SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. __ |_|
Post-Effective Amendment No. 29 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 31 |X|
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SELIGMAN FRONTIER FUND, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
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Registrant's Telephone Number: 212-850-1864 or
Toll-Free 800-221-2450
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THOMAS G. ROSE, Treasurer
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to |_| on (date) pursuant to
paragraph (b) paragraph (a)(1)
|X| on January 31, 2000 pursuant to |_| 75 days after filing
paragraph (b) pursuant to paragraph
(a)(2)
|_| 60 days after filing pursuant to |_| on (date) pursuant to
paragraph (a)(1) paragraph (a)(2) of
rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
S E L I G M A N
---------------
FRONTIER
FUND, INC.
The Securities and Exchange Commission has neither approved nor disapproved this
Fund, and it has not determined the prospectus to be accurate or adequate. Any
representation to the contrary is a criminal offense.
An investment in this Fund or any other fund cannot provide a complete
investment program. The suitability of an investment in the Fund should be
evaluated based on the investment objective, strategies and risks described in
this Prospectus, considered in light of all of the other investments in your
portfolio, as well as your risk tolerance, financial goals, and time horizons.
We recommend that you consult your financial advisor to determine if this Fund
is suitable for you.
[GRAPHIC]
P R O S P E C T U S
FEBRUARY 1, 2000
-------
Seeking Growth
In Capital Value
Through Investments
In Small-Company
Growth Stocks
managed by
[LOGO]
J. & W. Seligman & Co.
Incorporated
Established 1864
EQFR1 2/2000
<PAGE>
Table of Contents
The Fund
Investment Objective 1
Principal Investment Strategies 1
Principal Risks 2
Past Performance 3
Fees and Expenses 4
Management 5
Year 2000 5
Shareholder Information
Deciding Which Class of Shares to Buy 6
Pricing of Fund Shares 8
Opening Your Account 8
How to Buy Additional Shares 9
How to Exchange Shares Among
the Seligman Mutual Funds 10
How to Sell Shares 10
Important Policies That May Affect
Your Account 11
Dividends and Capital Gain Distributions 12
Taxes 12
The Seligman Mutual Funds 13
Financial Highlights 15
How to Contact Us 17
For More Information back cover
TIMES CHANGE ... VALUES ENDURE
<PAGE>
The Fund
Investment Objective
The Fund seeks growth of capital. Income may be considered but is incidental to
the Fund's investment objective.
Principal Investment Strategies
The Fund uses the following investment strategies to pursue its investment
objective of growth of capital:
The Fund generally invests at least 65% of its total assets in equity
securities of small US companies. Companies are selected for their growth
prospects. The Fund uses a bottom-up stock selection approach. This means that
the investment manager concentrates on individual company fundamentals, rather
than on a particular market sector. The Fund maintains a disciplined investment
process that focuses on downside risks as well as upside potential. In
selecting investments, the investment manager looks to identify companies that
it believes display one or more of the following:
. Positive operating cash flows
. Quality management
. Unique competitive advantages
. Historically high returns on capital
Small Companies:
Companies with
market
capitalizations,
at the time of
purchase by the
Fund, of $1.25
billion or less.
The Fund generally sells a stock if the investment manager believes its target
price is reached, its earnings are disappointing, its revenue growth has
slowed, or its underlying fundamentals have deteriorated.
The Fund generally invests primarily in common stocks; however, it may also
invest in preferred stocks, securities convertible into common stocks, and
stock purchase warrants if the manager believes these investments offer capital
growth opportunities. The Fund may also invest in American Depositary Receipts
(ADRs), which are publicly-traded instruments generally issued by domestic
banks or trust companies that represent a security of a foreign issuer. ADRs
are quoted and settled in US dollars. The Fund uses the same criteria in
evaluating these securities as it does for common stocks.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold) and may invest up to 10% of its total
assets directly in foreign securities. The limit on foreign securities does not
include ADRs or commercial paper or certificates of deposit issued by foreign
banks. The Fund may also purchase put options in an attempt to hedge against a
decline in the price of securities it holds. A put option gives the Fund the
right to sell an underlying security at a particular price during a fixed
period of time. The Fund generally does not invest a significant amount of its
assets, if any, in illiquid securities, foreign securities, or put options.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund from achieving its objective.
The Fund may change its principal strategies if the Fund's Board of Directors
believes doing so is consistent with the Fund's objective. The Fund's objective
may be changed only with shareholder approval.
The Fund's Board of Directors may change the parameters by which small
companies are defined if it concludes such a change is appropriate.
As with any mutual fund, there is no guarantee the Fund will achieve its
objective.
1
<PAGE>
Principal Risks
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate, especially in the short term. You may
experience a decline in the value of your investment and you could lose money
if you sell your shares at a price lower than you paid for them.
Small-company stocks, as a whole, may experience larger price fluctuations than
large-company stocks or other types of investments. Small companies tend to
have shorter operating histories and may have less experienced management.
During periods of investor uncertainty, investor sentiment may favor large,
well-known companies over small, lesser-known companies.
The Fund seeks to reduce the risks of investing in small company stocks by
adhering to its disciplined investment process and by diversifying its
investments, typically among more than 100 stocks, and avoiding concentration
in any one industry. The Fund may, however, invest more heavily in certain
industries believed to offer good investment opportunities. To the extent that
an industry in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
The Fund's performance may also be affected by the broad investment environment
in the US or international securities markets, which is influenced by, among
other things, interest rates, inflation, politics, fiscal policy, and current
events.
Foreign securities, illiquid securities, or options in the Fund's investments
involve higher risk and may subject the Fund to higher price volatility.
Investing in securities of foreign issuers involves risks not associated with
US investments, including settlement risks, currency fluctuations, foreign
taxation, differences in financial reporting practices, and changes in
political conditions.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs, which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
2
<PAGE>
Past Performance
The Fund offers four Classes of shares. The information below provides some
indication of the risks of investing in the Fund by showing how the performance
of Class A shares has varied year to year, as well as how the performance of
each Class compares to three widely-used measures of small company stock
performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past, however, is not necessarily an indication of how the
Fund will perform in the future. Total returns will vary between each Class of
shares due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be lower. The average annual total returns presented in the table below the
chart do reflect the effect of the applicable sales charges. Both the bar chart
and table assume that all dividends and capital gain distributions were
reinvested.
Class A Annual Total Returns - Calendar Years
[GRAPH]
1990 -0.0903
1991 0.4963
1992 0.1599
1993 0.263
1994 0.0701
1995 0.3643
1996 0.1126
1997 0.1783
1998 -0.0224
1999 0.1328
Best calendar quarter return: 26.98% - quarter ended 12/31/99.
Worst calendar quarter return: -23.39% - quarter ended 9/30/90.
Average Annual Total Returns - Periods Ended 12/31/99
<TABLE>
<CAPTION>
CLASS B CLASS C CLASS D
ONE FIVE TEN SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION
YEAR YEARS YEARS 4/22/96 5/27/99 5/3/93
----- ----- ----- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Class A 7.90% 13.53% 14.94% -- -- --
Class B 7.46 n/a n/a 6.12% -- --
Class C n/a n/a n/a -- 26.00% --
Class D 11.46 13.76 n/a -- -- 15.54%
Russell 2000 Index 21.26 16.69 13.40 12.12(/1/) 15.97(/2/) 14.67(/3/)
Russell 2000 Growth
Index 43.09 18.99 13.51 13.65(/1/) 33.52(/2/) 16.54(/3/)
Lipper Small Cap Funds
Average 30.04 20.23 17.28 15.00(/1/) 27.64(/2/) 17.65(/3/)
</TABLE>
The Russell 2000 Index, Russell 2000 Growth Index, and the Lipper Small Cap
Funds Average are unmanaged benchmarks that assume the reinvestment of
dividends and capital gain distributions. The Lipper Average does not
reflect any sales charges and the Russell Indices do not reflect any fees or
sales charges. The Russell 2000 Index measures the performance of small-cap
stocks, the Russell 2000 Growth Index measures the performance of small-cap
growth stocks, and the Lipper Average measures the performance of mutual
funds with investment objectives similar to the Fund.
(/1/) From April 30, 1996.
(/2/) From May 31, 1999.
(/3/) From April 30, 1993.
3
<PAGE>
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to your account. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of
the Fund.
<TABLE>
<CAPTION>
Shareholder Fees Class A Class B Class C Class D
---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load)............... 4.75% 5% 2% 1%
Maximum Sales Charge (Load) on Purchases
(as a % of offering price)............... 4.75%(/1/) none 1% none
Maximum Contingent Deferred Sales Charge
(Load) (CDSC) on Redemptions (as a % of
original purchase price or current net
asset value, whichever is less).......... none(/1/) 5% 1% 1%
<CAPTION>
Annual Fund Operating Expenses for Fiscal
Year 1999
-----------------------------------------
<S> <C> <C> <C> <C>
(as a percentage of average net assets)
Management Fees........................... .95% .95% .95% .95%
Distribution and/or Service (12b-1) Fees.. .24% 1.00% 1.00% 1.00%
Other Expenses............................ .43% .43% .43% .43%
----- ----- ----- -----
Total Annual Fund Operating Expenses...... 1.62% 2.38% 2.38% 2.38%
===== ===== ===== =====
</TABLE>
(/1/If)you buy Class A shares for $1,000,000 or more you will not pay an
initial sales charge, but your shares will be subject to a 1% CDSC if sold
within 18 months.
Management Fees:
Fees paid out of Fund
assets to the
investment manager to
compensate it for
managing the Fund.
12b-1 Fees:
Fees paid by each
Class, pursuant to a
plan adopted by the
Fund under Rule 12b-1
of the Investment
Company Act of 1940.
The plan allows each
Class to pay
distribution and/or
service fees for the
sale and distribution
of its shares and for
providing services to
shareholders.
Other Expenses:
Miscellaneous
expenses of running
the Fund, including
such things as
transfer agency,
registration,
custody, auditing and
legal fees.
Example
This example is intended to help you compare the expenses of investing in the
Fund with the expenses of investing in other mutual funds. It assumes (1) you
invest $10,000 in the Fund for each period and then sell all of your shares at
the end of that period, (2) your investment has a 5% return each year, and (3)
the Fund's operating expenses remain the same. Although your actual expenses
may be higher or lower, based on these assumptions your expenses would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $632 $ 962 $1,314 $2,306
Class B 741 1,042 1,470 2,527+
Class C 439 835 1,358 2,789
Class D 341 742 1,270 2,716
If you did not sell your shares at the end of each period, your expenses would
be:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $632 $ 962 $1,314 $2,306
Class B 241 742 1,270 2,527+
Class C 339 835 1,358 2,789
Class D 241 742 1,270 2,716
</TABLE>
+ Class B shares will automatically convert to Class A shares after eight
years.
4
<PAGE>
Management
The Fund's Board of Directors provides broad supervision over the affairs of
the Fund.
J. & W. Seligman & Co. Incorporated (Seligman), 100 Park Avenue, New York, New
York 10017, is the manager of the Fund. Seligman manages the investment of the
Fund's assets, including making purchases and sales of portfolio securities
consistent with the Fund's investment objective and strategies, and administers
the Fund's business and other affairs.
Established in 1864, Seligman currently serves as manager to 20 US registered
investment companies, which offer more than 50 investment portfolios with
approximately $27.4 billion in assets as of December 31, 1999. Seligman also
provides investment management or advice to institutional or other accounts
having an aggregate value at December 31, 1999, of approximately $11.3 billion.
The Fund pays Seligman a fee for its management services. The fee rate declines
as the Fund's net assets increase. It 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. For the
Fund's fiscal year ended October 31, 1999, the management fee paid by the Fund
to Seligman was equal to an annual rate of 0.95% of the Fund's average daily
net assets.
Year 2000
January 1, 2000 has come and gone. Participants in the financial services
industry, including Seligman and SDC, have substantially completed programs
designed to ensure that their computer systems properly process and calculate
date-related information in the Year 2000 and beyond. To date, the Fund has not
experienced any Year 2000-related problems, and the Fund believes that the
systems on which it relies will continue to function properly, but this is not
guaranteed. The Fund, like other investment companies, financial and business
organizations and individuals around the world, could be adversely affected if
the computer systems on which it relies (including the systems of its third-
party service providers) fail to interpret data properly because of Year 2000
problems. The Fund will continue to monitor the potential impact of Year 2000
issues, including any impact on the issuers of securities in which the Fund
invests. A Year 2000 problem yet to be identified or anticipated by those
issuers, or identified but not adequately addressed, could adversely impact the
Fund's performance.
Portfolio Management
The Fund is managed by the Seligman Small Company Team, headed by Mr. Arsen
Mrakovcic. Mr. Mrakovcic, a Managing Director of Seligman, has been Vice
President and Portfolio Manager of the Fund since October 1, 1995. Mr. Mrakovcic
joined Seligman in June 1992 as a Portfolio Assistant. He was named Vice
President, Investment Officer on January 1, 1995, and Managing Director on
January 1, 1996. Mr. Mrakovcic also co-manages Seligman Global Smaller Companies
Fund; and he manages the Seligman Frontier Portfolio and co- manages the
Seligman Global Smaller Companies Portfolio, two portfolios of Seligman
Portfolios, Inc.
Affiliates of Seligman:
Seligman Advisors, Inc.:
The Fund's general
distributor; responsible
for accepting orders for
purchases and sales of
Fund shares.
Seligman Services, Inc.:
A limited purpose
broker/dealer; acts as the
broker/dealer of record
for shareholder accounts
that do not have a
designated financial
advisor.
Seligman Data Corp. (SDC):
The Fund's shareholder
service agent; provides
shareholder account
services to the Fund at
cost.
5
<PAGE>
Shareholder Information
Deciding Which Class of Shares to Buy
Each of the Fund's Classes represents an interest in the same portfolio of
investments. However, each Class has its own sales charge schedule, and its
ongoing 12b-1 fees may differ from other Classes. When deciding which Class of
shares to buy, you should consider, among other things:
. The amount you plan to invest.
. How long you intend to remain invested in the Fund, or another Seligman
mutual fund.
. If you would prefer to pay an initial sales charge and lower ongoing 12b-1
fees, or be subject to a CDSC and pay higher ongoing 12b-1 fees.
. Whether you may be eligible for reduced or no sales charges when you buy
or sell shares.
Your financial advisor will be able to help you decide which Class of shares
best meets your needs.
Class A
. Initial sales charge on Fund purchases, as set forth below:
<TABLE>
<CAPTION>
Sales Charge Regular Dealer
Sales Charge as a % Discount
as a % of Net as a % of
Amount of your Investment of Offering Price(/1/) Amount Invested Offering Price
------------------------- ---------------------- --------------- --------------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.25%
$50,000 - $ 99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and
over(/2/) 0.00 0.00 0.00
</TABLE>
(/1/"Offering)Price" is the amount that you actually pay for Fund shares;
it includes the initial sales charge.
(/2/You)will not pay a sales charge on purchases of $1 million or more,
but you will be subject to a 1% CDSC if you sell your shares within 18
months.
. Annual 12b-1 fee (for shareholder services) of up to 0.25%.
. No sales charge on reinvested dividends or capital gain distributions.
. Certain employer-sponsored defined contribution-type plans can purchase
shares with no initial sales charge.
Class B
. No initial sales charge on purchases.
. A declining CDSC on shares sold within 6 years of purchase:
<TABLE>
<CAPTION>
Years Since Purchase CDSC
-------------------- ----
<S> <C>
Less than 1 year 5%
1 year or more but less than 2
years 4
2 years or more but less than 3
years 3
3 years or more but less than 4
years 3
4 years or more but less than 5
years 2
5 years or more but less than 6
years 1
6 years or more 0
</TABLE>
. Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
. Automatic conversion to Class A shares after eight years, resulting in
lower ongoing 12b-1 fees.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
Your purchase of Class B
shares must be for less
than $250,000, because if
you invest $250,000 or
more, you will pay less in
fees and charges if you buy
another Class of shares.
6
<PAGE>
Class C
. Initial sales charge on Fund purchases, as set forth below:
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Discount
as a % as a % of Net as a % of
Amount of your Investment of Offering Price(/1/) Amount Invested Offering Price
------------------------- ---------------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 -
$1,000,000(/2/) 0.00 0.00 0.00
</TABLE>
(/1/"Offering)Price" is the amount that you actually pay for Fund
shares; it includes the initial sales charge.
(/2/Your)purchase of Class C shares must be for less than $1,000,000
because if you invest $1,000,000 or more you will pay less in
fees and charges if you buy Class A shares.
. A 1% CDSC on shares sold within eighteen months of purchase.
. Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
. No automatic conversion to Class A shares, so you will be subject to
higher ongoing 12b-1 fees indefinitely.
. No sales charge on reinvested dividends or capital gain distributions.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
Class D*
. No initial sales charge on purchases.
. A 1% CDSC on shares sold within one year of purchase.
. Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
. No automatic conversion to Class A shares, so you will be subject to
higher ongoing 12b-1 fees indefinitely.
. No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
*Class D shares are not available to all investors. You may purchase Class
D shares only (1) if you already own Class D shares of the Fund or another
Seligman mutual fund, (2) if your financial advisor of record maintains an
omnibus account at SDC, or (3) pursuant to a 401(k) or other retirement
plan program for which Class D shares are already available or for which
the sponsor requests Class D shares because the sales charge structure of
Class D shares is comparable to the sales charge structure of the other
funds offered under the program.
Because the Fund's 12b-1 fees are paid out of each Class's assets on an ongoing
basis, over time these fees will increase your investment expenses and may cost
you more than other types of sales charges.
The Fund's Board of Directors believes that no conflict of interest currently
exists between the Fund's Class A, Class B, Class C, and Class D shares. On an
ongoing basis, the Directors, in the exercise of their fiduciary duties under
the Investment Company Act of 1940 and Maryland law, will seek to ensure that
no such conflict arises.
How CDSCs Are Calculated
To minimize the amount of the CDSC you may pay when you sell your shares, the
Fund assumes that shares acquired through reinvested dividends and capital gain
distributions (which are not subject to a CDSC) are sold first. Shares that
have been in your account long enough so they are not subject to a CDSC are
sold next. After these shares are exhausted, shares will be sold in the order
they were purchased (oldest to youngest). The amount of any CDSC that you pay
will be based on the shares' original purchase price or current net asset
value, whichever is less.
You will not pay a CDSC when you exchange shares of the Fund to buy the same
class of shares of any other Seligman mutual fund. For the purpose of
calculating the CDSC when you sell shares that you acquired by exchanging
shares of the Fund, it will be assumed that you held the shares since the date
you purchased the shares of the Fund.
7
<PAGE>
Pricing of Fund Shares
When you buy or sell shares, you do so at the Class's net asset value (NAV)
next calculated after Seligman Advisors accepts your request. Any applicable
sales charge will be added to the purchase price for Class A shares and Class
C shares. Purchase or sale orders received by an authorized dealer or
financial advisor by the close of regular trading on the New York Stock
Exchange (NYSE) (normally 4:00 p.m. Eastern time) and accepted by Seligman
Advisors before the close of business (5:00 p.m. Eastern time) on the same day
will be executed at the Class's NAV calculated as of the close of regular
trading on the NYSE on that day. Your broker/dealer or financial advisor is
responsible for forwarding your order to Seligman Advisors before the close of
business.
If your buy or sell order is received by your broker/dealer or financial
advisor after the close of regular trading on the NYSE, or is accepted by
Seligman Advisors after the close of business, the order will be executed at
the Class's NAV calculated as of the close of regular trading on the next NYSE
trading day. When you sell shares, you receive the Class's per share NAV, less
any applicable CDSC.
The NAV of the Fund's shares is determined each day, Monday through Friday, on
days that the NYSE is open for trading. Because of their higher 12b-1 fees,
the NAV of Class B, Class C, and Class D shares will generally be lower than
the NAV of Class A shares of the Fund.
Securities owned by the Fund are valued at current market prices. If reliable
market prices are unavailable, securities are valued in accordance with
procedures approved by the Fund's Board of Directors.
NAV:
Computed
separately for
each Class by
dividing that
Class's share of
the net assets of
the Fund (i.e.,
its assets less
liabilities) by
the total number
of outstanding
shares of the
Class.
Opening Your Account
The Fund's shares are sold through authorized broker/dealers or financial
advisors who have sales agreements with Seligman Advisors. There are several
programs under which you may be eligible for reduced sales charges or lower
minimum investments. Ask your financial advisor if any of these programs apply
to you. Class D shares are not available to all investors. For more
information, see "Deciding Which Class of Shares to Buy--Class D."
To make your initial investment in the Fund, contact your financial advisor or
complete an account application and send it with your check directly to SDC at
the address provided on the account application. If you do not choose a Class,
your investment will automatically be made in Class A shares.
The required minimum initial investments are:
. Regular (non-retirement) accounts: $1,000
. For accounts opened concurrently with Invest-A-Check(R):
$100 to open if you will be making monthly investments
$250 to open if you will be making quarterly investments
You may buy shares of the
Fund for all types of
tax-deferred retirement
plans. Contact Retirement
Plan Services at the
address or phone number
listed on the inside back
cover of this prospectus
for information and to
receive the proper forms.
If you buy shares by check and subsequently sell the shares, SDC will not send
your proceeds until your check clears, which could take up to 15 calendar days
from the date of your purchase.
You will be sent a statement confirming your purchase, and any subsequent
transactions in your account. You will also be sent quarterly and annual
statements detailing your transactions in the Fund and the other Seligman
funds you own under the same account number. Duplicate account statements will
be sent to you 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
per year, per account, with a maximum charge of $150 per account. Send your
request and a check for the fee to SDC.
If you want to be able to buy, sell, or exchange shares by telephone, you
should complete an application when you open your account. This will prevent
you from having to complete a supplemental election form (which may require a
signature guarantee) at a later date.
8
<PAGE>
How to Buy Additional Shares
After you have made your initial investment, there are many options available
to make additional purchases of Fund shares. Subsequent investments must be for
$100 or more.
Shares may be purchased through your authorized financial advisor, or you may
send a check directly to SDC. Please provide either an investment slip or a
note that provides your name(s), Fund name, and account number. Your investment
will be made in the Class you already own. Send investment checks to:
Seligman Data Corp.
P.O. Box 9766
Providence, RI 02940-9766
Your check must be in US dollars and be drawn on a US bank. You may not use
third party or credit card convenience checks for investment.
You may also use the following account services to make additional investments:
Invest-A-Check(R). You may buy Fund shares electronically from a savings or
checking account of an Automated Clearing House (ACH) member bank. If your bank
is not a member of ACH, the Fund will debit your checking account by
preauthorized checks. You may buy Fund shares at regular monthly intervals in
fixed amounts of $100 or more, or regular quarterly intervals in fixed amounts
of $250 or more. If you use Invest-A-Check(R), you must continue to make
automatic investments until the Fund's minimum initial investment of $1,000 is
met or your account may be closed.
Automatic Dollar-Cost-Averaging. If you have at least $5,000 in Seligman Cash
Management Fund, you may exchange uncertificated shares of that fund to buy
shares of the same class of another Seligman mutual fund at regular monthly
intervals in fixed amounts of $100 or more or regular quarterly intervals in
fixed amounts of $250 or more. If you exchange Class A shares or Class C
shares, you may pay an initial sales charge to buy Fund shares.
Automatic CD Transfer. You may instruct your bank to invest the proceeds of a
maturing bank certificate of deposit (CD) in shares of the Fund. If you wish to
use this service, contact SDC or your financial advisor to obtain the necessary
forms. Because your bank may charge you a penalty, it is not normally advisable
to withdraw CD assets before maturity.
Dividends From Other Investments. You may have your dividends from other
companies paid to the Fund. (Dividend checks must include your name, account
number, Fund name, and Class of shares.)
Direct Deposit. You may buy Fund shares electronically with funds from your
employer, the IRS, or any other institution that provides direct deposit. Call
SDC for more information.
Seligman Time Horizon Matrixsm. (Requires an initial total investment of
$10,000.) This is a needs-based investment process, designed to help you and
your financial advisor plan to seek your long-term financial goals. It
considers your financial needs, and helps frame a personalized asset allocation
strategy around the cost of your future commitments and the time you have to
meet them. Contact your financial advisor for more information.
Seligman Harvestersm. If you are a retiree or nearing retirement, this program
is designed to help you establish an investment strategy that seeks to meet
your needs throughout your retirement. The strategy is customized to your
personal financial situation by allocating your assets to seek to address your
income requirements, prioritizing your expenses, and establishing a prudent
withdrawal schedule. Contact your financial advisor for more information.
9
<PAGE>
How to Exchange Shares Among the Seligman Mutual Funds
You may sell Fund shares to buy shares of the same Class of another Seligman
mutual fund, or you may sell shares of another Seligman mutual fund to buy
Fund shares. Exchanges will be made at each fund's respective NAV. You will
not pay an initial sales charge when you exchange, unless you exchange Class A
shares or Class C shares of Seligman Cash Management Fund to buy shares of the
same Class of the Fund or another Seligman mutual fund.
Only your dividend and capital gain distribution options and telephone
services will be automatically carried over to any new fund account. If you
wish to carry over any other account options (for example, Invest-A-Check(R)
or Systematic Withdrawals) to the new fund, you must specifically request so
at the time of your exchange.
If you exchange into a new fund, you must exchange enough to meet the new
fund's minimum initial investment.
See "The Seligman Mutual Funds" for a list of the funds available for
exchange. Before making an exchange, contact your financial advisor or SDC to
obtain the applicable fund prospectus(es).You should read and understand a
fund's prospectus before investing. Some funds may not offer all Classes of
shares.
How to Sell Shares
The easiest way to sell Fund shares is by phone. If you have telephone
services, you may be able use this service to sell Fund shares. Restrictions
apply to certain types of accounts. Please see "Important Policies That May
Affect Your Account."
When you sell Fund shares by phone, a check for the proceeds is sent to your
address of record. If you have current ACH bank information on file, you may
have the proceeds of the sale of your Fund shares directly deposited into your
bank account (typically, 3-4 business days after your shares are sold).
You may sell shares to the Fund through a broker/dealer or your financial
advisor. The Fund does not charge any fees or expenses, other than any
applicable CDSC, for this transaction; however, the dealer or financial
advisor may charge a fee. Contact your financial advisor for more information.
You may always send a written request to sell Fund shares; however, it may
take longer to get your money.
As an additional measure to protect you and the Fund, SDC may confirm written
redemption requests that are (1) for $25,000 or more, or (2) directed to be
paid to an alternate payee or sent to an address other than the address of
record, with you or your financial advisor by telephone before sending you
your money. This will not affect the date on which your redemption is actually
processed.
If your Fund shares are represented by certificates, you will need to
surrender the certificates to SDC before you sell your shares.
You will need to guarantee your signature(s) if the proceeds are:
(1) $50,000 or more;
(2) to be paid to someone other than the account owner; or
(3) mailed to other than your address of record.
Signature Guarantee:
Protects you and the
Fund from fraud. It
guarantees that a
signature is genuine. A
guarantee must be
obtained from an
eligible financial
institution.
Notarization by a notary
public is not an
acceptable guarantee.
You may need to provide additional documents to sell Fund shares if you are:
. a corporation;
. an executor or administrator;
. a trustee or custodian; or
. in a retirement plan.
Contact your financial advisor or SDC's Shareholder Services Department for
information on selling your shares under any of the above circumstances.
You may also use the following account service to sell Fund shares:
Systematic Withdrawal Plan. If you have at least $5,000 in the Fund, you may
withdraw (sell) a fixed dollar amount (minimum of $50) of uncertificated
shares at regular intervals. A check will be sent to you at your address of
record or, if you have current ACH bank information on file, you may have your
payments directly deposited to your predesignated bank account in 3-4 business
days after your shares are sold. If you bought $1,000,000 or more of Class A
shares without an initial sales charge, your withdrawals may be subject to a
1% CDSC if they occur within 18 months of purchase. If you own Class B, Class
C, or Class D shares and reinvest your dividends and capital gain
distributions, you may withdraw 12%, 10%, or 10%, respectively, of the value
of your Fund account (at the time of election) annually without a CDSC.
10
<PAGE>
Important Policies That May Affect Your Account
To protect you and other shareholders, the Fund reserves the right to:
. Refuse an exchange request if:
1. you have exchanged twice from the same fund in any three-month period;
2. the amount you wish to exchange equals the lesser of $1,000,000 or 1%
of the Fund's net assets; or
3. you or your financial advisor have been advised that previous patterns
of purchases and sales or exchanges have been considered excessive.
. Refuse any request to buy Fund shares.
. Reject any request received by telephone.
. Suspend or terminate telephone services.
. Reject a signature guarantee that SDC believes may be fraudulent.
. Close your fund account if its value falls below $500.
. Close your account if it does not have a certified taxpayer identification
number.
Telephone Services
You and your broker/dealer or financial advisor will be able to place the
following requests by telephone, unless you indicate on your account
application that you do not want telephone services:
. Sell uncertificated shares (up to $50,000 per day, payable to account
owner(s) and mailed to address of record).
. Exchange shares between funds.
. Change dividend and/or capital gain distribution options.
. Change your address.
. Establish systematic withdrawals to address of record.
If you do not complete an account application when you open your account,
telephone services must be elected on a supplemental election form.
Restrictions apply to certain types of accounts:
. Trust accounts on which the current trustee is not listed may not sell
Fund shares by phone.
. Corporations may not sell Fund shares by phone.
. IRAs may only exchange Fund shares or request address changes by phone.
. Group retirement plans may not sell Fund shares by phone; plans that allow
participants to exchange by phone must provide a letter of authorization
signed by the plan custodian or trustee and provide a supplemental
election form signed by all plan participants.
Unless you have current ACH bank information on file, you will not be able to
sell Fund shares by phone within thirty days following an address change.
Your request must be communicated to an SDC representative. You may not request
any phone transactions via the automated access line.
You may cancel telephone services at any time by sending a written request to
SDC. Each account owner, by accepting or adding telephone services, authorizes
each of the other owners to make requests by phone. Your broker/dealer or
financial advisor representative may not establish telephone services without
your written authorization. SDC will send written confirmation to the address
of record when telephone services are added or terminated.
