File No. 33-15253
811-5221
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
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Post-Effective Amendment No. 19 |X|
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 21 |X|
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SELIGMAN PORTFOLIOS, INC.
(Exact name of registrant as specified in charter)
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b) of rule 485.
|X| on November 1, 1996 pursuant to paragraph (b) of rule 485.
|_| 60 days after filing pursuant to paragraph (a)(i) of rule 485.
|_| on (date) pursuant to paragraph (a)(1) of rule 485.
|_| 75 days after filing pursuant to paragraph (a)(2) of rule 485.
|_| on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on February
20, 1996.
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POST-EFFECTIVE AMENDMENT NO. 19
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
<S> <C>
Item No. in Part A of Form N-1A Location in Prospectus
- -------------------------------- ----------------------
1. Cover Page Cover Page
2. Synopsis Not applicable
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Investment Objectives and Policies
5. Management of Fund Management Services; Portfolio Transactions,
Portfolio Turnover and Valuation
5a. Manager's Discussion of Fund Performance Management Services
6. Capital Stock and Other Securities Organization and Capitalization; Other Investment
Policies; Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered Cover Page; Purchases and Redemptions
8. Redemption or Repurchase Purchases and Redemptions
9. Pending Legal Proceedings Not applicable
Item No. in Part B of Form N-1A Location in Statement of Additional Information
- ------------------------------- -----------------------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Appendix A
13. Investment Objectives and Policies Investment Policies and Restrictions
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers
Holders of Services
16. Investment Advisory and Other Management and Expenses;
Services Custodians and Independent Auditors
17. Brokerage Allocation Portfolio Transactions, Valuation and Redemption
18. Capital Stock and Other Securities Portfolio Transactions, Valuation and Redemption
19. Purchase, Redemption and Pricing of Portfolio Transactions, Valuation and
Securities Being Offered Redemption
20. Tax Status Dividends, Distributions and Taxes (Prospectus)
21. Underwriters Not applicable
22. Calculation of Performance Data Portfolio Transactions, Valuation and Redemption
23. Financial Statements Financial Statements; Appendix B
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SELIGMAN PORTFOLIOS, INC.
100 Park Avenue
New York, New York 10017
800-221-7844 All Continental United States, except New York
212-850-1864 New York State
800-221-2783 Marketing Services
November 1, 1996
Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management
investment company consisting of twelve separate portfolios (the "Portfolios"),
each designed to meet different investment goals. Investment management services
for each of the Fund's Portfolios are provided by J. & W. Seligman & Co.
Incorporated (the "Manager"). Seligman Henderson Co. supervises and directs the
non-U.S. investments of Seligman Henderson Global
(continued on page 2)
The Fund's twelve Portfolios are:
/ / SELIGMAN BOND PORTFOLIO: seeks favorable current income by investing
in a diversified portfolio of debt securities, primarily of investment
grade, including convertible issues and preferred stocks, with capital
appreciation as a secondary consideration.
/ / SELIGMAN CAPITAL PORTFOLIO: seeks to produce capital appreciation, not
current income, by investing in common stocks (primarily those with
strong near or intermediate-term prospects) and securities convertible
into or exchangeable for common stocks, in common stock purchase
warrants and rights, in debt securities and in preferred stocks
believed to provide capital appreciation opportunities.
/ / SELIGMAN CASH MANAGEMENT PORTFOLIO: seeks to preserve capital and to
maximize liquidity and current income by investing in a diversified
portfolio of high-quality money market instruments. Investments in
this Portfolio are neither insured nor guaranteed by the U.S.
/ / Government and there is no assurance that this Portfolio will be able
to maintain a stable net asset value of $1.00 per share.
/ / SELIGMAN COMMON STOCK PORTFOLIO: seeks favorable, but not the highest,
current income and long-term growth of both income and capital value
without exposing capital to undue risk, primarily through equity
investments broadly diversified over a number of industries.
/ / SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO: seeks capital gain,
not income, by investing primarily in securities of companies in the
communications, information and related industries.
/ / SELIGMAN FRONTIER PORTFOLIO: seeks growth in capital value; income may
be considered but will be only incidental to the Portfolio's
investment objective. In general, securities owned are likely to be
those issued by small to medium-sized companies selected for their
growth prospects.
/ / SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO: seeks long-term capital
appreciation primarily through international investments in securities
of medium- to large-sized companies.
/ / SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO: seeks to
achieve its objective of long-term capital appreciation by investing
primarily in equity securities of companies that have the potential to
benefit from global economic or social trends.
/ / SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO: seeks long-term
capital appreciation primarily through global investments in
securities of companies with small to medium market capitalization.
/ / SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO: seeks long-term
capital appreciation by making global investments of at least 65% of
its assets in securities of companies with business operations in
technology and technology-related industries.
/ / SELIGMAN HIGH-YIELD BOND PORTFOLIO: seeks to produce maximum current
income by investing primarily in high-yielding, high risk corporate
bonds and corporate notes, which, generally, are non-rated or carry
ratings lower than those assigned to investment grade bonds. The
Portfolio will invest up to 100% of its assets in lower rated bonds,
commonly known as "junk bonds," which are subject to a greater risk of
loss of principal and interest than higher rated investment grade
bonds. Purchasers should carefully assess the risks associated with an
investment in this Portfolio. See "Investment Objectives and
Policies--Seligman High-Yield Bond Portfolio."
/ / SELIGMAN INCOME PORTFOLIO: seeks primarily to produce high current
income consistent with what is believed to be prudent risk of capital
and secondarily to provide the possibility of improvement in income
and capital value over the longer term, by investing primarily in
income-producing securities.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
(continued from page 1)
Growth Opportunities Portfolio, Seligman Henderson International Portfolio,
Seligman Henderson Global Smaller Companies Portfolio and Seligman Henderson
Global Technology Portfolio (collectively, the "Seligman Henderson Portfolios").
Shares of the Fund are currently provided as the investment medium for Canada
Life of America Variable Annuity Account 1 ("CLAVA-1"), Canada Life of America
Variable Annuity Account 2 ("CLAVA-2"), Canada Life of America Annuity Account 2
("CLAA-2"), Canada Life of America Annuity Account 3 ("CLAA-3"), Canada Life of
New York Variable Annuity Account 1 ("CLNYVA-1") and Canada Life of New York
Variable Annuity Account 2 ("CLNYVA-2") (collectively, "Canada Life Accounts"),
each of which is a separate account of either Canada Life Insurance Company of
America or Canada Life Insurance Company of New York, (collectively, "Canada
Life"). Shares of certain Portfolios of the Fund may not be offered to all
Canada Life Accounts. Shares of the Seligman Bond Portfolio, Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman Common Stock Portfolio
and Seligman Income Portfolio (but not the other Portfolios of the Fund) are
also provided as the investment medium for Mutual Benefit Variable Contract
Account-9 ("VCA-9") established by MBL Life Assurance Corporation ("MBL Life")
(formerly, The Mutual Benefit Life Insurance Company).
CLAVA-1, CLAVA-2, CLNYVA-1 and CLNYVA-2 are each registered as a unit
investment trust under the Investment Company Act of 1940 (the "1940 Act") and
fund variable annuity contracts ("VA Contracts") issued by Canada Life and
distributed by Seligman Financial Services, Inc. CLAA-2 and CLAA-3 are not
registered or regulated under the 1940 Act in reliance on the exemption provided
in Section 3(c)(11) of the 1940 Act. CLAA-2 and CLAA-3 fund annuity contracts
("CLAA Contracts") issued by Canada Life and distributed by Seligman Financial
Services, Inc. which may be purchased only by pension or profit-sharing employee
benefit plans that satisfy the requirements for qualification set forth in
Section 401 of the Internal Revenue Code of 1986. VCA-9 is registered as a unit
investment trust under the 1940 Act and funds variable annuity contracts ("VCA-9
Contracts") issued by MBL Life.
This Prospectus sets forth concisely information about the Fund and its
Portfolios that a prospective investor should know before investing. Please read
it carefully before you invest and keep it for future reference. Additional
information about the Fund, including a Statement of Additional Information, has
been filed with the Securities and Exchange Commission (the "SEC"). The
Statement of Additional Information is available upon request and without charge
by calling or writing the Fund at the telephone numbers or address set forth
above. The Statement of Additional Information is dated the same date as this
Prospectus and is incorporated herein by reference in its entirety.
TABLE OF CONTENTS
PAGE
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Financial Highlights................................ P-4
Investment Objectives And Policies.................. P-8
Seligman Bond Portfolio............................. P-8
Seligman Capital Portfolio.......................... P-9
Seligman Cash Management Portfolio.................. P-9
Seligman Common Stock Portfolio..................... P-10
Seligman Communications and
Information Portfolio............................. P-11
Seligman Frontier Portfolio......................... P-11
Seligman Henderson International Portfolio.......... P-12
Seligman Henderson Global Growth
Opportunities Portfolio........................... P-12
Seligman Henderson Global Smaller
Companies Portfolio............................... P-12
Seligman Henderson Global Technology
Portfolio......................................... P-12
Seligman High-Yield Bond Portfolio.................. P-16
Seligman Income Portfolio........................... P-17
Other Investment Policies........................... P-18
Management Services................................. P-21
Portfolio Transactions, Portfolio Turnover
And Valuation..................................... P-24
Dividends, Distributions And Taxes.................. P-24
Purchases And Redemptions........................... P-25
Custodians And Transfer Agent....................... P-25
Organization And Capitalization..................... P-25
Appendix............................................ P-26
P-2
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P-3
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FINANCIAL HIGHLIGHTS
The following sets forth selected data for the periods indicated for a
single share outstanding of each of the Fund's Portfolios. The results shown
below for all periods through the year ended December 31, 1995 have been audited
in conjunction with the annual audits of the financial statements of Seligman
Portfolios, Inc. by Ernst & Young LLP, independent auditors. The 1995 financial
statements and independent auditors' report thereon as well as the unaudited
financial statements for the six months ended June 30, 1996 are incorporated by
reference in the Fund's Statement of Additional Information. Unaudited financial
statements for the period May 1, 1996 (commencement of operations) to September
30, 1996 for the Seligman Henderson Global Growth Opportunities Portfolio and
the Seligman Henderson Global Technology Portfolio are contained in the Fund's
Statement of Additional Information. Copies of the Statement of Additional
Information may be obtained free of charge from the Fund at the telephone
numbers or address provided on the cover page of this Prospectus.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from a Portfolio's
beginning net asset value to its ending net asset value so that investors may
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INCREASE
NET REALIZED (DECREASE) DISTRIBUTIONS NET INCREASE
NET ASSET VALUE NET & UNREALIZED FROM FROM NET (DECREASE) NET ASSET
PER SHARE OPERATING AT BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT DIVIDENDS GAIN IN NET VALUE AT
PERFORMANCE: OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS PAID REALIZED ASSET VALUE END OF PERIOD
- ------------------- -------------- ------------- -------------- ---------- --------- ------------- ----------- -------------
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BOND PORTFOLIO
Six months
ended 6/30/96* ....... $10.440 $0.282 $(0.672) $(0.390) $ -- $ -- $(0.390) $10.050
Year ended 12/31/95 ..... 9.270 0.605 1.171 1.776 (0.606) -- 1.170 10.440
Year ended 12/31/94...... 10.110 0.499 (0.841) (0.342) (0.498) -- (0.840) 9.270
Year ended 12/31/93...... 10.660 0.713 0.142 0.855 (0.711) (0.694) (0.550) 10.110
Year ended 12/31/92...... 10.990 0.706 (0.092) 0.614 (0.772) (0.172) (0.330) 10.660
Year ended 12/31/91...... 10.310 0.798 0.699 1.497 (0.817) -- 0.680 10.990
Year ended 12/31/90...... 10.220 0.680 (0.054) 0.626 (0.536) -- 0.090 10.310
Year ended 12/31/89...... 9.930 0.658 0.208 0.866 (0.576) -- 0.290 10.220
6/21/88*-12/31/88........ 10.000 0.262 (0.162) 0.100 (0.170) -- (0.070) 9.930
CAPITAL PORTFOLIO
Six months ended 6/30/96* 14.910 0.020 2.070 2.090 -- -- 2.090 17.000
Year ended 12/31/95 ..... 12.700 0.048 3.385 3.433 (0.047) (1.176) 2.210 14.910
Year ended 12/31/94...... 14.950 0.015 (0.699) (0.684) (0.018) (1.548) (2.250) 12.700
Year ended 12/31/93...... 16.980 0.021 1.928 1.949 (0.021) (3.958) (2.030) 14.950
Year ended 12/31/92...... 17.740 (0.022) 1.202 1.180 -- (1.940) (0.760) 16.980
Year ended 12/31/91...... 11.230 0.079 6.547 6.626 (0.088) (0.028) 6.510 17.740
Year ended 12/31/90...... 11.620 0.044 (0.414) (0.370) (0.020) -- (0.390) 11.230
Year ended 12/31/89...... 10.060 (0.084) 1.739 1.655 -- (0.095) 1.560 11.620
6/21/88*-12/31/88........ 10.000 0.060 -- 0.060 -- -- 0.060 10.060
CASH MANAGEMENT PORTFOLIO
Six months ended 6/30/96* 1.000 0.026 -- 0.026 (0.026) -- -- 1.000
Year ended 12/31/95 ..... 1.000 0.055 -- 0.055 (0.055) -- -- 1.000
Year ended 12/31/94...... 1.000 0.040 -- 0.040 (0.040) -- -- 1.000
Year ended 12/31/93...... 1.000 0.030 -- 0.030 (0.030) -- -- 1.000
Year ended 12/31/92...... 1.000 0.035 -- 0.035 (0.035) -- -- 1.000
Year ended 12/31/91...... 1.000 0.056 -- 0.056 (0.056) -- -- 1.000
Year ended 12/31/90...... 1.000 0.075 -- 0.075 (0.075) -- -- 1.000
Year ended 12/31/89...... 1.000 0.075 -- 0.075 (0.075) -- -- 1.000
6/21/88*-12/31/88........ 1.000 0.020 -- 0.020 (0.020) -- -- 1.000
COMMON STOCK PORTFOLIO
Six months ended 6/30/96* 15.440 0.166 1.644 1.810 -- -- 1.810 17.250
Year ended 12/31/95 ..... 13.780 0.349 3.400 3.749 (0.345) (1.744) 1.660 15.440
Year ended 12/31/94...... 14.980 0.365 (0.356) 0.009 (0.385) (0.824) (1.200) 13.780
Year ended 12/31/93...... 15.600 0.392 1.479 1.871 (0.394) (2.097) (0.620) 14.980
Year ended 12/31/92...... 14.740 0.346 1.445 1.791 (0.369) (0.562) 0.860 15.600
Year ended 12/31/91...... 11.580 0.362 3.459 3.821 (0.355) (0.306) 3.160 14.740
Year ended 12/31/90...... 12.260 0.356 (0.743) (0.387) (0.263) (0.030) (0.680) 11.580
Year ended 12/31/89...... 10.150 0.248 2.195 2.443 (0.179) (0.154) 2.110 12.260
6/21/88*-12/31/88........ 10.000 0.120 0.060 0.180 (0.030) -- 0.150 10.150
COMMUNICATIONS AND
INFORMATION PORTFOLIO
Six months ended 6/30/96* 13.500 (0.014) (0.426) (0.440) -- -- (0.440) 13.060
Year ended 12/31/95 ..... 10.440 -- 4.015 4.015 -- (0.955) 3.060 13.500
10/11/94* to 12/31/94.... 10.000 (0.016) 0.456 0.440 -- -- 0.440 10.440
FRONTIER PORTFOLIO
Six months ended 6/30/96* 13.560 (0.025) 2.875 2.850 -- -- 2.850 16.410
Year ended 12/31/95 ..... 10.580 (0.001) 3.512 3.511 -- (0.531) 2.980 13.560
10/11/94* to 12/31/94.... 10.000 (0.012) 0.592 0.580 -- -- 0.580 10.580
</TABLE>
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* Commencement of Operations.
