------ ------ ------ ------ ------ ------ ------ ------
Increase from investment operations 3.81 1.02 4.51 0.51 3.73 3.60 0.83 2.68
Dividends paid -- -- -- -- (0.01)** -- -- --
Distributions from net gain realized (1.39) (2.23) (1.90) (1.00) (0.02) (1.39) (2.23) --
Net increase (decrease) in net asset value 2.42 (1.21) 2.61 (0.49) 3.70 2.21 (1.40) 2.68
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $14.04 $11.62 $12.83 $10.22 $10.71 $13.61 $11.40 $12.80
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE 36.80% 9.79% 50.67% 4.91% 53.34% 35.53% 8.06% 26.48%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average
net assets 1.43% 1.34% 1.25% 1.37% 1.28% 2.29% 2.72% 2.24%+
Net investment loss to average net assets (0.50)% (0.87)% (0.27)% (0.71)% (0.35)% (1.35)% (2.25)% (1.94)%+
Portfolio turnover 71.52% 124.76% 129.13% 129.46% 38.56% 71.52% 124.76% 129.13%++
Net assets, end of period (000's omitted) $272,122 $58,478 $43,188 $27,178 $23,449 $145,443 $9,318 $967
</TABLE>
- -----------------
The per share data for the fiscal years 1991 and 1992 have been restated to
reflect the 2-for-1 stock split effected on April 16, 1992, as a 100% stock
dividend. The per share data for the years ended September 30, 1994 and 1995,
are based on average shares outstanding for the periods.
* Commencement of offering of Class D shares.
** Excess of taxable dividend over net investment income was charged against
additional paid-in capital.
+ Annualized.
++ For the year ended September 30, 1993.
See notes to financial statements.
14
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders,
Seligman Frontier Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Frontier Fund, Inc. as of September
30, 1995, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for 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
September 30, 1995, 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 Frontier
Fund, Inc. as of September 30, 1995, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
---------------------
DELOITTE & TOUCHE LLP
New York, New York
November 3, 1995
15
<PAGE>
================================================================================
THE SELIGMAN GROUP OF FUNDS' SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
Seligman Data Corp. (SDC) takes pride in providing superior customer service for
all Seligman Fund accounts.
SHAREHOLDER SERVICES
One of the most important services SDC provides the Seligman Group of Funds is
shareholder services. Trained professionals respond quickly and thoroughly to
all shareholder inquiries and requests, whether by telephone or written
correspondence. Each representative is selected based on his or her sincere
interest in providing meaningful and prompt responses to a variety of requests.
RETIREMENT PLAN SERVICES
Similar to Shareholder Services, this specialized group is trained to answer
your questions about Seligman's Qualified Retirement Plans. For information
about Retirement Plan Services, please call 1-800-445-1777.
FOR INFORMATION AND ASSISTANCE
For any inquiries or concerns you may have about your Fund or your investment in
its shares,
please call our
SHAREHOLDER SERVICES DEPARTMENT
toll-free at:
1-800-221-2450
or write:
SHAREHOLDER SERVICES
SELIGMAN DATA CORP.
100 PARK AVENUE
NEW YORK, NY 10017
Experienced customer service professionals are available to assist you Monday
through Friday 8:30 am to 6:00 pm, Eastern Standard Time.
24-HOUR AUTOMATED TELEPHONE ACCESS
You may obtain account information via our automated 24-Hour Telephone Access
Service by calling 1-800-622-4JWS, which gives you important information
regarding your account any time, any day, whenever you need it. Using a
touch-tone telephone you will recieve up-to-date information on:
O FUND PRICES
O TOTAL RETURNS
O ACCOUNT BALANCES
O RECENT TRANSACTIONS
O CAPITAL GAIN DISTRIBUTIONS
For a brochure that explains this service and lists Fund access codes, please
call our Literature Department at 1-800-597-1120.
J. & W. SELIGMAN'S RICH 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 Company, United Artists Theater Circuit,
and Maytag.
J. & W. Seligman & Co. Incorporated has been providing financial services for
more than 130 years. From its beginning, Seligman has adopted a long-term
approach to making money for its clients, by managing investment products and
services of the highest quality. Today, with approximately $13 billion in assets
under management, Seligman manages institutional accounts--including some of the
nation's largest public funds, endowments, and foundations--and offers
individual investors more than 30 fund options.
16
<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 MCPHERSON 2
Chairman and CEO, Kerr-McGee Corporation
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
JOHN E. MEROW
Partner, Sullivan & Cromwell, Law Firm
Director, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
Director or Trustee, Various Organizations
WILLIAM C. MORRIS 1
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Daniel Industries, 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
Vice President, Pfizer Inc.
Director, USLIFE Corporation
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
Managing Director, J. & W. Seligman & Co. Incorporated
- -------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
17
<PAGE>
================================================================================
EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
WILLIAM C. MORRIS
Chairman
BRIAN T. ZINO
President
ARSEN MRAKOVCIC
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
18
<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 Frontier Fund, Inc., which contains information about the sales
charges, management fee, and other costs. Please read the prospectus carefully
before investing or sending money.