During times of heavy call volume, you may not be able to get through to SDC by
phone to request a sale or exchange of Fund shares. In this case, you may need
to write, and it may take longer for your request to be processed. The Fund's
NAV may fluctuate during this time.
The Fund and SDC will not be liable for processing requests received by phone
as long as it was reasonable to believe that the request was genuine.
Reinstatement Privilege
If you sell Fund shares, you may, within 120 calendar days, use part or all of
the proceeds to buy shares of the Fund or any other Seligman mutual fund
(reinstate your investment) without paying an initial sales charge or, if you
paid a CDSC when you sold your shares, receiving a credit for the applicable
CDSC paid. This privilege is available only once each calendar year. Contact
your financial advisor for more information. You should consult your tax
advisor concerning possible tax consequences of exercising this privilege.
11
<PAGE>
Dividends And Capital Gain Distributions
The Fund generally pays any dividends from its net investment income and
distributes net capital gains realized on investments annually. It is expected
that the Fund's distributions will be primarily capital gains.
You may elect to:
Dividend: (1) reinvest both dividends and capital gain
distributions;
A payment by a (2) receive dividends in cash and reinvest capital
mutual fund, gain distributions; or
usually derived
from the fund's (3) receive both dividends and capital gain
net investment distributions in cash.
income
(dividends and Your dividends and capital gain distributions will be
interest earned reinvested if you do not instruct otherwise or if you
on portfolio own Fund shares in a Seligman tax-deferred retirement
securities less plan.
expenses).
If you want to change your election, you may write SDC
Capital Gain at the address listed on the back cover of this
Distribution: prospectus or, if you have telephone services, you or
A payment to your financial advisor may call SDC. Your request must
mutual fund be received by SDC before the record date to be
shareholders effective for that dividend or capital gain
which distribution.
represents
profits Cash dividends or capital gain distributions will be
realized on the sent by check to your address of record or, if you
sale of have current ACH bank information on file, directly
securities in a deposited into your predesignated bank account within
fund's 3-4 business days from the payable date.
portfolio.
Dividends and capital gain distributions are
Ex-dividend Date: reinvested to buy additional Fund shares on the
The day on payable date using the NAV of the ex-dividend date.
which any
declared Dividends on Class B, Class C, and Class D shares will
distributions be lower than the dividends on Class A shares as a
(dividends or result of their higher 12b-1 fees. Capital gain
capital gains) distributions will be paid in the same amount for each
are deducted Class.
from a fund's
assets before
it calculates
its NAV.
Taxes
The tax treatment of dividends and capital gain distributions is the same
whether you take them in cash or reinvest them to buy additional Fund shares.
Tax-deferred retirement plans are not taxed currently on dividends or capital
gain distributions or on exchanges.
Dividends paid by the Fund are taxable to you as ordinary income. You may be
taxed at different rates on capital gains distributed by the Fund depending on
the length of time the Fund holds its assets.
When you sell Fund shares, any gain or loss you realize will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year, or as a short-term capital gain or loss if you held your shares
for one year or less. However, if you sell Fund shares on which a long-term
capital gain distribution has been received and you held the shares for six
months or less, any loss you realize will be treated as a long-term capital
loss to the extent that it offsets the long-term capital gain distribution.
An exchange of Fund shares is a sale and may result in a gain or loss for
federal income tax purposes.
Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each
shareholder's situation is unique, you should always consult your tax advisor
concerning the effect income taxes may have on your individual investment.
12
<PAGE>
The Seligman Mutual Funds
Equity
Specialty
- --------------------------------------------------------------------------------
Seligman Communications and
Information Fund
Seeks capital appreciation by investing in companies operating in all aspects
of the communications, information, and related industries.
Seligman Global Technology Fund
Seeks long-term capital appreciation by investing primarily in global
securities (US and non-US) of companies in the technology and technology-
related industries.
Seligman Emerging Markets Fund
Seeks long-term capital appreciation by investing primarily in equity
securities of companies in emerging markets.
Small Company
- --------------------------------------------------------------------------------
Seligman Frontier Fund
Seeks growth of capital by investing primarily in small company growth stocks.
Seligman Small-Cap Value Fund
Seeks long-term capital appreciation by investing in equities of small
companies, deemed to be "value" companies by the investment manager.
Seligman Global Smaller Companies Fund
Seeks long-term capital appreciation by investing in securities of smaller
companies around the world, including the US.
Medium Company
- --------------------------------------------------------------------------------
Seligman Capital Fund
Seeks capital appreciation by investing in the common stocks of companies with
significant potential for growth.
Large Company
- --------------------------------------------------------------------------------
Seligman Growth Fund
Seeks long-term growth of capital value and an increase in future income.
Seligman Global Growth Fund
Seeks capital appreciation by investing primarily in equity securities of
companies that have the potential to benefit from global economic or social
trends.
Seligman Large-Cap Value Fund
Seeks long-term capital appreciation by investing in equities of large
companies, deemed to be "value" companies by the investment manager.
Seligman Common Stock Fund
Seeks favorable, but not the highest, current income and long-term growth of
both income and capital, without exposing capital to undue risk.
Seligman International Growth Fund
Seeks long-term capital appreciation by investing in securities of medium- to
large-sized companies, primarily in the developed markets outside the US.
Balanced
- --------------------------------------------------------------------------------
Seligman Income Fund
Seeks high current income and improvement in capital value over the long term,
consistent with prudent risk of capital.
Fixed-Income
Income
- --------------------------------------------------------------------------------
Seligman High-Yield Bond Fund
Seeks to maximize current income by investing in a diversified portfolio of
high-yielding, high-risk corporate bonds, commonly referred to as "junk bonds."
Seligman U.S. Government Securities Fund
Seeks high current income primarily by investing in a diversified portfolio of
securities guaranteed by the US government, its agencies, or instrumentalities,
which have maturities greater than one year.
Municipal
- --------------------------------------------------------------------------------
Seligman Municipal Funds:
National Fund
Seeks maximum income, exempt from regular federal income taxes.
State-specific funds:*
Seek to maximize income exempt from regular federal income taxes and from
regular income taxes in the designated state.
California Louisiana New Jersey
. High-Yield
Maryland New York
. Quality MassachusettsNorth Carolina
Colorado Michigan Ohio
Florida Minnesota Oregon
Georgia Missouri Pennsylvania
South Carolina
* A small portion of income may be subject to state taxes.
Money Market
- --------------------------------------------------------------------------------
Seligman Cash Management Fund
Seeks to preserve capital and to maximize liquidity and current income, by
investing only in high-quality money market securities having a maturity of 90
days or less. The fund seeks to maintain a constant net asset value of $1.00
per share.
13
<PAGE>
Asset Allocation
Seligman Time Horizon/Harvester Series, Inc. is an asset-allocation type mutual
fund. It offers four different asset allocation funds that pursue their
investment objectives by allocating their assets among other mutual funds in
the Seligman Group.
Seligman Time Horizon 30 Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in aggressive growth-oriented domestic and international equity
securities weighted toward small- and medium-capitalization companies.
Seligman Time Horizon 20 Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in growth-oriented domestic and international equity securities,
with a more even weighting among small-, medium- and large-capitalization
companies than Seligman Time Horizon 30 Fund.
Seligman Time Horizon 10 Fund
Seeks capital appreciation by creating a portfolio of mutual funds that invests
in small-, medium- and large-capitalization domestic and international equity
securities as well as domestic fixed-income securities.
Seligman Harvester Fund
Seeks capital appreciation and preservation of capital with current income and
growth of income by creating a portfolio of mutual funds that invests in
medium- and large-capitalization domestic and international equity securities
supplemented by a larger allocation of fixed-income securities and cash than
Seligman Time Horizon 10 Fund.
14
<PAGE>
Financial Highlights
The tables below are intended to help you understand the financial performance
of the Fund's Classes for the past five years and one month or, if less than
five years and one month, the period of the Class's operations. Certain
information reflects financial results for a single share of a Class that was
held throughout the periods shown. "Total return" shows the rate that you would
have earned (or lost) on an investment in the Fund, assuming you reinvested all
of your capital gain distributions. Total returns do not reflect any sales
charges. Deloitte & Touche llp, independent auditors, have audited this
information. Their reports, along with the Fund's financial statements, are
included in the Fund's Annual Report, which is available upon request.
CLASS A
---------------------------------------------------
<TABLE>
<CAPTION>
One Month
ended Year ended September 30,
October 31, -------------------------------------------------
1999** 1999 1998 1997 1996 1995
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value,
beginning of period.... $13.23 $12.44 $17.55 $15.38 $14.04 $11.62
-------- -------- --------- -------- -------- --------
Income from investment
operations:
Net investment income
(loss)................ (0.02) (0.15) (0.16) (0.16) (0.13) (0.06)
Net gains or losses on
securities (both
realized and
unrealized)........... (0.28) 0.94 (3.32) 3.20 1.95 3.87
-------- -------- --------- -------- -------- --------
Total from investment
operations............. (0.30) 0.79 (3.48) 3.04 1.82 3.81
-------- -------- --------- -------- -------- --------
Less distributions:
Distributions from
capital gains......... -- -- (1.63) (0.87) (0.48) (1.39)
-------- -------- --------- -------- -------- --------
Total distributions..... -- -- (1.63) (0.87) (0.48) (1.39)
-------- -------- --------- -------- -------- --------
Net asset value, end of
period................. $12.93 $13.23 $12.44 $17.55 $15.38 $14.04
======== ======== ========= ======== ======== ========
Total Return: (2.27)% 6.35% (21.32)% 21.19% 13.40% 36.80%
Ratios/Supplemental
Data:
Net assets, end of
period (in thousands).. $197,424 $212,664 $ 379,945 $568,261 $523,737 $272,122
Ratio of expenses to
average net assets..... 1.76%+ 1.62% 1.47% 1.52% 1.56% 1.43%
Ratio of net income
(loss) to average net
assets................. (1.63)%+ (1.16)% (1.05)% (1.10)% (0.91)% (0.50)%
Portfolio turnover
rate................... 5.19% 56.31% 83.90% 97.37% 59.36% 71.52%
</TABLE>
- --------------
See footnotes on page 16.
15
<PAGE>
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------------- ----------------------
One Month Year ended One Month
ended September 30, 4/22/96*** ended 5/27/99***
October 31, ---------------------------- to October 31, to
1999** 1999 1998 1997 9/30/96 1999** 9/30/99
----------- -------- -------- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value,
beginning of period.... $12.32 $11.66 $16.68 $14.78 $14.55 $12.32 $12.18
-------- -------- -------- -------- -------- -------- -------
Income from investment
operations:
Net investment income
(loss)................ (0.02) (0.23) (0.27) (0.27) (0.11) (0.02) (0.08)
Net gains or losses on
securities (both
realized and
unrealized)........... (0.27) 0.89 (3.12) 3.04 0.34 (0.27) 0.22
-------- -------- -------- -------- -------- -------- -------
Total from investment
operations............. (0.29) 0.66 (3.39) 2.77 0.23 (0.29) 0.14
-------- -------- -------- -------- -------- -------- -------
Less Distributions:
Distributions from
capital gains......... -- -- (1.63) (0.87) -- -- --
-------- -------- -------- -------- -------- -------- -------
Total distributions..... -- -- (1.63) (0.87) -- -- --
-------- -------- -------- -------- -------- -------- -------
Net asset value, end of
period................. $12.03 $12.32 $11.66 $16.68 $14.78 $12.03 $12.32
======== ======== ======== ======== ======== ======== =======
Total Return: (2.35)% 5.66% (21.95)% 20.17% 1.58% (2.35)% 1.15%
Ratios/Supplemental
Data:
Net assets, end of
period (in thousands).. $47,310 $49,080 $67,199 $69,869 $24,016 $420 $403
Ratio of expenses to
average net assets..... 2.52%+ 2.38% 2.24% 2.30% 2.45%+ 2.52%+ 2.36%+
Ratio of net income
(loss) to average net
assets................. (2.39)%+ (1.92)% (1.82)% (1.88)% (1.80)%+ (2.39)%+ (1.84)%+
Portfolio turnover
rate................... 5.19% 56.31% 83.90% 97.37% 59.36%++ 5.19% 56.31%+++
<CAPTION>
CLASS D
-----------------------------------------------------------------
One Month
ended Year ended September 30,
October 31, -----------------------------------------------------
1999** 1999 1998 1997 1996 1995
----------- -------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:*
Net asset value,
beginning of period.... $12.32 $11.67 $16.69 $14.77 $13.61 $11.40
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income
(loss)................ (0.02) (0.23) (0.27) (0.27) (0.24) (0.15)
Net gains or losses on
securities (both
realized and
unrealized)........... (0.27) 0.88 (3.12) 3.06 1.88 3.75
-------- -------- -------- -------- -------- --------
Total from investment
operations............. (0.29) 0.65 (3.39) 2.79 1.64 3.60
-------- -------- -------- -------- -------- --------
Less Distributions:
Distributions from
capital gains......... -- -- (1.63) (0.87) (0.48) (1.39)
-------- -------- -------- -------- -------- --------
Total distributions..... -- -- (1.63) (0.87) (0.48) (1.39)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $12.03 $12.32 $11.67 $16.69 $14.77 $13.61
======== ======== ======== ======== ======== ========
Total Return: (2.35)% 5.57% (21.94)% 20.32% 12.47% 35.53%
Ratios/Supplemental
Data:
Net assets, end of
period (in thousands).. $123,955 $136,173 $263,900 $390,904 $337,327 $145,443
Ratio of expenses to
average net assets..... 2.52%+ 2.38% 2.24% 2.30% 2.35% 2.29%
Ratio of net income
(loss) to average net
assets................. (2.39)%+ (1.92)% (1.82)% (1.88)% (1.70)% (1.35)%
Portfolio turnover
rate................... 5.19% 56.31% 83.90% 97.37% 59.36% 71.52%
</TABLE>
- --------------
* Per share amounts are calculated based on average shares outstanding.
** Effective for the period ended October 31, 1999, the Fund's Board of
Directors approved a change of the Fund's fiscal year end from September
30 to October 31.
*** Commencement of offering of shares.
+ Annualized.
++ For the period ended September 30, 1996.
+++ For the period ended September 30, 1999.
16
<PAGE>
How to Contact Us
<TABLE>
<S> <C> <C>
The Fund Write: Corporate Communications/
Investor Relations Department
J. & W. Seligman & Co. Incorporated
100 Park Avenue, New York, NY 10017
Phone: Toll-Free (800) 221-7844 in the US or
(212) 850-1864 outside the US
Website: http://www.seligman.com
Your Regular
(Non-Retirement) Account
Write: Shareholder Services Department
Seligman Data Corp.
100 Park Avenue, New York, NY 10017
Phone: Toll-Free (800) 221-2450 in the US or
(212) 682-7600 outside the US
Website: http://www.seligman.com
Your Retirement
Account Write: Retirement Plan Services
Seligman Data Corp.
100 Park Avenue, New York, NY 10017
Phone: Toll-Free (800) 445-1777
</TABLE>
24-hour automated telephone access is
available by dialing (800) 622-4597 on a
touchtone telephone. You will have instant
access to price, yield, account balance,
most recent transaction, and other
information.
17
<PAGE>
For More Information
The following information is available without charge upon request: Call
toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US. You
may also call these numbers to request other information about the Fund or to
make shareholder inquiries.
Statement of Additional Information (SAI) contains additional information about
the Fund. It is on file with the Securities and Exchange Commission, or SEC, and
is incorporated by reference into (is legally part of) this prospectus.
Annual/Semi-Annual Reports contain additional information about the Fund's
investments. In the Fund's annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund's performance during its last fiscal year.
SELIGMAN ADVISORS, INC.
an affiliate of
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
Information about the Fund, including the SAI, can be viewed and copied at the
SEC's Public Reference Room in Washington, DC. For information about the
operation of the Public Reference Room, call (202) 942-8090. The SAI,
Annual/Semi-Annual Reports and other information about the Fund are also
available on the Edgar Database on the SEC's Internet site: http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by electronic request at the following E-mail address: [email protected], or by
writing: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102.
SEC FILE NUMBER: 811-4078
<PAGE>
SELIGMAN FRONTIER FUND, INC.
Statement of Additional Information
February 1, 2000
100 Park Avenue
New York, New York 10017
(212) 850-1864
Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information (SAI) expands upon and supplements the
information contained in the current Prospectus of Seligman Frontier Fund, Inc.,
dated February 1, 2000. This SAI, although not in itself a prospectus, is
incorporated by reference into the Prospectus in its entirety. It should be read
in conjunction with the Prospectus, which you may obtain by writing or calling
the Fund at the above address or telephone numbers.
The financial statements and notes included in the Fund's Annual Report, and the
Independent Auditors' Report thereon, are incorporated herein by reference. The
Annual Report will be furnished to you without charge if you request a copy of
this SAI.
Table of Contents
Fund History.......................................................... 2
Description of the Fund and its Investments and Risks................. 2
Management of the Fund................................................ 5
Control Persons and Principal Holders of Securities................... 10
Investment Advisory and Other Services................................ 10
Brokerage Allocation and Other Practices.............................. 16
Capital Stock and Other Securities ................................... 16
Purchase, Redemption, and Pricing of Shares........................... 17
Taxation of the Fund.................................................. 22
Underwriters.......................................................... 23
Calculation of Performance Data ...................................... 25
Financial Statements.................................................. 27
General Information................................................... 27
Appendix ............................................................. 28
<PAGE>
Fund History
The Fund was incorporated under the laws of the state of Maryland on July 9,
1984.
Description of the Fund and Its Investments and Risks
Classification
The Fund is a diversified open-end management investment company, or mutual
fund.
Investment Strategies and Risks
The following information regarding the Fund's investments and risks supplements
the information contained in the Fund's Prospectus.
Foreign Securities. The Fund may invest in commercial paper and certificates of
deposit issued by foreign banks and may invest either directly or 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 US company and foreign companies
may not be subject to reporting standards and requirements comparable to those
applicable to US companies. Foreign securities may not be as liquid as US
securities and there may be delays and risks attendant in local settlement
procedures. Securities of foreign companies may involve greater market risk than
securities of US 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, the possible nationalization of issuers and the risk of
expropriation or restrictions on the repatriation of proceeds of sale. In
addition, foreign investments may be subject to withholding and other taxes.
ADRs, which are traded in dollars on US 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.
Investment income received by the Fund from sources within foreign countries may
be subject to foreign income taxes withheld at the source. The United States has
entered into tax treaties with many foreign countries which entitle the Fund to
a reduced rate of such taxes or exemption from taxes on such income. It is
impossible to determine the effective rate of foreign tax in advance since the
amounts of the Fund's assets to be invested within various countries is not
known.
Repurchase Agreements. The Fund may enter into repurchase agreements with
commercial banks and broker/dealers as a short-term cash management tool. A
repurchase agreement is an agreement under which the Fund acquires a security,
generally a US Government obligation, 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 Fund holds the security and is unrelated to the interest
rate on the security. The Fund's repurchase agreements will at all times be
fully collateralized.
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, a decline in value of the
underlying securities and a loss of interest. Repurchase agreements are
typically entered into for periods of one week or less. As a matter of
fundamental policy, the Fund will not enter into repurchase agreements of more
than one week's duration if more than 10% of its net assets would be so
invested.
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 (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
2
<PAGE>
determine that the Rule 144A security continues to be liquid. It is not possible
to predict with assurance exactly how the market for Rule 144A securities will
further evolve. This investment practice could have the effect of increasing the
level of illiquidity in the Fund, if and to the extent that qualified
institutional buyers become for a time uninterested in purchasing Rule 144A
securities.
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.
Put Options. The Fund may purchase put options on portfolio securities in an
attempt to provide a hedge against a decrease in the market price of an
underlying 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. This hedge protection is provided during the life of the put
option since the Fund, as holder of the put option, can sell the underlying
security at the put exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be profitable, the market
price of the underlying security must decline sufficiently below the exercise
price to cover the premium and transaction costs. By using put options in this
manner, the Fund will reduce any profit it might otherwise have realized in the
underlying security by the premium paid for the put option and by transaction
costs.
Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, the Fund would let the option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option premium and transaction costs.
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. The cost of the put option is limited to the
premium plus commission paid. The Fund's maximum financial exposure will be
limited to these costs.
The Fund may purchase both listed and over-the-counter put options. The Fund
will be exposed to the risk of counterparty nonperformance in the case of
over-the-counter put options.
Put options on securities may not be available to the Fund on reasonable terms
in many situations and the Fund may frequently choose not to purchase options
even when they are available. The Fund's ability to engage in option
transactions may be limited by tax considerations.
Rights and Warrants. The Fund may invest in common stock rights and warrants
believed by the investment manager to provide capital appreciation
opportunities. Common stock rights and warrants received as part of a unit or
attached to securities purchased (i.e., not separately purchased) are not
included in the Fund's investment restrictions regarding such securities.
The Fund may not invest in rights and warrants if, at the time of acquisition,
the investment in rights and warrants would exceed 5% of the Fund's net assets,
valued at the lower of cost or market. In addition, no more than 2% of net
assets may be invested in warrants not listed on the New York or American Stock
Exchanges. For purposes of this restriction, rights and warrants acquired by the
Fund in units or attached to securities may be deemed to have been purchased
without cost.
Lending of Portfolio Securities. The Fund may lend portfolio securities to
broker/dealers or other institutions if the investment manager believes such
loans will 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 collateral and earn additional income or receive an agreed-upon
amount of interest income 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 collateral to the
3
<PAGE>
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. The Fund may lose money if
a borrower defaults on its obligation to return securities and the value of the
collateral held by the Fund is insufficient to replace the loaned securities. In
addition, the Fund is responsible for any loss that might result from its
investment of the borrower's collateral.
Except as otherwise specifically noted above, the Fund's investment strategies
are not fundamental and the Fund, with the approval of the Board of Directors,
may change such strategies without the vote of shareholders.
Fund Policies
The Fund is subject to fundamental policies that place restrictions on certain
types of investments. These policies cannot be changed except by vote of a
majority of the Fund's outstanding voting securities. Under these policies, 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 US 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;
o Invest in securities issued by other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization or
for the purpose of hedging the Fund's obligations under its deferred
compensation plan for directors;
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 1933 Act in disposing of a portfolio
security;
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; or
o 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.
The Fund also may not change its investment objective without shareholder
approval.
4
<PAGE>
Under the Investment Company Act of 1940, as amended (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.
The Fund also may not acquire any securities of a registered open-end investment
company or a registered unit investment trust in reliance on subparagraph (F) or
subparagraph (G) of Section 12(d)(1) of the 1940 Act. This policy is not
fundamental.
Temporary Defensive Position
In an attempt to respond to adverse market, economic, political, or other
conditions, the Fund may invest up to 100% of its assets in cash or cash
equivalents, including, but not limited to, prime commercial paper, bank
certificates of deposit, bankers' acceptances, or repurchase agreements for such
securities, and securities of the US Government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. The Fund's investments in foreign cash equivalents will be limited
to those that, in the opinion of the investment manager, equate generally to the
standards established for US cash equivalents. Investments in bank obligations
will be limited at the time of investment to the obligations of the 100 largest
domestic banks in terms of assets which are subject to regulatory supervision by
the US Government or state governments, and the obligations of the 100 largest
foreign banks in terms of assets with branches or agencies in the United States.
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, 1999 and 1998 were 56.31% and
83.90%, respectively, and for the one-month period ended October 31, 1999 was
5.19%.
Management of the Fund
Board of Directors
The Board of Directors provides broad supervision over the affairs of the Fund.
Management Information
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>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
William C. Morris* Director, Chairman Chairman, J. & W. Seligman & Co. Incorporated, Chairman and
(61) of the Board, Chief Chief Executive Officer, the Seligman Group of investment
Executive Officer companies; Chairman, Seligman Advisors, Inc, Seligman
and Chairman of the Services, Inc., and Carbo Ceramics Inc., ceramic proppants for
Executive Committee oil and gas industry; and Director, Seligman Data Corp.,
Kerr-McGee Corporation, diversified energy company. Formerly,
Director, Daniel Industries Inc., manufacturer of oil and gas
metering equipment.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
Brian T. Zino* Director, President Director and President, J. & W. Seligman & Co. Incorporated;
(47) and Member of the President (with the exception of Seligman Quality Municipal
Executive Committee Fund, Inc. and Seligman Select Municipal Fund, Inc.) and
Director or Trustee, the Seligman Group of investment
companies; Chairman, Seligman Data Corp.; Member of the Board
of Governors of the Investment Company Institute; and
Director, ICI Mutual Insurance Company, Seligman Advisors,
Inc., and Seligman Services, Inc.
Richard R. Schmaltz* Director and Member Director and Managing Director, Director of Investments, J. &
(59) of the Executive W. Seligman & Co. Incorporated; Director or Trustee, the
Committee Seligman Group of investment companies (except Seligman Cash
Management Fund, Inc.); Director, Seligman Henderson Co., and
Trustee Emeritus of Colby College. Formerly, Director,
Investment Research at Neuberger & Berman from May 1993 to
September 1996.
John R. Galvin Director Dean, Fletcher School of Law and Diplomacy at Tufts
(70) University; Director or Trustee, the Seligman Group of
Tufts University investment companies; Chairman Emeritus, American Council on
Packard Avenue, Germany; Governor of the Center for Creative Leadership;
Medford, MA 02155 Director; Raytheon Co., electronics; National Defense
University; and the Institute for Defense Analysis. Formerly,
Director, USLIFE Corporation, life insurance; Ambassador, U.S.
State Department for negotiations in Bosnia; Distinguished
Policy Analyst at Ohio State University and Olin Distinguished
Professor of National Security Studies at the United States
Military Academy. From June 1987 to June 1992, he was the
Supreme Allied Commander, Europe and the Commander-in-Chief,
United States European Command.
Alice S. Ilchman Director Retired President, Sarah Lawrence College; Director or
(64) Trustee, the Seligman Group of investment companies; Trustee,
18 Highland Circle the Committee for Economic Development; and Chairman, The
Bronxville, NY 10708 Rockefeller Foundation, charitable foundation. Formerly,
Trustee, The Markle Foundation, philanthropic organization;
and Director, New York Telephone Company and International
Research and Exchange Board, intellectual exchanges.
Frank A. McPherson Director Retired Chairman and Chief Executive Officer of Kerr-McGee
(66) Corporation; Director or Trustee, the Seligman Group of
2601 Northwest Expressway, investment companies; Director, Kimberly-Clark Corporation,
Suite 805E consumer products; Bank of Oklahoma Holding Company; Baptist
Oklahoma City, OK 73112 Medical Center; Oklahoma Chapter of the Nature Conservancy;
Oklahoma Medical Research Foundation; and National Boys and
Girls Clubs of America; and Member of the Business Roundtable
and National Petroleum Council. Formerly, Chairman, Oklahoma
City Public Schools Foundation; and Director, Federal Reserve
System's Kansas City Reserve Bank and the Oklahoma City
Chamber of Commerce.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
John E. Merow Director Retired Chairman and Senior Partner, Sullivan & Cromwell, law
(70) firm; Director or Trustee, the Seligman Group of investment
125 Broad Street, companies; Director, Commonwealth Industries, Inc.,
New York, NY 10004 manufacturers of aluminum sheet products; the Foreign Policy
Association; Municipal Art Society of New York; the U.S.
Council for International Business; and New York-Presbyterian
Hospital; Chairman, New York-Presbyterian Healthcare Network,
Inc.; Vice-Chairman, the U.S.-New Zealand Council; and Member
of the American Law Institute and Council on Foreign
Relations.
Betsy S. Michel Director Attorney; Director or Trustee, the Seligman Group of
(57) investment companies; Trustee, The Geraldine R. Dodge
P.O. Box 449 Foundation, charitable foundation. Formerly, Chairman of the
Gladstone, NJ 07934 Board of Trustees of St. George's School (Newport, RI) and
Director, the National Association of Independent Schools
(Washington, DC).
James C. Pitney Director Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm;
(73) Director or Trustee, the Seligman Group of investment
Park Avenue at Morris companies. Formerly, Director, Public Service Enterprise
County, P.O. Box 1945, Group, public utility.
Morristown, NJ 07962
James Q. Riordan Director Director or Trustee, the Seligman Group of investment
(72) companies; Director, The Houston Exploration Company, oil
675 Third Avenue, exploration; The Brooklyn Museum, KeySpan Energy Corporation;
Suite 3004 and Public Broadcasting Service; and Trustee, the Committee
New York, NY 10017 for Economic Development. Formerly, Co-Chairman of the Policy
Council of the Tax Foundation; Director, Tesoro Petroleum
Companies, Inc. and Dow Jones & Company, Inc.; Director and
President, Bekaert Corporation; and Co-Chairman, Mobil
Corporation.
Robert L. Shafer Director Retired Vice President, Pfizer Inc., pharmaceuticals; Director
(66) or Trustee, the Seligman Group of investment companies.
96 Evergreen Avenue, Formerly, Director, USLIFE Corporation, life insurer.
Rye, NY 10580
James N. Whitson Director Director and Consultant, Sammons Enterprises, Inc., a
(64) diversified holding company; Director or Trustee, the
6606 Forestshire Drive Seligman Group of investment companies; Director, C-SPAN, cable
Dallas, TX 75230 television, and CommScope, Inc., manufacturer of coaxial cables.
Formerly, Executive Vice President, Chief Operating Officer,
Sammons Enterprises, Inc.; and Director, Red Man Pipe and Supply
Company, piping and other materials.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
Arsen Mrakovcic Vice President and Managing Director, J. & W. Seligman & Co. Incorporated; Vice
(34) Portfolio Manager President and Portfolio Manager, two other open-end investment
companies in the Seligman Group of investment companies.
Formerly, Vice President, Investment Officer, J. & W. Seligman
& Co. Incorporated, from January 1995 to January 1996 and
Portfolio Assistant, J. & W. Seligman & Co. Incorporated, from
June 1992 to January 1995.