** The Manager, at its discretion, waived its management fee and/or reimbursed
expenses for certain periods presented.
+ Annualized.
P-4
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understand what effect the individual items have on their investment, assuming
it was held throughout the period. Generally, the per share amounts are derived
by converting the actual dollar amounts incurred for each item, as disclosed in
the financial statements, to their equivalent per share amount.
The total return based on net asset value measures a Portfolio's
performance assuming investors purchased shares at net asset value as of the
beginning of the period, reinvested dividends and capital gains paid at net
asset value, and then sold the shares at the net asset value per share on the
last day of the period. The total returns exclude the effect of all
administration fees and asset-based sales loads associated with variable annuity
contracts. The total returns for periods of less than one year are not
annualized.
Average commission rate paid represents the average commissions paid by a
Portfolio to purchase or sell securities. It is determined by dividing the total
commission dollars paid by the number of shares purchased and sold during the
period for which commissions were paid.
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WITHOUT MANAGEMENT FEE WAIVER AND/OR
EXPENSE REIMBURSEMENT**
RATIOS/SUPPLEMENTAL DATA ---------------------------------------------
------------------------------------------------------------------- RATIO OF
TOTAL RETURN EXPENSES NET INVESTMENT NET RATIO OF NET INVESTMENT
BASED ON TO INCOME (LOSS) AVERAGE NET ASSETS AT INVESTMENT EXPENSES TO INCOME (LOSS)
NET ASSET AVERAGE TO AVERAGE PORTFOLIO COMMISSION END OF PERIOD INCOME (LOSS) AVERAGE NET TO AVERAGE
VALUE NET ASSETS NET ASSETS TURNOVER RATE PAID (000'S OMITTED) PER SHARE ASSETS NET ASSETS
------------ ---------- -------------- --------- ----------- -------------- ------------- ------------ --------------
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(3.74)% 0.60%+ 5.75%+ 135.65% $ 4,345 $0.270 0.85 %+5.50%+
19.18 0.60 6.22 114.42 4,497 0.571 0.99 5.83
(3.39) 0.60 5.12 237.23 3,606 0.430 1.31 4.41
7.98 0.74 5.41 33.21 3,775 0.675 1.07 5.08
5.60 1.00 6.22 23.40 4,750
14.58 0.60 7.30 6.34 5,369 0.712 1.42 6.48
6.14 1.73 6.59 6.62 4,600
8.70 2.13 6.51 49.92 4,129 0.643 2.27 6.37
1.01 2.99+ 5.25+ 144.21 2,223
14.02 0.60+ 0.25+ 34.96 $0.0536 12,382 0.019 0.61+ 0.24+
27.17 0.60 0.32 122.20 9,294 0.035 0.71 0.21
(4.59) 0.60 0.10 67.39 5,942 (0.036) 0.96 (0.26)
11.65 0.71 0.09 65.30 5,886 (0.003) 0.83 (0.03)
6.80 0.91 (0.14) 54.95 5,497
59.05 0.60 0.56 31.44 5,812 (0.035) 1.37 (0.21)
(3.18) 2.15 0.18 28.94 3,560
16.47 3.55 (0.88) 32.55 2,577 (0.092) 3.80 (1.12)
0.60 6.99+ (0.11)+ -- 890
2.68 -- 5.32+ -- 9,150 0.023 0.68+ 4.64+
5.60 -- 5.48 -- 7,800 0.046 0.87 4.61
4.03 -- 3.98 -- 3,230 0.025 1.48 2.50
3.00 -- 2.96 -- 3,102 0.019 1.07 1.89
3.53 -- 3.50 -- 4,230 0.025 0.97 2.53
5.70 -- 5.49 -- 5,849 0.048 0.83 4.66
7.79 -- 7.53 -- 3,994 0.045 2.97 4.56
7.81 -- 7.72 -- 908 (0.019) 9.57 (1.85)
2.35 0.95+ 5.83+ -- 283 (0.050) 20.02+ (13.24)+
11.72 0.52+ 2.03+ 24.94 0.0537 33,350
27.28 0.54 2.42 55.48 28,836
0.04 0.60 2.45 15.29 20,168 0.361 0.62 2.43
11.94 0.55 2.10 10.70 21,861
12.14 0.56 2.21 12.57 24,987
33.16 0.60 2.63 27.67 26,103 0.350 0.71 2.52
(3.15) 0.88 3.01 13.78 18,030
24.11 1.59 2.32 37.56 9,332 0.236 1.67 2.23
1.80 3.62+ 1.65+ 14.40 2,476
(3.26) 0.89 +(0.24)+ 113.32 0.0537 49,563
38.55 0.95 (0.89) 96.62 38,442
4.40 0.95+ (0.95)+ -- 495 (0.436) 13.96+ (13.96)+
21.02 0.95+ (0.40) +73.62 0.0562 22,763 (0.025) 0.96+ (0.41)+
33.28 0.95 (0.55) 106.48 12,476 (0.019) 1.37 (0.97)
5.80 0.95+ (0.70)+ -- 169 (1.319) 40.47+ (40.22)+
</TABLE>
P-5
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<TABLE>
<CAPTION>
NET REALIZED
& UNREALIZED INCREASE
NET REALIZED GAIN (LOSS) (DECREASE) DISTRIBUTIONS NET
NET ASSET VALUE NET & UNREALIZED FROM FOREIGN FROM FROM NET INCREASE
PER SHARE OPERATING AT BEGINNING INVESTMENT GAIN (LOSS) CURRENCY INVESTMENT DIVIDENDS GAIN (DECREASE) IN
PERFORMANCE: OF PERIOD INCOME ON INVESTMENTS TRANSACTIONS OPERATIONS PAID REALIZED NET ASSET VALUE
- ------------------- -------------- ------------- -------------- ------------ --------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL PORTFOLIO
Six months ended 6/30/96. $12.390 $0.076 $0.723 $(0.129) $0.670 $ -- $ -- $0.670
Year ended 12/31/95...... 11.340 0.154 0.896 0.236 1.286 (0.151) (0.085) 1.050
Year ended 12/31/94...... 11.370 0.131 (0.306) 0.325 0.150 (0.064) (0.116) (0.030)
5/3/93*-12/31/93......... 10.000 0.021 1.518 (0.099) 1.440 (0.053) (0.017) 1.370
GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO
5/1/96*-9/30/96........ 10.000 0.035 (0.275) 0.050 (0.190) -- -- (0.190)
GLOBAL SMALLER COMPANIES
PORTFOLIO
Six months ended 6/30/96. 11.670 0.039 2.467 (0.166) 2.340 -- -- 2.340
Year ended 12/31/95...... 10.310 0.051 2.037 (0.301) 1.787 (0.052) (0.375) 1.360
10/11/94*-12/31/94....... 10.000 0.058 0.266 0.029 0.353 (0.043) -- 0.310
GLOBAL TECHNOLOGY
PORTFOLIO
5/1/96*-9/30/96........ 10.000 0.038 (0.056) (0.012) (0.030) -- -- (0.030)
HIGH-YIELD BOND PORTFOLIO
Six months ended 6/30/96. 10.500 0.443 0.147 -- 0.590 -- -- 0.590
5/1/95*-12/31/95......... 10.000 0.218 0.519 -- 0.737 (0.219) (0.018) 0.500
INCOME PORTFOLIO
Six months ended 6/30/96. 10.560 0.289 (0.019) -- 0.270 -- -- 0.270
Year ended 12/31/95...... 9.970 0.604 1.187 -- 1.791 (0.604) (0.597) 0.590
Year ended 12/31/94...... 11.380 0.689 (1.369) -- (0.680) (0.730) -- (1.410)
Year ended 12/31/93...... 11.390 0.828 0.576 -- 1.404 (0.828) (0.586) (0.010)
Year ended 12/31/92...... 11.250 0.862 0.896 -- 1.758 (0.987) (0.631) 0.140
Year ended 12/31/91...... 9.500 0.896 2.024 -- 2.920 (0.904) (0.266) 1.750
Year ended 12/31/90...... 10.780 0.829 (1.487) -- (0.658) (0.622) -- (1.280)
Year ended 12/31/89...... 10.040 0.634 0.834 -- 1.468 (0.419) (0.309) 0.740
6/21/88*-12/31/88........ 10.000 0.142 (0.032) -- 0.110 (0.070) -- 0.040
</TABLE>
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* Commencement of Operations.
** The Manager, at its discretion, waived its management fee and/or reimbursed
expenses for certain periods presented.
+ Annualized.