EQFR2 9/95
- --------------------------------------------------------------------------------
ANNUAL REPORT
SELIGMAN
FRONTIER
FUND, INC.
SEPTEMBER 30, 1995
[LOGO]
- --------------------------------------------------------------------------------
A Capital Appreciation Fund
Established in 1984
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A-Financial Highlights for Class A shares for the ten years ended
September 30, 1995. Financial Highlights for Class D shares for the
period May 3, 1993 (commencement of operations) to September 30, 1995.
Part B - Required Financial Statements are included in the Fund's Annual
Report to shareholders, dated September 30, 1995, which in incorporated
by reference in the Statement of Additional Information. These
Financial Statements are: Portfolio of Investments as of September 30,
1995. Statement of Assets and Liabilities as of September 30, 1995;
Statement of Operations for the year ended September 30, 1995;
Statements of Changes in Net Assets for the years ended September 30,
1995 and September 30, 1994; Notes to Financial Statements; Financial
Highlights for the five years ended September 30, 1995 for the Fund's
Class A shares and for the period May 3, 1993 (commencement of
operations) to September 30, 1995 for the Fund's Class D shares; Report
of Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed and are incorporated
herein by reference, except Exhibits marked with an asterisk (*) which
are attached hereto.
(1) Copy of Articles Supplementary to Articles of Incorporation of
Registrant. (Incorporated by reference to Post-Effective Amendment No.
15 filed on April 23, 1993.)
(2) Copy of Bylaws of Registrant. (Incorporated by reference to
Registrant's Registration Statement filed July 31, 1984.)
(3) N/A
(4) Copy of Specimen certificate of Class D Capital Stock. (Incorporated by
reference to Post-Effective Amendment No. 15 filed on April 23, 1993.)
(5) Copy of amended Management Agreement between the Registrant and J. & W.
Seligman & Co. Incorporated.*
(5a) Copy of amended Subadvisory Agreement between the Manager and Seligman
Henderson Co.*
(6) Copy of Distributing Agreement between Registrant and Seligman
Financial Services, Inc. (Incorporated by reference to Post-Effective
Amendment No. 14 filed on January 29, 1993.)
(6a) Copy of amended Sales Agreement between Seligman Financial Services,
Inc. and Dealer. (Incorporated by reference to Post-Effective Amendment
No. 15 filed on April 23, 1993.)
(7) Copy of amendments to the Amended Retirement Income Plan of J. & W.
Seligman & Co. Incorporated and Trust. (Incorporated by reference to
Post-Effective Amendment No. 17 filed on April 29, 1994.)
(7a) Copy of amendments to the Amended Employees' Thrift Plan of Union Data
Service Center, Inc. and Trust. (Incorporated by reference to
Post-Effective Amendment No. 17 filed on April 29, 1994.)
(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Post-Effective Amendment
No. 9 filed on November 30, 1990.)
(9) N/A
(10) Opinion and Consent of Counsel. (Incorporated by reference to Seligman
Capital Fund, Inc. File No. 2-33566, Post-Effective Amendment No. 47
filed on March 31, 1994.)
(11) Consent of Independent Auditors.*
(12) N/A
<PAGE>
(13) Copy of Purchase Agreement for Initial Capital for Class D shares.
(Incorporated by reference to Post-Effective Amendment No. 15 filed on
April 23, 1993.)
(14) Copy of amended Individual Retirement Account Trust and Related
Documents. (Incorporated by reference to Seligman Tax-Exempt Fund
Series, Inc., File No. 2-86008, Post-Effective Amendment No. 24 filed
on November 30, 1992.)
(14a) Copy of amended Comprehensive Retirement Plans for Money Purchase
and/or Prototype Profit Sharing Plan. (Incorporated by reference to
Seligman Tax-Exempt Fund Series, Inc., File No. 2-86008, Post-Effective
Amendment No. 24 filed on November 30, 1992.)
(14b) Copy of amended Basic Business Retirement Plans for Money Purchase
and/or Profit Sharing Plans. (Incorporated by reference to Seligman
Tax-Exempt Fund Series, Inc., File No. 2-86008, Post-Effective
Amendment No. 24 filed on November 30, 1992.)
(14c) Copy of amended 403(b)(7) Custodial Account Plan. (Incorporated by
reference to Seligman New Jersey Tax-Exempt Fund Series, Inc., File No.
33-13401, Pre-Effective Amendment No. 1 filed on January 11, 1988.)
(14d) Copy of amended Simplified Employee Pension Plan (SEP). (Incorporated
by reference to Seligman Tax-Exempt Fund Series, Inc., File No.
2-86008, Post-Effective Amendment No. 24 filed on November 30, 1992.)
(14e) Copy of amended J. & W. Seligman & Co. Incorporated (SARSEP) Salary
Reduction and Other Elective Simplified Employee Pension-Individual
Retirement Accounts Contribution Agreement (Under Section 408(k) of the
Internal Revenue Code). (Incorporated by reference to Seligman
Tax-Exempt Fund Series, Inc., File No. 2-86008, Post-Effective
Amendment No. 24 filed on November 30, 1992.)