Lawrence P. Vogel Vice President Senior Vice President, Finance, J. & W. Seligman & Co.
(43) Incorporated, Seligman Advisors, Inc., and Seligman Data
Corp.; Vice President, the Seligman Group of investment
companies, and Seligman Services, Inc.; Vice President and
Treasurer, Seligman International, Inc.; and Treasurer,
Seligman Henderson Co.
Frank J. Nasta Secretary General Counsel, Senior Vice President, Law and Regulation and
(35) Corporate Secretary, J. & W. Seligman & Co. Incorporated;
Secretary, the Seligman Group of investment companies,
Seligman Advisors, Inc., Seligman Henderson Co., Seligman
Services, Inc., Seligman International, Inc. and Seligman Data
Corp.
Thomas G. Rose Treasurer Treasurer, the Seligman Group of investment companies and
(42) Seligman Data Corp.
</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.
Directors and officers of the Fund are also directors and officers of some or
all of the other investment companies in the Seligman Group.
<TABLE>
<CAPTION>
Compensation
Pension or Total Compensation
Aggregate Retirement Benefits from Fund and
Name and Compensation Accrued as Part of Fund Complex Paid
Position with Fund from Fund (1) Fund Expenses to Directors (1)(2)
------------------ ------------- ------------- -------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director N/A N/A N/A
John R. Galvin, Director $1,615.87 N/A $82,000
Alice S. Ilchman, Director 1,595.87 N/A 80,000
Frank A. McPherson, Director 1,615.87 N/A 80,000
John E. Merow, Director 1,615.87 N/A 80,000
Betsy S. Michel, Director 1,615.87 N/A 82,000
James C. Pitney, Director 1,575.87 N/A 74,000
James Q. Riordan, Director 1,595.87 N/A 80,000
Robert L. Shafer, Director 1,595.87 N/A 80,000
James N. Whitson, Director 1,595.87(3) N/A 80,000(3)
</TABLE>
- ----------
(1) For the Fund's fiscal year ended September 30, 1999.
(2) The Seligman Group of investment companies consists of twenty investment
companies.
(3) Deferred.
8
<PAGE>
The Fund has a compensation arrangement under which outside directors may elect
to defer receiving their fees. The Fund has adopted a deferred compensation plan
under which a director who has elected deferral of his or her fees may choose a
rate of return equal to either (1) the interest rate on short-term Treasury
Bills, or (2) the rate of return on the shares of certain of the investment
companies advised by J. & W. Seligman & Co. Incorporated (Seligman), as
designated by the director. The cost of such fees and earnings is included in
directors' fees and expenses, and the accumulated balance thereof is included in
other liabilities in the Fund's financial statements. The total amount of
deferred compensation (including earnings) payable in respect of the Fund to Mr.
Whitson as of September 30, 1999 was $18,012 and as of the one-month period
ended October 31, 1999 was $18,788.
Messrs. Merow and Pitney no longer defer current compensation; however, they
have accrued deferred compensation in the amounts of $27,688 and $10,700,
respectively, as of September 30, 1999, and $28,591 and $10,744, respectively,
as of October 31, 1999.
The Fund may, but is not obligated to, purchase shares of the other funds in the
Seligman Group of investment companies to hedge its obligations in connection
with the Fund's deferred compensation plan.
Sales Charges
Class A shares of the Fund may be issued without a sales charge to present and
retired directors, trustees, officers, employees (and their family members) of
the Fund, the other investment companies in the Seligman Group, and Seligman and
its affiliates. Family members are defined to include lineal descendants and
lineal ancestors, siblings (and their spouses and children) and any company or
organization controlled by any of the foregoing. Such sales may also be made to
employee benefit plans and thrift plans for such persons and to any investment
advisory, custodial, trust or other fiduciary account managed or advised by
Seligman or any affiliate. The sales may be made for investment purposes only,
and shares may be resold only to the Fund.
Class A shares may be sold at net asset value to these persons since such sales
require less sales effort and lower sales related expenses as compared with
sales to the general public.
Code of Ethics
Seligman, Seligman Advisors, Inc. (Seligman Advisors), their subsidiaries and
affiliates, and the Seligman Group of Investment Companies have adopted a Code
of Ethics that sets forth the circumstances under which officers, directors and
employees (collectively Employees) are permitted to engage in personal
securities transactions. The Code of Ethics proscribes certain practices with
regard to personal securities transactions and personal dealings, provides a
framework for the reporting and monitoring of personal securities transactions
by Seligman's Director of Compliance, and sets forth a procedure of identifying,
for disciplinary action, those individuals who violate the Code of Ethics. The
Code of Ethics prohibits Employees (including all investment team members) from
purchasing or selling any security or an equivalent security that is being
purchased or sold by any client, or where the Employee intends, or knows of
another's intention, to purchase or sell the security on behalf of a client. The
Code also prohibits all Employees from acquiring securities in a private
placement or in an initial or secondary public offering unless an exemption has
been obtained from Seligman's Director of Compliance.
The Code of Ethics prohibits (1) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) that the portfolio manager or investment team
manages; (2) each Employee from engaging in short-term trading (a purchase and
sale or vice-versa within 60 days); and (3) each member of an investment team
from engaging in short sales of a security if, at that time, any client managed
by that team has a long position in that security. Any profit realized pursuant
to any of these prohibitions must be disgorged.
Employees are required, except under very limited circumstances, to engage in
personal securities transactions through Seligman's order desk. The order desk
maintains a list of securities that may not be purchased due to a possible
conflict with clients. All Employees are also required to disclose all
securities beneficially owned by them upon commencement of employment and at the
end of each calendar year.
A copy of the Code of Ethics is on public file with, and is available upon
request from, the Securities and Exchange Commission (SEC). You can access it
through the SEC's Internet site, http://www.sec.gov.
9
<PAGE>
Control Persons and Principal Holders of Securities
Control Persons
As of January 7, 2000, there was no person or persons who controlled the Fund,
either through a significant ownership of shares or any other means of control.
Principal Holders
As of January 7, 2000, Merrill Lynch, Pierce, Fenner & Smith Incorporated for
the Sole Benefit of Its Customers, Attn. Fund Administrator, 4800 Deer Lake
Drive East, 3rd Floor, Jacksonville, FL 32246, owned of record 13.40% of the
Fund's Class A shares of capital stock then outstanding, 32.70% of the Fund's
Class B shares of capital stock then outstanding and 43.18% of the Fund's Class
D shares of capital stock then outstanding.
As of January 7, 2000, 5.59% of the Fund's Class C shares of capital stock then
outstanding were owned of record by Lawrence A Yoble, 7844 Sycamore Drive,
Lincoln, NE 68506, 10.45% of the Fund's Class C shares of capital stock then
outstanding were owned of record by Salomon Smith Barney Inc, For Account
00165160588, 333 West 34th Street, 3rd Floor, New York, NY 10001 and 7.32% of
the Fund's Class C shares of capital stock then outstanding were owned of record
by Prudential Securities Inc FBO The Prina Securities LLC, 102 East 2nd Street,
Safford, AZ 85546.
Management Ownership
As of January 7, 2000, Directors and officers of the Fund as a group owned less
than 1% of the Fund's Class A Class B, Class C or Class D shares of capital
stock then outstanding.
Investment Advisory and Other Services
Investment Manager
Seligman manages the Fund. Seligman is a successor firm to an investment banking
business founded in 1864 which has thereafter provided investment services to
individuals, families, institutions, and corporations. On December 29, 1988, a
majority of the outstanding voting securities of Seligman was purchased by Mr.
William C. Morris and a simultaneous recapitalization of Seligman occurred. See
Appendix for further history of Seligman.
All of the officers of the Fund listed above are officers or employees of
Seligman. Their affiliations with the Fund and with Seligman are provided under
their principal business occupations.
The Fund pays Seligman a management fee for its services, calculated daily and
payable monthly. 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. For the
one-month period ended October 31, 1999, the Fund paid Seligman $295,732, equal
to .95% per annum of its average daily net assets. For the fiscal year ended
September 30, 1999, the Fund paid Seligman $5,574,591, equal to .95% per annum
of its average daily net assets. For the fiscal year ended September 30, 1998,
the Fund paid Seligman $8,859,463, equal to .93% per annum of its average daily
net assets, and for the fiscal year ended September 30, 1997, the Fund paid
Seligman $8,127,464, equal to .94% per annum of its average daily net assets.
The Fund pays all of its expenses other than those assumed by Seligman,
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
10
<PAGE>
and expenses of Directors of the Fund not employed by or serving as a Director
of Seligman or its affiliates, insurance premiums and extraordinary expenses
such as litigation expenses.
The Management Agreement provides that Seligman 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.
The Management Agreement was initially approved by the Board of Directors at a
Meeting held on October 11, 1988 and by the shareholders at a meeting held on
December 15, 1988. Amendments to the Management Agreement, effective January 1,
1996, to increase the fee rate payable to the Manager by the Fund, were approved
by the Board of Directors on September 21, 1995 and by the shareholders at a
special meeting held on December 12, 1995. The Management Agreement will
continue in effect until December 31 of each year if (1) such continuance is
approved in the manner required by the 1940 Act (i.e., 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) Seligman
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 Seligman, without penalty, on 60 days' written
notice to Seligman 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 Seligman's business.
Principal Underwriter
Seligman Advisors, an affiliate of Seligman, 100 Park Avenue, New York, New York
10017, acts as general distributor of the shares of the Fund and of the other
mutual funds in the Seligman Group. Seligman Advisors is an "affiliated person"
(as defined in the 1940 Act) of Seligman, which is itself an affiliated person
of the Fund. Those individuals identified above under "Management Information"
as directors or officers of both the Fund and Seligman Advisors are affiliated
persons of both entities.
Services Provided by the Investment Manager
Under the Management Agreement, dated December 29, 1988, as amended January 1,
1996, subject to the control of the Board of Directors, Seligman 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. Seligman provides the
Fund with such office space, administrative and other services and executive and
other personnel as are necessary for Fund operations. Seligman pays all of the
compensation of directors of the Fund who are employees or consultants of
Seligman and of the officers and employees of the Fund. Seligman also provides
senior management for Seligman Data Corp., the Fund's shareholder service agent.
Service Agreements
There are no other management-related service contracts under which services are
provided to the Fund.
Other Investment Advice
No person or persons, other than directors, officers, or employees of Seligman,
regularly advise the Fund with respect to its investments.
Dealer Reallowances
Dealers and financial advisors receive a percentage of the initial sales charge
on sales of Class A shares and Class C shares of the Fund, as set forth below:
11
<PAGE>
Class A shares:
- ---------------
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
As a % of as a % of Net As a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- ------------------ ----------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 - $99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and over 0 0 0
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
Class C shares:
- ---------------
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
As a % of as a % of Net As a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- ------------------ ----------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 - $1,000,000 0 0 0
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
Seligman Services, Inc. (Seligman Services), an affiliate of Seligman, is a
limited purpose broker/dealer. Seligman Services is eligible to receive
commissions from certain sales of Fund shares. For the fiscal years ended
September 30, 1999, 1998 and 1997, and for the one-month period ended October
31, 1999, Seligman Services received commissions in the amounts of $7,868,
$14,982, $25,093 and $302, respectively.
Rule 12b-1 Plan
The Fund has adopted an Administration, Shareholder Services and Distribution
Plan (12b-1 Plan) in accordance with Section 12(b) of the 1940 Act and Rule
12b-1 thereunder.
Under the 12b-1 Plan, the Fund may pay to Seligman Advisors an administration,
shareholder services and distribution fee in respect of the Fund's Class A,
Class B, Class C, and Class D shares. Payments under the 12b-1 Plan may include,
but are not limited to: (1) compensation to securities dealers and other
organizations (Service Organizations) for providing distribution assistance with
respect to assets invested in the Fund; (2) compensation to Service
Organizations for providing administration, accounting and other shareholder
services with respect to Fund shareholders; and (3) 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 Seligman Advisors' costs
incurred in connection with its marketing efforts with respect to shares of the
Fund. Seligman, in its sole discretion, may also make similar payments to
Seligman Advisors from its own resources, which may include the management fee
that Seligman receives from the Fund. Payments made by the Fund under the 12b-1
Plan are intended to be used to encourage sales of the Fund, as well as to
discourage redemptions.
Fees paid by the Fund under the 12b-1 Plan with respect to any class of shares
may not be used to pay expenses incurred solely in respect of any other class or
any other Seligman fund. Expenses attributable to more than one class of the
Fund are allocated between the classes in accordance with a methodology approved
by the Fund's Board of Directors. The Fund may participate in joint distribution
activities with other Seligman funds, and the expenses of such activities will
be allocated among the applicable funds based on relative sales, in accordance
with a methodology approved by the Board.
12
<PAGE>
Class A
- -------
Under the 12b-1 Plan, the Fund, with respect to Class A shares, pays quarterly
to Seligman Advisors a service fee at an annual rate of up to .25% of the
average daily net asset value of the Class A shares. This fee is used by
Seligman Advisors exclusively to make payments to Service Organizations which
have entered into agreements with Seligman Advisors. Such Service Organizations
receive from Seligman Advisors 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 maintenance of shareholder accounts. The fee payable to Service
Organizations from time to time shall, within such limits, be determined by the
Directors of the Fund. The Fund is not obligated to pay Seligman Advisors for
any such costs it incurs in excess of the fee described above. No expense
incurred in one fiscal year by Seligman Advisors with respect to Class A shares
of the Fund may be paid from Class A 12b-1 fees received from the Fund in any
other fiscal year. If the Fund's 12b-1 Plan is terminated in respect of Class A
shares, no amounts (other than amounts accrued but not yet paid) would be owed
by the Fund to Seligman Advisors with respect to Class A shares. The total
amount paid by the Fund to Seligman Advisors in respect of Class A shares for
the fiscal year ended September 30, 1999 was $759,146, equivalent to .24% per
annum of the Class A shares' average daily net assets, and for the one-month
period ended October 31, 1999 was $39,286, equivalent to .24% per annum of the
Class A shares' average daily net assets.
Class B
- -------
Under the 12b-1 Plan, the Fund, with respect to Class B shares, pays monthly a
12b-1 fee at an annual rate of up to 1% of the average daily net asset value of
the Class B shares. This fee is comprised of (1) a distribution fee equal to
.75% per annum, which is paid directly to a third party, FEP Capital, L.P., to
compensate it for having funded, at the time of sale of Class B shares (i) a 4%
sales commission to Service Organizations and (ii) a payment of up to .25% of
sales to Seligman Advisors to help defray its costs of distributing Class B
shares; and (2) a service fee of up to .25% per annum which is paid to Seligman
Advisors. The service fee is used by Seligman Advisors exclusively to make
payments to Service Organizations which have entered into agreements with
Seligman Advisors. Such Service Organizations receive from Seligman Advisors a
continuing service fee of up to .25% on an annual basis, payable quarterly, of
the average daily net assets of Class B shares attributable to the particular
Service Organization for providing personal service and/or maintenance of
shareholder accounts. The amounts expended by Seligman Advisors or FEP Capital,
L.P. in any one year upon the initial purchase of Class B shares of the Fund may
exceed the 12b-1 fees paid by the Fund in that year. The Fund's 12b-1 Plan
permits expenses incurred in respect of Class B shares in one fiscal year to be
paid from Class B 12b-1 fees received from the Fund in any other fiscal year;
however, in any fiscal year the Fund is not obligated to pay any 12b-1 fees in
excess of the fees described above. Seligman Advisors and FEP Capital, L.P. are
not reimbursed for expenses which exceed such fees. If the Fund's 12b-1 Plan is
terminated in respect of Class B shares, no amounts (other than amounts accrued
but not yet paid) would be owed by that Fund to Seligman Advisors or FEP
Capital, L.P. with respect to Class B shares. The total amount paid by the Fund
to Seligman Advisors in respect of Class B shares for the fiscal year ended
September 30, 1999 was $627,782, equivalent to 1% per annum of the Class B
shares' average daily net assets, and for the one-month period ended October 31,
1999 was $38,787, equivalent to 1% per annum of the Class B shares' average
daily net assets.
Class C
- -------
Under the 12b-1 Plan, the Fund, with respect to Class C shares, pays monthly to
Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of the average daily
net asset value of the Class C shares. This fee is used by Seligman Advisors as
follows: During the first year following the sale of Class C shares, a
distribution fee of .75% of the average daily net assets attributable to Class C
shares is used, along with any CDSC proceeds during the first eighteen months,
to (1) reimburse Seligman Advisors for its payment at the time of sale of Class
C shares of a 1.25% sales commission to Service Organizations, and (2) pay for
other distribution expenses, 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 other marketing costs of
Seligman Advisors. In addition, during the first year following the sale of
Class C shares, a service fee of up to .25% of the average daily net assets
attributable to such Class C shares is used to reimburse Seligman Advisors for
its prepayment to Service Organizations at the time of sale of Class C shares of
a service fee of .25% of the net asset value of the Class C shares sold (for
shareholder services to be provided to Class C shareholders over the course of
the one year
13
<PAGE>
immediately following the sale). The payment of services fees to Seligman
Advisors is limited to amounts Seligman Advisors actually paid to Service
Organizations at the time of sale as service fees. After the initial one-year
period following a sale of Class C shares, the entire 12b-1 fee attributable to
such Class C shares is paid to Service Organizations for providing continuing
shareholder services and distribution assistance in respect of the Fund. The
total amount paid by the Fund to Seligman Advisors in respect of Class C shares
from May 27, 1999 (inception) to September 30, 1999 was $859, equivalent to 1%
per annum of the Class C shares' average daily net assets, and for the one-month
period ended October 31, 1999 was $332, equivalent to 1% per annum of the Class
C shares' average daily net assets.
The amounts expended by Seligman Advisors in any one year with respect to Class
C shares of the Fund may exceed the 12b-1 fees paid by the Fund in that year.
The Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in respect
of Class C shares in one fiscal year to be paid from Class C 12b-1 fees in any
other fiscal year; however, in any fiscal year the Fund is not obligated to pay
any 12b-1 fees in excess of the fees described above.
As of September 30, 1999, (the most recent calendar quarter for which such
information was reported), Seligman Advisors incurred $6,034 of unreimbursed
expenses in respect of the Fund's Class C shares. This amount is equal to 1.50%
of the net assets of Class C shares at September 30, 1999.
If the 12b-1 Plan is terminated in respect of Class C shares of the Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to Class C shares.
Class D
- -------
Under the 12b-1 Plan, the Fund, with respect to Class D shares, pays monthly to
Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of the average daily
net asset value of the Class D shares. This fee is used by Seligman Advisors as
follows: During the first year following the sale of Class D shares, a
distribution fee of .75% of the average daily net assets attributable to such
Class D shares is used, along with any CDSC proceeds, to (1) reimburse Seligman
Advisors for its payment at the time of sale of Class D shares of a .75% sales
commission to Service Organizations, and (2) pay for other distribution
expenses, 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 other marketing costs of Seligman
Advisors. In addition, during the first year following the sale of Class D
shares, a service fee of up to .25% of the average daily net assets attributable
to such Class D shares is used to reimburse Seligman Advisors for its prepayment
to Service Organizations at the time of sale of Class D shares of a service fee
of .25% of the net asset value of the Class D shares sold (for shareholder
services to be provided to Class D shareholders over the course of the one year
immediately following the sale). The payment of service fees to Seligman
Advisors is limited to amounts Seligman Advisors actually paid to Service
Organizations at the time of sale as service fees. After the initial one-year
period following a sale of Class D shares, the entire 12b-1 fee attributable to
such Class D shares is paid to Service Organizations for providing continuing
shareholder services and distribution assistance in respect of the Fund. The
total amount paid by the Fund to Seligman Advisors in respect of Class D shares
for the fiscal year ended September 30, 1999 was $2,073,650, equivalent to 1%
per annum of the Class D shares' average daily net assets, and for the one-month
period ended October 31, 1999 was $105,168, equivalent to 1% per annum of the
Class D shares' average daily net assets.
The amounts expended by Seligman Advisors in any one year with respect to Class
D shares of the Fund may exceed the 12b-1 fees paid by the Fund in that year.
The Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in respect
of Class D shares in one fiscal year to be paid from Class D 12b-1 fees in any
other fiscal year; however, in any fiscal year the Fund is not obligated to pay
any 12b-1 fees in excess of the fees described above.
As of September 30, 1999, (the most recent calendar quarter for which such
information was reported), Seligman Advisors incurred $149,083 of unreimbursed
expenses in respect of the Fund's Class D shares. This amount is equal to .11%
of the net assets of Class D shares at September 30, 1999.
If the 12b-1 Plan is terminated in respect of Class D shares of the Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to Class D shares.
Payments made by the Fund under the 12b-1 Plan for its fiscal year ended
September 30, 1999 and for the one-month period ended October 31, 1999 were
spent on the following activities in the following amounts:
14
<PAGE>
<TABLE>
<CAPTION>
Year ended September 30, 1999
Class A Class B Class C* Class D
------- ------- ------- -------
<S> <C> <C> <C> <C>
Compensation to underwriters $-0- $-0- $859 $228,340
Compensation to broker/dealers $759,146 $156,985 $-0- $1,845,310
Other** $-0- $470,797 $-0- $-0-
<CAPTION>
One-month ended October 31, 1999
Class A Class B Class C Class D
------- ------- ------- -------
<S> <C> <C> <C> <C>
Compensation to underwriters $-0- $-0- $332 $7,218
Compensation to broker/dealers $39,286 $9,697 $-0- $97,950
Other** $-0- $29,090 $-0- $-0-
</TABLE>
* From May 27, 1999 (inception) to September 30, 1999.
** Payment is made to FEP Capital, L. P. to compensate it for having funded at
the time of sale, payments to broker/dealers and underwriters.
The 12b-1 Plan was approved on March 19, 1992 by the Board of Directors,
including a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund and who have no direct or indirect
financial interest in the operation of the 12b-1 Plan or in any agreement
related to the 12b-1 Plan (Qualified Directors) and was approved by shareholders
of the Fund at a Special Meeting of the Shareholders held on May 1, 1992. The
12b-1 Plan became effective in respect of the Class A shares on June 1, 1992.
The 12b-1 Plan was approved in respect of the Class B shares on March 21, 1996
by the Board of Directors of the Fund, including a majority of the Qualified
Directors, and became effective in respect of the Class B shares on April 22,
1996. The 12b-1 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 in respect of the Class D shares on May 1, 1993. The 12b-1 Plan
was approved in respect of the Class C shares on May 20, 1999 by the Directors,
including a majority of the Qualified Directors, and became effective in respect
of the Class C shares on June 1, 1999. The 12b-1 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 12b-1 Plan may not be amended to increase materially the amounts
payable to Service Organizations with respect to a class without the approval of
a majority of the outstanding voting securities of the class. If the amount
payable in respect of Class A shares under the 12b-1 Plan is proposed to be
increased materially, the Fund will either (1) permit holders of Class B shares
to vote as a separate class on the proposed increase or (2) establish a new
class of shares subject to the same payment under the 12b-1 Plan as existing
Class A shares, in which case the Class B shares will thereafter convert into
the new class instead of into Class A shares. No material amendment to the 12b-1
Plan may be made except by vote of a majority of both the Directors and the
Qualified Directors.
The 12b-1 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 12b-1 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. The
12b-1 Plan is reviewed by the Directors annually.
Seligman Services acts as a broker/dealer of record for shareholder accounts
that do not have a designated financial advisor and receives compensation from
the Fund pursuant to the 12b-1 Plan for providing personal services and account
maintenance to such accounts and other distribution services. For the fiscal
years ended September 30, 1999, 1998 and 1997, and for the one-month period
ended October 31, 1999, Seligman Services received distribution and service fees
from the Fund pursuant to its 12b-1 Plan of $47,494, $87,176, $65,586 and $-0-,
respectively.
15
<PAGE>
Brokerage Allocation and Other Practices
Brokerage Transactions
Seligman will seek the most favorable price and execution in the purchase and
sale of portfolio securities of the Fund. When two or more of the investment
companies in the Seligman Group or other investment advisory clients of Seligman
desire to buy or sell the same security at the same time, the securities
purchased or sold are allocated by Seligman 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.
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.
For the fiscal years ended September 30, 1999, 1998 and 1997, and for the
one-month period ended October 31, 1999, the Fund paid total brokerage
commissions to others for execution, research and statistical services in the
amounts of $1,313,281, $1,769,832, $1,446,040 and $74,289, respectively.
Commissions
For the fiscal years ended September 30, 1999, 1998 and 1997, and for the
one-month period ended October 31, 1999, the Fund did not execute any portfolio
transactions with, and therefore did not pay any commissions to, any broker
affiliated with either the Fund, Seligman, or Seligman Advisors.
Brokerage Selection
Consistent with seeking the most favorable price and execution when buying or
selling portfolio securities, Seligman may give consideration to the research,
statistical, and other services furnished by brokers or dealers to Seligman 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 Seligman to be beneficial to the Fund. In
addition, Seligman 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 Seligman in connection with its services to clients other than the
Fund.
Directed Brokerage
During its fiscal year ended September 30, 1999, and for the one-month period
ended October 31, 1999, neither the Fund nor Seligman, through an agreement or
understanding with a broker, or otherwise through an internal allocation
procedure, directed any of the Fund's brokerage transactions to a broker because
of research services provided.
Regular Broker-Dealers
During its fiscal year ended September 30, 1999, and for the one-month period
ended October 31, 1999, the Fund did not acquire securities of its regular
brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or of its
parents.
Capital Stock and Other Securities
Capital Stock
The Fund is authorized to issue 500,000,000 shares of capital stock, each with a
par value of $0.10, divided into four classes, designated Class A common stock,
Class B common stock, Class C common stock, and Class D common stock. Each share
of the Fund's Class A, Class B, Class C, 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,
16
<PAGE>
certain other class expenses and has exclusive voting rights with respect to any
matter to which a separate vote of any class is required by the 1940 Act or
Maryland law. The Fund has adopted a multiclass plan pursuant to Rule 18f-3
under the 1940 Act permitting the issuance and sale of multiple classes of
common stock. In accordance with the Articles of Incorporation, the Board of
Directors may authorize the creation of additional classes of common stock with
such characteristics as are permitted by the multiclass plan and Rule 18f-3. The
1940 Act requires that where more than one class exists, each class must be
preferred over all other classes in respect of assets specifically allocated to
such class. 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.
Other Securities
The Fund has no authorized securities other than common stock.
Purchase, Redemption, and Pricing of Shares
Purchase of Shares
Class A
- -------
Class A shares may be purchased at a price equal to the next determined net
asset value per share, plus an initial sales charge.
Purchases of Class A shares by a "single person" (as defined below under
"Persons Entitled to Reductions") may be eligible for the following reductions
in initial sales charges:
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 mutual
funds in the Seligman Group which are sold with an initial sales charge, reaches
levels indicated in the sales charge schedule set forth in the Prospectus.
The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of the Fund and shares of the other Seligman mutual
funds sold with an initial sales charge with the total net asset value of shares
of those mutual funds already owned that were sold with an initial sales charge
and the total net asset value of shares of Seligman Cash Management Fund which
were acquired through an exchange of shares of another Seligman mutual fund on
which there was an initial sales charge at the time of purchase to determine
reduced sales charges in accordance with the schedule in the prospectus. The
value of the shares owned, including the value of shares of Seligman Cash
Management Fund acquired in an exchange of shares of another Seligman mutual
fund on which there was an initial sales charge at the time of purchase will be
taken into account in orders placed through a dealer, however, only if Seligman
Advisors is notified by an investor or a dealer of the amount owned by the
investor at the time the purchase is made and is furnished sufficient
information to permit confirmation.
A Letter of Intent allows an investor to purchase Class A shares over a 13-month
period at reduced initial sales charges 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 an initial sales charge of the other Seligman mutual
funds already owned and the total net asset value of shares of Seligman Cash
Management Fund which were acquired through an exchange of shares of another
Seligman mutual fund on which there was an initial sales charge at the time of
purchase. Reduced sales charges 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.
Persons Entitled to Reductions. Reductions in initial sales charges apply to
purchases of Class A shares by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
trustee or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code of 1986,
as amended, organizations tax exempt under Section 501(c)(3) or (13) of the
Internal Revenue Code, and non-qualified employee benefit plans that satisfy
uniform criteria are considered "single persons" for this purpose. The uniform
criteria are as follows:
17
<PAGE>
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
prospectus, reports, and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
Eligible Employee Benefit Plans. The table of sales charges in the Prospectus
applies to sales to "eligible employee benefit plans," except that the Fund may
sell shares at net asset value to "eligible employee benefit plans" which have
at least (1) $500,000 invested in the Seligman Group of mutual funds or (2) 50
eligible employees to whom such plan is made available. Such sales must be made
in connection with a payroll deduction system of plan funding or other systems
acceptable to Seligman Data Corp., the Fund's shareholder service agent.
"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.
Such sales are believed to require limited sales effort and sales-related
expenses and therefore are made at net asset value. Contributions or account
information for plan participation also should be transmitted to Seligman Data
Corp. by methods which it accepts. Additional information about "eligible
employee benefit plans" is available from financial advisors or Seligman
Advisors.
Further Types of Reductions. Class A shares may also be issued without an
initial sales charge in the following instances:
(1) 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;
(2) to separate accounts established and maintained by an insurance company
which are exempt from registration under Section 3(c)(11) of the 1940 Act;
(3) to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with Seligman Advisors;
(4) to financial institution trust departments;
(5) to registered investment advisers exercising discretionary investment
authority with respect to the purchase of Fund shares;
(6) to accounts of financial institutions or broker/dealers that charge account
management fees, provided Seligman or one of its affiliates has entered
into an agreement with respect to such accounts;
(7) pursuant to sponsored arrangements with organizations which make
recommendations to, or permit group solicitations of, its employees,
members or participants in connection with the purchase of shares of the
Fund;
(8) to other investment companies in the Seligman Group in connection with a
deferred fee arrangement for outside Directors;
(9) to certain "eligible employee benefit plans" as discussed above;
(10) to those partners and employees of outside counsel to the Fund or its
directors or trustees who regularly provide advice and services to the
Fund, to other funds managed by Seligman, or to their directors or
trustees; and
18
<PAGE>
(11) in connection with sales pursuant to a 401(k) alliance program which has an
agreement with Seligman Advisors.