P-6
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<TABLE>
<CAPTION>
WITHOUT MANAGEMENT FEE WAIVER AND/OR
EXPENSE REIMBURSEMENT**
RATIOS/SUPPLEMENTAL DATA -----------------------------------------
-------------------------------------------------------------- RATIO OF NET
TOTAL RETURN EXPENSES NET INVESTMENT NET RATIO OF INVESTMENT
NET ASSET BASED ON TO INCOME (LOSS) AVERAGE NET ASSETS AT INVESTMENT EXPENSES TO INCOME (LOSS)
VALUE AT NET ASSET AVERAGE TO AVERAGE PORTFOLIO COMMISSION END OF PERIOD INCOME (LOSS) AVERAGE NET TO AVERAGE
END OF PERIOD VALUE NET ASSETS NET ASSETS TURNOVER RATE PAID (000'S OMITTED) PER SHARE ASSETS NET ASSETS
------------ ---------- ---------- ------------- --------- ---------- -------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$13.060 5.41% 1.40%+ 1.27%+ 19.12% $0.0151 $5,697 $ 0.002 2.66%+ 0.01%+
12.390 11.34 1.35 1.01 41.40 4,183 0.001 3.40 (1.04)
11.340 1.32 1.20 1.17 47.34 1,776 (0.419) 6.12 (3.75)
11.370 14.40 1.20+ 1.30+ 2.82 648 (1.004) 17.94+ (15.44)+
9.81 (1.90) 1.40+ 0.88+ -- 0.0594 783 (0.282) 9.47+ (7.19)+
14.010 20.05 1.40+ 0.84+ 41.82 0.0249 11,431 0.002 2.21+ 0.03+
11.670 17.38 1.39 0.64 55.65 4,837 (0.051) 3.84 (1.81)
10.310 3.53 1.20+ 3.14+ -- 132 (1.225) 37.25+ (32.91)+
9.97 (0.30) 1.40+ 0.96+ 7.02 0.0561 958 (0.159) 6.41+ (4.05)+
11.090 5.62 0.70+ 9.38+ 68.25 6,632 0.428 1.02+ 9.06+
10.500 7.37 0.70+ 7.46+ 67.55 3,009 0.117 4.38+ 3.78+
10.830 2.56 0.60+ 5.48+ 5.50 0.0600 12,577
10.560 17.98 0.60 5.55 51.22 12,619 0.602 0.62 5.53
9.970 (5.96) 0.60 6.34 29.76 10,050 0.670 0.77 6.17
11.380 12.37 0.64 6.40 38.38 11,220 0.826 0.65 6.39
11.390 15.72 0.68 7.53 39.46 11.363
11.250 30.89 0.60 8.05 43.67 11,509 0.867 0.93 7.72
9.500 (6.10) 1.40 8.19 21.64 7,419
10.780 14.61 2.69 5.95 60.10 4,085 0.610 2.88 5.77
10.040 1.10 5.02+ 2.46+ -- 1,265 0.089 5.42+ 2.07+
</TABLE>
P-7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Set forth below is a description of the investment objective of each of the
Fund's Portfolios and their investment policies. Of course, because any
investment involves risk, there can be no assurance that any of the Portfolios
will meet its objective. The investment objective of each Portfolio may not be
changed without the affirmative vote of the holders of a majority of the voting
securities of that Portfolio; however, unless otherwise noted, the investment
policies of each Portfolio are not fundamental and may be changed by the Fund's
Board of Directors without a vote of shareholders. A more detailed description
of each Portfolio's investment policies, including a list of those restrictions
on each Portfolio's investment activities which cannot be changed without such a
vote, appears in the Statement of Additional Information. Information regarding
the various rating categories used by the Standard & Poor's Corporation ("S&P")
and Moody's Investors Services, Inc. ("Moody's"), and referred to in the
following descriptions, is included in the Appendix to this Prospectus.
SELIGMAN BOND PORTFOLIO (FORMERLY, SELIGMAN FIXED INCOME SECURITIES PORTFOLIO)
The investment objective of this Portfolio is to achieve favorable current
income by investing in debt securities, including convertible issues and
preferred stock, diversified over a number of industries. Capital appreciation
will be a secondary consideration in selecting portfolio securities. As a matter
of fundamental policy, the Portfolio will invest at least 80% of its assets in
securities that are rated investment grade.
The Portfolio's assets may be invested in (l) corporate debt securities,
including bonds and debentures convertible into common stock or with warrants
and rights; (2) debt securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; or (3) mortgage-backed debt securities, including
securities issued by the Government National Mortgage Association ("GNMA") and
debt obligations secured by commercial or residential real estate, rated within
one of the three highest rating categories by S&P or, if unrated, of comparable
quality in the opinion of the Manager; (4) preferred stock; and (5) commercial
paper rated within one of the three highest rating categories by S&P or Moody's.
The Portfolio may also hold or sell any securities obtained through the exercise
of conversion rights or warrants, or as a result of reorganization,
recapitalization, or liquidation proceedings of any issuer of securities owned
by the Portfolio. Long-term debt securities normally will be held when it is
believed that the trend of interest rates is down and prices of such securities
will increase; conversely, when it is believed that long-term interest rates
will rise, the Portfolio may attempt to shift into short-term debt securities
that are generally not as volatile as longer-term securities in periods of
rising interest rates. The Portfolio may, pending investment and for temporary
defensive purposes, invest without limitation in high-grade short-term money
market instruments, including repurchase agreements, of the types listed under
"Seligman Cash Management Portfolio."
Corporate debt securities purchased by the Portfolio will, in order to meet
the Portfolio's fundamental policy, be investment grade bonds that are rated
within one of the four highest rating categories by S&P or Moody's. To the
extent that the Portfolio may invest in lower-rated bonds, an investor should be
aware that while providing higher yields, such lower-rated bonds generally are
subject to greater market fluctuations and risks of loss of income and principal
than higher-rated (and lower-yielding) bonds. A description of the credit
ratings and the risks associated with such investments is contained in the
Appendix to this Prospectus. U.S. Government and agency obligations in which the
Portfolio invests may include direct obligations of the U.S. Treasury, such as
bills, notes and bonds, and marketable obligations issued by a U.S. Government
agency or instrumentality. Agency securities include those issued by the Small
Business Administration, General Services Administration and Farmers Home
Administration, which are guaranteed by the U.S. Treasury. Other such securities
are supported by the right of the issuer to borrow from the Treasury, such as
securities issued by the Federal Home Loan Mortgage Corporation ("FHLMC"), while
certain other securities are supported only by the credit of the agency or
instrumentality itself, such as securities issued by the Federal National
Mortgage Association ("FNMA"). Commercial paper includes unsecured promissory
notes of corporate issuers, which securities generally have remaining maturities
not exceeding nine months.
The mortgage-backed securities in which the Portfolio invests will include
securities that represent interests in pools of mortgage loans made by lenders
such as savings and loan institutions, mortgage bankers, and commercial banks.
Such securities provide a "pass-through" of monthly payments of interest and
principal made by the borrowers on their residential mortgage loans (net of any
fees paid to the issuer or guarantor of such securities). Although the
residential mortgages underlying a pool may have maturities of up to 30 years, a
pool's effective maturity may be reduced by prepayments of principal on the
underlying mortgage obligations. Factors affecting mortgage prepayments include,
P-8
<PAGE>
among other things, the level of interest rates, general economic and social
conditions and the location and age of the mortgages. High interest rate
mortgages are more likely to be prepaid than lower-rate mortgages; consequently,
the effective maturities of mortgage-related obligations that pass-through
payments of higher-rate mortgages are likely to be shorter than those of
obligations that pass-through payments of lower-rate mortgages. If such
prepayment of mortgage-related securities in which the Portfolio invests occurs,
the Portfolio may have to invest the proceeds in securities with lower yields.
GNMA is a U.S. Government corporation within the Department of Housing and
Urban Development, authorized to guarantee, with the full faith and credit of
the U.S. Government, the timely payment of principal and interest on securities
issued by institutions approved by GNMA (such as savings and loan institutions,
commercial banks and mortgage bankers) and backed by pools of Federal Housing
Administration insured or Veterans Administration guaranteed residential
mortgages. These securities entitle the holder to receive all interest and
principal payments owed on the mortgages in the pool, net of certain fees,
regardless of whether or not the mortgagors actually make the payments. Other
government-related issuers of mortgage-related securities include FNMA, a
government-sponsored corporation subject to general regulation by the Secretary
of Housing and Urban Development but owned entirely by private stockholders, and
FHLMC, a corporate instrumentality of the U.S. Government created for the
purpose of increasing the availability of mortgage credit for residential
housing that is owned by the twelve Federal Home Loan Banks. FHLMC issues
Participation Certificates ("PCs"), which represent interests in mortgages from
FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but PCs are not backed by the full faith and
credit of the U.S. Government. Pass-through securities issued by FNMA are backed
by residential mortgages purchased from a list of approved seller/servicers and
are guaranteed as to timely payment of principal and interest by FNMA, but are
not backed by the full faith and credit of the U.S. Government.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through securities based on pools of conventional residential mortgage
loans. Securities created by such non-governmental issuers may offer a higher
rate of interest than government-related securities; however, timely payment of
interest and principal may or may not be supported by insurance or guarantee
arrangements, and there can be no assurance that the private issuers can meet
their obligations.
SELIGMAN CAPITAL PORTFOLIO
The investment objective of this Portfolio is to produce capital
appreciation for its shareholders. Current income is not an objective. The
Portfolio will seek to achieve its objective by investing in common stocks and
securities convertible into or exchangeable for common stocks, in common stock
purchase warrants and rights, in debt securities and in preferred stocks
believed to provide capital appreciation opportunities. Common stocks, for the
most part, are selected for their near or intermediate-term prospects. They may
be stocks believed to be underpriced or stocks of growth companies, cyclical
companies, or companies believed to be undergoing a basic change for the better.
They may be stocks of established, well-known companies or of newer,
less-seasoned companies believed to have better-than-average prospects. The
principal criterion for choice of investments is capital appreciation potential.
The Portfolio may, pending investment and for temporary defensive purposes,
hold cash and invest without limitation in high-grade, short-term money market
instruments, including repurchase agreements, of the types listed under
"Seligman Cash Management Portfolio."
The Seligman Capital Portfolio may borrow money to increase its portfolio
of securities. Investing for capital appreciation and borrowing ordinarily
expose capital to added risk, and investment in the Portfolio should be
considered only by persons who are able and willing to take such risk.
SELIGMAN CASH MANAGEMENT PORTFOLIO
The investment objective of this Portfolio is to preserve capital and to
maximize liquidity and current income by investing in a diversified portfolio of
high-quality money market instruments consisting of U.S. Government obligations,
U.S. dollar-denominated bank obligations (including those issued by U.S. banks,
their foreign branches and U.S. branches of foreign banks), prime commercial
P-9
<PAGE>
paper, high-grade, short-term corporate obligations and repurchase agreements
with respect to the above types of instruments. The Portfolio seeks to maintain
a constant net asset value of $1.00 per share; there can be no assurance that
the Portfolio will be able to do so. In an effort to maintain a stable net asset
value, the Portfolio uses the amortized cost method of valuing its securities.
The Portfolio will invest only in U.S. dollar-denominated securities having
a remaining maturity of 13 months (397 days) or less and will maintain a
dollar-weighted average portfolio maturity of 90 days or less. The Portfolio
will limit its investments to those securities that, in accordance with
guidelines adopted by the Board of Directors, present minimal credit risks.
Accordingly, the Portfolio will not purchase any security (other than a U.S.
Government obligation) unless (i) it is rated in one of the two highest rating
categories assigned to short-term debt securities by at least two nationally
recognized statistical rating organizations ("NRSROs") such as Moody's and S&P,
or (ii) if not so rated, it is determined to be of comparable quality.
Determinations of comparable quality will be made in accordance with procedures
established by the Directors. These standards must be satisfied at the time an
investment is made. If the quality of the investment later declines, the
Portfolio may continue to hold the investment, subject in certain circumstances
to a finding by the Board of Directors that disposing of the investment would
not be in the Portfolio's best interest.
Presently, the Portfolio only invests in either U.S. Government obligations
or securities that are rated in the top rating category by Moody's and S&P.
However, the Portfolio is permitted to invest up to 5% of its assets in
securities rated in the second highest rating category by two NRSROs, provided
that not more than the greater of 1% of its total assets or $1,000,000 is
invested in any one such security.
U.S. GOVERNMENT OBLIGATIONS in which the Portfolio invests include
obligations issued or guaranteed as to both principal and interest by the U.S.
Government or backed by the full faith and credit of the United States, such as
U.S. Treasury bills, securities issued or guaranteed by a U.S. Government agency
or instrumentality, and securities supported by the right of the issuer to
borrow from the U.S. Treasury.
BANK OBLIGATIONS purchased by the Portfolio include U.S. dollar-denominated
certificates of deposit, banker's acceptances, fixed time deposits and
commercial paper of domestic banks, including their branches located outside the
United States, and of domestic branches of foreign banks. 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 U.S. 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.
COMMERCIAL PAPER AND SHORT-TERM CORPORATE DEBT SECURITIES include
short-term unsecured promissory notes with maturities not exceeding nine months
issued in bearer form by bank holding companies, corporations and finance
companies. Investments in commercial paper issued by bank holding companies will
be limited at the time of investment to the 100 largest U.S. bank holding
companies in terms of assets.
YIELD INFORMATION. Investors should recognize that, in periods of declining
interest rates, yields will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates, the yield of the Portfolio will
tend to be somewhat lower. Also, when interest rates are falling, the inflow of
new money to the Portfolio from the continuous sale of its shares will likely be
invested in portfolio instruments producing lower yields than the balance of the
Portfolio assets, thereby reducing the current yield of the Portfolio. In
periods of rising interest rates, the opposite can be true. The Portfolio may
attempt to increase yields on its investments by using trading techniques
designed to take advantage of short-term market variations. This policy,
together with the short maturities of the securities in which the Portfolio
invests, would result in high portfolio turnover. The Portfolio does not
anticipate incurring significant brokerage or transaction expenses since
portfolio transactions ordinarily will be made directly with the issuer, money
market dealer, or other financial institution on a net price basis.
SELIGMAN COMMON STOCK PORTFOLIO
The investment objective of this Portfolio is to produce favorable, but not
the highest, current income and long-term growth of both income and capital
value, without exposing capital to undue risk. The Portfolio seeks to achieve
its objective primarily through equity investments, and in general, investments
will be broadly diversified over a number of industries. The Portfolio may,
pending investment and for temporary defensive purposes, invest without
P-10
<PAGE>
limitation in high-grade, short-term money market instruments, including
repurchase agreements, of the types listed under "Seligman Cash Management
Portfolio."