(15) Copy of amended Administration, Shareholder Services and Distribution
Plan and Form of Agreement of Registrant. (Incorporated by reference to
Post-Effective Amendment No. 16 filed on January 31, 1994.)
(16) Schedule for computation of each performance quotation provided in
Registration Statement in response to Item 22.*
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940.*
Item 25. Persons Controlled by or Under Common Control with Registrant - None.
Item 26. Number of Holders of Securities - As of January 12, 1996, there
were 21,572 recordholders of Registrant's Class A Capital Stock
and 11,368 recordholders of Registrant's Class D Capital Stock.
Item 27. Indemnification - Incorporated by reference to the Registrant's
Registration Statement on Form N-1A and Pre-Effective Amendment Nos. 1
and 2 thereto; File No. 2-92487.
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 sixteen associated investment companies. They are Seligman
Capital Fund, Inc., Seligman Cash Management Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund
Series, Inc., Seligman High Income Fund Series, Seligman Income Fund,
Inc., Seligman New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania
Tax-Exempt Fund Series, Seligman Portfolios, Inc., Seligman Quality
Municipal Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman
Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt Series Trust and
Tri-Continental Corporation.
<PAGE>
Seligman Henderson Co. ("Subadvisor") is the Registrant's subadviser.
The Subadviser also serves as subadviser to five other associated
investment companies. They are Seligman Capital Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund
Series, Inc., Seligman Income Fund, Inc., the Global and Global Smaller
Companies Portfolios of Seligman Portfolios, Inc. and Tri-Continental
Corporation.
The Manager and Subadviser have an investment advisory service division
which provides investment management or advice to private clients. The
list required by this Item 28 of officers and directors of the Manager
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 or Form ADV,
filed by the Manager and the Subadviser, respectively, pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-5798 and SEC File No.
801-4067), both of which were filed on December 4, 1995.
Item 29. Principal Underwriters
(a) The names of each investment company (other than the Registrant) for
which each principal underwriter currently distributing securities of
the Registrant also acts as a principal underwriter, depositor or
investment adviser are:
Seligman Capital Fund, Inc.
Seligman Cash Management Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman New Jersey Tax-Exempt Fund, Inc.
Seligman Pennsylvania Tax-Exempt Fund Series
Seligman Portfolios, Inc.
Seligman Tax-Exempt Fund Series, Inc.
Seligman Tax-Exempt Series Trust.
(b) Name of each director, officer or partner of each principal underwriter
named in response to Item 21:
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of January 18, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
William C. Morris* Director Chairman of the Board
and Chief Executive
Officer
Brian T. Zino* Director Director and President
Ronald T. Schroeder* Director Director
Fred E. Brown* Director Director
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
David Watts* Director None
Stephen J. Hodgdon* President None
Lawrence P. Vogel* Senior Vice President, Finance Vice President
Mark R. Gordon* Senior Vice President, Director None
of Marketing
Gerald I. Cetrulo, III Senior Vice President of Sales, None
140 West Parkway Regional Sales Manager
Pompton Plains, NJ 07444
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of January 18, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
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
Marsha E. Jacoby* Vice President, National Accounts None
Manager
William W. Johnson* Vice President, Order Desk None
James R. Besher Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
Brad Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Andrew Draluck Regional Vice President None
4215 N. Civic Center
Blvd #273
Scottsdale, AZ 85251
Jonathan Evans Regional Vice Pesident None
222 Fairmont Way
Ft. Lauderdale, FL 33326
Carla Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Susan Gutterud Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
Mark Lien Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
Randy D. Lierman Regional Vice President None
2627 R.D. Mize Road
Independence, MO 64057
Judith L. Lyon Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
David Meyncke Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
Herb W. Morgan Regional Vice President None
11308 Monticook Court
San Diego, CA 92127
Melinda Nawn Regional Vice President None
5850 Squire Hill Court
Cincinnati, OH 45241
Robert H. Ruhm Regional Vice President None
167 Derby Street
Melrose, MA 02176
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
As of January 18, 1996
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
Diane H. Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
Bruce Tuckey Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
Andrew Veasey Regional Vice President None
14 Woodside
Rumson, NJ 07760
Todd Volkman Regional Vice President None
4650 Cole Avenue, #216
Dallas, TX 75205
Kelli A. Wirth-Dumser Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Frank P. Marino* Assistant Vice President, Mutual
Fund Product Manager None
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, N Y 10017.
(c) Not Applicable
Item 30. Location of Accounts and Records
Custodian: Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105 and
Seligman Frontier Fund, Inc.
100 Park Avenue
New York, NY 10017
Item 31. Management Services - Seligman Data Corp., 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
Seligman Data Corp, which commenced in July 1990. For the fiscal years
ended September 30, 1995, 1994 and 1993 the approximate cost of these
services was $64,500, $15,342.16, and $6,290, respectiviely.
Item 32. Undertakings - The Registrant undertakes: (1) 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; and (2) to furnish to each person to whom a prospectus is
delivered, a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 19 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 26th day of January, 1996.
SELIGMAN FRONTIER FUND, INC.
By: /s/ William C. Morris
William C. Morris, Chairman*
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 19 to Registration Statement has been signed below
by the following persons in the capacities indicated on January 26, 1996.