CDSC Applicable to Class A Shares. Class A shares purchased without an initial
sales charge in accordance with the sales charge schedule in the Fund's
Prospectus, or pursuant to a Volume Discount, Right of Accumulation, or Letter
of Intent are subject to a CDSC of 1% on redemptions of such shares within
eighteen months of purchase. Employee benefit plans eligible for net asset value
sales (as described below) may be subject to a CDSC of 1% for terminations at
the plan level only, on redemptions of shares purchased within eighteen months
prior to plan termination. The 1% CDSC will be waived on shares that were
purchased through Morgan Stanley Dean Witter & Co. by certain Chilean
institutional investors (i.e. pension plans, insurance companies, and mutual
funds). Upon redemption of such shares within an eighteen-month period, Morgan
Stanley Dean Witter will reimburse Seligman Advisors a pro rata portion of the
fee it received from Seligman Advisors at the time of sale of such shares.
See "CDSC Waivers" below for other waivers which may be applicable to Class A
shares.
Class B
Class B shares may be purchased at a price equal to the next determined net
asset value, without an initial sales charge. However, Class B shares are
subject to a CDSC if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original purchase price, whichever is less.
Years Since Purchase CDSC
- -------------------- ----
Less than 1 year .......................................... 5%
1 year or more but less than 2 years ...................... 4%
2 years or more but less than 3 years ..................... 3%
3 years or more but less than 4 years ..................... 3%
4 years or more but less than 5 years ..................... 2%
5 years or more but less than 6 years ..................... 1%
6 years or more ........................................... 0%
Approximately eight years after purchase, Class B shares will convert
automatically to Class A shares. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert automatically to
Class A shares along with the underlying shares on which they were earned.
Conversion occurs at the end of the month which precedes the eighth anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to the
Class B shares acquired in the exchange will apply, and the holding period of
the shares exchanged will be tacked onto the holding period of the shares
acquired. Class B shareholders of the Fund exercising the exchange privilege
will continue to be subject to the Fund's CDSC schedule if such schedule is
higher or longer than the CDSC schedule relating to the new Class B shares. In
addition, Class B shares of the Fund acquired by exchange will be subject to the
Fund's CDSC schedule if such schedule is higher or longer than the CDSC schedule
relating to the Class B shares of the Seligman mutual fund from which the
exchange has been made.
Class C
- -------
Class C shares may be purchased at a price equal to the next determined net
asset value, plus an initial sales charge. Purchases of Class C shares by a
"single person" may be eligible for the reductions in initial sales charges
described above for Class A shares. Class C shares are subject to a CDSC of 1%
if the shares are redeemed within eighteen months of purchase, charged as a
percentage of the current net asset value or the original purchase price,
whichever is less.
19
<PAGE>
Class D
- -------
Class D shares may be purchased at a price equal to the next determined net
asset value, without an initial sales charge. However, Class D shares are
subject to a CDSC of 1% if the shares are redeemed within one year of purchase,
charged as a percentage of the current net asset value or the original purchase
price, whichever is less. Unlike Class B shares, Class D shares do not
automatically convert to Class A shares after eight years.
Systematic Withdrawals. Class B, Class C, and Class D shareholders who reinvest
both their dividends and capital gain distributions to purchase additional
shares of the Fund may use the Systematic Withdrawal Plan to withdraw up to 12%,
10%, and 10%, respectively, of the value of their accounts per year without the
imposition of a CDSC. Account value is determined as of the date the systematic
withdrawals begin.
CDSC Waivers. The CDSC on Class B, Class C, and Class D shares (and certain
Class A shares, as discussed above) will be waived or reduced in the following
instances:
(1) on redemptions following the death or disability (as defined in Section
72(m)(7) of the Internal Revenue Code) of a shareholder or beneficial
owner;
(2) in connection with (1) distributions from retirement plans qualified under
Section 401(a) of the Internal Revenue 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), (2) distributions from a custodial account under
Section 403(b)(7) of the Internal Revenue Code or an IRA due to death,
disability, minimum distribution requirements after attainment of age 70
1/2 or, for accounts established prior to January 1, 1998, attainment of
age 59 1/2, and (3) a tax-free return of an excess contribution to an IRA;
(3) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund;
(4) 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 any registered investment
management company;
(5) in whole or in part, in connection with systematic withdrawals;
(6) in connection with participation in the Merrill Lynch Small Market 401(k)
Program.
If, with respect to a redemption of any Class A, Class B, Class C, or Class D
shares sold by a dealer, the CDSC is waived because the redemption qualifies for
a waiver as set forth above, the dealer shall remit to Seligman Advisors
promptly upon notice, an amount equal to the payment or a portion of the payment
made by Seligman Advisors at the time of sale of such shares.
Fund Reorganizations
Class A and Class C shares may be issued without an initial sales charge in
connection with the acquisition of cash and securities owned by other investment
companies. Any CDSC will be waived in connection with the redemption of shares
of the Fund if the Fund is combined with another Seligman mutual fund, or in
connection with a similar reorganization transaction.
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 charge), 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 Seligman 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 charges, and may discontinue accepting securities as payment for Fund
shares at any time without notice. The Fund will not accept restricted
20
<PAGE>
securities in payment for shares. The Fund will value accepted securities in the
manner provided for valuing portfolio securities of the Fund.
Offering Price
When you buy or sell fund shares, you do so at the Class's net asset value (NAV)
next calculated after Seligman Advisors accepts your request. Any applicable
sales charge will be added to the purchase price for Class A shares and Class C
shares.
NAV per share of each class of the Fund is determined as of the close of regular
trading on the New York Stock Exchange (normally, 4:00 p.m. Eastern time), on
each day that the NYSE is open for business. The NYSE is currently closed on New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The Fund
will also determine NAV for each class on each day in which there is a
sufficient degree of trading in the Fund's portfolio securities that the NAV of
Fund shares might be materially affected. NAV per share for a class is computed
by dividing such class's 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 management fee,
are accrued daily and taken into account for the purpose of determining NAV. The
NAV of Class B, Class C, and Class D shares will generally be lower than the NAV
of Class A shares as a result of the higher 12b-1 fees with respect to such
shares.
Portfolio securities, including open short positions and options written, are
valued at the last sale price on the securities exchange or securities market on
which such securities primarily are traded. Securities 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 60 days remaining to
maturity are generally valued at amortized cost. Short-term obligations with
more than 60 days remaining to maturity will be valued at current market value
until the sixtieth day prior to maturity, and will then be valued on an
amortized cost basis based on the value on such date unless the Board determines
that this amortized cost value does not represent fair market value. Expenses
and fees, including the investment management fee, are accrued daily and taken
into account for the purpose of determining the net asset value of Fund shares.
Generally, trading in foreign securities, as well as US 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.
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 US dollars at the mean between the bid and offer prices of such
currencies against US 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.
Specimen Price Make-Up
Under the current distribution arrangements between the Fund and Seligman
Advisors, Class A shares and Class C shares are sold with a maximum initial
sales charge of 4.75% and 1.00%(1), respectively, and Class B and Class D shares
are sold at NAV(2). Using each Class's NAV at October 31, 1999, the maximum
offering price of the Fund's shares is as follows:
Class A
- -------
Net asset value and offering price per share..................... $12.93
Maximum sales charge (4.75% of offering price)................... .64
------
Offering price to public......................................... $13.57
======
21
<PAGE>
Class B
- -------
Net asset value and offering price per share(2).................. $12.03
======
Class C
- -------
Net asset value and offering price per share..................... $12.03
Maximum sales charge (1.00% of offering price(1))................ .12
------
Offering price to public......................................... $12.15
======
Class D
- -------
Net asset value and offering price per share(2) ................. $12.03
======
- ----------
(1) In addition to the 1.00% front-end sales charge, Class C shares are subject
to a 1% CDSC if you redeem your shares within 18 months of purchase.
(2) Class B shares are subject to a CDSC declining from 5% in the first year
after purchase to 0% after six years. Class D shares are also subject to a
1% CDSC if you redeem your shares within one year of purchase.
Redemption in Kind
The procedures for selling Fund shares under ordinary circumstances are set
forth in the Prospectus. In unusual circumstances, payment may be postponed, or
the right of redemption postponed for more than seven days, if the orderly
liquidation of portfolio securities is prevented by the closing of, or
restricted trading on, the NYSE during periods of emergency, or such other
periods as ordered by the SEC. Under these circumstances, redemption proceeds
may be made in securities. If payment is made in securities, a shareholder may
incur brokerage expenses in converting these securities to cash.
Taxation of the Fund
The Fund is qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code. For each
year so qualified, the Fund will not be subject to federal income taxes on its
net investment income and capital gains, if any, realized during any taxable
year, which it distributes to its shareholders, provided that at least 90% of
its net investment income and net short-term capital gains are distributed to
shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to shareholders, whether received
in cash or reinvested in additional shares. To the extent designated as 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 the shares have been held by a shareholder. 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. Individual shareholders generally will be
subject to federal tax on distributions of net capital gains at a maximum rate
of 20% if designated as derived from the Fund's capital gains from property held
for more than one year.
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
20% in respect of shares held for more than one year. 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
22
<PAGE>
30 days after such date, the holder acquires (including shares acquired 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 charge
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales charge by reason of the Exchange or Reinstatement Privilege offered by
the Fund. Any sales charge not taken into account in determining the tax basis
of shares sold or exchanged within 90 days after acquisition will be added to
the shareholder's tax basis in the shares acquired pursuant to the Exchange or
Reinstatement Privilege.
The Fund will generally be subject to an excise tax of 4% on the amount of any
income or capital gains, above certain permitted levels, distributed to
shareholder 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 advisors concerning the effect of
federal income taxes in their individual circumstances.
Unless a shareholder includes a certified taxpayer identification number (social
security number for individuals) on the account application and certifies that
the shareholder is not subject to backup withholding, the fund is required to
withhold and remit to the US 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
deducted from the shareholder's account and offset against any undistributed
dividends and capital gain distributions. The Fund also reserves the right to
close any account which does not have a certified taxpayer identification
number.
Underwriters
Distribution of Securities
The Fund and Seligman Advisors are parties to a Distributing Agreement, dated
January 1, 1993, under which Seligman Advisors acts as the exclusive agent for
distribution of shares of the Fund. Seligman Advisors accepts orders for the
purchase of Fund shares, which are offered continuously. As general distributor
of the Fund's capital stock, Seligman Advisors allows reallowances to all
dealers on sales of Class A shares and Class C shares, as set forth above under
"Dealer Reallowances." Seligman Advisors retains the balance of sales charges
and any CDSCs paid by investors.
Total initial sales charges paid by shareholders of Class A and Class C shares
of the Fund for the fiscal year ended September 30, 1999, and for the one-month
period ended October 31, 1999, amounted to $329,477 and $9,923, respectively, of
which $36,866 and $1,010, respectively, was retained by Seligman Advisors. Total
initial sales charges paid by shareholders of Class A shares of the Fund for the
fiscal years ended September 30, 1998 and 1997 amounted to $1,040,233 and
$1,825,779, respectively, of which $117,076 and $203,896, respectively, was
retained by Seligman Advisors. No Class C shares of the Fund were issued or
outstanding during the fiscal years ended September 30, 1998 and 1997.
Compensation
Seligman Advisors, which is an affiliated person of Seligman, which is an
affiliated person of the Fund, received the following commissions and other
compensation from the Fund during its fiscal year ended September 30, 1999 and
the one-month period ended October 31, 1999:
23
<PAGE>
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Discounts and Redemptions and
Commissions Repurchases
(Class A and Class C (CDSC on Class A, Class C and Brokerage Other
Sales Charges Retained) Class D Shares Retained) Commissions Compensation (1)
----------------------- ------------------------ ----------- ----------------
<S> <C> <C> <C> <C>
Year ended
September 30,
1999 $36,866 $115,637 $-0- $11,285
One-month period
ended October 31,
1999 $1,010 $4,992 $-0- $247
</TABLE>
(1) Seligman Advisors has sold its rights to collect any the distribution fees
paid by the Fund in respect of Class B shares and any CDSC imposed on
redemptions of Class B shares to FEP Capital, L.P., in connection with an
arrangement with FEP Capital, L.P. as discussed above under "12b-1 Plan."
In connection with this arrangement, Seligman Advisors receives payments
from FEP Capital, L.P. based on the value of Class B shares sold. Such
payments received for the fiscal year ended September 30, 1999 and the
one-month period ended October 31, 1999, are reflected in the table.
Other Payments
Seligman Advisors shall pay broker/dealers, from its own resources, a fee on
purchases of Class A shares of $1,000,000 or more (NAV sales), calculated as
follows: 1.00% of NAV sales up to but not including $2 million; .80% of NAV
sales from $2 million up to but not including $3 million; .50% of NAV sales from
$3 million up to but not including $5 million; and .25% of NAV sales from $5
million and above. The calculation of the fee will be based on assets held by a
"single person," 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 purchases made on behalf of any other fiduciary or
individual account.
Seligman Advisors shall also pay broker/dealers, from its own resources, a fee
on assets of certain investments in Class A shares of the Seligman mutual funds
participating in an "eligible employee benefit plan" that are attributable to
the particular broker/dealer. The shares eligible for the fee are those on which
an initial sales charge was not paid because either the participating eligible
employee benefit plan has at least (1) $500,000 invested in the Seligman mutual
funds or (2) 50 eligible employees to whom such plan is made available. Class A
shares representing only an initial purchase of Seligman Cash Management Fund
are not eligible for the fee. Such shares will become eligible for the fee once
they are exchanged for shares of another Seligman mutual fund. The payment is
based on cumulative sales for each Plan during a single calendar year, or
portion thereof. The payment schedule, for each calendar year, is as follows:
1.00% of sales up to but not including $2 million; .80% of sales from $2 million
up to but not including $3 million; .50% of sales from $3 million up to but not
including $5 million; and .25% of sales from $5 million and above.
Seligman Advisors may from time to time assist dealers by, among other things,
providing sales literature to, and holding informational programs for the
benefit of, dealers' registered representatives. Dealers may limit the
participation of registered representatives in such informational programs by
means of sales incentive programs which may require the sale of minimum dollar
amounts of shares of Seligman mutual funds. Seligman Advisors 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 will be made in the form of cash or, if permitted, may take the
form of non-cash payments. The non-cash payments will include (i) business
seminars at Seligman's headquarters or other locations, (ii) travel expenses,
including meals, entertainment and lodging, incurred in connection with trips
taken by qualifying registered representatives and members of their families to
places within or outside the United States, or (iii) the receipt of certain
merchandise. The cash payments may include payment of various business expenses
of the dealer. The cost to Seligman Advisors of such promotional activities and
payments shall be consistent with the rules of the National Association of
Securities Dealers, Inc., as then in effect.
24
<PAGE>
Calculation of Performance Data
The average annual total returns for the Fund's Class A shares for the one-,
five-, and ten-year periods through October 31, 1999, were (4.93)%, 7.18% and
12.25%, respectively. These returns were computed by subtracting the maximum
sales charge of 4.75% of public offering price and assuming that all of the
dividends and distributions paid by the Fund over the relevant time period were
reinvested. It was then assumed that at the end of 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). Table A below illustrates the total return
(income and capital) on Class A shares of the Fund, assuming all dividends and
gain distributions are reinvested in additional taken in shares. It shows that a
$1,000 investment in Class A shares, assuming payment of the initial 4.75% sales
charge, made on October 31, 1989, had a value of $3,176 on October 31, 1999,
resulting in an aggregate total return of 217.58%.
The average annual total returns for the Fund's Class B shares for the one-year
period ended October 31, 1999 and for the period from April 22, 1996 (inception)
through October 31, 1999, were (5.78)% and (1.21)%, respectively. These returns
were computed assuming that all dividends and distributions paid by the Fund's
Class B shares, if any, were reinvested over the relevant time period. It was
then assumed that at the end of each period, the entire amount was redeemed,
subtracting the applicable CDSC. Table B illustrates the total return (income
and capital) on Class B shares of the Fund, assuming all dividends and gain
distributions are reinvested in additional shares. It shows that a $1,000
investment in Class B shares on April 22, 1996 (commencement of operations of
Class B shares) had a value of $958 on October 31, 1999, resulting in an
aggregate total return of (4.19)%.
The total return for the Fund's Class C shares from May 27, 1999 (inception)
through October 31, 1999 was (3.17)%. This return was computed by subtracting
the maximum sales charge of 1% of public offering price and assuming that all
dividends and distributions paid by the Fund's Class C shares, if any, were
reinvested over the time period. It was then assumed that at the end of the
period, the entire amount was redeemed, subtracting the 1% CDSC, if applicable.
Table C illustrates the total return (income and capital) on Class C shares of
the Fund, assuming all dividends and gain distributions are reinvested in
additional shares. It shows that a $1,000 investment in Class C shares on May
27, 1999 (commencement of operations of Class C shares) had a value of $968 on
October 31, 1999, resulting in an aggregate total return of (3.17)%.
The average annual total returns for the Fund's Class D shares for the one- and
five-year periods ended October 31, 1999 and for the period from May 3, 1993
(inception) through October 31, 1999, were (1.90)%, 7.37% and 11.40%,
respectively. These returns were computed assuming that all of the dividends and
distributions paid by the Fund's Class D shares, if any, were reinvested over
the relevant time period. It was then assumed that at the end of each period,
the entire amount was redeemed, subtracting for the one-year period the 1% CDSC,
if applicable. Table D illustrates the total return (income and capital) on
Class D shares of the Fund, assuming all dividends and gain distributions are
reinvested in additional shares. It shows that a $1,000 investment in Class D
shares made on May 3, 1993 (commencement of operations of Class D shares) had a
value of $2,017 on October 31, 1999, resulting in an aggregate total return of
101.71%.
The results shown below 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.
25
<PAGE>
<TABLE>
<CAPTION>
TABLE A - CLASS A
Value of Value of Total Value
Year Initial Capital Gain Value of Of Total
Ended(1) Investment(2) Distributions Dividends Investment(2) Return(1)(3)
- -------- ------------ ------------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
10/31/90 $753 $-0- $-0- $753
10/31/91 1,247 3 1 1,251
10/31/92 1,200 123 1 1,324
10/31/93 1,424 461 1 1,886
10/31/94 1,332 806 1 2,139
10/31/95 1,545 1,262 1 2,808
10/31/96 1,621 1,428 1 3,050
10/31/97 1,856 1,851 2 3,709
10/31/98 1,434 1,746 1 3,181
10/31/99 1,432 1,743 1 3,176 217.58%
<CAPTION>
TABLE B - CLASS B
Value of Value of Total Value
Period Initial Capital Gain Value of Of Total
Ended(1) Investment(2) Distributions Dividends Investment(2) Return(1)(3)
- -------- ------------ ------------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
10/31/96 $966 $-0- $-0- $966
10/31/97 1,094 71 -0- 1,165
10/31/98 834 157 -0- 991
10/31/99 802 156 -0- 958 (4.19)%
<CAPTION>
TABLE C - CLASS C
Value of Value of Total Value
Period Initial Capital Gain Value of Of Total
Ended(1) Investment(2) Distributions Dividends Investment(2) Return(1)(3)
- -------- ------------ ------------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
10/31/99 $968 $-0- $-0- $968 (3.17)%
<CAPTION>
TABLE D - CLASS D
Value of Value of Total Value
Period Initial Capital Gain Value of Of Total
Ended(1) Investment(2) Distributions Dividends Investment(2) Return(1)(3)
- -------- ------------ ------------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
10/31/93 $1,266 $-0- $-0- $1,266
10/31/94 1,165 248 -0- 1,413
10/31/95 1,335 504 -0- 1,839
10/31/96 1,389 594 -0- 1,983
10/31/97 1,574 819 -0- 2,393
10/31/98 1,200 836 -0- 2,036
10/31/99 1,189 828 -0- 2,017 101.71%
</TABLE>
- ----------
(1) For the ten-year period ended October 31, 1999 for Class A shares, from
commencement of operations of Class B shares on April 22, 1996, from
commencement of operations of Class C shares on May 27, 1999 and from
commencement of operations of Class D shares on May 3, 1993.
(2) The "Value of Initial Investment" as of the date indicated (1) reflects the
effect of the maximum initial sales charge or CDSC, if applicable, (2)
assumes that all dividends and capital gain distributions were taken in
cash, and (3) reflects changes in the net asset value of the shares
purchased with the hypothetical initial investment. "Total Value of
Investment" (1) reflects the effect of the CDSC, if applicable, and (2)
assumes investment of all dividends and capital gain distributions.
(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 charge for Class A and Class C
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 CDSC on Class
26
<PAGE>
B, Class C and Class D shares, if applicable; and finally, by dividing the
difference between the amount of the hypothetical initial investment at the
beginning of the period and its total value at the end of the period by the
amount of the hypothetical initial investment.
The total returns and average annual total returns of Class A shares quoted from
time to time for periods through June 1, 1992, do not reflect the deduction of
12b-1 fees, because the 12b-1 Plan was implemented on that date. The total
returns and average annual total returns for Class A and Class D shares for
periods through December 31, 1995 do not reflect the increased management fee,
approved by shareholders on December 12, 1995, and effective on January 1, 1996.
These fees, if reflected, would reduce the performance quoted.
From time to time, reference may be made in advertising or promotional material
to performance information, including mutual fund rankings, prepared by Lipper
Analytical Services, Inc., an independent reporting service which monitors the
performance of mutual funds. In calculating the total return of the Fund's Class
A, Class B, Class C, and Class D shares, the Lipper analysis assumes investment
of all dividends and distributions paid but does not take into account
applicable sales charges. The Fund may also refer in advertisements 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.
The Fund's advertising or promotional material may make reference to the Fund's
"Beta," "Standard Deviation," or "Alpha." Beta measures the volatility of the
Fund, as compared to that of the overall market. Standard deviation measures how
widely the Fund's performance has varied from its average performance, and is an
indicator of the Fund's potential for volatility. Alpha measures the difference
between the returns of the Fund and the returns of the market, adjusted for
volatility.
Financial Statements
Effective for the period ended October 31, 1999, the Fund's Board of Directors
approved a change of the Fund's fiscal year end from September 30 to October 31.
The Annual Report to Shareholders for the full fiscal year ended September 30,
1999, and for the one-month period ended October 31, 1999, contains a schedule
of the investments of the Fund as of September 30, 1999 and as of October 31,
1999, as well as certain other financial information. The financial statements
and notes included in the Annual Report, and the Independent Auditors' Report
thereon, are incorporated herein by reference. The Annual Report will be
furnished without charge to investors who request copies of this SAI.
General Information
Custodian. Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
Missouri 64105 serves as custodian of the Fund. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for the Fund.
Auditors. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York, NY
10281.
27
<PAGE>
Appendix
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of J. & W.
Seligman & Co. In the years that followed, the Seligman Complex played a major
role in the geographical expansion and industrial development of the United
States.
The Seligman Complex:
...Prior to 1900
o Helps finance America's fledgling railroads through underwritings.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
o Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o Participates in hundreds of 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.
28
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 50
mutual fund portfolios.
o Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal 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 plc of London, known as
Seligman Henderson Co., to offer global investment products.
o Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
o Launches Seligman Global Fund Series, Inc., which today offers five
separate series: Seligman International Growth Fund, Seligman Global
Smaller Companies Fund, Seligman Global Technology Fund, Seligman Global
Growth Fund and Seligman Emerging Markets Fund.
o Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
o Launches innovative Seligman New Technologies Fund, Inc., a closed-end
"interval" fund seeking long-term capital appreciation by investing in
technology companies, including venture capital investing..
...2000
o Introduces Seligman Time Horizon/Harvester Series, Inc., an asset
allocation type mutual fund containing four funds: Seligman Time Horizon 30
Fund, Seligman Time Horizon 20 Fund, Seligman Time Horizon 10 Fund and
Seligman Harvester Fund.
29
<PAGE>
SELIGMAN
- --------------------------- [Graphic Omitted]
FRONTIER
FUND, INC.
ANNUAL REPORT
SEPTEMBER 30, 1999
AND
THE ONE MONTH ENDED
OCTOBER 31, 1999
----------
SEEKING GROWTH
IN CAPITAL VALUE
THROUGH
INVESTMENTS IN
SMALL-COMPANY
GROWTH STOCKS
[Logo Omitted]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE EVALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE ...
Established in 1864, Seligman has a history of providing
financial services marked not by fanfare, but rather by a
[Graphic Omitted] quiet and firm adherence to financial prudence.
While the world has changed dramatically in the 135 years
since Seligman first opened its doors, the firm has
continued to offer its clients high-quality investment
solutions through changing times.
In the late 19th century, as the country grew, Seligman
helped finance the westward expansion of the railroads, the
construction of the Panama Canal, and the launching of urban
transit systems. In the first part of the 20th century, as
JAMES, JESSE, AND America became an industrial power, the firm helped fund the
JOSEPH SELIGMAN, growing capital needs of the nascent automobile and steel 1870
industries.
With the formation of Tri-Continental Corporation in 1929 --
today, the nation's largest diversified publicly-traded
closed-end investment company -- Seligman began shifting its emphasis from
investment banking to investment management. Despite the stock market crash and
ensuing depression, Seligman was convinced of the importance that investment
companies could have in building wealth for individual investors and began
managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
TABLE OF CONTENTS
To the Shareholders .................................. 1
Interview With Your Portfolio Manager ................ 2
Performance Overview ................................. 4
Portfolio Overview ................................... 8
Portfolio of Investments ............................. 10
Statements of Assets and Liabilities ................. 18
Statements of Operations ............................. 19
Statements of Changes in Net Assets .................. 20
Notes to Financial Statements ........................ 21
Financial Highlights ................................. 25
Report of Independent Auditors and
For More Information ............................... 27
Board of Directors and Executive Officers ............ 28
Glossary of Financial Terms .......................... 29
<PAGE>
TO THE SHAREHOLDERS
For the fiscal year ended September 30, 1999, Seligman Frontier Fund trailed
markedly behind its benchmark indices. During this time, the Fund posted a total
return of 6.35%, based on the net asset value of Class A shares, while the
Russell 2000 Index returned 19.08%, the Russell 2000 Growth Index returned
32.63%, and the Lipper Small Cap Funds Average returned 25.41%.
This poor showing for the fiscal year was due primarily to a very disappointing
first calendar quarter, from which the Fund has been unable to fully recover.
During the first calendar quarter, the environment was generally unfavorable for
small-capitalization stocks, and the Fund's benchmarks posted poor results.
However, the Fund posted a particularly dismal return of -18.88% for the
quarter. This loss was largely due to a few heavily weighted holdings in health
care -- a sector which suffered dramatically due to concerns regarding
government regulation. The Fund's lack of exposure to Internet issues also
contributed to the poor performance.
In the Fund's last report in March 1999, we assured you that we were taking
action to regain the Fund's standing among its benchmarks. The evidence of the
past six months shows that our commitment is indeed paying off. For the six
months ended September 30, 1999, the Fund's return of 9.98%, based on the net
asset value of Class A shares, outpaced the 9.10% return for the Russell 2000
Growth Index and the 8.25% return for the Russell 2000 Index, but trailed the
12.36% return for the Lipper Small Cap Funds Average.
We remain committed to monitoring the Fund's risk, relative to its benchmarks,
in an effort to avoid poor relative performance in the future. And, we remain
committed to the Fund's stringent investment process, which includes relying
upon research and fundamental analysis. This means that the Fund does not buy
securities simply because its peers are doing so. We believe that this policy is
crucial to the Fund's long-term success.
We have recently expanded the Fund's portfolio management team so that the Fund
has the resources it needs to seek additional opportunities, particularly in the
technology sector. The Fund does, however, continue to avoid direct Internet
exposure because of the sector's high valuations relative to the broader market,
general lack of earnings, and typically poor fundamentals. While these stocks
have, as a group, enjoyed exceptional returns based on stock price appreciation
over the past few years, this industry is fiercely competitive and we believe
that many of these startup companies will be unable to survive over the long
term. However, the Fund is selectively investing in companies that we believe
will be able to profit from the growth of the Internet, such as semiconductors
and semiconductor equipment.
J. & W. Seligman & Co. Incorporated, your Fund's manager, and Seligman Data
Corp., your Fund's shareholder service agent, have completed preparations for
potential computer problems related to the Year 2000 (Y2K). All internal
mission-critical systems, software, and interfaces have been successfully tested
for Y2K compliance. We have devoted considerable time and resources to Y2K
during the past several years, and we believe that shareholders will not be
inconvenienced or experience disruptions as a result of the Corporation's entry
into the new millennium. In addition, your portfolio management team considers
the potential ramifications of the Y2K computer issue when making decisions on
which securities should be held by the Fund.
Seligman Frontier Fund's fiscal year end has been changed to October 31 from
September 30. This change was made to conform the Fund's year end to the date
used for determining annual distributions for federal income tax purposes. For
the one-month period ended October 31, 1999, the Fund returned -2.27% based on
the net asset value of Class A shares. Going forward, shareholder reports will
be mailed following the Fund's semiannual and annual periods ending in April and
October.
We appreciate your continued support of Seligman Frontier Fund and look forward
to serving your investment needs for many years to come. A discussion with your
Portfolio Manager regarding the Fund's performance, as well as the Fund's
investment results, portfolio of investments, and financial statements, follows
this letter.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
November 19, 1999
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
ARSEN MRAKOVCIC
Q: HOW DID SELIGMAN FRONTIER FUND PERFORM DURING THE PAST 13 MONTHS?
A: Seligman Frontier Fund returned 6.35%, based on the net asset value of Class
A shares, for the one-year period ended September 30, 1999, while the
Russell 2000 Index returned 19.08%, the Russell 2000 Growth Index returned
32.63%, and the Lipper Small Cap Funds Average returned 25.41%. For the
one-month period ended October 31, 1999, the Fund returned -2.27% based on
the net asset value of Class A shares.