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
The investment objective of this Portfolio is to produce capital gain.
Income is not an objective. The Portfolio seeks to achieve its objective by
investing in a portfolio consisting of securities of companies operating in
virtually all aspects of the communications, information and related industries.
It invests at least 80% of its net assets, exclusive of government securities,
short-term notes, cash and cash equivalents, in securities of companies engaged
in these industries.
The value of Portfolio shares may be susceptible to factors affecting the
communications, information and related industries. As such, this Portfolio is
not an appropriate investment for individuals who require safety of principal or
stable income from their investments. These industries may be subject to greater
governmental regulation than many other industries and changes in governmental
policies and the need for regulatory approvals may have a material effect on the
products and services of these industries. Although securities of large
companies that now are well established in the world communications and
information market and can be expected to grow with the market are held by this
Portfolio, rapidly changing technologies and the expansion of the
communications, information and related industries provide a favorable
environment for investing in companies of small to medium size. Securities of
smaller, less-seasoned companies may be subject to greater price fluctuation,
limited liquidity and above-average investment risk.
This Portfolio invests primarily in common stocks. It also may invest in
securities convertible into or exchangeable for common stocks, in warrants and
rights to purchase common stocks and in debt securities or preferred stocks
believed to provide opportunities for capital gain. It is this Portfolio's
present intention to invest not more than 5% of its net assets in debt
securities that are not rated within the four highest rating categories by S&P
or by Moody's.
SELIGMAN FRONTIER PORTFOLIO
The investment objective of this Portfolio is to produce growth in capital
value; income may be considered but will be only incidental to the Portfolio's
investment objective. This Portfolio seeks to achieve its objective by investing
in a portfolio consisting of securities of companies selected for their growth
prospects. It invests primarily in common stocks, and may also invest in
securities that may be exchanged for or converted into common stock, preferred
stock and common stock purchase warrants and rights believed by the Manager to
provide capital growth opportunities.
Stocks of companies believed by the Manager to have special characteristics
(such as a high growth rate of unit sales, an important opportunity in a
developing industry or a distinct competitive advantage) are favored by this
Portfolio. In general, securities owned are likely to be those issued by
companies of small to medium size with annual revenue of $400 million or less.
Except when investing for temporary defensive purposes, this Portfolio will
invest at least 65% of its net assets, exclusive of government securities,
short-term notes, cash and cash items, in securities of such companies.
Securities of smaller or medium-sized companies may be subject to above-average
market price fluctuation and business risk; however, the Manager will seek to
temper such risks by diversification of investments and by avoiding
concentration of investments in any one industry.
This Portfolio's investments, other than in securities of the companies
discussed above, will be substantially in securities issued or guaranteed by the
U.S. Government (such as Treasury bills, notes and bonds), its agencies,
instrumentalities or authorities, highly-rated corporate debt securities (rated
AA-, or better, by S&P or Aa3, or better, by Moody's); prime commercial paper
(rated A-1+/A-1 by S&P or P-1 by Moody's) and certificates of deposit of the 100
largest (based on assets) banks that are subject to regulatory supervision by
the U.S. Government or state governments and the 100 largest (based on assets)
foreign banks with branches or agencies in the United States.
P-11
<PAGE>
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (FORMERLY, SELIGMAN HENDERSON
GLOBAL PORTFOLIO)
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
Unless otherwise indicated, the following description of investment
objectives and policies applies to each of the Seligman Henderson International
Portfolio ("International Portfolio"), the Seligman Henderson Global Growth
Opportunities Portfolio ("Global Growth Opportunities Portfolio"), the Seligman
Henderson Global Smaller Companies Portfolio ("Global Smaller Companies
Portfolio") and the Seligman Henderson Global Technology Portfolio ("Global
Technology Portfolio").
The investment objective of the International Portfolio is long-term
capital appreciation primarily through international investments in securities
of medium- to large-sized companies. Under normal market conditions, the
International Portfolio will invest 65% of its assets in securities of issuers
located in at least three different countries, not including the U.S.
The investment objective of the Global Growth Opportunities Portfolio is
long-term capital appreciation. The Global Growth Opportunities Portfolio seeks
to achieve its objective by investing primarily in equity securities of
companies that have the potential to benefit from global economic or social
trends. The Subadviser believes that such trends are reshaping the world as it
moves towards the new millennium. The trends that will be initially focused on
will include global economic liberalization and the flow of capital through
trade and investment; the globalization of the world's economy; the expansion of
technology as an increasingly important influence on society; the increased
awareness of the importance of protecting the environment; and the increase in
life expectancy leading to changes in consumer demographics and a greater need
for healthcare, security and leisure.
The investment objective of the Global Smaller Companies Portfolio is
long-term capital appreciation primarily through global investments in
securities of companies with small to medium market capitalizations. Under
normal market conditions, the Global Smaller Companies Portfolio will invest its
assets in securities of issuers located in at least three different countries,
one of which may be the U.S., and will invest at least 65% of its assets in
securities of small to medium-sized companies with market capitalization up to
$1 billion.
The investment objective of the Global Technology Portfolio is long-term
capital appreciation. The Global Technology Portfolio seeks to achieve its
objective by making global investments of at least 65% of its assets in
securities of companies with business operations in technology and
technology-related industries. The Global Technology Portfolio defines
technology as the use of science to create new products and services. As such
the industry comprises not only information technology and communications but
also medical, environmental and bio-technology. The Global Technology Portfolio
expects to invest in a broad range of technologies. The technology market is
global in its scope and has exhibited and continues to demonstrate rapid growth
both through increasing demand for existing products and services and the
broadening of the technology market. Penetration rates remain low while emerging
technologies such as multimedia and genetic engineering are opening up whole new
markets. The application of new technology to traditional industries is, in many
cases, revolutionizing both manufacturing and distribution industries.
Nonetheless, older technologies such as photography and print may also be
represented. The Subadviser expects to take advantage of valuation anomalies in
international markets created by the emergence of established U.S. technology
trends in overseas markets and the relative immaturity of the technology sectors
in those countries' securities markets. Securities of large companies that are
well established in the world technology market can be expected to grow with the
market and will frequently be held by the Global Technology Portfolio; however,
rapidly changing technologies and the expansion of technology and
technology-related industries provide a favorable environment for investment in
companies of small- to medium-size. Consequently, the Global Technology
Portfolio's investments are not subject to any minimum capitalization
requirement, and the Global Technology Portfolio may invest in securities
without regard to the capitalization of the issuer.
Seligman Henderson Co. (the "Subadviser") will supervise and direct the
investments of each of the Portfolios. While each Portfolio may invest in
securities of issuers domiciled in any country (except the International
Portfolio, which normally will not invest in the U.S.), under normal conditions
investments will be made in four principal regions: The United
Kingdom/Continental Europe, North America, the Pacific Basin and Latin America.
Continental European countries include Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and Turkey. Pacific Basin countries include
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<PAGE>
Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand,
Pakistan, The People's Republic of China, The Philippines, Singapore, Sri Lanka,
Taiwan and Thailand. North America includes the United States and Canada. Latin
American countries include Argentina, Brazil, Chile, Mexico and Venezuela.
In allocating investments among geographic regions and individual
countries, the Subadviser will consider such factors as the relative economic
growth potential of the various economies and securities markets; expected
levels of inflation; financial, social and political conditions influencing
investment opportunities; and the outlook for currency relationships.
These Portfolios may invest in all types of securities, most of which will
be denominated in currencies other than the U.S. dollar. Since opportunities for
long-term growth are primarily expected from equity securities, the Portfolios
will normally invest substantially all of their assets in such securities,
including common stock, securities convertible into common stock, depositary
receipts for these securities and warrants. These Portfolios may, however,
invest up to 25% of their assets in preferred stock and debt securities if the
Subadviser believes that the capital appreciation available from an investment
in such securities will equal or exceed the capital appreciation available from
an investment in equity securities. Dividends or interest income are considered
only when the Subadviser believes that such income will have a favorable
influence on the market value of a security in light of the Portfolios'
objective of capital appreciation. Equity securities in which each of the
Portfolios will invest may be listed on a U.S. or foreign stock exchange or
traded in U.S. or foreign over-the-counter markets.
There is no requirement that the debt securities in which the Portfolios
may invest be rated by a recognized rating agency. However, it is the
Portfolios' policy that investments in debt securities, whether rated or
unrated, will be made only if they are, in the opinion of the Subadviser, of
equivalent quality to "investment grade" securities. "Investment grade"
securities are those rated within the four highest quality grades as determined
by Moody's or S&P. Debt securities are interest-rate sensitive, so that their
value will tend to decrease when interest rates rise and increase when interest
rates fall.
DEPOSITARY RECEIPTS. The Portfolios may invest in securities represented by
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") or
Global Depositary Shares ("GDSs"). ADRs and ADSs are instruments generally
issued by domestic banks or trust companies that represent the deposit of a
security of a foreign issuer. ADRs and ADSs may be publicly traded on exchanges
or over-the-counter in the United States and are quoted and settled in dollars
at a price that generally reflects the dollar equivalent of the home country
share price. EDRs, GDRs and GDSs are typically issued by foreign banks or trust
companies and traded in Europe. ADRs, ADSs, EDRs, GDRs and GDSs may be issued
under sponsored or unsponsored programs. In sponsored programs, the issuer has
made arrangements to have its securities trade in the form of ADRs, ADSs, EDRs,
GDRs or GDSs. In unsponsored programs, the issuer may not be directly involved
in the creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, the issuers of
unsponsored ADRs, ADSs, EDRs, GDRs and GDSs are not obligated to disclose
material information in the U.S., and therefore, the import of such information
may not be reflected in the market value of such receipts.
By investing in foreign securities, the Portfolios will attempt to take
advantage of differences among economic trends and the performance of securities
markets in various countries. To date, the market values of securities of
issuers located in different countries have moved relatively independently of
each other. During certain periods, the return on equity investments in some
countries has exceeded the return on similar investments in the U.S. The
Subadviser believes that, in comparison with investment companies investing
solely in domestic securities, it may be possible to obtain significant
appreciation from a portfolio of foreign investments and securities from various
markets that offer different investment opportunities and are affected by
different economic trends. Global diversification reduces the effect that events
in any one country will have on the entire investment portfolio. Of course, a
decline in the value of a Portfolio's investments in one country may offset
potential gains from investments in another country.
FOREIGN INVESTMENT RISK FACTORS. Investments in securities of foreign
issuers may involve risks that are not associated with domestic investments, and
there can be no assurance that either of the Portfolios' foreign investments
will present less risk than a portfolio of domestic securities. Foreign issuers
may lack uniform accounting, auditing and financial reporting standards,
practices and requirements, and there is generally less publicly available
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<PAGE>
information about foreign issuers than there is about U.S. issuers. Governmental
regulation and supervision of foreign stock exchanges, brokers and listed
companies may be less pervasive than is customary in the U.S. Securities of some
foreign issuers are less liquid and their prices are more volatile than
securities of comparable domestic issuers. Foreign securities settlements may in
some instances be subject to delays and related administrative uncertainties
which could result in temporary periods when assets of a Portfolio are
uninvested and no return is earned thereon and may involve a risk of loss to a
Portfolio. Foreign securities markets may have substantially less volume than
U.S. markets and far fewer traded issues. Fixed brokerage commissions on foreign
securities exchanges are generally higher than in the U.S., and transaction
costs with respect to smaller capitalization companies may be higher than those
of larger capitalization companies. Income from foreign securities may be
reduced by a withholding tax at the source or other foreign taxes. In some
countries, there may also be the possibility of nationalization, expropriation
or confiscatory taxation, (in which a Portfolio could lose its entire investment
in a certain market), limitations on the removal of monies or other assets of
the Portfolios, higher rates of inflation, political or social instability or
revolution, or diplomatic developments that could affect investments in those
countries. In addition, it may be difficult to obtain and enforce a judgement in
a court outside the U.S.
Some of the risks described in the preceding paragraph may be more severe
for investments in emerging or developing countries. By comparison with the
United States and other developed countries, emerging or developing countries
may have relatively unstable governments, economies based on a less diversified
industrial base and securities markets that trade a smaller number of
securities. Companies in emerging markets may generally be smaller, less
experienced and more recently organized than many domestic companies. Prices of
securities traded in the securities markets of emerging or developing countries
tend to be volatile. Furthermore, foreign investors are subject to many
restrictions in emerging or developing countries. These restrictions may
require, among other things, governmental approval prior to making investments
or repatriating income or capital, or may impose limits on the amount or type of
securities held by foreigners or on the companies in which the foreigners may
invest.
The economies of individual emerging countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payment position and may be based on a
substantially less diversified industrial base. Further, the economies of
developing countries generally are heavily dependent upon international trade
and, accordingly, have been, and may continue to be, adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which
they trade. These economies also have been, and may continue to be, adversely
affected by economic conditions in the countries with which they trade.