Signature Title
/s/ William C. Morris Chairman of the Board (Principal
William C. Morris* executive officer) and Director
/s/ Brian T. Zino President and Director
Brian T. Zino
/s/ Thomas G. Rose Treasurer (Principal financial
Thomas G. Rose and accounting officer)
Fred E. Brown, Director )
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director ) /s/ Brian T. Zino
-------------------
Betsy S. Michel, Director ) *Brian T. Zino, Attorney-in-fact
James C. Pitney, Director )
James Q. Riordan, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
Brian T. Zino, Director )
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of December 29, 1988, and amended
January 1, 1996, between SELIGMAN FRONTIER FUND, INC., a Maryland corporation
(the "Corporation"), and J. & W. SELIGMAN & CO. INCORPORATED, a Delaware
corporation (the "Manager").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. Duties of the Manager. The Manager shall manage the affairs of the
Corporation including, but not limited to, continuously providing the
Corporation with investment management, including investment research, advice
and supervision, determining which securities shall be purchased or sold by the
Corporation, making purchases and sales of securities on behalf of the
Corporation and determining how voting and other rights with respect to
securities of the Corporation shall be exercised, subject in each case to the
control of the Board of Directors of the Corporation and in accordance with the
objectives, policies and principles set forth in the Registration Statement and
Prospectus of the Corporation and the requirements of the Investment Company Act
of 1940 (the "Act") and other applicable law. In performing such duties, the
Manager shall provide such office space, such bookkeeping, accounting, internal
legal, clerical, secretarial and administrative services (exclusive of, and in
addition to, any such services provided by any others retained by the
Corporation) and such executive and other personnel as shall be necessary for
the operations of the Corporation. The Corporation understands that the Manager
also acts as the manager of all of the investment companies in the Seligman
Group.
Subject to Section 36 of the Act, the Manager shall not be liable to
the Corporation for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the management of
the Corporation and the performance of its duties under this Agreement except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement.
2. Expenses. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1 and shall pay any salaries, fees
and expenses of the directors of the Corporation who are employees of the
Manager or its affiliates. The Manager shall not be required to pay any other
expenses of the Corporation, including, but not limited to, direct charges
relating to the purchase and sale of portfolio securities, interest charges,
fees and expenses of independent attorneys and auditors, taxes and governmental
fees, cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares, expenses of
registering and qualifying shares for sale, expenses of printing and
distributing reports, notices and proxy materials to shareholders, expenses of
corporate data processing and related services, shareholder recordkeeping and
shareholder account services, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses, expenses of annual and special shareholders'
meetings, fees and disbursements of transfer agents and custodians, expenses of
disbursing dividends and distributions, fees and expenses of directors of the
Corporation who are not employees of the Manager or its affiliates, membership
dues in the Investment Company Institute, insurance premiums and extraordinary
expenses such as litigation expenses.
<PAGE>
3. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section 1, the
Corporation will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month on the basis of the Corporation's net
assets at the close of business on the previous day, at an annual rate of 0.95%
of the Corporation's average daily net assets on the first $750 million of net
assets and .85% of the Corporation's average daily net assets in excess of $750
million.
(b) If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Manager shall purchase
securities from or through and sell securities to or through such persons,
brokers or dealers (including the Manager or an affiliate of the Manager) as the
Manager shall deem appropriate in order to carry out the policy with respect to
allocation of portfolio transactions as set forth in the Registration Statement
and Prospectus(es) of the Corporation or as the Board of Directors of the
Corporation may direct from time to time. In providing the Corporation with
investment management and supervision, it is recognized that the Manager will
seek the most favorable price and execution, and, consistent with such policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the Manager for its use, to the general attitude of
brokers or dealers toward investment companies and their support of them, and to
such other considerations as the Board of Directors of the Corporation may
direct or authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for
the Corporation that the Manager have access to supplemental investment and
market research and security and economic analysis provided by brokers who
execute brokerage transactions at a higher cost to the Corporation than may
result when allocating brokerage to other brokers on the basis of seeking the
most favorable price and execution. Therefore, the Manager is authorized to
place orders for the purchase and sale of securities of the Corporation with
such brokers, subject to review by the Corporation's Board of Directors from
time to time with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to the
Manager in connection with its services to other clients as well as the
Corporation.
The placing of purchase and sale orders may be carried out by the
Manager or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the
Corporation, the Manager or any subsidiary of the Manager may, without material
risk, arrange to receive a soliciting dealer's fee or other underwriter's or
dealer's discount or commission, the Manager shall, unless otherwise directed by
the Board of Directors of the Corporation, obtain such fee, discount or
commission and the amount thereof shall be applied to reduce the compensation to
be received by the Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Corporation of additional compensation to
others for consulting services, supplemental research and security and economic
analysis.
<PAGE>
5. Term of Agreement. This Agreement shall continue in full force and
effect until December 31, 1996, and from year to year thereafter if such
continuance is approved in the manner required by the Act if the Manager shall
not have notified the Corporation in writing at least 60 days prior to such
December 31 or prior to December 31 of any year thereafter that it does not
desire such continuance. This Agreement may be terminated at any time, without
payment of penalty by the Corporation, on 60 days' written notice to the Manager
by vote of the Board of Directors of the Corporation or by vote of a majority of
the outstanding voting securities of the Corporation (as defined by the Act).