The Fund's underperformance versus its benchmarks was almost entirely due to
events of the first calendar quarter of 1999, which was difficult for
small-cap stocks overall. The Fund's benchmarks posted negative returns for
this period. However, the Fund's return of -18.88% was particularly
disappointing and was the result of a few specific and, unfortunately,
heavily weighted positions, which experienced sharp declines. The third
quarter of 1999 was also a difficult quarter, but the Fund's return of
-4.55% was in line with the small-cap market in general and the Fund's
benchmarks all delivered negative performance.
During the past 13 months, the Fund posted strong returns during two
calendar quarters, the fourth quarter of 1998 and the second quarter of
1999, with returns of 19.21% and 15.21%, respectively. These returns were in
line with the Fund's Lipper peer group and with its Russell benchmarks.
[PHOTO OMITTED]
SELIGMAN SMALL COMPANY TEAM: (FROM LEFT) MIKE SULLIVAN, MANDHIR UPPAL, SONIA
THOMAS (ADMINISTRATIVE ASSISTANT) BRUCE ZIRMAN, TED HILLENMEYER, MICHAEL
ALPERT, (SEATED) RICK RUVKUN, ARSEN MRAKOVCIC (PORTFOLIO MANAGER)
The Fund's performance during the month of October 1999 suffered as a result
of the earthquake in Taiwan, which negatively affected some of our
technology holdings during the month.
Q: WHAT FACTORS MOST INFLUENCED THE FUND'S PERFORMANCE?
A: The primary factor that hurt the Fund's performance for the thirteen-month
period was the sharp decline of some of the Fund's health care holdings
during the first calendar quarter of 1999. At that time, many health care
stocks fell dramatically as investors became concerned about the impact that
the Balanced Budget Act of 1997 (BBA) would have on the profits of these
companies following government funding reductions.
Nursing homes were particularly affected, not only by the legislation itself
but, to a much greater extent, by negative investor reaction to the
legislation. While we did not own any nursing homes directly, fallout
extended to nursing home supply providers, which we did own. At that time,
some of the Fund's health care stocks represented considerably overweighted
positions, and this sector downturn had a significant impact on performance
for that quarter, from which the Fund is still recovering.
In addition, during this time, only two areas of the small-cap sector -- the
Internet and biotechnology -- have delivered exceptional performance.
However, the
A TEAM APPROACH
Seligman Frontier Fund is managed by the Seligman Small Company Team, headed
by Arsen Mrakovcic. Mr. Mrakovcic is assisted in the management of the Fund
by a group of seasoned research professionals who are responsible for
identifying small companies in specific industry groups that offer the
greatest potential for growth.
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
ARSEN MRAKOVCIC
Fund has intentionally avoided these areas because we believe that they are
highly speculative. While we are convinced that the Internet is a
significant, and growing force in the economy, we are just as sure that many
of today's Internet startups will be unable to survive the intense
competition in this area. However, the Internet is a high-growth industry
which cannot be ignored. To gain exposure to this group, we have sought
opportunities in companies that provide structure for the Internet, such as
semiconductors and semiconductor equipment. The Fund's exposure to these
stocks contributed positively to portfolio performance during the period
overall, but hurt performance in October 1999 when concern that the
earthquake in Taiwan would negatively affect these companies dampened the
sector's performance. We have expanded our portfolio management team as part
of our effort to find additional opportunities in this area.
Q: HAVE YOU MADE ANY CHANGES TO THE FUND'S INVESTMENT STRATEGY DURING THE PAST
13 MONTHS?
A: While the BBA had a much greater impact than could have reasonably been
foreseen, the effect on the portfolio would have been less acute had we not
been as heavily weighted as we were in some specific stocks. At that time,
we took steps to ensure that our sector weightings remain closer to those of
our benchmarks. In this way, we hope to limit some of the Fund's relative
risk and avoid a repeat of the first calendar quarter of 1999 in which the
Fund's returns had strayed far from its benchmarks.
Q: WHAT IS YOUR OUTLOOK FOR THE SMALL-CAP GROWTH SECTOR?
A: The small-cap growth sector is historically volatile and delivers most of
its gains in short periods of time. That is why investors in this area must
keep a long-term time horizon. Those who try to time the market -- getting
out during difficult environments and attempting to get in during better
times -- are likely to miss opportunities, penalizing their portfolio's
long-term performance.
The fundamentals underpinning small-cap stocks remain strong, and these
issues are currently offering exceptional values relative to larger-cap
stocks. Based upon almost any valuation criteria -- price to earnings, price
to book, price to sales, price to cash flow -- these stocks are at 25-year
lows relative to the S&P 500. Small-cap stocks have also sustained a
relative earnings per share growth of two to three times that of the S&P
500.
While the fundamentals are attractive, investor acceptance is a critical
factor, and without it prices cannot move higher. The environment of the
past year has been difficult in this regard. The high level of uncertainty
in the stock market has caused money to flow to the largest and best-known
names in the market. However, we believe that this is now changing. The
global economic crisis has subsided, corporate profits are increasing, and
the economy is showing signs of slowing to a more sustainable rate of
growth. The more settled environment that should result will likely give
investors the confidence to seek more attractively valued opportunities in
the stock market, particularly among the small-cap sector.
We believe that today's small-cap market offers exceptional opportunities
for long-term, patient investors who are willing to ride out high volatility
and remain invested in this fundamentally strong and attractively valued
sector.
3
<PAGE>
PERFORMANCE OVERVIEW
OCTOBER 31, 1999
This chart compares a $10,000 hypothetical investment made in Seligman
Frontier Fund Class A shares, with and without the initial 4.75% maximum sales
charge, and assumes that all distributions within the period are invested in
additional shares, for the 10-year period ended October 31, 1999, to a $10,000
investment made in the Lipper Small Cap Funds Average (Lipper Average), the
Russell 2000 Growth Index, and the Russell 2000 Index for the same period. The
performances of Seligman Frontier Fund Class B, Class C, and Class D shares are
not shown in this chart but are included in the table on page 5. It is important
to keep in mind that the Lipper Average excludes the effect of sales charges,
and the Russell indices exclude the effect of any fees or sales charges.
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Seligman Frontier
Fund Class A
----------------- Lipper
With Without Small Cap Russell 2000 Russell 2000
Date Load Load Funds Average Growth Index Index
- -------- ---- ----- ----- ----- -----
10/31/89 9524 10000 10000 10000 10000
8732 9169 9323 9221 9150
9230 9692 9805 9558 9637
9950 10448 10419 9812 10079
10/31/90 7530 7907 8038 7271 7366
9486 9961 9907 8866 9218
10881 11425 11390 10524 10870
11565 12143 11931 10751 11101
10/31/91 12515 13141 12918 11532 12267
13923 14620 14452 12842 13741
12842 13484 13623 12321 12329
12573 13202 13522 12312 11878
10/31/92 13245 13908 14072 12625 12223
15604 16384 16047 14541 13900
14651 15383 15576 14263 13056
16366 17185 16633 15194 14010
10/31/93 18860 19803 18226 16717 15605
20196 21206 18870 17248 15979
19521 20497 17937 16377 14954
18738 19675 17291 15904 14194
10/31/94 21387 22457 18614 16665 15462
20410 21430 18174 16212 14876
23006 24156 19669 17559 16259
27173 28531 22639 19869 18980
10/31/95 28078 29482 22782 19719 18645
27879 29273 24026 21067 19735
32588 34218 27587 23351 22658
28942 30389 25372 21242 19553
10/31/96 30505 32030 27739 22993 21130
32042 33644 29710 25059 22694
28856 30298 26992 23363 19589
36401 38221 33794 28334 24491
10/31/97 37087 38942 35443 29737 25603
36302 38117 34729 29588 24673
41853 43946 39493 33269 28150
37113 38968 34891 28990 24169
10/31/98 31807 33398 30847 26216 21543
34706 36441 35328 29686 26453
31193 32753 35169 30190 27088
33920 35616 38007 31138 27676
10/31/99 31758 33346 37871 30114 27851
The stocks of smaller companies may be subject to above-average market price
fluctuations.
The performances of Class B, Class C, and 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.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS C CLASS B CLASS D
SINCE SINCE SINCE
INCEPTION SIX ONE FIVE 10 INCEPTION INCEPTION
5/27/99* MONTHS* YEAR YEARS YEARS 4/22/96 5/3/93
----------- ---------- -------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge n/a (3.00)% (4.93)% 7.18% 12.25% n/a n/a
Without Sales Charge n/a 1.81 (0.15) 8.23 12.80 n/a n/a
CLASS B**
With CDSC+ n/a (3.48) (5.78) n/a n/a (1.21)% n/a
Without CDSC n/a 1.52 (0.82) n/a n/a (0.49) n/a
CLASS C**
With Sales Charge and CDSC (3.17)% n/a n/a n/a n/a n/a n/a
Without Sales Charge and CDSC (1.23) n/a n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC n/a 0.43 (1.90) n/a n/a n/a n/a
Without CDSC n/a 1.43 (0.91) 7.37 n/a n/a 11.40%
LIPPER SMALL CAP FUNDS AVERAGE*** 5.61o 7.69 22.77 15.26 14.24 9.46++ 14.63+++
RUSSELL 2000 GROWTH INDEX*** 2.66o 2.82 29.28 12.49 10.79 6.07++ 12.36+++
RUSSELL 2000 INDEX*** (1.69)o (0.25) 14.87 12.56 11.65 7.54++ 12.18+++
</TABLE>
NET ASSET VALUE
OCTOBER 31, 1999 APRIL 30, 1999 OCTOBER 31, 1998
-------------------- ------------------ ----------------------
CLASS A $12.93 $12.70 $12.95
CLASS B 12.03 11.85 12.13
CLASS C 12.03 n/a n/a
CLASS D 12.03 11.86 12.14
CAPITAL GAIN INFORMATION
FOR THE ONE MONTH ENDED OCTOBER 31, 1999
REALIZED $0.020
UNREALIZED 0.545oo
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
- -------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of dividends and capital gain distributions. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class A shares also reflect the effect of
the service fee of up to 0.25% under the Administration, Shareholder
Services and Distribution (12b-1) Plan after June 1, 1992, only. Returns for
Class B shares are calculated with and without the effect of the maximum 5%
contingent deferred sales charge ("CDSC"), charged on redemptions made
within one year of the date of purchase, declining to 1% in the sixth year
and 0% thereafter. Returns for Class C shares are calculated with and
without the effect of the initial 1% maximum sales charge and the 1% CDSC
that is charged on redemptions made within 18 months of the date of
purchase. Returns for Class D shares are calculated with and without the
effect of the 1% CDSC, charged on redemptions made within one year of the
date of purchase.
*** The Lipper Small Cap Funds Average (Lipper Average) is an average of all
funds that invest primarily in companies with market capitalizations of less
than $1 billion at the time of purchase. The Russell 2000 Growth Index
consists of small-company growth stocks. The Russell 2000 Index consists of
small-company stocks. The Lipper Average, the Russell 2000 Growth Index, and
the Russell 2000 Index are unmanaged benchmarks that assume reinvestment of
all distributions and exclude the effect of fees and/or sales charges. The
monthly performance of the Lipper Average is used in the Performance
Overview. Investors cannot invest directly in an average or an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o From May 31, 1999.
oo Represents the per share amount of net unrealized appreciation of portfolio
securities as of October 31, 1999.
5
<PAGE>
PERFORMANCE OVERVIEW
SEPTEMBER 30, 1999
This chart compares a $10,000 hypothetical investment made in Seligman
Frontier Fund Class A shares, with and without the initial 4.75% maximum sales
charge, and assumes that all distributions within the period are invested in
additional shares, for the 10-year period ended September 30, 1999, to a $10,000
investment made in the Lipper Small Cap Funds Average (Lipper Average), the
Russell 2000 Growth Index, and the Russell 2000 Index for the same period. The
performances of Seligman Frontier Fund Class B, Class C, and Class D shares are
not shown in this chart but are included in the table on page 7. It is important
to keep in mind that the Lipper Average excludes the effect of sales charges,
and the Russell indices exclude the effect of any fees or sales charges.
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Seligman Frontier
Fund Class A
----------------- Lipper
With Without Small Cap Russell 2000 Russell 2000
Date Load Load Funds Average Growth Index Index
- ---- ---- ------- ------------- ------------ ------------
10/31/89 9524 10000 10000 10000 10000
8732 9169 9323 9221 9150
9230 9692 9805 9558 9637
9950 10448 10419 9812 10079
10/31/90 7530 7907 8038 7271 7366
9486 9961 9907 8866 9218
10881 11425 11390 10524 10870
11565 12143 11931 10751 11101
10/31/91 12515 13141 12918 11532 12267
13923 14620 14452 12842 13741
12842 13484 13623 12321 12329
12573 13202 13522 12312 11878
10/31/92 13245 13908 14072 12625 12223
15604 16384 16047 14541 13900
14651 15383 15576 14263 13056
16366 17185 16633 15194 14010
10/31/93 18860 19803 18226 16717 15605
20196 21206 18870 17248 15979
19521 20497 17937 16377 14954
18738 19675 17291 15904 14194
10/31/94 21387 22457 18614 16665 15462
20410 21430 18174 16212 14876
23006 24156 19669 17559 16259
27173 28531 22639 19869 18980
10/31/95 28078 29482 22782 19719 18645
27879 29273 24026 21067 19735
32588 34218 27587 23351 22658
28942 30389 25372 21242 19553
10/31/96 30505 32030 27739 22993 21130
32042 33644 29710 25059 22694
28856 30298 26992 23363 19589
36401 38221 33794 28334 24491
10/31/97 37087 38942 35443 29737 25603
36302 38117 34729 29588 24673
41853 43946 39493 33269 28150
37113 38968 34891 28990 24169
10/31/98 31807 33398 30847 26216 21543
34706 36441 35328 29686 26453
31193 32753 35169 30190 27088
33920 35616 38007 31138 27676
10/31/99 31758 33346 37871 30114 27851
The stocks of smaller companies may be subject to above-average market price
fluctuations.
The performances of Class B, Class C, and 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.
6
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS C CLASS B CLASS D
SINCE SINCE SINCE
INCEPTION SIX ONE FIVE 10 INCEPTION INCEPTION
5/27/99* MONTHS* YEAR YEARS YEARS 4/22/96 5/3/93
----------- ---------- -------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge n/a 4.75% 1.30% 8.42% 12.01% n/a n/a
Without Sales Charge n/a 9.98 6.35 9.48 12.56 n/a n/a
CLASS B**
With CDSC+ n/a 4.61 0.66 n/a n/a (0.55)% n/a
Without CDSC n/a 9.61 5.66 n/a n/a 0.19 n/a
CLASS C**
With Sales Charge and CDSC (0.83)% n/a n/a n/a n/a n/a n/a
Without Sales Charge and CDSC 1.15 n/a n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC n/a 8.61 4.57 n/a n/a n/a n/a
Without CDSC n/a 9.61 5.57 8.61 n/a n/a 11.98%
LIPPER SMALL CAP FUNDS AVERAGE*** 3.51o 12.36 25.41 15.07 13.51 9.07++ 14.48+++
RUSSELL 2000 GROWTH INDEX*** 9.00o 9.10 32.63 12.16 9.89 5.44++ 12.09+++
RUSSELL 2000 INDEX*** (2.09)o 8.25 19.08 12.38 10.93 7.60++ 12.28+++
</TABLE>
NET ASSET VALUE
SEPTEMBER 30, 1999 MARCH 31, 1999 SEPTEMBER 30, 1998
--------------------- ------------------ -----------------------
CLASS A $13.23 $12.03 $12.44
CLASS B 12.32 11.24 11.66
CLASS C 12.32 n/a n/a
CLASS D 12.32 11.24 11.67
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 1999
REALIZED $0.055
UNREALIZED 0.81500
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
- ------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of dividends and capital gain distributions. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class A shares also reflect the effect of
the service fee of up to 0.25% under the Administration, Shareholder
Services and Distribution (12b-1) Plan after June 1, 1992, only. Returns for
Class B shares are calculated with and without the effect of the maximum 5%
contingent deferred sales charge ("CDSC"), charged on redemptions made
within one year of the date of purchase, declining to 1% in the sixth year
and 0% thereafter. Returns for Class C shares are calculated with and
without the effect of the initial 1% maximum sales charge and the 1% CDSC
that is charged on redemptions made within 18 months of the date of
purchase. Returns for Class D shares are calculated with and without the
effect of the 1% CDSC, charged on redemptions made within one year of the
date of purchase.
*** The Lipper Small Cap Funds Average (Lipper Average) is an average of all
funds that invest primarily in companies with market capitalizations of less
than $1 billion at the time of purchase. The Russell 2000 Growth Index
consists of small-company growth stocks. The Russell 2000 Index consists of
small-company stocks. The Lipper Average, the Russell 2000 Growth Index, and
the Russell 2000 Index are unmanaged benchmarks that assume reinvestment of
all distributions and exclude the effect of fees and/or sales charges. The
monthly performance of the Lipper Average is used in the Performance
Overview. Investors cannot invest directly in an average or an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o From May 31, 1999.
oo Represents the per share amount of net unrealized appreciation of portfolio
securities as of September 30, 1999.
7
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
----------------------------
OCTOBER 31, SEPTEMBER 30,
ISSUES COST VALUE 1999 1999 1998
----- ------------- ------------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS:
Advertising ...................................... 2 $ 5,788,564 $ 6,526,969 1.8 0.9 1.3
Business Goods and Services ...................... 19 75,831,484 74,489,745 20.2 19.5 16.5
Capital Goods .................................... 3 12,373,083 17,472,581 4.7 5.1 4.1
Computer Hardware ................................ 1 2,773,002 1,737,928 0.5 0.9 --
Computer Software and Services ................... 14 50,351,303 56,588,602 15.3 17.1 5.8
Consulting Services .............................. 4 12,686,026 14,497,291 3.9 4.8 4.1
Consumer Goods and Services ...................... 6 16,873,626 20,578,058 5.6 7.3 5.3
Drugs and Health Care ............................ 16 62,419,919 43,035,387 11.7 12.4 17.6
Electronics ...................................... 11 29,930,487 48,995,739 13.3 13.3 7.3
Energy ........................................... 4 7,273,481 9,217,562 2.5 2.3 4.0
Environmental Management ......................... 1 641,430 420,591 0.1 0.3 4.9
Financial Services ............................... 2 8,273,989 10,159,700 2.8 3.2 3.1
Industrial Goods and Services .................... 1 3,858,784 2,814,237 0.8 0.5 1.5
Leisure and Entertainment ........................ 1 6,934,963 10,839,987 2.9 3.0 1.8
Manufacturing .................................... 1 1,919,961 492,456 0.1 0.4 1.5
Media and Broadcasting ........................... 2 5,901,008 6,447,103 1.7 2.2 6.0
Paper and Packaging .............................. -- -- -- -- -- 0.7
Real Estate Investment Trust ..................... 1 10,511,554 3,901,813 1.1 1.0 0.8
Retail Trade ..................................... -- -- -- -- -- 2.8
Schools .......................................... 4 15,303,375 12,514,416 3.4 3.2 1.1
Telecommunications ............................... 4 7,918,319 11,954,550 3.2 2.4 2.0
Transportation ................................... 2 2,911,788 3,873,825 1.0 0.8 0.4
---- ------------- ------------- ------ ------ ------
99 340,476,146 356,558,540 96.6 100.6 92.6
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES .................... 1 12,550,558 12,550,558 3.4 (0.6) 7.4
---- ------------- ------------- ------ ------ ------
NET ASSETS ......................................... 100 $353,026,704 $369,109,098 100.0 100.0 100.0
==== ============= ============= ====== ====== ======
</TABLE>
LARGEST INDUSTRIES
OCTOBER 31, 1999
[FIGURES BELOW REPRESENT BAR CHART IN ITS PRINTED FORM]
Percent of
Net Assets
----------
BUSINESS GOODS AND SERVICES $74,489,745 20.2%
COMPUTER SOFTWARE AND SERVICES 56,588,602 14.8%
ELECTRONICS $48,995,739 13.3%
DRUGS AND HEALTH CARE $43,035,387 11.7%
CONSUMER GOODS AND SERVICES $20,578,058 6.1%
8
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
APRIL 1 TO OCTOBER 31, 1999
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/99
- --------- --------------------------
Alpharma (Class A) ........... 91,400 91,400
Aspect Development ........... 120,700 120,700
CoStar Group ................. 145,670 145,670
CSG Systems International .... 192,900 192,900
DoubleClick .................. 34,200 34,200
Engage Technologies .......... 147,600 147,600
Insight Communications
(Class A) .................. 101,300 101,300
ISS Group .................... 114,100 114,100
Profit Recovery Group
International .............. 70,700 102,950(1)
Tekelec ...................... 173,200 173,200
SHARES
------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/99
- --------- ------------------------
Analog Devices ............... 217,400 --
antec ........................ 277,100 160,600
avx .......................... 263,400 230,400
Burr-Brown ................... 562,400 317,550
Calpine ...................... 245,500 --
Coach USA .................... 255,200 --
Microchip Technology ......... 262,700 107,400
PMC-Sierra ................... 63,700 31,200
Sanmina ...................... 147,100 --
Superior Services ............ 296,900 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
- -------------
(1) Includes 32,250 shares received as a result of a 3-for-2 stock split.
LARGEST PORTFOLIO HOLDINGS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SECURITY VALUE SECURITY VALUE
- -------- ------------ -------- ------------
<S> <C> <C> <C>
Burr-Brown ................... $12,533,302 MemberWorks ............... $8,054,425
Premier Parks ................ 10,839,987 ANTEC ..................... 7,774,044
NOVA ......................... 10,519,730 Microchip Technology ...... 7,152,168
National Instruments ......... 10,377,830 Teva Pharmaceutical
U.S. Foodservice ............. 10,002,444 Industries (ADRs) ....... 6,976,003
AVX .......................... 9,216,000
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
SHARES VALUE
-------- -------------
COMMON STOCKS 96.6%
ADVERTISING 1.8%
DOUBLECLICK*
Provider of Internet advertising
applications for advertisers
and web publishers 34,200 $ 4,784,794
NFO WORLDWIDE*
International provider of
consulting services 156,600 1,742,175
-------------
6,526,969
-------------
BUSINESS GOODS
AND SERVICES 20.2%
ABACUS DIRECT*
Provider of marketing
research services to the direct
marketing industry 18,700 2,738,966
ACXIOM*
Provider of data processing
services 120,000 1,976,250
AFFILIATED COMPUTER SERVICES
(CLASS A)*
Provider of information
technology services and
electronic funds transfer
processing 76,300 2,899,400
APPLIED GRAPHICS TECHNOLOGIES*
Provider of digital media
asset services; publisher of
greeting cards and calendars 150,400 1,052,800
COPART*
Auctioneer of damaged vehicles
for insurance companies 245,100 5,683,256
COSTAR GROUP*
Information provider for the
real estate industry 145,670 3,550,706
CREO PRODUCTS* (CANADA)
Developer of applications
software for the printing industry 57,000 1,457,063
CSG SYSTEMS INTERNATIONAL*
Provider of customer service for
the communications industry 192,900 6,636,966
FIRSTSERVICE* (CANADA)
Provider of property
management and
business services 273,100 3,140,650
INDUS INTERNATIONAL*
Worldwide developer and
marketer of management
software and implementation
services 446,000 2,773,562
Integrated Electrical Services*
Provider of electrical
contracting and
maintenance services 153,500 1,669,312
BUSINESS GOODS
AND SERVICES (CONTINUED)
KEYSTONE AUTOMOTIVE INDUSTRIES*
Distributor of after-market
collision replacement parts for
automobiles and light trucks 66,600 564,019
METAMOR WORLDWIDE*
International provider of
information technology
and staffing services 148,100 2,786,131
MODIS PROFESSIONAL SERVICES*
Provider of temporary
personnel services 513,800 5,748,137
NOVA*
Provider of transaction
processing services 404,605 10,519,730
PERSONNEL GROUP OF AMERICA*
Provider of personnel
staffing services 308,100 2,060,419
PROVANT*
Provider of training and
development services 378,470 6,670,534
U.S. FOODSERVICE*
Distributor of food and
related products 521,300 10,002,444
WILMAR INDUSTRIES*
Marketer and distributor of
repair and maintenance
products to the apartment
housing market 214,400 2,559,400
-------------
74,489,745
-------------
CAPITAL GOODS 4.7%
MICROCHIP TECHNOLOGY*
Supplier of field programmable
microcontrollers 107,400 7,152,168
NOVELLUS SYSTEMS*
Manufacturer of wafer
fabrication systems for the
disposition of thin films 78,600 6,089,044
UCAR INTERNATIONAL*
Manufacturer of graphite
and carbon electrodes 216,300 4,231,369
-------------
17,472,581
-------------
COMPUTER HARDWARE 0.5%
APEX*
Manufacturer of switching
systems for computer
network administrators 101,300 1,737,928
-------------
COMPUTER SOFTWARE AND
SERVICES 15.3%
Aspect Development
Provider of computer software 120,700 4,243,359
- ----------
See footnotes on page 13.
10
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
SHARES VALUE
-------- -------------
COMPUTER SOFTWARE AND
SERVICES (CONTINUED)
AVANT!*
Developer and marketer of
software products that
assist design engineers 297,700 $ 3,842,191
CAREINSITE*
Provider of Internet messaging
services for physicians 45,400 1,994,761
CBT GROUP (ADRS)* (IRELAND)
Provider of interactive
education software 120,700 2,481,894
ENGAGE TECHNOLOGIES*
Provider of Internet solutions
for web user profiles 147,600 5,189,062
INSO*
Marketer and developer of
textual information software 132,300 1,794,319
ISS GROUP*
Provider of security monitoring,
detection, and response software 114,100 4,371,456
NATIONAL INSTRUMENTS*
Provider of instrumentation
hardware and software products
for the engineering
and scientific industries 344,850 10,377,830
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechanical
design software 332,500 3,304,219
SUNGARD DATA SYSTEMS*
Provider of computer disaster
recovery services, as well as
health care information and
investment support systems 167,000 4,081,063
THQ*
Worldwide provider of inter-
active entertainment software 46,300 1,904,088
TRANSACTION SYSTEMS ARCHITECTS
(Class A)*
Worldwide developer and
marketer of software
products for electronic
funds transfer 204,100 6,282,453
UNIGRAPHICS SOLUTIONS (CLASS A)*
International provider of
services used for virtual
product development 204,600 4,411,688
VERTICALNET*
Operator of vertical trade
communities on the Internet 41,300 2,310,219
-------------
56,588,602
-------------
CONSULTING SERVICES 3.9%
CORPORATE EXECUTIVE BOARD*
Worldwide provider of consulting
services for corporations 59,800 2,244,369
FORRESTER RESEARCH*
Independent research company
which studies changes in future
technology and its impact on
businesses, consumers and society 56,100 2,662,997
PRIMARK*
Provider of information
through software and databases 139,800 3,547,425
PROFESSIONAL DETAILING*
Provider of consulting services
to the pharmaceutical industry 241,700 6,042,500
-------------
14,497,291
-------------
CONSUMER GOODS AND
SERVICES 5.6%
CAREY INTERNATIONAL*
Worldwide provider of
chauffeured vehicle service 201,900 4,309,303
MEMBERWORKS*
Provider of membership
service programs for
various industries 301,100 8,054,425
PRE-PAID LEGAL SERVICES*
Underwriter and marketer of
legal service plans 132,000 3,201,000
PROFIT RECOVERY GROUP INTERNATIONAL*
Worldwide provider of accounts
payable and auditing services 102,950 4,237,036
SITEL*
Provider of customer relation-
ship management services 104,300 469,350
TELESPECTRUM WORLDWIDE*
Provider of marketing and
customer care services 73,300 306,944
-------------
20,578,058
-------------
DRUGS AND HEALTH
CARE 11.7%
AFFYMETRIX*
Developer and manufacturer of
DNA chip technology used to
improve diagnosis, monitoring,
and treatment of diseases 13,800 1,217,850
ALPHARMA (CLASS A)
International manufacturer of
human and animal health
products 91,400 3,216,137
BARR LABORATORIES*
Developer, manufacturer, and
marketer of generic
prescription drugs 128,600 3,898,188
- ----------
See footnotes on page 13.