FOREIGN CURRENCY RISK FACTORS. Investments in foreign securities will
usually be denominated in foreign currencies, and each Portfolio may temporarily
hold funds in foreign currencies. The value of a Portfolio's investments
denominated in foreign currencies may be affected, favorably or unfavorably, by
the relative strength of the U.S. dollar, changes in foreign currency and U.S.
dollar exchange rates and exchange control regulations. A Portfolio may incur
costs in connection with conversions between various currencies. A Portfolio's
net asset value per share will be affected by changes in currency exchange
rates. Changes in foreign currency exchange rates may also affect the value of
dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and gains, if any, to be distributed to
shareholders by the Portfolios. The rate of exchange between the U.S. dollar and
other currencies is determined by the forces of supply and demand in the foreign
exchange markets (which in turn are affected by interest rates, trade flows and
numerous other factors, including, in some countries, local governmental
intervention).
TECHNOLOGY INVESTMENT RISK FACTORS. The value of the Global Technology
Portfolio shares may be susceptible to factors affecting technology and
technology-related industries and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities. As
such, the Global Technology Portfolio is not an appropriate investment for
individuals who require safety of principal or stable income from their
investments. Technology and technology-related industries may be subject to
greater governmental regulation than many other industries in certain countries;
changes in governmental policies and the need for regulatory approvals may have
a material adverse effect on these industries. Additionally, these companies may
be subject to risks of developing technologies, competitive pressures and other
factors and are dependent upon consumer and business acceptance as new
technologies evolve. Securities of smaller, less experienced companies also may
involve greater risks, such as limited product lines, markets and financial or
managerial resources, and trading in such securities may be subject to more
abrupt price movements than trading in the securities of larger companies.
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SMALLER COMPANY INVESTMENT RISK FACTORS. With regard to the Global Smaller
Companies Portfolio and the Global Technology Portfolio, the Subadviser believes
that smaller companies generally have greater earnings and sales growth
potential than larger companies. In addition, the Global Growth Opportunities
Portfolio may also invest in securities without regard to the minimum
capitalization of issuers. However, investments in such companies may involve
greater risks, such as limited product lines, markets and financial or
managerial resources. Less frequently traded securities may be subject to more
abrupt price movements than securities of larger companies.
DERIVATIVES. Each of the Portfolios may invest in financial instruments
commonly known as "derivatives" only for hedging or investment purposes. A
Portfolio will not invest in derivatives for speculative purposes, i.e., where
the derivative investment exposes the Portfolio to undue risk of loss, such as
where the risk of loss is greater than the cost of the investment.
A derivative is generally defined as an instrument whose value is derived
from, or based upon, some underlying index, reference rate (e.g., interest rates
or currency exchange rates), security, commodity or other asset. A Portfolio
will not invest in a specific type of derivative without prior approval from its
Board of Directors, after consideration of, among other things, how the
derivative instrument serves the Portfolio's investment objective, and the risk
associated with the investment. The only types of derivatives in which the
Portfolios are currently permitted to invest are stock purchase rights and
warrants, and, as described more fully below, forward currency exchange
contracts and put options.
A Portfolio may not invest in rights and warrants, if, at the time of
acquisition, the investment in rights and warrants would exceed 5% of the
Portfolio'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, warrants
acquired in units or attached to securities will be deemed to have been
purchased without cost.
FORWARD CURRENCY EXCHANGE CONTRACTS. The Subadviser will consider changes
in exchange rates in making investment decisions. As one way of managing
exchange rate risk, each Portfolio may enter into forward currency exchange
contracts (agreements to purchase or sell foreign currencies at a future date).
A Portfolio will usually enter into these contracts to fix the U.S. dollar value
of securities that it has agreed to buy or sell for the period between the date
the trade was entered into and the date the security is delivered and paid for.
A Portfolio may also use these contracts to hedge the U.S. dollar value of
securities it already owns. A Portfolio may be required to cover certain forward
currency exchange contract positions by establishing a segregated account with
its custodian that will contain only liquid assets, such as U.S. Government
securities or other liquid high-grade debt obligations. Under normal
circumstances, the portfolio manager will limit forward currency contracts to
not greater than 75% of the Portfolio's position in any one country as of the
date the contract is entered into.
Although the Portfolios will seek to benefit by using forward contracts,
anticipated currency movements may not be accurately predicted and the
Portfolios may therefore incur a gain or loss on a forward contract. A forward
contract may help reduce the Portfolios' losses on securities denominated in
foreign currency, but it may also reduce the potential gain on the securities
depending on changes in the currency's value relative to the U.S. dollar or
other currencies.
OPTIONS TRANSACTIONS. Each of the Portfolios may purchase put options on
portfolio securities in an attempt to provide a hedge against a decrease in the
price of a security held by the Portfolio. A Portfolio will not purchase options
for speculative purposes. Purchasing a put option gives a Portfolio the right to
sell, and obligates the writer to buy, the underlying security at the exercise
price at any time during the option period.
When a Portfolio 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 Portfolio, the premium and the commission paid
may be greater than the amount of the brokerage commission charged if the
security were to be purchased or sold directly. See "Investment Policies and
Restrictions" in the Statement of Additional Information.
TEMPORARY INVESTMENTS. When the Subadviser believes that market conditions
warrant a temporary defensive position, a Portfolio may invest up to 100% of its
assets in short-term instruments such as commercial paper, bank certificates of
deposit, bankers' acceptances, or repurchase agreements for such securities and
securities of the U.S. Government and its agencies and instrumentalities, as
well as cash and cash equivalents denominated in foreign currencies. Investments
in domestic bank certificates of deposit and bankers' acceptances will be
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limited to banks that have total assets in excess of $500 million and are
subject to regulatory supervision by the U.S. Government or state governments. A
Portfolio's investments in commercial paper of U.S. issuers will be limited to
(a) obligations rated Prime-1 by Moody's or A-1 by S&P or (b) unrated
obligations issued by companies having an outstanding unsecured debt issue
currently rated A or better by S&P. A description of various commercial paper
ratings and debt securities ratings appears in the Appendix to this Prospectus.
A Portfolio's investments in foreign short-term instruments will be limited to
those that, in the opinion of the Subadviser, equate generally to the standards
established for U.S. short-term instruments.
SELIGMAN HIGH-YIELD BOND PORTFOLIO
The objective of this Portfolio is to produce maximum current income. The
Portfolio seeks to achieve its objective by following a policy of investing in a
diversified range of high-yield, high-risk, medium and lower quality corporate
bonds and notes, commonly referred to as "junk bonds". Generally, bonds and
notes providing the highest yield are unrated or carry lower ratings (Baa or
lower by Moody's or BBB or lower by S&P) than those assigned by S&P or Moody's
to investment-grade bonds and notes. A description of the S&P and Moody's rating
categories is set forth in the Appendix to this Prospectus. While providing
higher yields, these bonds and notes are subject to greater risks of loss of
principal and income than higher-rated bonds and notes and are considered to be
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. They are also generally considered to be subject to greater
price volatility due to market risks than higher rated bonds and notes.
The amount of outstanding high-yield, lower-rated corporate securities has
recently proliferated. Based on industry estimates, the market grew from $20
billion in outstanding securities to in excess of $300 billion, principally over
the past ten years, a period of national economic expansion. An economic
downturn could adversely impact issuers' abilities to pay interest and repay
principal and could result in issuers' defaulting on such payments. The value of
the Portfolio's bonds and notes will be affected like all fixed-income
securities by market conditions relating to changes in prevailing interest
rates. However, the value of lower-rated or unrated corporate bonds and notes is
also affected by investors' perceptions. When economic conditions appear to be
deteriorating, lower-rated or unrated corporate bonds and notes may decline in
market value due to investors' heightened concerns and perceptions over credit
quality. If the security is downgraded, the Portfolio may retain the security.
The Portfolio may invest in "zero coupon" (interest payments accrue until
maturity) and "pay-in-kind" (interest payments are made in cash or additional
shares) bonds. Such securities may be subject to greater fluctuations in value
as they tend to be more speculative than income bearing securities. Fluctuations
in the market prices of the securities owned by the Portfolio result in
corresponding fluctuations and volatility in the net asset value of the shares
of the Portfolio.
Lower-rated and non-rated corporate bonds and notes in which the Portfolio
invests are traded principally by dealers in the over-the-counter market. The
market for these securities may be less active and less liquid than for higher
rated securities. Under adverse market or economic conditions, the secondary
market for these bonds and notes could contract further, causing the Portfolio
difficulties in valuing and selling the securities in its portfolio.
The ratings of fixed-income securities by Moody's and S&P are a generally
accepted barometer of credit risk. They are, however, subject to certain
limitations from an investor's standpoint. The rating of an issuer is heavily
weighted by past developments and does not necessarily reflect probable future
conditions. There is frequently a lag between the time the rating is assigned
and the time it is updated. In addition there may be varying degrees of
difference in credit risk of securities within each rating category.
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The following table sets forth the weighted average ratings of the
Portfolio invested in debt securities, including convertible bonds, for the year
ended December 31, 1995. When securities received different ratings from S&P and
Moody's, the table reflects the lower rating.
AAA/Aaa..................................... --
AA/Aa....................................... --
A/A......................................... --
BBB/Baa..................................... --
BB/Ba....................................... 4.6%
B/B......................................... 89.5%
CCC/Caa..................................... 1.9%
CC/Ca....................................... 3.6%
Non-rated................................... 0.4%
The Manager will try to minimize the risk inherent in the Portfolio's
investment objective through credit analysis, diversification and attention to
current developments and trends in interest rates and economic conditions.
However, there can be no assurance that losses will not occur and an investment
in the Portfolio is appropriate for you only if you can bear the high risk
inherent in seeking maximum current income by investing in high-yielding
corporate bonds and notes which are unrated or carry lower ratings than those
assigned by S&P or Moody's to investment-grade bonds.
Except for temporary defensive purposes, at least 80% of the value of the
Portfolio's total assets will be invested in high-yielding, income-producing
corporate bonds. This investment policy is a fundamental policy and may not be
changed by the Board of Directors of the Fund without the vote of a majority of
the Portfolio's outstanding voting securities. The Portfolio may invest up to
20% of the value of its total assets in a range of high-yield, medium and lower
quality corporate notes, short-term money market instruments, including
certificates of deposit of banks having total assets of more than $1 billion and
which are members of the FDIC, bankers' acceptances and interest-bearing savings
or time deposits of such banks, commercial paper of prime quality rated A-1 or
higher by S&P or Prime-1 or higher by Moody's or, if not rated, issued by
companies which have an outstanding debt issue rated AA or higher by S&P or Aa
or higher by Moody's, securities issued, guaranteed or insured by the U.S.
Government, its agencies and instrumentalities and other income-producing cash
items. The Portfolio may invest temporarily for defensive purposes without limit
in the foregoing securities.
In accordance with its objective of producing maximum current income, the
Portfolio may invest up to 10% of its total assets in preferred stock, including
non-investment grade preferred stock. Certain preferred stock issues may offer
higher yields than similar bond issues because their rights are subordinated to
the bonds. Consequently, such preferred stock issues will have a greater risk
potential. The Manager will try to minimize this greater risk potential through
its investment process. However, there can be assurance that losses will not
occur and, as stated above, an investment in the Portfolio is appropriate only
for an investor who can bear the high risk in seeking maximum current income by
investing in high-yielding securities, including non-investment grade preferred
stock.
SELIGMAN INCOME PORTFOLIO
The primary investment objective of this Portfolio is to provide
shareholders with high current income consistent with what is believed to be
prudent risk of capital; secondarily, the Portfolio seeks to provide the
possibility of improvement in income and capital value over the longer term.
Assets are invested in securities carefully selected in light of the Portfolio's
investment objectives and diversified to limit risk. The distribution of
investments between different types of securities is governed by a fundamental
policy, which can be changed only by the vote of the shareholders, that at least
25% of the market value of gross assets must at all times be in cash, bonds
and/or preferred stocks. Under an investment policy established by the Board of
Directors, at least 80% of assets will be invested in income-producing
securities.
Subject to that limitation, assets may be invested in many different types
of securities, including money market instruments, fixed-income securities such
as bonds, debentures and preferred stocks, senior securities convertible into
common stocks, and common stocks.