This Agreement will automatically terminate in the event of its assignment (as
defined by the Act).
6. Right of Manager In Corporate Name. The Manager and the Corporation
each agree that the word "Seligman", which comprises a component of the
Corporation' name, is a property right of the Manager. The Corporation agrees
and consents that (i) it will only use the word "Seligman" as a component of its
corporate name and for no other purpose, (ii) it will not purport to grant to
any third party the right to use the word "Seligman" for any purpose, (iii) the
Manager or any corporate affiliate of the Manager may use or grant to others the
right to use the word "Seligman", or any combination or abbreviation thereof, as
all or a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, and at the
request of the Manager, the Corporation will take such action as may be required
to provide its consent to the use of the word "Seligman", or any combination or
abbreviation thereof, by the Manager or any corporate affiliate of the Manager,
or by any person to whom the Manager or an affiliate of the Manager shall have
granted the right to such use; and (iv) upon the termination of any management
agreement into which the Manager and the Corporation may enter, the Corporation
shall, upon request by the Manager, promptly take such action, at its own
expense, as may be necessary to change its corporate name to one not containing
the word "Seligman" and following such change, shall not use the word Seligman,
or any combination thereof, as a part of its corporate name or for any other
commercial purpose, and shall use its best efforts to cause its officers,
trustees and stockholders to take any and all actions which the Manager may
request to effect the foregoing and to reconvey to the Manager any and all
rights to such word.
7. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Corporation and the Manager have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
SELIGMAN FRONTIER FUND, INC.
By______________________________________
J. & W. SELIGMAN & CO. INCORPORATED
By______________________________________
SUBADVISORY AGREEMENT
Seligman Frontier Fund, Inc.
SUBADVISORY AGREEMENT, dated as of May 19, 1994 and amended January 1, 1996,
between J. & W. SELIGMAN & CO. INCORPORATED, a Delaware corporation (the
"Manager") and SELIGMAN HENDERSON CO., a New York general partnership (the
"Subadviser").
WHEREAS, the Manager has entered into a Management Agreement dated December 29,
1988, as amended January 1, 1996 (the "Management Agreement") with Seligman
Frontier Fund, Inc. (the "Fund"), an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), pursuant to which the Manager will render investment management
services to the Fund, and to administer the business and other affairs of the
Fund; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment
management services to the Fund, and the Subadviser is willing to render such
investment management services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Duties of the Subadviser. The Subadviser will provide the Fund with
investment management services with respect to assets of the Fund if, and to the
extent, designated by the Manager (such designated assets, "Qualifying Assets").
Such services shall include investment research, advice and supervision,
determining which securities shall be purchased or sold by the Fund, making
purchases and sales of securities on behalf of the Fund and determining how
voting and other rights with respect to securities of the Fund shall be
exercised, subject in each case to the control of the Board of Directors of the
Fund and in accordance with the objectives, policies and principles set forth in
the Registration Statement and Prospectus(es) of the Fund and the requirements
of the 1940 Act and other applicable law.
Subject to Section 36 of the 1940 Act, the Subadviser shall not be liable to the
Fund for any error of judgment or mistake of law or for any loss arising out of
any investment or for any act or omission in the management of the Fund and the
performance of its duties under this Agreement except for willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
2. Expenses. The Subadviser shall pay all of its expenses arising from the
performance of its obligations under Section 1.
3. Compensation
(a) As compensation for the services performed and the facilities
and personnel provided by the Subadviser pursuant to Section 1,
the Manager will pay to the Subadviser each month a fee, equal
to the applicable percentage of the average monthly Net
Qualifying Assets of the Fund.
<PAGE>
(b) As used herein:
(1) The term "Applicable Percentage" means the percentage
fee rate that the Manager receives from the Fund
pursuant to the Management Agreement, which equals .95%
of the Fund's average daily net assets on the first
$750,000,000 of net assets and .85% of the Fund's
average daily net assets in excess of $750,000,000.
(2) The term "Net Qualifying Assets" means the Qualifying
Assets less related liabilities as designated by the
Manager.
(c) Average monthly Net Qualifying Assets shall be determined, for
any month, by taking the average of the value of the Net
Qualifying Assets as of the (i) opening of business on the first
day of such month and (ii) close of business on the last day of
such month.
(d) If the Subadviser shall serve hereunder for less than the whole
of any month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Subadviser shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers as the Subadviser shall deem appropriate in order to carry out the
policy with respect to allocation of portfolio transactions as set forth in the
Registration Statement and Prospectus(es) of the Fund or as the Board of
Directors of the Fund may direct from time to time. In providing the Fund with
investment management and supervision, it is recognized that the Subadviser will
seek the most favorable price and execution, and, consistent with such policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the Subadviser for its use, to the general attitude of
brokers or dealers toward investment companies and their support of them, and to
such other considerations as the Board of Directors of the Fund may direct or
authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the Fund
that the Subadviser have access to supplemental investment and market research
and security and economic analysis provided by brokers who execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
execution. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities of the Fund with such brokers, subject to review
by the Fund's Board of Directors from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Subadviser in connection with its services
to other clients as well as the Fund.