11
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
SHARES VALUE
-------- -------------
DRUGS AND HEALTH
CARE (CONTINUED)
DRUG EMPORIUM*
Pharmacy operator 127,200 $ 584,325
DURA PHARMACEUTICALS*
Developer and retailer of pres-
cription pharmaceutical products
for the treatment of allergies,
asthma, pneumonia, and
related respiratory conditions 248,500 3,176,140
HANGER ORTHOPEDIC GROUP*
Provider of orthopedic and
prosthetic rehabilitation
services 250,300 3,081,819
NOVEN PHARMACEUTICALS*
Developer of drug delivery
systems and technologies 93,600 921,375
OMNICARE
Provider of pharmaceutical
services to long-term care
institutions 256,900 2,376,325
PRIORITY HEALTHCARE (CLASS B)*
Pharmaceutical and medical
supply distributor to the
alternative health care industry 53,500 1,071,672
PROVINCE HEALTHCARE*
Provider of health care
services in non-urban markets 310,800 5,001,938
PSS WORLD MEDICAL*
Distributor of medical
supplies, equipment,
and pharmaceuticals 651,000 5,075,766
RENEX*
Provider of dialysis and
ancillary services 114,800 509,425
SCHEIN PHARMACEUTICAL*
Developer, manufacturer,
and vendor of generic
pharmaceuticals 140,400 1,193,400
TEVA PHARMACEUTICAL INDUSTRIES
(ADRs) (Israel)
Developer and marketer of
pharmaceutical, disposable
medical, and veterinary
products 144,300 6,976,003
TOTAL RENAL CARE HOLDINGS*
Provider of dialysis services 426,600 3,119,512
TRIANGLE PHARMACEUTICALS*
Developer of new drugs
primarily in the antiviral area 99,800 1,615,512
-------------
43,035,387
-------------
ELECTRONICS 13.3%
AVX
Manufacturer and supplier of
passive electronic
components and related
products 230,400 9,216,000
BURR-BROWN*
Manufacturer of micro-electric
data devices for business
end-users 317,550 12,533,302
C-CUBE MICROSYSTEMS*
Provider of digital video
compression and decompression
circuits and systems 53,900 2,401,919
COGNEX*
Manufacturer of machine
vision systems 177,400 5,305,369
EXAR*
Provider of integrated circuits
for communications and video
products 58,800 2,127,825
GENERAL SEMICONDUCTOR*
Designer and manufacturer
of power semiconductors 498,500 5,234,250
KLA-TENCOR*
Manufacturer of wafer and
metrology equipment 52,700 4,174,828
ORBOTECH* (ISRAEL)
Manufacturer of automated
optical inspection systems for
circuit boards and flat panel
displays 28,500 2,233,687
PHOTON DYNAMICS*
Provider of inspection and
repair systems for the flat panel
display manufacturing industry 65,600 1,996,700
PMC-SIERRA* (CANADA)
Provider of high-speed
networking circuits 31,200 2,939,625
VEECO INSTRUMENTS*
Ion beam etching and surface
measurement systems for
disk drive heads 24,500 832,234
-------------
48,995,739
-------------
ENERGY 2.5%
Barrett Resources*
Explorer, developer, and
producer of oil and gas 66,400 2,228,550
Cabot Oil & Gas (Class A)
Explorer, developer, and
producer of oil and gas 104,800 1,689,900
Pride International*
Provider of oil and gas
well services 136,300 1,874,125
- ----------
See footnotes on page 13.
12
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
SHARES VALUE
-------- -------------
ENERGY (CONTINUED)
SANTA FE SNYDER*
Explorer, producer, and
developer of oil and gas 397,100 $ 3,424,987
-------------
9,217,562
-------------
ENVIRONMENTAL
MANAGEMENT 0.1%
WASTE CONNECTIONS*
Provider of solid waste
collection, disposal, and
recycling services 27,300 420,591
-------------
FINANCIAL SERVICES 2.8%
AFFILIATED MANAGERS GROUP*
Holding company specializing
in asset management 180,000 4,815,000
Metris Companies
Direct marketer of consumer
credit cards 155,200 5,344,700
-------------
10,159,700
-------------
INDUSTRIAL GOODS AND
SERVICES 0.8%
UNITED RENTALS*
Equipment rental supplier
for the construction industry
and homeowners 151,100 2,814,237
-------------
LEISURE AND
ENTERTAINMENT 2.9%
PREMIER PARKS*
Owner and operator of
regional theme parks 374,600 10,839,987
-------------
MANUFACTURING 0.1%
AMERICAN HOMESTAR*
Retailer and producer of
manufactured homes 127,600 492,456
-------------
MEDIA AND
BROADCASTING 1.7%
INSIGHT COMMUNICATIONS (CLASS A)*
Operator of cable television and
interactive digital video 101,300 2,396,378
SBS Broadcasting* (Luxembourg)
Television and radio broadcaster 110,600 4,050,725
-------------
6,447,103
-------------
REAL ESTATE INVESTMENT
TRUST 1.1%
PRISON REALTY TRUST
Real estate investment
trust investing in prisons 383,000 3,901,813
-------------
SCHOOLS 3.4%
CAREER EDUCATION*
Provider of private
post-secondary education 212,700 4,759,163
SCHOOLS (continued)
DeVRY*
Owner and manager of higher
education systems 97,700 $ 2,057,806
ITT EDUCATIONAL SERVICES*
Provider of technology-
oriented schooling 230,800 4,558,300
LEARNING TREE INTERNATIONAL*
Provider of education and
training services for information
technology workers 62,100 1,139,147
-------------
12,514,416
-------------
TELECOMMUNICATIONS 3.2%
ANTEC*
Developer and supplier of
products for the cable
television industry 160,600 7,774,044
CONCORD COMMUNICATIONS*
Provider of performance analysis
for computer network operations 17,900 930,241
TEKELEC*
Provider of telecommunications
switching equipment 173,200 2,192,062
TRANSWITCH*
Provider of integrated semi-
conductor solutions for the
telecommunications and data
communications industries 22,500 1,058,203
-------------
11,954,550
-------------
TRANSPORTATION 1.0%
EXPEDITORS INTERNATIONAL
OF WASHINGTON
Transportation provider 76,000 2,842,875
FORWARD AIR*
Provider of transportation
services to the airline industry 34,800 1,030,950
-------------
3,873,825
-------------
TOTAL COMMON STOCKS
(Cost $340,476,146) 356,558,540
SHORT-TERM HOLDINGS 4.2%
(Cost $15,510,000) 15,510,000
-------------
TOTAL INVESTMENTS 100.8%
(COST $355,986,146) 372,068,540
OTHER ASSETS
LESS LIABILITIES (0.8)% (2,959,952)
-------------
NET ASSETS 100.0% $369,108,588
=============
- ----------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
13
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
SHARES VALUE
-------- -------------
COMMON STOCKS 100.6%
ADVERTISING 0.9%
DOUBLECLICK*
Provider of Internet advertising
applications for advertisers
and web publishers 14,500 $ 1,727,766
NFO WORLDWIDE*
International provider of
consulting services 156,600 1,996,650
-------------
3,724,416
-------------
BUSINESS GOODS
AND SERVICES 19.5%
ABACUS DIRECT*
Provider of marketing
research services to the direct
marketing industry 18,700 2,282,569
ACXIOM*
Provider of data processing
services 120,000 2,358,750
AFFILIATED COMPUTER SERVICES
(CLASS A)*
Provider of information
technology services and
electronic funds transfer
processing 118,400 4,810,000
APPLIED GRAPHICS TECHNOLOGIES*
Provider of digital media
asset services; publisher of
greeting cards and calendars 265,400 2,313,956
COPART*
Auctioneer of damaged vehicles
for insurance companies 245,100 4,542,009
CoSTAR GROUP*
Information provider for the
real estate industry 140,070 3,348,548
CREO PRODUCTS* (CANADA)
Developer of applications
software for the printing industry 57,000 1,405,406
CSG Systems International*
Provider of customer service for
the communications industry 148,800 4,078,050
FIRSTSERVICE* (CANADA)
Provider of property
management and
business services 320,500 3,876,047
INDUS INTERNATIONAL*
Worldwide developer and
marketer of management
software and implementation
services 446,000 2,327,563
INNOTRAC
Provider of technology support
and services for large
corporations 30,100 534,275
INTEGRATED ELECTRICAL SERVICES*
Provider of electrical
contracting and
maintenance services 180,700 2,857,319
KEYSTONE AUTOMOTIVE INDUSTRIES*
Distributor of after-market
collision replacement parts for
automobiles and light trucks 66,600 743,006
METAMOR WORLDWIDE*
International provider of
information technology
and staffing services 148,100 2,624,147
MODIS PROFESSIONAL SERVICES*
Provider of temporary
personnel services 562,400 7,451,800
NOVA*
Provider of transaction
processing services 404,605 10,115,125
PERSONNEL GROUP OF AMERICA*
Provider of personnel
staffing services 457,500 2,859,375
PROVANT*
Provider of training and
development services 378,470 6,055,520
U.S. FOODSERVICE*
Distributor of food and
related products 536,400 9,655,200
WILMAR INDUSTRIES*
Marketer and distributor of
repair and maintenance
products to the apartment
housing market 280,100 3,571,275
-------------
77,809,940
-------------
CAPITAL GOODS 5.1%
MICROCHIP TECHNOLOGY*
Supplier of field programmable
microcontrollers 138,300 7,105,162
NOVELLUS SYSTEMS*
Manufacturer of wafer
fabrication systems for the
disposition of thin films 95,600 6,450,013
UCAR INTERNATIONAL*
Manufacturer of graphite
and carbon electrodes 287,800 6,565,438
-------------
20,120,613
-------------
COMPUTER HARDWARE 0.9%
APEX*
Manufacturer of switching
systems for computer
network administrators 189,600 3,549,075
-------------
- ----------------
See footnotes on page 17.
14
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
SHARES VALUE
-------- -------------
COMPUTER SOFTWARE AND
SERVICES 17.1%
ASPECT DEVELOPMENT
Provider of computer software 120,700 $ 3,051,447
AVANT!*
Developer and marketer of
software products that
assist design engineers 335,200 5,981,225
CAREINSITE*
Provider of Internet messaging
services for physicians 45,400 2,272,838
CBT GROUP (ADRS)* (IRELAND)
Provider of interactive
education software 120,700 2,987,325
ENGAGE TECHNOLOGIES*
Provider of Internet solutions
for web user profiles 147,600 5,558,062
INSO*
Marketer and developer of
textual information software 132,300 1,066,669
ISS GROUP*
Provider of security monitoring,
detection, and response software 114,100 3,094,962
NATIONAL INSTRUMENTS*
Provider of instrumentation
hardware and software products
for the engineering
and scientific industries 422,550 14,934,502
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechnanical
design software 332,500 4,997,891
SUNGARD DATA SYSTEMS*
Provider of computer disaster
recovery services, as well as
health care information and
investment support systems 167,000 4,394,187
THQ*
Worldwide provider of inter-
active entertainment software 24,500 1,057,328
TRANSACTION SYSTEMS ARCHITECTS
(CLASS A)*
Worldwide developer and
marketer of software
products for electronic
funds transfer 204,100 5,504,322
UNIGRAPHICS SOLUTIONS (CLASS A)*
International provider of
services used for virtual
product development 235,800 6,396,075
VERTICALNET*
Operator of vertical trade
communities on the Internet 36,800 1,362,750
COMPUTER SOFTWARE AND
SERVICES (continued)
Visio*
Provider of business
diagramming and technical
drawing software 138,300 $ 5,428,275
------------
68,087,858
------------
CONSULTING SERVICES 4.8%
CORPORATE EXECUTIVE BOARD*
Worldwide provider of consulting
services for corporations 59,800 2,429,375
FORRESTER RESEARCH*
Independent research company
which studies changes in future
technology and its impact on
businesses, consumers and
society 66,900 2,632,097
PRIMARK*
Provider of information
through software and databases 274,700 7,811,781
PROFESSIONAL DETAILING*
Provider of consulting services
to the pharmaceutical industry 241,700 6,261,541
------------
19,134,794
------------
CONSUMER GOODS AND
SERVICES 7.3%
CAREY INTERNATIONAL*
Worldwide provider of
chauffeured vehicle service 201,900 5,034,881
GARDEN.COM*
Internet retailer of gardening
products 12,500 236,328
MEMBERWORKS*
Provider of membership
service programs for
various industries 297,000 9,865,969
PRE-PAID LEGAL SERVICES*
Underwriter and marketer of
legal service plans 216,600 8,528,625
PROFIT RECOVERY GROUP INTERNATIONAL*
Worldwide provider of accounts
payable and auditing services 124,450 5,553,581
------------
29,219,384
------------
DRUGS AND HEALTH
CARE 12.4%
ALPHARMA (CLASS A)
International manufacturer of
human and animal health
products 91,400 3,227,563
BARR LABORATORIES*
Developer, manufacturer, and
marketer of generic
prescription drugs 128,600 4,083,050
- ----------------
See footnotes on page 17.
15
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
SHARES VALUE
-------- -------------
DRUG AND HEALTH
CARE (CONTINUED)
DRUG EMPORIUM*
Pharmacy operator 108,600 $ 726,262
DURA PHARMACEUTICALs*
Developer and retailer of pres-
cription pharmaceutical products
for the treatment of allergies,
asthma, pneumonia, and
related respiratory conditions 233,800 3,265,894
HANGER ORTHOPEDIC GROUP*
Provider of orthopedic and
prosthetic rehabilitation
services 250,300 3,629,350
OMNICARE
Provider of pharmaceutical
services to long-term care
institutions 287,700 2,769,112
PRIORITY HEALTHCARE (CLASS B)*
Pharmaceutical and medical
supply distributor to the
alternative health care industry 61,500 1,902,656
PROVINCE HEALTHCARE*
Provider of health care
services in non-urban markets 310,800 3,554,775
PSS WORLD MEDICAL*
Distributor of medical
supplies, equipment,
and pharmaceuticals 726,400 6,480,850
RENAL CARE GROUP*
Provider of dialysis and
ancillary services 12,900 282,591
RENEX*
Provider of dialysis and
ancillary services 114,800 597,319
SCHEIN PHARMACEUTICAL*
Developer, manufacturer,
and vendor of generic
pharmaceuticals 140,400 1,316,250
Teva Pharmaceutical Industries
(ADRs) (Israel)
Developer and marketer of
pharmaceutical, disposable
medical, and veterinary
products 200,600 10,098,956
TOTAL RENAL CARE HOLDINGS*
Provider of dialysis services 536,600 3,990,963
TRIANGLE PHARMACEUTICALS*
Developer of new drugs
primarily in the antiviral area 172,200 3,309,469
-------------
49,235,060
-------------
ELECTRONICS 13.3%
ANADIGICS*
Designer and manufacturer of
circuits for the communications
industry 29,300 822,231
AVX
Manufacturer and supplier of
passive electronic
components and related
products 276,000 9,694,500
BURR-BROWN*
Manufacturer of micro-electric
data devices for business
end-users 416,850 16,413,469
C-CUBE MICROSYSTEMS*
Provider of digital video
compression and decompression
circuits and systems 66,000 2,868,938
COGNEX*
Manufacturer of machine
vision systems 177,400 5,355,262
EXAR*
Provider of integrated circuits
for communications and video
products 35,400 1,326,394
GENERAL SEMICONDUCTOR*
Designer and manufacturer
of power semiconductors 498,500 5,140,781
KLA-TENCOR*
Manufacturer of wafer and
metrology equipment 52,700 3,427,147
Photon Dynamics*
Provider of inspection and
repair systems for the flat panel
display manufacturing industry 2,800 59,062
PMC-SIERRA* (CANADA)
Provider of high-speed
networking circuits 75,500 6,997,906
VEECO INSTRUMENTS*
Ion beam etching and surface
measurement systems for
disk drive heads 26,500 741,172
-------------
52,846,862
-------------
ENERGY 2.3%
Barrett Resources*
Explorer, developer, and
producer of oil and gas 66,400 2,452,650
CABOT OIL & GAS (CLASS A)
Explorer, developer, and
PRODUCER OF OIL AND GAS 104,800 1,807,800
PRIDE INTERNATIONAL*
Provider of oil and gas
well services 77,000 1,092,438
- ----------------
See footnotes on page 17.
16
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
SHARES VALUE
-------- -------------
ENERGY (CONTINUED)
SANTA FE SNYDER*
Explorer, producer, and
developer of oil and gas 397,100 $ 3,573,900
-------------
8,926,788
-------------
ENVIRONMENTAL
MANAGEMENT 0.3%
CASELLA WASTE SYSTEMS (CLASS A)* Provider of non-hazardous solid waste
collection, disposal, and recycling
services 30,300 506,578
WASTE CONNECTIONS*
Provider of solid waste
collection, disposal, and
recycling services 27,300 560,503
-------------
1,067,081
-------------
FINANCIAL SERVICES 3.2%
AFFILIATED MANAGERS GROUP*
Holding company specializing
in asset management 180,000 4,905,000
American Capital Strategies
Provider of commercial
financing 184,800 3,430,350
Metris Companies
Direct marketer of consumer
credit cards 155,200 4,568,700
-------------
12,904,050
-------------
INDUSTRIAL GOODS AND
SERVICES 0.5%
UNITED RENTALS*
Equipment rental supplier
for the construction industry
and homeowners 92,500 2,011,875
-------------
LEISURE AND
ENTERTAINMENT 3.0%
PREMIER PARKS*
Owner and operator of
regional theme parks 417,100 12,095,900
-------------
MANUFACTURING 0.4%
AMERICAN HOMESTAR*
Retailer and producer of
manufactured homes 345,300 1,359,619
-------------
MEDIA AND
BROADCASTING 2.2%
INSIGHT COMMUNICATIONS (CLASS A)*
Operator of cable television and
interactive digital video 101,300 2,906,044
SBS BROADCASTING* (LUXEMBOURG)
Television and radio broadcaster 150,300 5,842,912
-------------
8,748,956
-------------
REAL ESTATE INVESTMENT
TRUST 1.0%
Prison Realty Trust
Real estate investment
trust investing in prisons 383,000 4,117,250
-------------
SCHOOLS 3.2%
CAREER EDUCATION*
Provider of private
post-secondary education 212,700 5,929,012
DeVRY*
Owner and manager of higher
education systems 97,700 1,954,000
ITT EDUCATIONAL SERVICES*
Provider of technology-
oriented schooling 227,000 4,426,500
LEARNING TREE INTERNATIONAL*
Provider of education and
training services for information
technology workers 34,100 565,847
-------------
12,875,359
-------------
TELECOMMUNICATIONS 2.4%
ANTEC*
Developer and supplier of
products for the cable
television industry 144,100 7,650,809
TEKELEC*
Provider of telecommunications
switching equipment 136,200 1,877,006
-------------
9,527,815
-------------
TRANSPORTATION 0.8%
EXPEDITORS INTERNATIONAL
OF WASHINGTON
Transportation provider 76,000 2,439,125
FORWARD AIR*
Provider of transportation
services to the airline industry 34,800 812,363
-------------
3,251,488
-------------
TOTAL COMMON STOCKS
(Cost $375,245,738) 400,614,183
SHORT-TERM HOLDINGS 1.9%
(Cost $7,620,000) 7,620,000
-------------
TOTAL INVESTMENTS 102.5%
(COST $382,865,738) 408,234,183
OTHER ASSETS
LESS LIABILITIES (2.5)% (9,914,424)
-------------
NET ASSETS 100.0% $398,319,759
=============
- -------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
17
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
OCTOBER 31, 1999 SEPTEMBER 30, 1999
---------------- ------------------
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks (cost $340,476,146 and $375,245,738, respectively) ... $ 356,558,540 $ 400,614,183
Short-term holdings (cost $15,510,000 and $7,620,000, respectively) 15,510,000 7,620,000
------------- -------------
Total Investments .................................................... 372,068,540 408,234,183
Cash ................................................................. 2,115 10,007
Receivable for securities sold ....................................... 4,376,333 1,487,467
Receivable for Capital Stock sold .................................... 1,715,818 8,877,671
Expenses prepaid to shareholder service agent ........................ 176,939 137,223
Receivable for dividends and interest ................................ 21,762 80,641
Other ................................................................ 27,799 5,953
------------- -------------
TOTAL ASSETS ......................................................... 378,389,306 418,833,145
------------- -------------
LIABILITIES:
Payable for Capital Stock repurchased ................................ 4,487,329 10,183,371
Payable for securities purchased ..................................... 3,918,099 9,396,110
Accrued expenses and other ........................................... 875,290 933,905
------------- -------------
TOTAL LIABILITIES .................................................... 9,280,718 20,513,386
------------- -------------
NET ASSETS ........................................................... $ 369,108,588 $ 398,319,759
============= =============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.10 par value; 500,000,000 shares authorized;
29,534,863 and 31,134,391 shares outstanding, respectively):
Class A ............................................................ $ 1,526,720 $ 1,606,879
Class B ............................................................ 393,306 398,415
Class C ............................................................ 3,486 3,271
Class D ............................................................ 1,029,974 1,104,874
Additional paid-in capital ........................................... 351,699,882 370,829,467
Accumulated net investment loss ...................................... (58,123) (56,400)
Accumulated net realized loss ........................................ (1,569,051) (935,192)
Net unrealized appreciation of investments ........................... 16,082,394 25,368,445
------------- -------------
NET ASSETS ........................................................... $ 369,108,588 $ 398,319,759
============= =============
NET ASSETS:
Class A ............................................................ $ 197,424,189 $ 212,663,725
Class B ............................................................ $ 47,309,695 $ 49,080,340
Class C ............................................................ $ 419,488 $ 403,093
Class D ............................................................ $ 123,955,216 $ 136,172,601
SHARES OF CAPITAL STOCK OUTSTANDING:
Class A ............................................................ 15,267,203 16,068,790
Class B ............................................................ 3,933,057 3,984,151
Class C ............................................................ 34,857 32,713
Class D ............................................................ 10,299,746 11,048,737
NET ASSET VALUE PER SHARE:
CLASS A ............................................................ $ 12.93 $ 13.23
============= =============
CLASS B ............................................................ $ 12.03 $ 12.32
============= =============
CLASS C ............................................................ $ 12.03 $ 12.32
============= =============
CLASS D ............................................................ $ 12.03 $ 12.32
============= =============
</TABLE>
- --------------
See Notes to Financial Statements.
18
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE ONE FOR THE
MONTH ENDED YEAR ENDED
OCTOBER 31, 1999 SEPTEMBER 30, 1999
------------------ --------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................................... $ 20,205 $ 1,153,750
Dividends (net of foreign taxes withheld of $0 and $7,330, respectively) 19,089 1,541,305
------------ ------------
TOTAL INVESTMENT INCOME ................................................ 39,294 2,695,055
------------ ------------
EXPENSES:
Management fee ......................................................... 295,732 5,574,591
Distribution and service fees .......................................... 183,573 3,461,437
Shareholder account services ........................................... 105,243 1,639,836
Shareholder reports and communications ................................. 16,423 262,319
Custody and related services ........................................... 11,500 130,557
Registration ........................................................... 9,752 198,103
Auditing and legal fees ................................................ 7,252 80,468
Directors' fees and expenses ........................................... 2,915 25,951
Miscellaneous .......................................................... 25,404 189,851
------------ ------------
TOTAL EXPENSES ......................................................... 657,794 11,563,113
------------ ------------
NET INVESTMENT LOSS .................................................... (618,500) (8,868,058)
------------ ------------
NET REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS:
Net realized gain on investments ....................................... 586,290 1,718,133*
Net change in unrealized appreciation/depreciation of investments ...... (9,286,051) 48,514,019
------------ ------------
NET GAIN (LOSS) ON INVESTMENTS ......................................... (8,699,761) 50,232,152
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ...................... $ (9,318,261) $ 41,364,094
============ ============
</TABLE>
- ------------
* Includes net realized loss from affiliated issuer of $911,922.
See Notes to Financial Statements.
19
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE ONE YEAR ENDED SEPTEMBER 30,
MONTH ENDED -----------------------------------
OCTOBER 31, 1999 1999 1998
---------------- -----------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment loss ................................... $ (618,500) $ (8,868,058) $ (13,374,405)
Net realized gain on investments ...................... 586,290 1,718,133 27,728,578
Net change in unrealized appreciation/depreciation
of investments ..................................... (9,286,051) 48,514,019 (216,052,533)
--------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ..... (9,318,261) 41,364,094 (201,698,360)
--------------- --------------- ---------------
DISTRIBUTION TO SHAREHOLDERS:
Net realized gain on investments:
Class A ............................................ -- -- (53,153,741)
Class B ............................................ -- -- (7,202,049)
Class D ............................................ -- -- (37,501,083)
--------------- --------------- ---------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ............. -- -- (97,856,873)
--------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ..................... 1,590,602 62,895,521 151,890,138
Exchanged from associated Funds ....................... 57,211,520 1,062,460,049 588,688,321
Value of shares issued in payment of gain distributions -- -- 89,056,784
--------------- --------------- ---------------
Total ................................................. 58,802,122 1,125,355,570 829,635,243
--------------- --------------- ---------------
Cost of shares repurchased ............................ (14,135,703) (348,573,441) (232,571,957)
Exchanged into associated Funds ....................... (64,559,329) (1,130,870,201) (615,498,157)
--------------- --------------- ---------------
Total ................................................. (78,695,032) (1,479,443,642) (848,070,114)
--------------- --------------- ---------------
DECREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS .......................... (19,892,910) (354,088,072) (18,434,871)
--------------- --------------- ---------------
DECREASE IN NET ASSETS ................................ (29,211,171) (312,723,978) (317,990,104)
NET ASSETS:
Beginning of period ................................... 398,319,759 711,043,737 1,029,033,841
--------------- --------------- ---------------
END OF PERIOD (including accumulated net investment
loss of $58,123, $56,400, and $49,317, respectively) $ 369,108,588 $ 398,319,759 $ 711,043,737
=============== =============== ===============
</TABLE>
- ------------
See Notes to Financial Statements.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Frontier Fund, Inc. (the "Fund")
offers four classes of 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 A shares purchased in an amount of $1,000,000 or more are sold
without an initial sales charge but are subject to a contingent deferred sales
charge ("CDSC") of 1% on redemptions within 18 months of purchase. Class B
shares are sold without an initial sales charge but are subject to a
distribution fee of 0.75% and a service fee of up to 0.25% on an annual basis,
and a CDSC, if applicable, of 5% on redemptions in the first year of purchase,
declining to 1% in the sixth year and 0% thereafter. Class B shares will
automatically convert to Class A shares on the last day of the month that
precedes the eighth anniversary of their date of purchase. The Fund began
offering Class C shares on May 27, 1999. Class C shares are sold with an initial
sales charge of up to 1% and 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 CDSC, if applicable,
of 1% imposed on redemptions made within 18 months of purchase. Class D shares
are sold without an initial sales charge but are subject to a distribution fee
of up to 0.75%, and a service fee of up to 0.25% on an annual basis, and a CDSC,
if applicable, of 1% imposed on redemptions made within one year of purchase.
The four classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain other class
expenses, and has exclusive voting rights with respect to any matter on which a
separate vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
A. CHANGE IN FISCAL YEAR END -- Effective for the period ended October 31, 1999,
the Fund changed its fiscal year end for financial reporting and federal
income tax purposes to October 31 from September 30.
B. SECURITY VALUATION -- Investments in stocks are valued at current market
values or, in their absence, at fair values determined in accordance with
procedures approved by the Board of Directors. Securities traded on national
exchanges are valued at last sales prices or, in their absence and in the
case of over-the-counter securities, at the mean of bid and asked prices.
Short-term holdings maturing in 60 days or less are valued at amortized cost.
C. FEDERAL TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments sold
is used for both financial statement and federal income tax purposes.
Dividends receivable and payable are recorded on ex-dividend dates. Interest
income is recorded on an accrual basis.
E. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses are allocated daily to
each class of shares based upon the relative value of the shares of each
class. Class-specific expenses, which include distribution and service fees
and any other items that are specifically attributable to a particular class,
are charged directly to such class. For the periods ended October 31, 1999,
and September 30, 1999, distribution and service fees were the only
class-specific expenses.
F. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders during the year from net
investment income or net realized gains may differ from their ultimate
treatment for federal income tax purposes. These differences are caused
primarily by differences in the timing of the recognition of certain
components of income, expense, or realized capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. For the period ended
October 31, 1999, and September 30, 1999, permanent differences aggregating
approximately $600,000 and $7 million respectively, have been reclassified
from accumulated net investment loss and undistributed net realized gain to
additional paid-in
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
capital. These reclassifications have no effect on net assets, results of
operations, or net asset value per share of the Fund.
For the one month ended October 31, 1999, and the year ended September 30,
1999, the Fund redeemed 6,489,844 and 116,768,183, respectively, of its
shares from shareholders aggregating $78,695,032 and $1,479,443,642,
respectively, of which approximately $600,000 and $2,000,000, respectively,
represent capital gain distributions. This information is provided for
federal income tax purposes only.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the one month ended October 31, 1999, aggregated $19,633,239 and $54,989,121,
respectively, and for the year ended September 30, 1999, aggregated $322,227,340
and $630,461,105, respectively.
At October 31, 1999, the cost of investments for federal income tax purposes
was $357,555,197, and the tax basis gross unrealized appreciation and
depreciation of portfolio securities amounted to $70,567,215 and $56,053,872,
respectively.
At September 30, 1999, the cost of investments for federal income tax
purposes was $383,800,930 and the tax basis gross unrealized appreciation and
depreciation of portfolio securities amounted to $84,475,748 and $60,042,495,
respectively.
4. SHORT-TERM INVESTMENTS -- At October 31, 1999, and September 30, 1999, the
Fund owned short-term investments which matured in less than seven days.
5. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager, is paid by the Manager.
The Manager receives a fee, calculated daily and payable monthly, equal to 0.95%
per annum of the first $750 million of the Fund's average daily net assets and
0.85% per annum of the Fund's average daily net assets in excess of $750
million. The management fees reflected in the Statements of Operations represent
0.95% per annum of the Fund's average daily net assets.
Seligman Advisors, Inc. (the "Distributor"), agent for the distribution of
the Fund's shares and an affiliate of the Manager, received concessions from
sales of Class A shares. For the one month ended October 31, 1999, and the year
ended September 30, 1999, concessions aggregated $1,010 and $36,866,
respectively. For the one month ended October 31, 1999, commissions of $8,605
and $308 were paid to dealers for sales of Class A and Class C shares,
respectively. For the year ended September 30, 1999, commissions of $288,321 and
$4,290 were paid to dealers for sales of Class A and Class C shares,
respectively.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive a continuing fee of up to 0.25% on an annual basis,
payable quarterly, of 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 one month ended October 31, 1999, fees
incurred under the Plan aggregated $39,286, or 0.24% per annum of average daily
net assets of Class A shares. For the year ended September 30, 1999, such fees
aggregated $759,146, or 0.24% per annum of average daily net assets of Class A
shares.
Under the Plan, with respect to Class B shares, Class C shares, and Class D
shares, service organizations can enter into agreements with the Distributor and
receive a continuing fee for providing personal services and/or the maintenance
of shareholder accounts of up to 0.25% on an annual basis of the average daily
net assets of the Class B, Class C, and Class D shares for which the
organizations are responsible; and, for Class C and Class D shares, fees for
providing other distribution assistance of up to 0.75% on an annual basis of
such average daily net assets. Such fees are paid monthly by the Fund to the
Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of 0.75% on an annual
basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to this fee to a third
party (the "Purchaser"), which provides funding to the Distributor to enable it
to pay commissions to dealers at the time of the sale of the related Class B
shares.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the one month ended October 31, 1999, fees incurred under the Plan
amounted to $38,787, $332, and $105,168, for Class B, Class C, and Class D
shares, respectively, equivalent to 1% per annum of the average daily net assets
of each class. For the year ended September 30, 1999, such fees, equivalent to
1% per annum of the average daily net assets of Class B, Class C, and Class D
shares, amounted to $627,782, $859, and $2,073,650, respectively.