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Convertible bonds are convertible at a stated exchange rate or price into
common stock. Before conversion, convertible securities are similar to
non-convertible debt securities in that they provide a steady stream of income
with generally higher yields than an issuer's equity securities. The market
value of all debt securities, including convertible securities, tends to decline
as interest rates increase and to increase as interest rates decline. In
general, convertible securities may provide lower interest or dividend yields
than non-convertible debt securities of similar quality, but they may also allow
investors to benefit from increases in the market price of the underlying common
stock. When the market price of the underlying common stock increases, the price
of the convertible security tends to reflect the increase. When the market price
of the underlying common stock declines, the convertible security tends to trade
on the basis of yield, and may not depreciate to the same extent as the
underlying common stock. In an issuer's capital structure, convertible
securities are senior to common stocks. They are therefore of higher quality and
involve less risk than the issuer's common stock, but the extent to which risk
is reduced depends largely on the extent to which the convertible security sells
above its value as a fixed-income security. In selecting convertible securities
for the Portfolio, the Manager evaluates such factors as economic and business
conditions involving the issuer, future earnings growth potential of the issuer,
potential for price appreciation of the underlying equity, the value of
individual securities relative to other investment alternatives, trends in the
determinants of corporate profits and capability of management. In evaluating a
convertible security, the Manager gives emphasis to the attractiveness of the
underlying common stock and the capital appreciation opportunities that the
convertible bonds present. Convertible securities can be callable or redeemable
at the issuer's discretion, in which case the Manager would be forced to seek
alternative investments. The Portfolio may invest in debt securities convertible
into equity securities rated as low as CC by S&P or Ca by Moody's. Debt
securities rated below investment grade (frequently referred to as "junk bonds")
often have speculative characteristics and will be subject to greater market
fluctuations and risk of loss of income and principal than higher-rated
securities. A description of credit ratings and risks associated with
lower-rated debt securities is set forth in the Appendix to this Prospectus. The
Manager does not rely on the ratings of these securities in making investment
decisions but performs its own analysis, based on the factors described above,
in light of the Portfolio's investment objectives.
The Portfolio does not expect to invest more than 5% of its assets in
non-convertible bonds, notes and debentures ("bonds") rated below BBB by S&P or
Baa by Moody's. Although bonds rated in the fourth credit rating category (BBB
or Baa) are commonly referred to as investment grade, they may have speculative
characteristics. The Appendix to this Prospectus contains a description of
credit ratings and the risks associated with lower-rated debt securities, which
tend to be more speculative and riskier than higher-rated debt securities.
The following table sets forth the weighted average ratings of the
Portfolio invested in debt securities, including convertible bonds, for the year
ended December 31, 1995. The balance of the Portfolio is invested in equity
securities. When securities received different ratings from S&P and Moody's, the
table reflects the higher rating.
AAA/Aaa..................................... 5.7%
AA/Aa....................................... --
A/A......................................... 10.0%
BBB/Baa..................................... 20.7%
BB/Ba....................................... 4.9%
B/B......................................... 11.8%
CCC/Caa..................................... 0.5%
CC/Ca....................................... --
Non-rated................................... 3.2%
OTHER INVESTMENT POLICIES
The Fund's Portfolios may invest for either the long or short term in their
efforts to attain their objectives, and changes in investments may be made
whenever considered advisable by the Manager or, in the case of the Seligman
Henderson Portfolios, the Subadviser. Except as otherwise noted, each of the
Portfolios may engage in transactions involving the types of securities and
investment strategies described below. Further information about these
strategies is included in the Fund's Statement of Additional Information.
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REPURCHASE AGREEMENTS. Each Portfolio may hold cash or cash equivalents and
may enter into repurchase agreements with respect to securities; normally
repurchase agreements relate to money market obligations backed by the full
faith and credit of the U.S. Government. Repurchase agreements are transactions
in which an investor (e.g., any of the Fund's Portfolios) purchases a security
from a bank, recognized securities dealer, or other financial institution and
simultaneously commits to resell that security to such institution at an agreed
upon price, date and market rate of interest unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement thus involves the
obligation of the bank or securities dealer to pay the agreed upon price on the
date agreed to, which obligation is in effect secured by the value of the
underlying security held by the Portfolio. Repurchase agreements could involve
certain risks in the event of bankruptcy or other default by the seller,
including possible delays and expenses in liquidating the securities underlying
the agreement, decline in value of the underlying securities and loss of
interest. Although repurchase agreements carry certain risks not associated with
direct investments in securities, each Portfolio intends to enter into
repurchase agreements only with financial institutions believed to present
minimum credit risks in accordance with guidelines established by the Fund's
Board of Directors. The creditworthiness of such institutions will be reviewed
and monitored under the general supervision of the Board of Directors. The
Portfolios will invest only in repurchase agreements collateralized in an amount
at least equal at all times to the purchase price plus accrued interest.
Repurchase agreements usually are for short periods, such as one week or less,
but may be for longer periods. No Portfolio will enter into a repurchase
agreement with a maturity of more than seven days if, as a result, more than 15%
of the value of its net assets would then be invested in such repurchase
agreements and other illiquid investments.
ILLIQUID SECURITIES. Other than the Seligman Cash Management Portfolio,
each Portfolio may invest up to 15% of its net assets in illiquid securities,
including restricted securities (i.e., securities not readily marketable without
registration under the Securities Act of 1933 (the "1933 Act")) and other
securities that are not readily marketable. Each Portfolio, other than the
Seligman Cash Management Portfolio, may purchase restricted securities that can
be offered and sold to "qualified institutional buyers" under Rule 144A of the
1933 Act, and the Fund's Board of Directors may determine, when appropriate,
that specific Rule 144A securities are liquid and not subject to the 15%
limitation on illiquid securities. Should the Board of Directors make this
determination, it will carefully monitor the security (focusing on such factors,
among others, as trading activity and availability of information) to determine
that the Rule 144A security continues to be liquid. It is not possible to
predict with assurance exactly how the market for restricted securities offered
and sold under Rule 144A will develop. This investment practice could have the
effect of increasing the level of illiquidity in a Portfolio to the extent that
qualified institutional buyers become for a time uninterested in purchasing Rule
144A securities.
SHORT SALES. Each of the Seligman Henderson Portfolios may sell securities
short "against-the-box." A short sale "against-the-box" is a short sale in which
the Portfolio owns an equal amount of the securities sold short or securities
convertible into or exchangeable without payment of further consideration for
securities of the same issue as, and equal in amount to, the securities sold
short.
FOREIGN SECURITIES. Each of the Fund's Portfolios may invest in commercial
paper and certificates of deposit issued by foreign banks and may invest in
other securities of foreign issuers directly or through ADRs, ADSs, EDRs, GDRs
or GDSs. Foreign investments may be affected favorably or unfavorably by changes
in currency rates and exchange control regulations. There may be less
information available about a foreign company than about a U.S. company and
foreign companies may not be subject to reporting standards and requirements
comparable to those applicable to U.S. companies. Foreign securities may not be
as liquid as U.S. securities. Securities of foreign companies may involve
greater market risk than securities of U.S. companies, and foreign brokerage
commissions and custody fees are generally higher than in the U.S. Investments
in foreign securities may also be subject to local economic or political risks,
political instability and possible nationalization of issuers. A Portfolio may
invest up to 10% of its total assets in foreign securities (except the
International Portfolio and the Global Smaller Companies Portfolio, which may
invest up to 100% of their total assets in foreign securities), except that this
10% limit does not apply to foreign securities held through ADRs, ADSs, EDRs,
GDRs or GDSs, or to commercial paper and certificates of deposit issued by
foreign banks.
LENDING OF PORTFOLIO SECURITIES AND BORROWING. Other than the Seligman Cash
Management Portfolio, each of the Fund's Portfolios may lend portfolio
securities to banks or other institutional borrowers, provided that securities
loaned by each of the Seligman Henderson Portfolios may not exceed 331/3% of the
Portfolios' total assets taken at market value. The Fund's Portfolios will not
lend portfolio securities to any institutions affiliated with the Fund. The
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<PAGE>
borrower must maintain with the Fund's custodian bank 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 is required to
pay an amount equal to any dividends or interest paid on the securities to the
lending Portfolio. In addition, the lending Portfolio may invest the cash
collateral and earn additional income or may receive an agreed upon amount of
interest income from the borrower. The lending of portfolio securities could
involve the risk of delays in receiving additional collateral or in the recovery
of securities and possible loss of rights in collateral in the event that a
borrower fails financially.
Except as noted below, a Portfolio may not borrow money except from banks
for temporary purposes (but not for the purpose of purchasing portfolio
securities) in an amount not to exceed 10% of the value of the total assets of
that Portfolio. In addition, the Seligman Frontier Portfolio and the Seligman
High-Yield Bond Portfolio will not purchase additional portfolio securities if
that Portfolio has outstanding borrowings in excess of 5% of the value of its
total assets.
The Seligman Capital Portfolio, the Seligman Common Stock Portfolio and the
Seligman Communications and Information Portfolio may from time to time borrow
money in order to purchase securities. Borrowings may be made only from banks
and each of these Portfolios may not borrow in excess of one-third of the market
value of its assets, less liabilities other than such borrowing, or pledge more
than 10% of its total assets, taken at cost, to secure the borrowing. Current
asset value coverage of three times any amount borrowed by the respective
Portfolio is required at all times. Borrowed money creates an opportunity for
greater capital appreciation, but at the same time increases exposure to capital
risk. The net cost of any money borrowed would be an expense that otherwise
would not be incurred, and this expense will reduce the Portfolio's net
investment income in any given period. Any gain in the value of securities
purchased with money borrowed to an amount in excess of amounts borrowed plus
interest would cause the net asset value of the Portfolio's shares to increase
more than otherwise would be the case. Conversely, any decline in the value of
securities purchased to an amount below the amount borrowed plus interest would
cause the net asset value to decrease more than would otherwise be the case.
Each of the Seligman Henderson Portfolios may from time to time borrow
money for temporary, extraordinary or emergency purposes and may invest the
funds in additional securities. Borrowings for the purchase of securities will
not exceed 5% of the Portfolio's total assets and will be made at prevailing
interest rates.
WHEN-ISSUED SECURITIES. The Seligman Bond Portfolio and the Seligman
High-Yield Bond Portfolio may purchase securities on a when-issued basis.
Settlement of such transactions (i.e., delivery of securities and payment of
purchase price) normally takes place within 45 days after the date of the
commitment to purchase. Although the Seligman High-Yield Bond Portfolio will
purchase a security on a when-issued basis only with the intention of actually
acquiring the securities, the Portfolio may sell these securities before the
purchase settlement date if it is deemed advisable.
At the time a Portfolio enters into such a commitment both payment and
interest terms will be established prior to settlement; there is a risk that
prevailing interest rates on the settlement date will be greater than the
interest rate terms established at the time the commitment was entered into.
When-issued securities are subject to changes in market value prior to
settlement based upon changes, real or anticipated, in the level of interest
rates or creditworthiness of the issuer. If a Portfolio remains substantially
fully invested at the same time that it has purchased securities on a
when-issued basis, the market value of that Portfolio's assets may fluctuate
more than otherwise would be the case. For this reason, accounts for each
Portfolio will be established with the Fund's custodian consisting of cash
and/or liquid high-grade debt securities equal to the amount of each Portfolio's
when-issued commitment; these accounts will be valued each day and additional
cash and/or liquid high-grade debt securities will be added to an account in the
event that the current value of the when-issued commitment increases. When the
time comes to pay for when-issued securities, a Portfolio will meet its
respective obligations from then available cash flow, sale of securities held in
the separate account, sale of other securities, or from the sale of the
when-issued securities themselves (which may have a value greater or less than a
Portfolio's payment obligations). Sale of securities to meet when-issued
commitments carries with it a greater potential for the realization of capital
gain or loss.
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<PAGE>
MANAGEMENT SERVICES
The Board of Directors provides broad supervision over the affairs of the
Fund. Pursuant to management agreements approved by the Board of Directors (the
"Management Agreements"), the Manager manages the investments of each Portfolio
and administers their business and other affairs. The address of the Manager is
100 Park Avenue, New York, New York 10017.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Fund. Mr. Morris owns a majority
of the outstanding voting securities of the Manager.
For its services under the Management Agreements, the Manager receives a
fee, calculated daily and payable monthly, at an annual rate of .40% of the
average daily net assets of the Seligman Bond Portfolio, Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman Common Stock Portfolio
and Seligman Income Portfolio; at an annual rate of .50% of the average daily
net assets of the Seligman High-Yield Bond Portfolio; and at an annual rate of
.75% of the average daily net assets of the Seligman Communications and
Information Portfolio and Seligman Frontier Portfolio.
Each of the Seligman Henderson Portfolios pays the Manager a management
fee, calculated daily and payable monthly, equal to an annual rate of 1.00% of
the average daily net assets of each Portfolio, of which .90% is paid to the
Subadviser for the services described below. This management fee is higher than
that of the other Portfolios of the Fund and of most investment companies but is
comparable to that of most global or international equity funds.
The Manager voluntarily has agreed to waive its management fee and to
reimburse all expenses for the Seligman Cash Management Portfolio, and has
voluntarily agreed to reimburse annual expenses (other than the management fee)
that exceed .20% of average net assets for each of the Seligman Bond, Seligman
Capital, Seligman Common Stock, Seligman Communications and Information,
Seligman Frontier, Seligman High-Yield Bond and Seligman Income Portfolios.
There is no assurance that the Manager will continue this policy in the future.
From January 1 through April 30, 1995, the Subadviser voluntarily agreed to
reimburse certain annual expenses (other than the management fee) that exceeded
.20% of average net assets for each of the Seligman Henderson Portfolios. From
May 1 through December 31, 1995, the Subadviser agreed to reimburse annual
expenses (other than the management fee) that exceeded .40% of average net
assets for these portfolios. There is no assurance that the Subadvisor will
continue this policy in the future.