If, in connection with purchases and sales of securities for the Fund, the
Subadviser may, without material risk, arrange to receive a soliciting dealer's
fee or other underwriter's or dealer's discount or commission, the Subadviser
shall, unless otherwise directed by the Board of Directors of the Fund, obtain
such fee, discount or commission and the amount thereof shall be applied to
reduce the compensation to be received by the Subadviser pursuant to Section 3
hereof.
Nothing herein shall prohibit the Board of Directors of the Fund from approving
the payment by the Fund of additional compensation to others for consulting
services, supplemental research and security and economic analysis.
5. Term of Agreement. This Agreement shall continue in full force and effect
until December 31, 1996, and from year to year thereafter if such continuance is
approved in the manner required by the 1940 Act, and if the Subadviser shall not
have notified the Manager in writing at least 60 days prior to such date or
prior to December 31 of any year thereafter that it does not desire such
continuance. This Agreement may be terminated at any time, without payment of
penalty by the Fund, on 60 days' written notice to the Subadviser by vote of the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act). This Agreement will
automatically terminate in the event of its assignment (as defined by the 1940
Act) or upon the termination of the Management Agreement.
6. Amendments. This Agreement may be amended by consent of the parties hereto
provided that the consent of the Fund is obtained in accordance with the
requirements of the 1940 Act.
7. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Manager and the Subadviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
J. & W. SELIGMAN & CO. INCORPORATED
By____________________________________________
SELIGMAN HENDERSON CO.
By____________________________________________
Consent of Independent Auditors
Seligman Frontier Fund, Inc.:
We consent to the incorporation by reference in the Statement of Additional
Information in this Post-Effective Amendment No. 19 to Registration Statement
No. 2-92487 of our report dated November 3, 1995, appearing in the annual report
to shareholders for the year ended September 30, 1995, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is a part
of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
January 25, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
[NUMBER]001
<NAME> SELIGMAN FRONTIER FUND, INC.-CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 370616
<INVESTMENTS-AT-VALUE> 432011
<RECEIVABLES> 7444
<ASSETS-OTHER> 778
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 440233
<PAYABLE-FOR-SECURITIES> 21643
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1025
<TOTAL-LIABILITIES> 22668
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 344838
<SHARES-COMMON-STOCK> 19387<F1>
<SHARES-COMMON-PRIOR> 5031<F1>
<ACCUMULATED-NII-CURRENT> (41)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11373
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 61395
<NET-ASSETS> 272122<F1>
<DIVIDEND-INCOME> 214<F1>
<INTEREST-INCOME> 844<F1>
<OTHER-INCOME> 31<F1>
<EXPENSES-NET> (1676)<F1>
<NET-INVESTMENT-INCOME> (587)<F1>
<REALIZED-GAINS-CURRENT> 14852
<APPREC-INCREASE-CURRENT> 51313
<NET-CHANGE-FROM-OPS> 64895
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (7039)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16583<F1>
<NUMBER-OF-SHARES-REDEEMED> (2857)<F1>
<SHARES-REINVESTED> 630<F1>
<NET-CHANGE-IN-ASSETS> 349769
<ACCUMULATED-NII-PRIOR> (34)
<ACCUMULATED-GAINS-PRIOR> 6162
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 880<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1676<F1>
<AVERAGE-NET-ASSETS> 117267<F1>
<PER-SHARE-NAV-BEGIN> 11.62<F1>
<PER-SHARE-NII> (.06)<F1>
<PER-SHARE-GAIN-APPREC> 3.87<F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.39)<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.04<F1>
<EXPENSE-RATIO> 1.43<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A only. All other data are fund level.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
[NUMBER]004
<NAME> SELIGMAN FRONTIER FUND, INC.-CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 370616
<INVESTMENTS-AT-VALUE> 432011
<RECEIVABLES> 7444
<ASSETS-OTHER> 778
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 440233
<PAYABLE-FOR-SECURITIES> 21643
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1025
<TOTAL-LIABILITIES> 22668
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 344838
<SHARES-COMMON-STOCK> 10687<F1>
<SHARES-COMMON-PRIOR> 817<F1>
<ACCUMULATED-NII-CURRENT> (41)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11373
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 61395
<NET-ASSETS> 145443<F1>
<DIVIDEND-INCOME> 93<F1>
<INTEREST-INCOME> 376<F1>
<OTHER-INCOME> 13<F1>
<EXPENSES-NET> (1165)<F1>
<NET-INVESTMENT-INCOME> (683)<F1>
<REALIZED-GAINS-CURRENT> 14852
<APPREC-INCREASE-CURRENT> 51313
<NET-CHANGE-FROM-OPS> 64895
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1339)<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10778<F1>
<NUMBER-OF-SHARES-REDEEMED> (1033)<F1>
<SHARES-REINVESTED> 125<F1>
<NET-CHANGE-IN-ASSETS> 349769
<ACCUMULATED-NII-PRIOR> (34)
<ACCUMULATED-GAINS-PRIOR> 6162
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 381<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1165<F1>
<AVERAGE-NET-ASSETS> 50767<F1>
<PER-SHARE-NAV-BEGIN> 11.40<F1>
<PER-SHARE-NII> (.15)<F1>
<PER-SHARE-GAIN-APPREC> 3.75<F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.39)<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.61<F1>
<EXPENSE-RATIO> 2.29<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
</TABLE>
SELIGMAN GROUP OF MUTUAL FUNDS
Plan for Multiple Classes of Shares
THIS PLAN, as it may be amended from time to time, sets forth
the separate arrangement and expense allocation of each class of shares (a
"Class") of each registered open-end management investment company, or series
thereof, in the Seligman Group of Mutual Funds that offers multiple classes of
shares (each, a "Fund"). The Plan has been adopted pursuant to Rule 18f-3(d)
under the Investment Company Act of 1940, as amended (the "Act"), by a majority
of the Board of Directors or Trustees, as applicable ("Directors"), of each Fund
listed on Schedule I hereto, including a majority of the Directors who are not
interested persons of such Fund within the meaning of Section 2(a)(19) of the
Act ("Disinterested Directors"). Any material amendment to this Plan is subject
to the prior approval of the Board of Directors of each Fund to which it
relates, including a majority of the Disinterested Directors.