The Distributor is entitled to retain any CDSC imposed on certain redemptions
of Class A and Class C shares occurring within 18 months of purchase and on
redemptions of Class D shares occurring within one year of purchase. For the one
month ended October 31, 1999, and the year ended September 30, 1999, such
charges amounted to $4,992 and $115,637, respectively.
The Distributor has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSC and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate of such payments
retained by the Distributor, for the one month ended October 31, 1999, and the
year ended September 30, 1999, amounted to $247 and $11,285, respectively.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the one month ended October 31, 1999,
and the year ended September 30, 1999, Seligman Services, Inc. received
commissions of $302 and $7,868, respectively, from the sales of shares of the
Fund. For the year ended September 30, 1999, Seligman Services, Inc. received
distribution and service fees of $47,494, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $105,243 and $1,636,808 for shareholder
account services for the one month ended October 31, 1999, and the year ended
September 30, 1999, respectively.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. The cost of
such fees and earnings accrued thereon is included in directors' fees and
expenses, and the accumulated balances thereof at October 31, 1999 and September
30, 1999, of $58,123 and $56,400, respectively, are included in other
liabilities. Deferred fees and related accrued earnings are not deductible for
federal income tax purposes until such amounts are paid.
6. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $750 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. The Fund's borrowings are limited to 10%
of its net assets. Borrowings pursuant to the credit facility are subject to
interest at a rate equal to the overnight federal funds rate plus 0.50%. The
Fund incurs a commitment fee of 0.08% per annum on its share of the unused
portion of the credit facility. The credit facility may be drawn upon only for
temporary purposes and is subject to certain other customary restrictions. The
credit facility commitment expires in June 2000, but is renewable annually with
the consent of the participating banks.
During the one month ended October 31, 1999, and the year ended September 30,
1999, the Fund periodically borrowed from the credit facility. The average
outstanding daily balances of bank loans (based on the number of days the loans
were outstanding during the periods) were $11,173,846 and $10,064,364,
respectively, with weighted average interest rates of 5.75% and 5.45%,
respectively. The maximum borrowings outstanding during the periods were
$16,330,000 and $21,000,000, respectively.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
7. Capital Share Transactions -- The Fund has authorized 500,000,000 shares of
$0.10 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
<TABLE>
<CAPTION>
FOR THE ONE YEAR ENDED SEPTEMBER 30,
MONTH ENDED ------------------------------------------------------------
OCTOBER 31, 1999 1999 1998
-------------------------- ---------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 77,233 $ 980,390 3,193,205 $ 42,033,215 5,029,443 $ 78,991,830
Exchanged from
associated Funds 1,142,641 14,546,456 36,768,137 481,112,233 19,887,832 302,151,838
Shares issued in
payment of gain
distributions -- -- -- -- 3,197,741 47,518,435
-------------------------- ---------------------------- ----------------------------
Total 1,219,874 15,526,846 39,961,342 523,145,448 28,115,016 428,662,103
-------------------------- ---------------------------- ----------------------------
Cost of shares
repurchased (475,943) (6,018,651) (15,770,829) (203,299,642) (9,287,625) (142,825,418)
Exchanged into
associated Funds (1,545,518) (19,845,440) (38,671,016) (509,317,966) (20,657,403) (315,167,006)
-------------------------- ---------------------------- ----------------------------
Total (2,021,461) (25,864,091) (54,441,845) (712,617,608) (29,945,028) (457,992,424)
-------------------------- ---------------------------- ----------------------------
Decrease (801,587) $(10,337,245) (14,480,503) $(189,472,160) (1,830,012) $ (29,330,321)
========================== ============================ ============================
FOR THE ONE YEAR ENDED SEPTEMBER 30,
MONTH ENDED ------------------------------------------------------------
OCTOBER 31, 1999 1999 1998
-------------------------- ---------------------------- ----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------------------------- ---------------------------- ----------------------------
Sales of shares 16,878 $ 198,226 635,500 $ 7,780,693 2,005,337 $ 29,952,250
Exchanged from
associated Funds 201,156 2,396,264 2,728,875 33,176,333 1,708,776 24,644,626
Shares issued in
payment of gain
distributions -- -- -- -- 474,373 6,655,460
-------------------------- ---------------------------- ----------------------------
Total 218,034 2,594,490 3,364,375 40,957,026 4,188,486 61,252,336
-------------------------- ---------------------------- ----------------------------
Cost of shares
repurchased (72,018) (844,478) (1,340,058) (16,374,340) (570,218) (8,232,601)
Exchanged into
associated Funds (197,110) (2,350,985) (3,802,442) (46,598,505) (2,043,767) (29,641,042)
-------------------------- ---------------------------- ----------------------------
Total (269,128) (3,195,463) (5,142,500) (62,972,845) (2,613,985) (37,873,643)
-------------------------- ---------------------------- ----------------------------
Increase (Decrease) (51,094) $ (600,973) (1,778,125) $ (22,015,819) 1,574,501 $ 23,378,693
========================== ============================ ============================
</TABLE>
FOR THE ONE
MONTH ENDED MAY 27, 1999* TO
OCTOBER 31, 1999 SEPTEMBER 30, 1999
-------------------- ----------------------
CLASS C SHARES AMOUNT SHARES AMOUNT
-------------------- ----------------------
Sales of shares 2,729 $ 31,419 33,815 $ 428,738
Exchanged from
associated Funds 169 2,000 884 11,107
-------------------- ----------------------
Total 2,898 33,419 34,699 439,845
-------------------- ----------------------
Cost of shares
repurchased (149) (1,820) (78) (948)
Exchanged into
associated Funds (605) (7,323) (1,908) (23,543)
-------------------- ----------------------
Total (754) (9,143) (1,986) (24,491)
-------------------- ----------------------
Increase 2,144 $ 24,276 32,713 $ 415,354
==================== ======================
* Commencement of offering of shares.
<TABLE>
<CAPTION>
FOR THE ONE YEAR ENDED SEPTEMBER 30,
MONTH ENDED ------------------------------------------------------------
OCTOBER 31, 1999 1999 1998
-------------------------- ---------------------------- ----------------------------
CLASS D SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 32,478 $ 380,567 1,035,938 $ 12,652,875 2,895,974 $ 42,946,058
Exchanged from
associated Funds 3,417,032 40,266,800 44,576,743 548,160,376 18,380,183 261,891,857
Shares issued in
payment of gain
distributions -- -- -- -- 2,484,536 34,882,889
-------------------------- ---------------------------- ----------------------------
Total 3,449,510 40,647,367 45,612,681 560,813,251 23,760,693 339,720,804
-------------------------- ---------------------------- ----------------------------
Cost of shares
repurchased (614,365) (7,270,754) (10,620,686) (128,898,511) (5,658,913) (81,513,938)
Exchanged into
associated Funds (3,584,136) (42,355,581) (46,561,166) (574,930,187) (18,903,435) (270,690,109)
-------------------------- ---------------------------- ----------------------------
Total (4,198,501) (49,626,335) (57,181,852) (703,828,698) (24,562,348) (352,204,047)
-------------------------- ---------------------------- ----------------------------
Decrease (748,991) $ (8,978,968) (11,569,171) $(143,015,447) (801,655) $ (12,483,243)
========================== ============================ ============================
</TABLE>
8. Affiliated Issuers -- As defined under the Investment Company Act of 1940, as
amended, affiliated issuers are those issuers in which the Fund's holdings
represent 5% or more of the outstanding voting securities of the issuer. The
Fund's transactions in the securities of these issuers during the year ended
September 30, 1999 are shown below. There were no transactions in such
securities during the month ended October 31, 1999.
<TABLE>
<CAPTION>
GROSS GROSS ENDING VALUE
BEGINNING PURCHASES SALES AND ENDING REALIZED -------------------
AFFILIATE SHARES AND ADDITIONS REDUCTIONS SHARES LOSS 10/31/99 9/30/99
- ---------- --------- ------------- ---------- ------ ---------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Renex 363,900 9,600 258,700 114,800 $911,922 $509,425 $597,319
</TABLE>
24
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five years and one month or from its inception if less
than five years and one month. Certain information reflects financial results
for a single share of a Class that was held throughout the periods shown. Per
share amounts are calculated using average shares outstanding during the period.
"Total return" shows the rate that you would have earned (or lost) on an
investment in each Class, assuming you reinvested all your capital gain
distributions. Total returns do not reflect any sales charges and are not
annualized for periods of less than one year.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
10/1/99 YEAR ENDED SEPTEMBER 30,
TO ----------------------------------------------------------
10/31/99 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................... $13.23 $12.44 $17.55 $15.38 $14.04 $11.62
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................... (0.02) (0.15) (0.16) (0.16) (0.13) (0.06)
Net realized and unrealized
gain (loss) on investments ........................... (0.28) 0.94 (3.32) 3.20 1.95 3.87
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ....................... (0.30) 0.79 (3.48) 3.04 1.82 3.81
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain ........... -- -- (1.63) (0.87) (0.48) (1.39)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .................................... -- -- (1.63) (0.87) (0.48) (1.39)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ......................... $12.93 $13.23 $12.44 $17.55 $15.38 $14.04
====== ====== ====== ====== ====== ======
TOTAL RETURN: .......................................... (2.27)% 6.35% (21.32)% 21.19% 13.40% 36.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ............... $197,424 $212,664 $379,945 $568,261 $523,737 $272,122
Ratio of expenses to average net assets ................ 1.76%+ 1.62% 1.47% 1.52% 1.56% 1.43%
Ratio of net loss to average net assets ................ (1.63)%+ (1.16)% (1.05)% (1.10)% (0.91)% (0.50)%
Portfolio turnover rate ................................ 5.19% 56.31% 83.90% 97.37% 59.36% 71.52%
</TABLE>
- ----------
See footnotes on page 26.
25
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------------- -------------------
10/1/99 YEAR ENDED SEPTEMBER 30, 4/22/96* 10/1/99 5/27/99*
TO ------------------------------ TO TO TO
10/31/99 1999 1998 1997 9/30/96 10/31/99 9/30/99
------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $12.32 $11.66 $16.68 $14.78 $14.55 $12.32 $12.18
------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss ........................ (0.02) (0.23) (0.27) (0.27) (0.11) (0.02) (0.08)
Net realized and unrealized
gain (loss) on investments ............... (0.27) 0.89 (3.12) 3.04 0.34 (0.27) 0.22
------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... (0.29) 0.66 (3.39) 2.77 0.23 (0.29) 0.14
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized
capital gain .............................. -- -- (1.63) (0.87) -- -- --
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................ -- -- (1.63) (0.87) -- -- --
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............. $12.03 $12.32 $11.66 $16.68 $14.78 $12.03 $12.32
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: .............................. (2.35)% 5.66% (21.95)% 20.17% 1.58% (2.35)% 1.15%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ... $47,310 $49,080 $67,199 $69,869 $24,016 $420 $403
Ratio of expenses to average net assets .... 2.52%+ 2.38% 2.24% 2.30% 2.45%+ 2.52%+ 2.36%+
Ratio of net loss to average net assets .... (2.39)%+ (1.92)% (1.82)% (1.88)% (1.80)%+ (2.39)%+ (1.84)%+
Portfolio turnover rate .................... 5.19% 56.31% 83.90% 97.37% 59.36%** 5.19% 56.31%++
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------------
10/1/99 YEAR ENDED SEPTEMBER 30,
To --------------------------------------------------------
10/31/99 1999 1998 1997 1996 1995
-------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE,
BEGINNING OF PERIOD ......................... $12.32 $11.67 $16.69 $14.77 $13.61 $11.40
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss .......................... (0.02) (0.23) (0.27) (0.27) (0.24) (0.15)
Net realized and unrealized
gain (loss) on investments ................. (0.27) 0.88 (3.12) 3.06 1.88 3.75
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ............. (0.29) 0.65 (3.39) 2.79 1.64 3.60
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized
capital gain ............................... -- -- (1.63) (0.87) (0.48) (1.39)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .......................... -- -- (1.63) (0.87) (0.48) (1.39)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............... $12.03 $12.32 $11.67 $16.69 $14.77 $13.61
====== ====== ====== ====== ====== ======
TOTAL RETURN: ................................ (2.35)% 5.57% (21.94)% 20.32% 12.47% 35.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ..... $123,955 $136,173 $263,900 $390,904 $337,327 $145,443
Ratio of expenses to average net assets ...... 2.52%+ 2.38% 2.24% 2.30% 2.35% 2.29%
Ratio of net loss to average net assets ...... (2.39)%+ (1.92)% (1.82)% (1.88)% (1.70)% (1.35)%
Portfolio turnover rate ...................... 5.19% 56.31% 83.90% 97.37% 59.36% 71.52%
</TABLE>
- ----------
* Commencement of offering of shares.
** For the year ended September 30, 1996.
+ Annualized.
++ For the year ended September 30, 1999.
See Notes to Financial Statements.
26
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN FRONTIER FUND, INC.:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Seligman Frontier Fund, Inc. as of October 31,
1999 and September 30, 1999, the related statements of operations for the one
month ended October 31, 1999 and the year ended September 30, 1999 and of
changes in net assets for the one month ended October 31, 1999 and for each of
the years in the two-year period ended September 30, 1999, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999 and September 30, 1999, 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 referred to
above present fairly, in all material respects, the financial position of
Seligman Frontier Fund, Inc. as of October 31, 1999 and September 30, 1999, the
results of its operations, the changes in its net assets, and the financial
highlights for each of the stated periods, all in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
November 19, 1999
FOR MORE INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGER GENERAL DISTRIBUTOR IMPORTANT TELEPHONE NUMBERS
J. & W. Seligman & Co. Incorporated Seligman Advisors, Inc. (800) 221-2450 Shareholder Services
100 Park Avenue 100 Park Avenue
New York, NY 10017 New York, NY 10017 (800) 445-1777 Retirement Plan
Services
GENERAL COUNSEL SHAREHOLDER SERVICE AGENT
Sullivan & Cromwell Seligman Data Corp. (212) 682-7600 Outside the United States
100 Park Avenue (800) 622-4597 24-Hour Automated Telephone Access Service
INDEPENDENT AUDITORS New York, NY 10017
Deloitte & Touche LLP
</TABLE>
27
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN (2, 4)
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN (3, 4)
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON (2, 4)
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
DIRECTOR, Conoco Inc.
JOHN E. MEROW (2, 4)
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL (2, 4)
TRUSTEE, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS (1)
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY (3, 4)
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN (3, 4)
DIRECTOr, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ (1)
MANAGING DIRECTOR, Director of Investments,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER (3, 4)
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON (2, 4)
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN DIRECTOR, CommScope, Inc.
BRIAN T. ZINO (1)
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
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
28
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- ----------
Adapted from the Investment Company Institute's 1999 MUTUAL FUND FACT BOOK.
29
<PAGE>
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.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[J.& W. SELIGMAN LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQF2 10/99 [Recycle Logo] Printed on Recycled Paper
<PAGE>
File No. 2-92487
811-4078
PART C. OTHER INFORMATION
Item 23. Exhibits
All Exhibits have been previously filed and are incorporated herein by
reference, except Exhibits marked with an asterisk (*) which are filed herewith.
(a) Articles Supplementary dated May 24, 1999. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 28 filed on May 28,
1999.)
(a)(1) Amended and Restated Articles of Incorporation. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 21 filed on
January 28, 1997.)
(b) Amended and Restated By-Laws of Registrant. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 21 filed on January 28,
1997.)
(c) Copy of Specimen Stock Certificate. (Incorporated by reference to Form
SE filed on April 16, 1996.)
(d) Management Agreement between the Registrant and J. & W. Seligman & Co.
Incorporated. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 20 filed April 19, 1996.)
(e) Addendum to Sales/Bank Agreement. (Incorporated by reference to
Post-Effective Amendment No. 57 to the Registration Statement of
Seligman Capital Fund, Inc. (File No. 811-1886) filed on May 28,
1999.)
(e)(1) Form of Bank Agreement between Seligman Advisors, Inc. and Banks.
(Incorporated by reference to Post-Effective Amendment No. 57 to the
Registration Statement of Seligman Capital Fund, Inc. (File No.
811-1886) filed on May 28, 1999.)
(e)(2) Distributing Agreement between Registrant and Seligman Advisors, Inc.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 21 filed on January 28, 1997.)
(e)(3) Form of Sales Agreement between Seligman Advisors, Inc. and Morgan
Stanley Dean Witter & Co. (Incorporated by reference to Exhibit 6b of
Post-Effective Amendment No 53 to the Registration Statement of
Seligman Capital Fund, Inc. (File No. 2-33566) filed on April 28,
1997.)
(e)(4) Form of Sales Agreement between Seligman Advisors, Inc. and Morgan
Stanley Dean Witter & Co. with respect to certain Chilean
institutional investors. (Incorporated by reference to Exhibit 6c of
Post-Effective Amendment No. 53 to the Registration Statement of
Seligman Capital Fund, Inc. (File No. 2-33566) filed on April 28,
1997.)
(e)(5) Form of Dealer Agreement between Seligman Advisors, Inc. and Salomon
Smith Barney Inc. (Incorporated by reference to Exhibit 6d of
Post-Effective Amendment No 53 to the Registration Statement of
Seligman Capital Fund, Inc. (File No. 2-33566) filed on April 28,
1997.)
(f) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 21 filed on January 28, 1997.)
(f)(1) Deferred Compensation Plan for the Board of Directors of Seligman
Frontier Fund, Inc. (Incorporated by reference to Exhibit (f)(1) of
Registrant's Post-Effective Amendment No. 26 filed January 27, 1999.)
(g) Custody Agreement between Registrant and Investors Fiduciary Trust
Company. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 21 filed on January 28, 1997.)
(h) Not applicable.
C-1
<PAGE>
PART C. OTHER INFORMATION (continued)
(i) Opinion and Consent of Counsel in respect of Class C shares.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 28 filed on May 28, 1999.)
(i)(1) Opinion and Consent of Counsel. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 21 filed on January 28,
1997.)
(j) *Consent of Independent Auditors.
(k) Not applicable.
(l) Form of Purchase Agreement for Initial Capital for Class C shares.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 28 filed on May 28, 1999.)
(l)(1) Copy of Purchase Agreement for Initial Capital for Class D shares.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 21 filed on January 28, 1997.)
(l)(2) Copy of Purchase Agreement for Initial Capital for Class B shares.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 20 filed on April 19, 1996.
(m) Amended Administration, Shareholder Services and Distribution Plan.
(Incorporated by reference to Registrant's Post-Effective Amendment
No. 28 filed on May 28, 1999.)
(m)(1) Amended Administration, Shareholder Services and Distribution
Agreement between Seligman Advisors, Inc. and Dealers. (Incorporated
by reference to Post-Effective Amendment No. 57 to the Registration
Statement of Seligman Capital Fund, Inc. (File No. 811-1886) filed on
May 28, 1999.)
(n) Rule 18f-3 Plan. Plan of Multiple Classes of Shares (four Classes)
pursuant to Rule 18f-3 under the Investment Company Act of 1940.
(Incorporated by reference to Post-Effective Amendment No. 57 to the
Registration Statement of Seligman Capital Fund, Inc. (File No.
811-1886) filed on May 28, 1999.)
(p) *Code of Ethics.
(Other Exhibits) Powers of Attorney. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 23 filed on January 28, 1998.)
Item 24. Persons Controlled by or Under Common Control with Registrant. None.
Item 25. Indemnification. Reference is made to the provisions of Articles
Twelfth and Thirteenth of Registrant's Amended and Restated Articles
of Incorporation filed as Exhibit 24(b)(1) and Article IV of
Registrant's Amended and Restated By-laws filed as Exhibit 24(b)(2) to
Registrant's Post-Effective Amendment No. 21 to the Registration
Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised by
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act as is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
C-2
<PAGE>
PART C. OTHER INFORMATION (continued)
Item 26. Business and Other Connections of Investment Adviser. J. & W. Seligman
& Co. Incorporated, a Delaware corporation (Seligman), is the
Registrant's investment manager. Seligman also serves as investment
manager to nineteen 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 Time Horizon/Harvester Series, Inc., Seligman Growth
Fund, Inc., Seligman Global Fund Series, Inc., Seligman High Income
Fund Series, Seligman Income Fund, Inc., Seligman Municipal Fund
Series, Inc., Seligman Municipal Series Trust, Seligman New Jersey
Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund Series,
Seligman Portfolios, Inc., Seligman Quality Municipal Fund, Inc.,
Seligman Select Municipal Fund, Inc., Seligman Value Fund Series,
Inc., Seligman New Technologies Fund, Inc. and Tri-Continental
Corporation.
Seligman has an investment advisory service division which provides
investment management or advice to private clients. The list required
by this Item 26 of officers and directors of Seligman, together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by Seligman pursuant to the
Investment Advisers Act of 1940, as amended (SEC File No. 801-15798),
which was filed on March 31, 1999.
Item 27. Principal Underwriters
(a) The names of each investment company (other than the Registrant) for
which Registrant's principal underwriter currently distributing
securities of the Registrant also acts as a principal underwriter,
depositor or investment adviser 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 Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman Municipal Fund Series, Inc.
Seligman Municipal Series Trust
Seligman New Jersey Municipal Fund, Inc.
Seligman Pennsylvania Municipal Fund Series
Seligman Portfolios, Inc.
Seligman Time Horizon/Harvester Series, Inc.
Seligman Value Fund Series, Inc.
C-3
<PAGE>
PART C. OTHER INFORMATION (continued)
(b) Name of each director, officer or partner of Registrant's principal
underwriter named in response to Item 20:
<TABLE>
<CAPTION>
Seligman Advisors, Inc.
-----------------------
As of December 31, 1999
-----------------------
(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 President and Director
Ronald T. Schroeder* Director None
Fred E. Brown* Director Director Emeritus
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
Stephen J. Hodgdon* President and Director None
Charles W. Kadlec* Chief Investment Strategist None
Lawrence P. Vogel* Senior Vice President, Finance Vice President
Edward F. Lynch* Senior Vice President, National None
Sales Director
James R. Besher Senior Vice President, Division None
14000 Margaux Lane Sales Director
Town & Country, MO 63017
Gerald I. Cetrulo, III Senior Vice President, Sales None
140 West Parkway
Pompton Plains, NJ 07444
Matthew A. Digan* Senior Vice President, Domestic None
Funds
Jonathan G. Evans Senior Vice President, Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
T. Wayne Knowles Senior Vice President, Division None
104 Morninghills Court Sales Director
Cary, NC 27511
Joseph Lam Senior Vice President, Regional None
Seligman International Inc. Director, Asia
Suite 1133, Central Building
One Pedder Street
Central Hong Kong
Bradley W. Larson Senior Vice President, Sales None
367 Bryan Drive
Alamo, CA 94526
Michelle L. McCann-Rappa* Senior Vice President, Retirement None
Plans
Scott H. Novak* Senior Vice President, Insurance None
Jeff Rold Senior Vice President, Product None
181 East 73rd Street, Apt 20B Business Management
New York, New York 10021
</TABLE>
C-4
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Advisors, Inc.
-----------------------
As of December 31, 1999
-----------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Richard M. Potocki Senior Vice President, Regional None
Seligman International UK Limited Director, Europe and the Middle East
Berkeley Square House 2nd Floor
Berkeley Square
London, United Kingdom W1X 6EA
Bruce M. Tuckey Senior Vice President, Sales None
41644 Chathman Drive
Novi, MI 48375
Andrew S. Veasey Senior Vice President, Sales None
14 Woodside Drive
Rumson, NJ 07760
Charles L. von Breitenbach, II* Senior Vice President, Managed None
Money
J. Brereton Young* Senior Vice President, Director None
of Sales Development
Jeffrey S. Dean* Vice President, Business Analysis None
Mason S. Flinn Vice President, Regional Retirement None
2130 Fillmore Street Plans Manager
BMB 280
San Francisco, CA 94115-2224
Marsha E. Jacoby* Vice President, Offshore Business None
Manager
Jody Knapp Vice President, Regional Retirement None
17011 East Monterey Drive Plans Manager
Fountain Hills, AZ 85268
David W. Mountford Vice President, Regional Retirement None
7131 NW 46th Street Plans Manager
Lauderhill, FL 33319
Ronald W. Pond* Vice President, Portfolio Advisor None
Jeffery C. Pleet* Vice President, Regional Retirement None
Plans Manager
Tracy A. Salomon* Vice President, Retirement Marketing None
Helen Simon* Vice President, Sales Administration None
Gary A. Terpening* Vice President, Director of Business None
Development
Charles E. Wenzel Vice President, Regional Retirement None
117 Carpetners Row Plans Manager
Mount Chanin, DE 19710
Daniel Chambers Regional Vice President None
4618 Lorraine Avenue
Dallas, TX 75209
</TABLE>
C-5
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Advisors, Inc.
-----------------------
As of December 31, 1999
-----------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Richard B. Callaghan Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
Kevin Casey Regional Vice President None
19 Bayview Avenue
Babylon, NY 11702
Bradford C. Davis Regional Vice President None
241 110th Avenue SE
Bellevue, WA 98004
Cathy Des Jardins Regional Vice President None
PMB 152
1705 14th Street
Boulder, CO 80302
Kenneth Dougherty Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
Kelli A. Wirth Dumser Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
Edward S. Finocchiaro Regional Vice President None
120 Screenhouse Lane
Duxbury, MA 02332
Michael C. Forgea Regional Vice President None
32 W. Anapamu Street # 186
Santa Barbara, CA 93101
Carla A. Goehring Regional Vice President None
11426 Long Pine
Houston, TX 77077
Michael K. Lewallen Regional Vice President None
908 Tulip Poplar Lane
Birmingham, AL 35244
Judith L. Lyon Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
Leslie A. Mudd Regional Vice President None
5243 East Calle Redonda
Phoenix, AZ 85018
Tim O'Connell Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
George M. Palmer, Jr. Regional Vice President None
1805 Richardson Place
Tampa, FL 33606
Thomas Parnell Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
</TABLE>
C-6
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
Seligman Advisors, Inc.
-----------------------
As of December 31, 1999
-----------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Craig Prichard Regional Vice President None
9207 Cross Oaks Court
Fairfax Station, VA 22039
Nicholas Roberts Regional Vice President None
200 Broad Street, Apt. 2225
Stamford, CT 06901
Diane H. Snowden Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
James Taylor Regional Vice President None
290 Bellington Lane
Creve Coeur, MO 63141
Steve Wilson Regional Vice President None
83 Kaydeross Park Road
Saratoga Springs, NY 12866
Frank J. Nasta* Secretary Secretary
Aurelia Lacsamana* Treasurer None
Gail S. Cushing* Assistant Vice President, National None
Accounts Manager
Sandra G. Floris* Assistant Vice President, Order Desk None
Keith Landry* Assistant Vice President, Order Desk None
Albert A. Pisano* Assistant Vice President and None
Compliance Officer
Joyce Peress* Assistant Secretary Assistant Secretary
</TABLE>
* The principal business address of each of these directors and/or officers
is 100 Park Avenue, New York, NY 10017.
(c) Not Applicable
Item 28. Location of Accounts and Records
Custodian: Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, MO 64105
and
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Item 29. Management Services - Not Applicable.
Item 30. Undertakings - The Registrant undertakes: (1) if requested to do so by
the holders of at least 10% 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, as amended; 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.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment No. 29 to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment No. 29 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 27th day of
January, 2000.
SELIGMAN FRONTIER FUND, INC.
By: /s/ William C. Morris
----------------------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Post-Effective Amendment No. 29 has been signed below
by the following persons in the capacities indicated on January 27, 2000.
Signature Title
- --------- -----
/s/ William C. Morris Chairman of the Board (Principal
- ------------------------------ executive officer) and Director
William C. Morris
/s/ Brian T. Zino President and Director
- ------------------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer (Principal financial
- ------------------------------ and accounting officer)
Thomas G. Rose
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director ) /s/ Brian T. Zino
Betsy S. Michel, Director ) ------------------------------------
James C. Pitney, Director ) Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
SELIGMAN FRONTIER FUND, INC.
Post-Effective Amendment No. 29 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
Item 23(j) Consent of Independent Auditors
Item 23(p) Code of Ethics
CONSENT OF INDEPENDENT AUDITORS
Seligman Frontier Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 29 to Registration
Statement No. 2-92487 of our report dated November 19, 1999, appearing in the
Annual Report to Shareholders for the year ended September 30, 1999 and the one
month ended October 31, 1999, incorporated by reference in the Statement of
Additional Information, and to the reference to us under the caption "Financial
Highlights" in the Prospectus, which is also part of such Registration
Statement.
/s/ Deloitte & Touche LLP
New York, New York
January 24, 2000
CODE OF ETHICS
J. & W. Seligman & Co. Incorporated
Seligman Advisors, Inc.
Seligman Services, Inc.
Seligman Data Corp.
Seligman International, Inc.
Seligman International UK Limited
The Seligman Group of Investment Companies
I. Introduction
A primary duty of all directors, officers and employees (collectively
"Employees") of J. & W. Seligman & Co. Incorporated, its subsidiaries and
affiliates (collectively, "Seligman") is to be faithful to the interest of the
various Seligman advisory clients, including the registered and unregistered
companies advised by Seligman (collectively, "Clients"). Directors of the
Seligman Registered Investment Companies also have a duty to the Seligman
Registered Investment Companies and their shareholders. Persons who are
Disinterested Directors are "Employees" for purposes of this Code of Ethics.