The management fee paid by each Portfolio (except the Global Growth
Opportunities and Global Technology Portfolios) expressed as a percentage of
average daily net assets of that Portfolio is presented in the following table
for the fiscal year/period ended December 31, 1995. Total expenses for each
Portfolio's shares (except the Global Growth Opportunities and Global Technology
Portfolios), expressed as an annualized percentage of average daily net assets,
are also presented in the following table for the year/period ended December 31,
1995.
<TABLE>
<CAPTION>
MANAGEMENT FEE RATE EXPENSE RATIOS FOR
FOR THE YEAR/PERIOD ENDED THE YEAR/PERIOD ENDED
PORTFOLIO 12/31/95 12/31/95
--------- ---------------------- -----------------------
<S> <C> <C>
Seligman Bond Portfolio............................. .40% .60%*
Seligman Capital Portfolio.......................... .40 .60*
Seligman Cash Management Portfolio.................. -* -*
Seligman Common Stock Portfolio..................... .40 .54
Seligman Communications and Information
Portfolio......................................... .75 .95
Seligman Frontier Portfolio......................... .75 .95
Seligman Henderson International Portfolio.......... 1.00 1.35*
Seligman Henderson Global Smaller
Companies Portfolio ............................. 1.00 1.39*
Seligman High-Yield Bond Portfolio
(annualized)...................................... .50 .70*
Seligman Income Portfolio........................... .40 .60*
</TABLE>
- --------------
* During the year ended December 31, 1995, the Manager, at its discretion,
waived all of its fees for the Seligman Cash Management Portfolio, and the
Manager or Subadviser elected to reimburse all or a portion of the expenses
for these Portfolios (except Seligman Common Stock Portfolio and Seligman
Communications and Information Portfolio).
P-21
<PAGE>
The Manager also serves as manager of sixteen other investment companies,
which, together with the Fund, make up the "Seligman Group." The aggregate
assets of the Seligman Group were approximately $13.4 billion at September 30,
1996. The Manager also provides investment management or advice to institutional
accounts having an aggregate value of approximately $4.0 billion at September
30, 1996.
The Fund bears all expenses of its organization, operations, and business
not specifically assumed or agreed to be paid by the Manager as provided in the
Management Agreements. In particular, but without limiting the generality of the
foregoing, the Fund pays brokerage commissions, custody expenses and expenses
relating to computation of the Fund's net asset value per share, including the
cost of any equipment or services used for obtaining price quotations; legal and
accounting fees and expenses; fees and expenses of registering the Fund under
the federal securities laws; taxes or governmental fees payable by or with
respect to the Fund to federal, state, or other governmental agencies, domestic
or foreign, including stamp or other transfer taxes; fees, dues, and other
expenses incurred in connection with the Fund's membership in any trade
association or other investment organization; and such nonrecurring expenses as
may arise, including litigation costs.
THE SUBADVISER. Seligman Henderson Co. serves as Subadviser to each of the
Seligman Henderson Portfolios pursuant to Subadvisory Agreements between the
Manager and the Subadviser (the "Subadvisory Agreements"). The Subadvisory
Agreements provide that the Subadviser will supervise and direct the Seligman
Henderson Portfolios' international investments in accordance with the
Portfolios' investment objectives, policies and restrictions. Seligman Henderson
Co. was created to provide international and global investment management
services to institutional investors and investment companies in the U.S. The
address of the Subadviser is 100 Park Avenue, New York, New York 10017.
PORTFOLIO MANAGERS. Loris D. Muzzatti, a Managing Director of the Manager,
has served as Vice President of the Fund and has been the Portfolio Manager of
the Seligman Capital Portfolio since December 1988. Mr. Muzzatti, who joined the
Manager in 1985, also manages a portion of the Manager's leading institutional
accounts. Mr. Muzzatti is also Vice President and Portfolio Manager of Seligman
Capital Fund, Inc., Seligman Growth Fund, Inc. and a Co-Portfolio Manager of the
Global Growth Opportunities Portfolio. The Portfolio Manager's discussion of the
Seligman Capital Portfolio's performance, as well as a line graph illustrating
comparative performance information between the Seligman Capital Portfolio, the
Standard & Poor's 500 Composite Stock Price Index and the Lipper Capital
Appreciation Fund Average, is included in the Fund's 1995 Annual Report to
Shareholders.
Charles C. Smith, Jr., a Managing Director of the Manager since January 1,
1994, serves as Vice President of the Fund and has been Portfolio Manager of the
Seligman Common Stock Portfolio and the Seligman Income Portfolio since December
1991. Mr. Smith, who joined the Manager in 1985 as Vice President, Investment
Officer and became Senior Vice President, Senior Investment Officer in 1992,
also manages Seligman Common Stock Fund, Inc., Seligman Income Fund, Inc. and
Tri-Continental Corporation. Odette Galli, Vice President, Investment Officer of
the Manager since 1993, serves as Co-Manager of the Seligman Common Stock
Portfolio. Ms. Galli is also Co-Manager of Seligman Common Stock Fund, Inc. and
Tri-Continental Corporation. Prior to 1993, Ms. Galli was an equity research
analyst at Morgan Stanley & Co. Rodney Collins, Vice President, Investment
Officer of the Manager, serves as Co-Manager of the Seligman Income Portfolio.
Mr. Collins, who joined the Manager in 1992 as an investment associate, is also
Co-Manager of Seligman Income Fund, Inc. The Portfolio Manager's discussion of
the Seligman Common Stock Portfolio's performance, as well as a line graph
illustrating comparative performance information between the Seligman Common
Stock Portfolio, the Standard & Poor's 500 Composite Stock Price Index and the
Lipper Growth and Income Fund Average, is included in the Fund's 1995 Annual
Report to Shareholders. The Portfolio Manager's discussion of the Seligman
Income Portfolio's performance, as well as a line graph illustrating comparative
performance information between the Seligman Income Portfolio, the Standard &
Poor's 500 Composite Stock Price Index, and the Lipper Income Fund Average, is
included in the Fund's 1995 Annual Report to Shareholders.
Paul H. Wick, a Managing Director of the Manager, serves as Vice President
of the Fund and is the Portfolio Manager of the Seligman Communications and
Information Portfolio and a Co-Manager of the Global Technology Portfolio. Mr.
Wick, who joined the Manager in 1987, also manages Seligman Communications and
Information Fund, Inc. and co-manages Seligman Henderson Global Technology Fund,
a series of Seligman Henderson Global Fund Series, Inc. The Portfolio Manager's
discussion of the Seligman Communications and Information Portfolio's
performance, as well as a line graph illustrating comparative information
between the Seligman Communications and Information Portfolio, the Standard &
Poor's 500 Composite Stock Price Index and the Lipper Science and Technology
Fund Average, is included in the Fund's 1995 Annual Report to Shareholders.
P-22
<PAGE>
Arsen Mrakovcic, a Managing Director of the Manager, is Vice President of
the Fund and Portfolio Manager of the Seligman Frontier Portfolio since October
1, 1995. Mr. Mrakovcic, who joined the Manager in 1992 as a Portfolio Assistant,
was named Vice President, Investment Officer on January 1, 1995 and Managing
Director on January 1, 1996. Mr. Mrakovcic also manages Seligman Frontier Fund,
Inc. and the domestic portion of the Seligman Henderson Global Smaller Companies
Fund, a series of Seligman Henderson Global Fund Series, Inc. The Portfolio
Manager's discussion of the Seligman Frontier Portfolio's performance, as well
as a line graph illustrating comparative information between the Seligman
Frontier Portfolio, the National Association of Securities Dealers Automated
Quotations ("NASDAQ") and the Lipper Small Company Fund Average, is included in
the Fund's 1995 Annual Report to Shareholders.
Leonard J. Lovito, a Vice President of the Manager, serves as Vice
President of the Fund and has been Portfolio Manager of the Seligman Bond
Portfolio since January 1, 1994 and of the Seligman Cash Management Portfolio
and Seligman Cash Management Fund, Inc. since January 1, 1995. Mr. Lovito, who
joined the Manager in 1984, also manages the Seligman U.S. Government Securities
Series of Seligman High Income Fund Series. The Portfolio Manager's discussion
of the Seligman Bond Portfolio's performance, as well as a line graph
illustrating comparative performance information between the Seligman Bond
Portfolio, the Lehman Brothers Government Bond Index and the Lipper Fixed Income
Fund Average, is included in the Fund's 1995 Annual Report to Shareholders.
Daniel J. Charleston, a Managing Director of the Manager, is Vice President
of the Fund and has been the Portfolio Manager of the Seligman High-Yield Bond
Portfolio since its inception on May 1, 1995. Mr. Charleston, who joined the
Manager in 1987, has managed the Seligman High-Yield Bond Series of Seligman
High Income Fund Series since 1989. The Portfolio Manager's discussion of the
Seligman High-Yield Bond Portfolio's performance, as well as a line graph
illustrating comparative information between the Seligman High-Yield Bond
Portfolio, the Lipper High-Yield Bond Index and the Merrill Lynch Master Index,
is included in the Fund's 1995 Annual Report to Shareholders.
The Subadviser's International Policy Group has overall responsibility for
directing and overseeing all aspects of investment activity for each of the
Seligman Henderson Portfolios and provides international investment policy,
including country weightings, asset allocations and industry sector guidelines,
as appropriate. Mr. Iain C. Clark, a Managing Director and the Chief Investment
Officer of the Subadviser, is responsible for the day-to-day investment activity
of the International Portfolio and the Global Smaller Companies Portfolio. Mr.
Clark, who joined the Subadviser in 1992, has been a Director of Henderson
Administration Group plc and Henderson International, Ltd. and Secretary,
Treasurer and Vice President of Henderson International, Inc. since 1985. Mr.
Clark's discussion of the International Portfolio's performance, as well as a
line graph illustrating comparative performance information between the
International Portfolio, the Morgan Stanley Capital International ("MSCI") World
Index and the MSCI Europe-Asia-Far East Index, is included in the Fund's 1995
Annual Report to Shareholders. Mr. Clark's discussion of the Global Smaller
Companies Portfolio's performance, as well as a line graph illustrating
comparative information between the Global Smaller Companies Portfolio, the MSCI
World Index, and the Lipper Global Small Company Fund Average, is included in
the Fund's 1995 Annual Report to Shareholders.
Brian Ashford-Russell, a Portfolio Manager with Henderson Administration
Group plc since February 1993, is the Co-Manager of the Global Technology
Portfolio. Mr. Ashford-Russell and Mr. Wick have responsibility for directing
and overseeing the international and domestic investments, respectively, of the
Global Technology Portfolio including the selection of individual securities for
purchase or sale. Mr. Ashford-Russell was previously a Portfolio Manager with
Touche Remnant & Co.
Nitin Mehta, a Portfolio Manager with Henderson Administration Group plc
since September 1994, is the Co-Manager of the Global Growth Opportunities
Portfolio. Mr. Mehta and Mr. Muzzatti have responsibility for directing and
overseeing the international and domestic investments, respectively, of the
Global Growth Opportunities Portfolio including the selection of individual
securities for purchase or sale. From May 1993 to September, 1994, Mr. Mehta was
Head of Currency Management and Derivatives at Quorum Capital Management. From
February 1993 to May 1993 he was a consultant with International Finance
Corporation. From 1986 through 1992, he was Head of Equity Investments at
Shearson Lehman Global Asset Management.
Copies of the Fund's 1995 Annual Report to Shareholders may be obtained,
without charge, by calling or writing the Fund at the telephone numbers or
address listed on the front page of this Prospectus.
P-23
<PAGE>
PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND VALUATION
PORTFOLIO TRANSACTIONS. In directing transactions involving exchange-listed
securities, the Manager (or in the case of the Seligman Henderson Portfolios,
the Manager or the Subadviser) will seek the most favorable price and execution,
and consistent with that policy may give consideration to the research,
statistical, and other services furnished by brokers or dealers to the Manager
or the Subadviser for its use. In addition, the Manager and Subadviser are
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 a Portfolio than the use of
brokers selected solely on the basis of seeking the most favorable price and
execution although such research and analysis received may be useful to the
Manager or the Subadviser in connection with their services to other clients as
well as to the Portfolios. Portfolio transactions for the Seligman Bond
Portfolio, Seligman Cash Management Portfolio and Seligman High-Yield Bond
Portfolio, which invest in debt securities generally traded in the
over-the-counter market, and transactions by any of the other Portfolios in debt
securities traded on a "principal basis" in the over-the-counter market are
normally directed by the Manager or the Subadviser to dealers in the
over-the-counter market, which dealers generally act as principals for their own
accounts.
Consistent with the rules of the National Association of Securities
Dealers, Inc. and subject to seeking the most favorable price and execution
available and such other policies as the Directors may determine, the Manager or
Subadviser may consider sales of the Canada Life Accounts and, if permitted by
applicable laws, of the other Funds in the Seligman Group as a factor in the
selection of brokers or dealers to execute portfolio transactions for the Fund.