1. General
A. Any Fund may issue more than one Class of voting stock,
provided that each Class:
i. Shall have a different arrangement for shareholder
services or the distribution of securities or both,
and shall pay all of the expenses of that
arrangement;
ii. May pay a different share of other expenses, not
including advisory or custodial fees or other
expenses related to the management of the Fund's
assets, if these expenses are actually incurred in a
different amount by that Class, or if the Class
receives services of a different kind or to a
different degree than other Classes of the same Fund
("Class Level Expenses");
iii. May pay a different advisory fee to the extent that
any difference in amount paid is the result of the
application of the same performance fee provisions in
the advisory contract of the Fund to the different
investment performance of each Class;
iv. Shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its
arrangement;
<PAGE>
v. Shall have separate voting rights on any matter
submitted to shareholders in which the interests of
one Class differ from the interests of any other
Class; and
vi. Shall have in all other respects the same rights and
obligations as each other Class of the Fund.
B. i. Except as expressly contemplated by this paragraph
B., no types or categories of expenses shall be
designated Class Level Expenses.
ii. The Directors recognize that certain expenses arising
in certain sorts of unusual situations are properly
attributable solely to one Class and therefore should
be borne by that Class. These expenses ("Special
Expenses") may include, for example: (i) the costs of
preparing a proxy statement for, and holding, a
special meeting of shareholders to vote on a matter
affecting only one Class; (ii) the costs of holding a
special meeting of Directors to consider such a
matter; (iii) the costs of preparing a special report
relating exclusively to shareholders of one Class;
and (iv) the costs of litigation affecting one Class
exclusively. J. & W. Seligman & Co. Incorporated (the
"Manager") shall be responsible for identifying
expenses that are potential Special Expenses.
iii. Subject to clause iv. below, any Special Expense
identified by the Manager shall be treated as a Class
Level Expense.
iv. Any Special Expense identified by the Manager that is
material to the Class in respect of which it is
incurred shall be submitted by the Manager to the
Directors of the relevant Fund on a case by case
basis with a recommendation by the Manager as to
whether it should be treated as a Class Level
Expense. If approved by the Directors, such Special
Expense shall be treated as a Class Level Expense of
the affected class.
C. i. Realized and unrealized capital gains and losses
of a Fund shall be allocated to each class of that
Fund on the basis of the aggregate net asset value of
all outstanding shares ("Record Shares") of the Class
in relation to the aggregate net asset value of
Record Shares of the Fund.
<PAGE>
ii. Income and expenses of a Fund not charged directly to
a particular Class shall be allocated to each Class
of that Fund on the following basis:
a. For periodic dividend funds, on the basis of
the aggregate net asset value of Record
Shares of each Class in relation to the
aggregate net asset value of Record Shares
of the Fund.
b. For daily dividend funds, on the basis of
the aggregate net asset value of Settled
Shares of each Class in relation to the
aggregate net asset value of Settled Shares
of the Fund. "Settled Shares" means Record
Shares minus the number of shares of that
Class or Fund that have been issued but for
which payment has not cleared and plus the
number of shares of that Class or Fund which
have been redeemed but for which payment has
not yet been issued.
D. On an ongoing basis, the Directors, pursuant to their
fiduciary responsibilities under the Act and otherwise, will
monitor each Fund for the existence of any material conflicts
among the interests of its several Classes. The Directors,
including a majority of the Disinterested Directors, shall
take such action as is reasonably necessary to eliminate any
such conflicts that may develop. The Manager and Seligman
Financial Services, Inc. (the "Distributor") will be
responsible for reporting any potential or existing conflicts
to the Directors. If a conflict arises, the Manager and the
Distributor will be responsible at their own expense for
remedying such conflict by appropriate steps up to and
including separating the classes in conflict by establishing a
new registered management company to operate one of the
classes.