Through the years, Seligman and its predecessor organizations have had a
reputation of maintaining the highest business and ethical standards and have
been favored with the confidence of investors and the financial community. Such
a reputation and confidence are not easily gained and are among the most
precious assets of Seligman. In large measure, they depend on the devotion and
integrity with which each Employee discharges his or her responsibilities. Their
preservation and development must be a main concern of each Employee, and each
Employee has a primary obligation to avoid any action or activity that could
produce conflict between the interest of the Clients and that Employee's
self-interest.
The purpose of this Code of Ethics ("Code") is to set forth the policies of
Seligman in the matter of conflicts of interest and to provide a formal record
for each Employee's reference and guidance. This Code is also designed to
prevent any act, practice or course of business prohibited by the rules and
regulations governing our industry.
Each Employee owes a fiduciary duty to each Client. Therefore, all Employees
must avoid activities, interests and relationships that might appear to
interfere with making decisions in the best interest of the Clients.
As an Employee, you must at all times:
1. Avoid serving your own personal interests ahead of the interests of
Clients. You may not cause a Client to take action, or not to take action,
for your personal benefit rather than the Client's benefit.
2. Avoid taking inappropriate advantage of your position. The receipt of
investment opportunities, perquisites or gifts from persons seeking
business with Clients or with Seligman could call into question the
exercise of your better judgment. Therefore, you must not give or receive
benefits that would compromise your ability to act in the best interest of
the Clients.
3. Conduct all personal Securities Transactions in full compliance with the
Code, including the pre-authorization and reporting requirements, and
comply fully with the Seligman Insider Trading Policies and Procedures (See
Appendix A).
While Seligman encourages you and your families to develop personal investment
programs, you must not take any action that could cause even the appearance that
an unfair or improper action has been taken. Accordingly, you must follow the
policies set forth below with respect to trading in your Account(s). This Code
places reliance on the good sense and judgment of you as an Employee; however,
if you are unclear as to the Code's meaning, you should seek the advice of the
Law and Regulation Department and assume the Code will be interpreted in the
most restrictive manner. Questionable situations should be resolved in favor of
Clients.
<PAGE>
Technical compliance with the Code's procedures will not insulate from scrutiny
any trades that indicate a violation of your fiduciary duties.
Application of the Code to Disinterested Directors
Disinterested Directors are only subject to the reporting requirements in
Section III.5(b) of the Code. Disinterested Directors are not subject to other
provisions of the Code but are subject to the requirements of the federal
securities laws and other applicable laws, such as the prohibition on trading in
securities of an issuer while in possession of material non-public information.
II. Definitions
(a) "Accounts" means all Employee Accounts and Employee Related Accounts.
(b) "Beneficial Interest" is broadly interpreted. The SEC has said that
the final determination of Beneficial Interest is a question to be
determined in the light of the facts of each particular case. The
terms Employee Account and Employee Related Account, as defined below,
generally define Beneficial Interest. However, the meaning of
"Beneficial Interest" may be broader than that described below. If
there are any questions as to Beneficial Interest, please contact the
Director of Compliance, General Counsel or Associate General Counsel.
(i) "Employee Account" means the following securities Accounts: (i)
any of your personal account(s); (ii) any joint or
tenant-in-common account in which you have an interest or are a
participant; (iii) any account for which you act as trustee,
executor, or custodian; (iv) any account over which you have
investment discretion or otherwise can exercise control,
including the accounts of entities controlled directly or
indirectly by you; (v) any account in which you have a direct or
indirect interest through a contract, arrangement or otherwise
(e.g., economic, voting power, power to buy or sell, or
otherwise); (vi) any account held by pledges, or for a
partnership in which you are a member, or by a corporation which
you should regard as a personal holding company; (vii) any
account held in the name of another person in which you do not
have benefits of ownership, but which you can vest or revest
title in yourself at once or some future time; (viii) any account
of which you have benefit of ownership; and (ix) accounts
registered by custodians, brokers, executors or other fiduciaries
for your benefit.
(ii) "Employee Related Account" means any Account of (i) your spouse
and minor children and (ii) any account of relatives or any other
persons to whose support you materially contribute, directly or
indirectly.
(c) "Disinterested Director" means a director or trustee of a Seligman
Registered Investment Company who is not an "interested person" of
such investment company within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940.
(d) "Equivalent Security" includes, among other things, an option to
purchase or sell a Security or an instrument convertible or
exchangeable into a Security.
(e) "Investment Team" means one or more Investment Teams formed by the
Manager in various investment disciplines to review and approve
Securities for purchase and sale by Client Accounts. This includes a
team's leader, portfolio managers, research analysts, traders and
their direct supervisors.
(f) "Security" includes, among other things, stocks, notes, bonds,
debentures, and other evidences of indebtedness (including loan
participation and assignments), limited partnership interests,
investment contracts, and all derivative instruments (e.g., options
and warrants).
<PAGE>
(g) "Securities Transaction" means a purchase or sale of a Security.
(h) "Seligman Registered Investment Company" means an investment company
registered under the Investment Company Act of 1940 for which Seligman
serves as investment manager or adviser.
III. Personal Securities Transactions
1. Prohibited Transactions
These apply to all of your Accounts.
(a) Seven-Day Blackout: If you are a member of an Investment Team,
Securities Transactions are prohibited within seven calendar days
either before or after the purchase or sale of the relevant security
(or an Equivalent Security) by a Client whose Account is managed by
your Investment Team.
(b) Intention to Buy or Sell for Clients: Securities Transactions are
prohibited at a time when you intend, or know of another's intention,
to purchase or sell that Security (or an Equivalent Security) on
behalf of a Client.
(c) Sixty-Day Holding Period: Profits on Securities Transactions made
within a sixty-day period are prohibited and must be disgorged. This
is a prohibition of short term trading. Specifically,
o Purchase of a Security within 60 days of your sale of the
Security (or an Equivalent Security), at a price that is less
than the price in the previous sale is prohibited.
o Sale of a Security within the 60 day period of your purchase of
the Security (or an Equivalent Security), at a price that is
greater than the price in the previous purchase is prohibited.
Examples are as follows:
1. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($15 a share) on February 15.
Employee must disgorge $500.
2. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee purchases 50 shares of XYZ ($12 a share) on January 30.
Employee sells 50 shares of XYZ ($15 a share) on March 15.
Employee must disgorge $150. (The March 15 sale may not be
matched to the January 1 purchase).
3. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($10 a share) on February 1.
Employee purchases 100 shares of XYZ ($9 a share) on March 1
Employee must disgorge $100. (The February 1 sale is permissible
because no profit was made. However, the March 1 purchase is
matched against the February 1 sale resulting in a $100 profit).
(d) Restricted Transactions: Transactions in a Security are prohibited (i)
on the day of a purchase or sale of the Security by a Client, or (ii)
anytime a Client's order in the Security is open on the trading desk.
Other Securities may be restricted from time to time as deemed
appropriate by the Law and Regulation Department.
<PAGE>
(e) Short Sales: If you are a member of an Investment Team, you may not
engage in any short sale of a Security if, at the time of the
transaction, any Client managed by your Team has a long position in
that same Security. However, this prohibition does not prevent you
from engaging short sales against the box and covered call writing, as
long as these personal trades are in accordance with the sixty-day
holding period described above.
(f) Public Offerings: Acquisitions of Securities in initial and secondary
public offerings are prohibited, unless granted an exemption by the
Director of Compliance. An exemption for an initial public offering
will only be granted in certain limited circumstances, for example,
the demutualization of a savings bank.
(g) Private Placements: Acquisition of Securities in a private placement
is prohibited absent prior written approval by the Director of
Compliance.
(h) Market Manipulation: Transactions intended to raise, lower, or
maintain the price of any Security or to create a false appearance of
active trading are prohibited.
(i) Inside Information: You may not trade, either personally or on behalf
of others, on material, non-public information or communicate
material, non-public information to another in violation of the law.
This policy extends to activities within and outside your duties at
Seligman. (See Appendix A).
2. Maintenance of Accounts
All Accounts that have the ability to engage in Securities Transactions
must be maintained at Ernst & Company (Investec) and/or the specific
Merrill Lynch branch office located at 712 Fifth Avenue, New York, NY. You
are required to notify the Director of Compliance of any change to your
account status. This includes opening a new Account, converting,
transferring or closing an existing account or acquiring Beneficial
Interest in an Account through marriage or otherwise. You must place all
orders for Securities Transactions in these Account(s) with the Equity
Trading Desk or the appropriate Fixed Income Team as set forth in Section
III.3 ("Trade Pre-authorization Requirements").
The Director of Compliance may grant exceptions to the foregoing
requirements on a case by case basis. All requests for exceptions must be
applied for in writing and submitted for approval to the Director of
Compliance and will be subject to certain conditions.
3. Trade Pre-authorization Requirements
All Securities Transactions in an Employee Account or Employee Related
Account must be pre-authorized, except for Securities Transactions set
forth in Section III.4 ("Exempt Transactions").
(a) Trade Authorization Request Form: Prior to entering an order for a
Securities Transaction in an Employee Account or Employee Related
Account, which is subject to pre-authorization, you must complete a
Trade Authorization Request Form (set forth in Appendix B) and submit
the completed Form (faxed or hand delivered) to the Director of
Compliance (or designee).
(b) Review of the Form and Trade Execution: After receiving the completed
Trade Authorization Request Form, the Director of Compliance (or
designee) will review the information and, as soon as practical,
determine whether to authorize the proposed Securities Transaction.
The authorization, date and time of the authorization must be
reflected on the Form. Once approved the order may then be executed by
Equity Trading Desk or the appropriate Fixed Income Team, except for
accounts for which an exemption was granted under Section III.2.
<PAGE>
(c) Length of Trade Authorization Approval: Any authorization, if granted,
is effective until the earliest of (i) its revocation, (ii) the close
of business on the day from which authorization was granted or (iii)
your discovery that the information in the Trade Authorization Request
Form is no longer accurate. If the Securities Transaction was not
placed or executed within that period, a new pre-authorization must be
obtained. A new pre-authorization need not be obtained for orders
which cannot be filled in one day due to an illiquid market, so long
as such order was placed for execution on the day the original
pre-authorization was given.
No order for a Securities Transaction may be placed prior to the Director
of Compliance (or designee) receiving the completed Trade Pre-authorization
Form and approving the transaction. In some cases, trades may be rejected
for a reason that is confidential.
4. Exempt Transactions
The prohibitions of this Code shall not apply to the following Securities
Transactions in your Account(s):
(a) Purchases or sales of Securities which are non-volitional (i.e., not
involving any investment decision or recommendation).
(b) Purchases of Securities through certain corporate actions (such as
stock dividends, dividend reinvestments, stock splits, mergers,
consolidations, spin-offs, or other similar corporate reorganizations
or distributions generally applicable to all holders of the same class
of Securities).
(c) Purchases of Securities effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of its Securities, to the
extent such rights were acquired from the issuer.
(d) Purchases or sales of open-end registered investment companies, U.S.
Government Securities and money market instruments (e.g., U.S.
Treasury Securities, bankers acceptances, bank certificates of
deposit, commercial paper and repurchase agreements).
(e) Purchases of Securities which are part of an automatic dividend
reinvestment plan or stock accumulation plan; however, quarterly
account statement of such plans must be sent to the Director of
Compliance.
(f) Securities Transactions that are granted a prior exemption by the
Director of Compliance, the General Counsel or the Associate General
Counsel.
5. Reporting
(a) You must arrange for the Director of Compliance to receive from the
executing broker, dealer or bank duplicate copies of each confirmation
and account statement for each Securities Transaction in an Employee
Account or Employee Related Account.
(b) If you are a Disinterested Director you are required to report the
information specified below with respect to any Securities Transaction
in any Securities Account in which you have Beneficial Interest, if
you knew, or in the ordinary course of fulfilling your official duties
as a Disinterested Director, should have known, that during 15 days
immediately before or after the date of your transaction, the Security
(or Equivalent Security) was purchased or sold by a Seligman
Registered Investment Company or considered for purchase or sale by a
Seligman Registered Investment Company. Such report shall be made not
later than 10 days after the end of the calendar quarter in which the
Transaction was effected and shall contain the following information:
<PAGE>
(i) The date of the transaction, the name of the company, the number
of shares, and the principal amount of each Security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(v) The date the report is submitted.
(c) You are required to disclose all Securities beneficially owned by you
within ten days of commencement of employment and at the end of each
calendar year within 10 days thereafter (See Appendix C).
(d) You are also required to disclose all Employee and Employee Related
Securities Accounts, Private Securities Transactions and Outside
Activities, Affiliations and Investments upon commencement of
employment and annually thereafter (See Appendix D).
(e) Any report may contain a statement that the report shall not be
construed as an admission by you, that you have any direct or indirect
beneficial ownership in the Security to which the report relates.
(f) The Director of Compliance or his designee will review all reports.
6. Dealings with the Clients
You should not have any direct or indirect investment interest in the
purchase or sale of any Security or property from or to Clients. This is a
prohibition against dealings between you and the Clients and is not
intended to preclude or limit investment transactions by you in Securities
or property, provided such transactions are not in conflict with the
provisions of this Code.
7. Preferential Treatment, Favors and Gifts
You are prohibited from giving and receiving gifts of significant value or
cost from any person or entity that does business with or on behalf of any
Client. You should also avoid preferential treatment, favors, gifts and
entertainment which might, or might appear to, influence adversely or
restrict the independent exercise of your best efforts and best judgments
on behalf of the Clients or which might tend in any way to impair
confidence in Seligman by Clients. Cash Gifts that do not exceed $100 in
value per person for a calendar year are permissible. Ordinary courtesies
of business life, or ordinary business entertainment, and gifts of
inconsequential value are also permissible. However, they should not be so
frequent nor so extensive as to raise any question of impropriety.
8. Outside Business Activities and Service as a Director, Trustee or in a
Fiduciary Capacity of any Organization
You may not engage in any outside business activities or serve as a
Director, Trustee or in a fiduciary capacity of any organization, without
the prior written consent of the Director of Compliance.
<PAGE>
9. Remedies of the Code
Upon discovering a violation of this Code, sanctions may be imposed against
the person concerned as may be deemed appropriate, including, among other
things, a letter of censure, fines, suspension or termination of personal
trading rights and/or employment.
As part of any sanction, you may be required to absorb any loss from the
trade. Any profits realized, as a result of your personal transaction that
violates the Code must be disgorged to a charitable organization, which you
may designate.
10. Compliance Certification
At least once a year, you will be required to certify on the Employee
Certification Form (set forth in Appendix E) that you have read and
understand this Code, that you have complied with the requirements of the
Code, and that you have disclosed or reported all personal Securities
Transactions pursuant to the provisions of the Code.
11. Inquiries Regarding the Code
If you have any questions regarding this Code or any other
compliance-related matter, please call the Director of Compliance, or in
his absence, the General Counsel or Associate General Counsel.
--------------------------------
William C. Morris
Chairman
December 22, 1966
Revised: March 8, 1968 December 7, 1990
January 14, 1970 November 18, 1991
March 21, 1975 April 1, 1993
May 1, 1981 November 1, 1994
May 1, 1982 February 28, 1995
April 1, 1985 November 19, 1999*
March 27, 1989
* Refers to the incorporation of the Code of Ethics of the Seligman
Investment Companies originally adopted June 12, 1962, as amended.
<PAGE>
Appendix A
Amended November 19, 1999
J. & W. Seligman & Co. Incorporated - Insider Trading Policies and Procedures
SECTION I. BACKGROUND
Introduction
United States law creates an affirmative duty on the part of broker-dealers
and investment advisers to establish, maintain and enforce written policies and
procedures that provide a reasonable and proper system of supervision,
surveillance and internal control to prevent the misuse of material, non-public
information by the broker-dealer, investment adviser or any person associated
with them. The purpose of these procedures is to meet those requirements. The
following procedures apply to J. & W. Seligman & Co. Incorporated, its
subsidiaries and affiliates (collectively, "Seligman") and all officers,
directors and employees (collectively, "Employees") thereof.
Statement of Policy
No Employee may trade, either personally or on behalf of others, on
material, non-public information or communicate material, non-public information
to another in violation of the law. This policy extends to activities within and
outside their duties at Seligman. Each Employee must read, acknowledge receipt
and retain a copy of these procedures.
Inside Information
The term "insider trading" is not defined in the federal securities laws,
but generally is used to refer to the use of material, non-public information to
trade in securities or to communicate material, non-public information to
others.
While the law concerning insider trading is not static, it is understood
that the law generally prohibits:
A. trading by an insider, while in possession of material, non-public
information, or
B. trading by a non-insider, while knowingly in possession of material,
non-public information, where the information either was disclosed to
the non-insider in violation of an insider's duty to keep it
confidential or was misappropriated, or
C. communicating material, non-public information to others.
The elements of insider trading and the penalties for such unlawful conduct
are discussed below. If you have any questions after reviewing these procedures,
you should consult the Director of Compliance, General Counsel or Associate
General Counsel.
1. Who Is An Insider?
The concept of "insider" is broad. It includes Employees of a company. In
addition, a person can be a "temporary insider" if he or she enters into a
special confidential relationship in the conduct of a company's affairs and
as a result is given access to information solely for the company's
purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the
Employees of such organizations. In addition, Seligman may become a
temporary insider of a company it advises or for which it performs other
services. According to the Supreme Court, the company must expect the
outsider to keep the disclosed non-public information
<PAGE>
confidential and the relationship must at least imply such a duty before
the outsider will be considered an insider.
2. What Is Material Information?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment
decisions, or information that is reasonably certain to have a substantial
affect on the price of a company's securities. Information that Employees
should consider material includes, but is not limited to: dividend changes,
earnings estimates, changes in previously released earnings estimates,
significant merger or acquisition proposals or agreements, major
litigation, liquidation problems and extraordinary management developments.
In addition, information about major contracts or new customers could also
qualify as material, depending upon the importance of such developments to
the company's financial condition or anticipated performance.
Material information does not have to relate to a company's business. For
example, in Carpenter v. U.S., 408 U.S. 316 (1987), the Supreme Court
considered as material certain information about the contents of a
forthcoming newspaper column that was expected to affect the market price
of a Security. In that case, a Wall Street Journal reporter was found
criminally liable for disclosing to others the dates that reports on
various companies would appear in the Journal and whether those reports
would be favorable or not.
3. What Is Non-Public Information?
Information is non-public until it has been effectively communicated to the
market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones, Reuters Economic Services,
The Wall Street Journal or other publications of general circulation would
be considered public. However, see Section II, Paragraph 2.
4. Penalties for Insider Trading
Penalties for trading on or communicating material, non-public information
are severe, both for individuals involved in such unlawful conduct and
their employers. A person can be subject to some or all of the penalties
below even if he or she does not personally benefit from the violation.
Penalties include:
- Civil injunctions
- Disgorgement of profits
- Jail sentences
- Fines for the person who committed the violation of up to three
times the profit gained or loss avoided, whether or not the
person actually benefited, and
- Fines for the employer or other controlling person of up to the
greater of $1,000,000 or three times the amount of the profit
gained or loss avoided.
In addition, any violation of policies and procedures set forth herein can
be expected to result in serious sanctions by Seligman, including dismissal of
the persons involved.
<PAGE>
SECTION II. PROCEDURES
Procedures to Implement Policy Against Insider Trading.
The following procedures have been established to assist the Employees of
Seligman in avoiding insider trading, and to aid Seligman in preventing,
detecting and imposing sanctions against insider trading. Every Employee of
Seligman must follow these procedures or risk serious sanctions, including
dismissal, substantial personal liability and criminal penalties. If you have
any questions about these procedures you should consult the Director of
Compliance, the General Counsel or Associate General Counsel.
1. Identifying Inside Information.
Before trading for yourself or others (including investment companies and
private Accounts managed by Seligman), in the securities of a company about
which you may have potential inside information, ask yourself the following
questions:
a. Is the information material? Is this information that an investor
would consider important in making his or her investment decisions? Is
this information that would substantially affect the market price of
the securities if generally disclosed?
b. Is the information non-public? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace in a publication of general circulation or does it fall
within the circumstances set forth in paragraph 2 below.
If, after consideration of the above, you believe that the information is
material and non-public, or if you have questions as to whether the information
is material and non-public, you should take the following steps:
c. Report the matter immediately to the Director of Compliance, General
Counsel or Associate General Counsel.
d. Do not purchase or sell the securities on behalf of yourself or
others, including investment companies or private Accounts managed by
Seligman.
e. Do not communicate the information inside or outside Seligman other
than to the Director of Compliance, General Counsel or Associate
General Counsel.
f. After the Director of Compliance, General Counsel or Associate General
Counsel has reviewed the issue, you will be instructed to continue the
prohibitions against trading and communication, or you will be allowed
to trade and communicate the information.
2. Important Specific Examples
a. If you have a telephone or face-to-face conversation with a senior
executive of a publicly-traded company and are provided information
about the company that you have reason to believe has not yet been
disclosed in a widely-disseminated publication such as a press
release, quarterly report or other public filing, you have received
non-public information. This information is considered non-public even
if you believe that the company executive would provide the same
information to other analysts or portfolio managers who call the
company. Until information has been disclosed in a manner that makes
it available to (or capable of being accessed by) the investment
community as a whole, it is considered non-public. If the information
is material, as described above, you may not trade while in possession
of this information unless you first discuss the matter and obtain
approval from the Director of Compliance, General Counsel or Associate
General Counsel. Although it may be lawful for an analyst to act on
the basis of material information that the company's management has
chosen to disclose selectively to that analyst, where the information
is provided in a one-on-one context,
<PAGE>
regulators are likely to question such conduct. Approval from the Law
and Regulation Department will therefore depend on the specific
circumstances of the information and the disclosure. Under the Supreme
Court's important decision of Dirks v. SEC, 463 U.S. 646 (1983),
securities analysts may be free to act on selectively disclosed
material information if it is provided by company executives
exclusively to achieve proper corporate purposes.
b. If you obtain material information in the course of an analysts'
conference call or meeting conducted by a publicly-traded company in
the ordinary course of its business in which representatives of
several other firms or investors are also present (as distinguished
from the one-on-one situation described in the preceding paragraph),
you may act on the basis of that information without need to consult
with the Director of Compliance, General Counsel or Associate General
Counsel, even if the information has not yet been published by the
news media. You should be aware, however, that if there is something
highly unusual about the meeting or conference call that leads you to
question whether it has been authorized by the company or is otherwise
suspect, you should first consult with the Director of Compliance,
General Counsel or Associate General Counsel.
c. If you are provided material information by a company and are
requested to keep such information confidential, you may not trade
while in possession of that information before first obtaining the
approval of the Director of Compliance, General Counsel or the
Associate General Counsel.
As these examples illustrate, the legal requirements governing insider
trading are not always obvious. You should therefore always consult with the
Director of Compliance, General Counsel or Associate General Counsel if you have
any question at all about the appropriateness of your proposed conduct.
3. Restricting Access To Material, Non-Public Information
Information in your possession that you identify as material and non-public
may not be communicated to anyone, including persons within Seligman,
except as provided in paragraphs 1 and 2 above. In addition, care should be
taken so that such information is secure. For example, files containing
material, non-public information should be sealed; access to computer files
containing material, non-public information should be restricted.
4. Resolving Issues Concerning Insider Trading
If, after consideration of the items set forth in paragraphs 1 and 2, doubt
remains as to whether information is material or non-public, or if there is
any unresolved question as to the applicability or interpretation of the
foregoing procedures, or as to the propriety of any action, it must be
discussed with the Director of Compliance, General Counsel and or the
Associate General Counsel before trading or communicating the information
to anyone.
5. Personal Securities Trading
All Employees shall follow with respect to personal Securities trading the
procedures set forth in the Code of Ethics. In addition, no Employee shall
establish a brokerage Account with a Firm other than those previously
approved without the prior consent of the Director of Compliance and every
Employee shall be subject to reporting requirements under Section III.5 of
the Code of Ethics. The Director of Compliance, or his designee, shall
monitor the personal Securities trading of all Employees.
<PAGE>
Appendix B
Amended November 19, 1999
J. & W. SELIGMAN & CO. INCORPORATED
TRADE AUTHORIZATION REQUEST FORM
1. Name of Employee/Telephone Number: ______________________________
2. If different than #1, name of the person
in whose account the trade will occur: ______________________________
3. Relationship of (2) to (1): ______________________________
4. Name the firm at which the account is held:______________________________
5. Name of Security: ______________________________
6. Number of shares or units to be bought or
sold or amount of bond: ______________________________
7. Approximate price per share, unit or bond: ______________________________
8. Check those that are applicable: ______ Purchase ______ Sale
_____ Market Order ______ Limit Order (Price of Limit Order: _____)
9. Do you possess material non public information
regarding the Security or the issuer of the
Security? ______ Yes ______ No
10. To your knowledge, are there any outstanding
(purchase or sell) orders for this Security or any
Equivalent Security by a Seligman Client? ______ Yes ______ No
11. To your knowledge, is this Security or Equivalent
Security being considered for purchase or sale for
one or more Seligman Clients? ______ Yes ______ No
12. Is this Security being acquired in an initial or
secondary public offering? ______ Yes ______ No
13. Is this Security being acquired in a private
placement? ______ Yes ______ No
14. Have you or any Related Account covered by the
pre-authorization provisions of the Code purchased
or sold this Security within the past 60 days? ______ Yes ______ No
<PAGE>
- - - - - -
For Investment Team Members Only:
15. Has any Client Account managed by your team purchased or
sold this Security or Equivalent Security within the past seven
calendar days or do you expect any such account to purchase
or sell this Security or Equivalent Security within seven
calendar days of your purchase or sale? ______ Yes ______ No
16. Why is this Security Transaction appropriate for you and not for one or
more of your team's Clients?
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
- - - - - -
I have read the J. & W. Seligman & Co. Incorporated Code of Ethics, as revised
on November 19, 1999, within the prior 12 months and believe that the proposed
trade(s) fully complies with the requirements of the Code of Ethics and Insider
Trading policy.
----------------------------
Employee Signature
----------------------------
Date Submitted
Authorized by: ________________________
Date: ________________________
<PAGE>
Appendix C
Amended November 19, 1999
REPORT OF SECURITIES BENEFICIALLY OWNED
AS OF DECEMBER 31, 1999
The following is a list of all Securities positions (except open-end
investment companies, U.S. Government Securities and money market instruments)
in which I have direct or indirect beneficial ownership, as defined in the Code
of Ethics. This includes Securities held at home, in safe deposit boxes or by an
issuer.
Description of Security No. of Shares Principal Amount Location of Security
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
_______ The list above (and any additional sheets I have attached)
represents all my Securities positions in which I have direct or
indirect beneficial ownership as defined in the Code of Ethics.
_______ I only have a beneficial ownership interest in open-end investment
companies, U.S. Government Securities and money market instruments,
and/or I do not beneficially own any Securities.
Date: __________________
---------------------------
First Last, Company
<PAGE>
Appendix D
Amended November 19, 1999
EMPLOYEE REPORTING QUESTIONNAIRE
Employee Name: ____________________ Ext: ______ Department: _______________
Please Print
Company/Affiliate: ______________________ Supervisor: ___________________
1. Securities Accounts
Do you have any Accounts in which Securities can be purchased or sold over
which you have control or in which you have a Beneficial Interest, as
defined in Seligman's Code of Ethics?
Yes _______ No ________
If yes, please list all such Accounts:
Account Account Type of
Institution Number Title Account
----------- ------ ------- -------
-------------------- --------------- ----------------- --------------
-------------------- --------------- ----------------- --------------
-------------------- --------------- ----------------- --------------
2. Financial Interests
Do you have any private placements, restricted stock warrants, general or
limited partnerships, or other investment interests in any organization
(public, private or charitable) not held in the accounts listed above?
Please include Securities and certificates held in your custody.
Yes _______ No _______
If yes, please describe:
------------------------------------------------
--------------------------------------------------------------------------
3. Outside Activities/Affiliations
a) Do you have any activities outside Seligman or its affiliates for
which you receive additional compensation:
Yes _______ No _______
If yes, please describe:
--------------------------------------------------
---------------------------------------------------------------------------
b) Do you serve in the capacity of officer, director, partner or employee
(or in any other fiduciary capacity) for any company or organization
(public, private or charitable) other than Seligman or its affiliates.
Yes ________ No _______
If yes, please describe:
--------------------------------------------------
---------------------------------------------------------------------------
I hereby certify that I have read and understand the foregoing statements
and that each of my responses thereto are true and complete. I agree to
immediately inform the Director of Compliance if there is any change in any
of the above answers. I also understand that any misrepresentation or
omissions of facts in response to this questionnaire and failure to
immediately inform the Director of Compliance of any changes to responses
provided herein may result in termination of my employment.
------------------------------------ ----------------------------
Employee's Signature Date
------------------------------------
Title
<PAGE>
Appendix E
Amended November 19, 1999
Annual Certification of Compliance with the Code of Ethics
I acknowledge that I have received and read the Code of Ethics and Insider
Trading Policies and Procedures, as amended on November 19, 1999 and hereby
agree, in consideration of my continued employment by J. & W. Seligman & Co.
Incorporated, or one of its subsidiaries or affiliates, to comply with the Code
of Ethics and Insider Trading Policies and Procedures.
I hereby certify that during the past calendar year:
1. In accordance with the Code of Ethics, I have fully disclosed the
Securities holdings in my Employee Account(s) and Employee Related
Account(s) (as defined in the Code of Ethics).
2. In accordance with the Code of Ethics, I have maintained all Employee
Accounts and Employee Related Accounts at Ernst & Company (Investec) or
Merrill Lynch located at 712 Fifth Avenue, New York, NY except for Accounts
as to which the Director of Compliance has provided written permission to
maintain elsewhere.
3. In accordance with the Code of Ethics, except for transactions exempt from
reporting under the Code of Ethics, I have arranged for the Director of
Compliance to receive duplicate confirmations and statements for each
Securities Transaction of all Employee Accounts and Employee Related
Accounts, and I have reported all Securities Transactions in each of my
Employee Accounts and Employee Related Accounts.
4. I have complied with the Code of Ethics in all other respects.
--------------------------------
Employee Signature
--------------------------------
Date:____________ Print Name