E. The plan of each Fund adopted pursuant to Rule 12b-1 under the
Act (the "Rule 12b-1 Plan") provides that the Directors will
receive quarterly and annual statements complying with
paragraph (b)(3)(ii) of Rule 12b-1, as it may be amended from
time to time. In the statements, only distribution
expenditures properly attributable to the sale of shares of a
specific Class will be used to support the Rule 12b-1 fee
charged to shareholders of such Class. Expenditures not
related to the sale of a specific Class will not be presented
to the Directors to support Rule 12b-1 fees charged to
shareholders of such Class. The statements, including the
allocations upon which they are based, will be subject to the
review of the Disinterested Directors.
<PAGE>
F. Dividends paid by a Fund with respect to each Class, to the
extent any dividends are paid, will be calculated in the same
manner, at the same time and on the same day and will be in
the same amount, except that fee payments made under the Rule
12b-1 Plan relating to the Classes will be borne exclusively
by each Class and except that any Class Level Expenses shall
be borne by the applicable Class.
G. The Directors of each Fund hereby instruct such Fund's
independent auditors to review expense allocations each year
as part of their regular audit process, to inform the
Directors and the Manager of any irregularities detected and,
if specifically requested by the Directors, to prepare a
written report thereon. In addition, if any Special Expense is
incurred by a Fund and is classified as a Class Level Expense
in the manner contemplated by paragraph B. above, the
independent auditors for such Fund, in addition to reviewing
such allocation, are hereby instructed to report thereon to
the Audit Committee of the relevant Fund and to the Manager.
The Manager will be responsible for taking such steps as are
necessary to remedy any irregularities so detected, and will
do so at its own expense to the extent such irregularities
should reasonably have been detected and prevented by the
Manager in the performance of its services to the Fund.
2. Specific Arrangements for Each Class
The following arrangements regarding shareholder services,
expense allocation and other indicated matters shall be in effect with respect
to the Class A shares and Class D shares of each Fund. The following
descriptions are qualified by reference to the more detailed description of such
arrangements set forth in the prospectus relating to each Fund, as the same may
from time to time be amended or supplemented (for each Fund, the "Relevant
Prospectus"), provided that no Relevant Prospectus may modify the provisions of
this Plan applicable to Rule 12b-1 fees or Class Level Expenses.
(a) Class A Shares
i. Class A shares are subject to an initial sales load
which varies with the size of the purchase, to a
maximum of 4.75% of the public offering price.
Reduced sales loads shall apply in certain
circumstances. Class A shares of Seligman Cash
Management Fund, Inc. shall not be subject to an
initial sales load.
ii. Class A shares shall be subject to a Rule 12b-1 fee
of up to 0.25% of average daily net assets.
<PAGE>
iii. Special Expenses attributable to the Class A shares,
except those determined by the Directors not to be
Class Level Expenses of the Class A shares in
accordance with paragraph 1.B.iv., shall be Class
Level Expenses and attributed solely to the Class A
shares. No other expenses shall be treated as Class
Level Expenses of the Class A shares.
iv. The Class A shares shall be entitled to the
shareholder services, including exchange privileges,
described in the Relevant Prospectus.
(b) Class D Shares
i. Class D shares are sold without an initial sales load
but are subject to a contingent deferred sales load
of 1% in certain cases if the shares are redeemed
within one year.
ii. Class D shares shall be subject to a Rule 12b-1 fee
of up to 1.00% of average daily net assets.
iii. Special Expenses attributable to the Class D shares,
except those determined by the Directors not to be
Class Level Expenses of the Class D shares in
accordance with paragraph 1.B.iv., shall be Class
Level Expenses and attributed solely to the Class D
shares. No other expenses shall be treated as Class
Level Expenses of the Class D shares.
iv. The Class D shares shall be entitled to the
shareholder services, including exchange privileges,
described in the Relevant Prospectus.
<PAGE>
Schedule I
Seligman Cash Management Fund, Inc.
Seligman Capital Fund, Inc.
Seligman Common Stock, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Income Fund, Inc.
Seligman Henderson Global Growth Opportunities Fund Seligman Henderson Global
Smaller Companies Fund Seligman Henderson Global Technology Fund Seligman
Henderson International Fund Seligman High-Yield Bond Fund Seligman U.S.
Government Securities Fund Seligman National Tax-Exempt Fund Seligman California
Quality Tax Exempt Fund Seligman California High-Yield Tax-Exempt Fund Seligman
Colorado Tax-Exempt Fund Seligman Florida Tax-Exempt Fund Seligman Georgia
Tax-Exempt Fund Seligman Louisiana Tax-Exempt Fund Seligman Maryland Tax-Exempt
Fund Seligman Massachusetts Tax-Exempt Fund Seligman Michigan Tax-Exempt Fund
Seligman Minnesota Tax-Exempt Fund Seligman Missouri Tax- Exempt Fund Seligman
New Jersey Tax-Exempt Fund, Inc. Seligman New York Tax-Exempt Fund Seligman
North Carolina Tax-Exempt Fund Seligman Ohio Tax-Exempt Fund Seligman Oregon
Tax-Exempt Fund Seligman Pennsylvania Tax-Exempt Fund Series Seligman South
Carolina Tax-Exempt Fund