PORTFOLIO TURNOVER. A change in securities held by any Portfolio is known
as "portfolio turnover" and may involve the payment by the Fund of dealer
spreads or underwriting commissions and other transactions costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
Changes will be made whenever the Manager or, in the case of the Seligman
Henderson Portfolios, the Subadviser, believes such changes will strengthen any
Portfolio's position. Portfolio turnover will vary from year to year as well as
within a year and may exceed 100%.
VALUATION. The net asset value of the shares of each Portfolio will be
computed each day, Monday through Friday, as of the close of the New York Stock
Exchange (normally, 4:00 p.m. Eastern time), on days the New York Stock Exchange
is open for trading. Securities of each Portfolio (except Seligman Cash
Management Portfolio) are valued at current market value, or in the absence
thereof, at fair value in accordance with procedures approved by the Board of
Directors. For purposes of determining the net asset value per share of each of
the Seligman Henderson Portfolios, securities traded on a foreign exchange or
over-the-counter market are valued at the last sales price on the primary
exchange or market on which they are traded. United Kingdom securities and
securities for which there are no recent sales transactions are valued based on
quotations provided by primary market makers in such securities. Any securities
for which recent market quotations are not readily available are valued at fair
value determined in accordance with procedures approved by the Board of
Directors. Short-term holdings maturing in 60 days or less are generally valued
at amortized cost if their original maturity was 60 days or less. Short-term
holdings with more than 60 days remaining to maturity will be valued at current
market value until the 61st day prior to maturity, and will then be valued on an
amortized cost basis based on the value of such date unless the Board determines
that this amortized cost value does not represent fair market value.
Securities held by the Seligman Cash Management Portfolio are valued using
the amortized cost method. This method is designed to stabilize the net asset
value of that Portfolio at $1.00 per share. The Board of Directors will monitor
closely the stabilization of the net asset value at $1.00 per share and has
adopted procedures to facilitate such stabilization. More information regarding
this method of valuation is contained in the Statement of Additional
Information.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio of the Fund intends to qualify as a "regulated investment
company" under certain provisions of the Internal Revenue Code of 1986, as
amended (the "Code"). Under such provisions, the Fund's Portfolios will be
subject to federal income tax only with respect to undistributed net investment
income and net realized capital gain. Each of the Fund's Portfolios will be
treated as a separate entity. Dividends on the Seligman Cash Management
Portfolio will be declared daily and reinvested monthly in additional full and
fractional shares of the Seligman Cash Management Portfolio; it is not expected
that this Portfolio will realize capital gains. Dividends and capital gain
distributions from each of the other Portfolios will be declared and paid
annually and will be reinvested at the net asset value of such shares of the
P-24
<PAGE>
Portfolio that declared such dividend or gain distribution. Dividend and gain
distributions are generally not currently taxable to owners of the VA, CLAA or
VCA-9 Contracts; further information regarding the tax consequences of an
investment in the Fund is contained in the separate prospectus or disclosure
documents of the Canada Life Accounts and VCA-9.
PURCHASES AND REDEMPTIONS
Shares of the Portfolios will be offered only to Canada Life Accounts and
VCA-9. Shares of the Fund will be purchased and redeemed by Canada Life Accounts
and VCA-9 at net asset value, without charge. However, the Canada Life Accounts
and VCA-9 are sold subject to certain fees and charges. These fees and charges
for the Canada Life Accounts and VCA-9 are more fully described in the
prospectuses or disclosure documents for Canada Life Accounts and VCA-9 which
should be read together with this Prospectus, as applicable. Purchase or
redemption requests received by the Fund prior to 4:00 p.m. Eastern time are
effected at the applicable Portfolio's net asset value per share calculated on
the date such purchase or redemption requests are received.
Any inquiries regarding the Fund should be directed in writing to Seligman
Financial Services, Inc., 100 Park Avenue, New York, New York 10017, or by
calling the telephone numbers listed on the front page of the Prospectus.
Seligman Financial Services, Inc. is an affiliate of the Manager and distributor
of the Fund's shares.
CUSTODIANS AND TRANSFER AGENT
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, acts as custodian of the Fund's assets, except for the assets of
each of the Seligman Henderson Portfolios, as well as transfer and dividend
disbursing agent.
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, New York
11201, acts as custodian of the assets of each of the Seligman Henderson
Portfolios.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end diversified management investment company
incorporated under the laws of the state of Maryland on June 24, 1987 under the
name Seligman Mutual Benefit Portfolios, Inc. The Fund's name was changed to
Seligman Portfolios, Inc. on April 15, 1993. Directors of the Fund have
authority to issue a total of 1,000,000,000 shares, each with a par value of
$.001. The Fund presently has twelve separate series of common stock, each of
which maintains a separate investment portfolio, designated as follows: Seligman
Bond Portfolio, Seligman Capital Portfolio, Seligman Cash Management Portfolio,
Seligman Common Stock Portfolio, Seligman Communications and Information
Portfolio, Seligman Frontier Portfolio, Seligman Henderson International
Portfolio, Seligman Henderson Global Growth Opportunities Portfolio, Seligman
Henderson Global Smaller Companies Portfolio, Seligman Henderson Global
Technology Portfolio, Seligman High-Yield Bond Portfolio, and Seligman Income
Portfolio. Each share represents an equal proportionate interest in the
respective series and shares entitle their holders to one vote per share. Shares
have noncumulative voting rights, do not have preemptive or subscription rights,
are transferable and are fully paid and non-assessable. In accordance with
current policy of the SEC, holders of the Canada Life Accounts and VCA-9 have
the right to instruct Canada Life and MBL Life, respectively, as to voting Fund
shares held by such Canada Life Accounts and VCA-9, respectively, on all matters
to be voted on by Fund shareholders. Such rights may change in accordance with
changes in policies of the SEC. Voting rights of the participants in the Canada
Life Accounts and VCA-9 are more fully set forth in the prospectus or disclosure
document relating to that account, as applicable, which should be read together
with this Prospectus. The Directors of the Fund have authority to create
additional portfolios and to classify and reclassify shares of capital stock
without further action by shareholders and additional series may be created in
the future. Under Maryland corporate law, the Fund is not required to hold
annual meetings and it is the intention of the Fund's Directors not to do so.
However, special meetings of shareholders will be held for action by
shareholders as may be required by the 1940 Act, the Fund's Articles of
Incorporation and By-Laws, or Maryland corporate law.
P-25
<PAGE>
APPENDIX
MOODY'S INVESTORS SERVICES, INC. (MOODY'S)
DEBT SECURITIES
AAA: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk. Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be characteristically lacking or may be unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact may have speculative characteristics as well.
BA: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA: Bonds which are rated Ca represent obligations which are speculative in
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.
COMMERCIAL PAPER
Moody's Commercial Paper Ratings are opinions of the ability of issuers to
repay punctually promissory senior debt obligations not having an original
maturity in excess of one year. Issuers rated "Prime-1" or "P-1" indicates the
highest quality repayment ability of the rated issue.
The designation "Prime-2" or "P-2" indicates that the issuer has a strong
ability for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
The designation "Prime-3" or "P-3" indicates that the issuer has an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained.
Issues rated "Not Prime" do not fall within any of the Prime rating
categories.
P-26
<PAGE>
STANDARD & POOR'S CORPORATION ("S&P")
DEBT SECURITIES
AAA: Debt issues rated AAA are highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.
A: Debt issues rated A are regarded as upper medium grade. They have a
strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB: Debt issues rated BBB are regarded as having an adequate capacity to
pay interest and re-pay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and re-pay principal
for bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC: Debt issues rated BB, B, CCC and CC are regarded on
balance, as predominantly speculative with respect to capacity to pay interest
and pre-pay principal in accordance with the terms of the bond. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
C: The rating C is reserved for income bonds on which no interest is being
paid.
D: Debt issues rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.
COMMERCIAL PAPER
S&P Commercial Paper ratings are current assessments of the likelihood of
timely payment of debts having an original maturity of no more than 365 days.
A-1: The A-1 designation indicates that the degree of safety regarding
timely payment is very strong.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3: Issues carrying this designation have adequate capacity for timely
payment. They are, however more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B: Issues rated B" are regarded as having only a speculative capacity for
timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful
capacity of payment.
D: Debt rated "D is in payment default.
The ratings assigned by S&P may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within its major rating categories.
P-27
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1996
SELIGMAN PORTFOLIOS, INC.
100 Park Avenue
New York, New York 10017
800-221-7844 - all continental United States, except New York
212-850-1864 - New York State
800-221-2783 - Marketing Services
This Statement of Additional Information expands upon and supplements the
information contained in the current Prospectus of Seligman Portfolios, Inc.
(the "Fund"), dated November 1, 1996. It should be read in conjunction with the
Prospectus, which may be obtained by contacting the Fund at the telephone
numbers or address set forth above. This Statement of Additional Information,
although not in itself a Prospectus, is incorporated by reference into the
Prospectus in its entirety.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RESTRICTIONS................................. 2
DIRECTORS AND OFFICERS............................................... 6
MANAGEMENT AND EXPENSES.............................................. 11
PORTFOLIO TRANSACTIONS, VALUATION AND REDEMPTION..................... 13
CUSTODIANS AND INDEPENDENT AUDITORS.................................. 15
FINANCIAL STATEMENTS................................................. 16
APPENDIX A........................................................... 17
APPENDIX B........................................................... 19
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus discusses the investment objectives of each of the Fund's
Portfolios and the policies it employs to achieve those objectives. The
following information regarding the Fund's investment policies supplements the
information contained in the Prospectus.
Purchasing Put Options on Securities
The Seligman Henderson International Portfolio (formerly, Seligman
Henderson Global Portfolio), the Seligman Henderson Global Growth Opportunities
Portfolio, the Seligman Henderson Global Smaller Companies Portfolio and the
Seligman Henderson Global Technology Portfolio (collectively, the "Seligman
Henderson Portfolios") may purchase put options to protect its portfolio
holdings in an underlying security against a decline in market value. This hedge
protection is provided during the life of the put option since a Portfolio, 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, a Portfolio 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, a Portfolio would let the put option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option. The cost of the put option is limited to the premium plus
commission paid. A Portfolio's maximum financial exposure will be limited to
these costs.
A Portfolio may purchase options listed on public exchanges as well as
over-the-counter. Options listed on an exchange are generally considered very
liquid. OTC options are considered less liquid, and therefore, will only be
considered where there is not a comparable listed option. Because options will
be used solely for hedging and due to their relatively low cost and short
duration, liquidity is not a significant concern.
A Portfolio's ability to engage in option transactions may be limited by
tax considerations.
Lending of Portfolio Securities
Certain of the Fund's Portfolios may lend portfolio securities to certain
institutional borrowers of securities and may invest the cash collateral and
obtain additional income or receive an agreed-upon amount of interest from the
borrower. Loans made will generally be short-term and are subject to termination
at the option of the Fund or the borrower. The lending Portfolio may pay
reasonable administrative and custodial fees in connection with a loan and may
pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The lending Portfolio does not
have the right to vote securities during the period of the loan, but would
terminate the loan and regain the right to vote if that were considered
important with respect to the investment.
Repurchase Agreements
Each of the Portfolios may enter into repurchase agreements with commercial
banks and with broker/dealers to invest cash for the short term. A repurchase
agreement is an agreement under which a Portfolio acquires a money market
instrument, generally a U.S. Government obligation, subject to resale at an
agreed-upon price and date. Such resale price reflects an agreed-upon interest
rate effective for the period of time the instrument is held by a Portfolio and
is unrelated to the interest rate on the instrument.
Each of the Portfolios has the right to sell securities subject to
repurchase agreements but would be required to deliver identical securities upon
maturity of the repurchase agreement unless the seller failed to pay the
repurchase price. It is not anticipated that securities subject to repurchase
agreements will be sold except in the case of default on the obligation to
repurchase. To the extent that the proceeds from any sale upon a default in the
obligation to repurchase were less than the repurchase price, a Portfolio would
suffer a loss. In addition, the law is unsettled regarding the rights of a
Portfolio if the financial institution that is party to the repurchase agreement
petitions for bankruptcy or otherwise becomes subject to the United States
Bankruptcy Code. As a result, under these extreme circumstances, there may be
restrictions on the ability to sell the collateral, and losses could be
incurred.
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<PAGE>
Illiquid Securities
Other than the Seligman Cash Management Portfolio, each Portfolio of the
Fund may invest up to 15% of its net assets in illiquid securities, including
restricted securities (i.e., securities subject to restrictions on resale
because they have not been registered under the Securities Act of 1933 (the
"1933 Act")) and other securities that are not readily marketable.
Foreign Currency Transactions
A forward foreign currency exchange contract is an agreement to purchase or
sell a specific currency at a future date and at a price set at the time the
contract is entered into. Each of the Seligman Henderson Portfolios will
generally enter into forward foreign currency exchange contracts to fix the U.S.
dollar value of a security it has agreed to buy or sell for the period between
the date the trade was entered into and the date the security is delivered and
paid for, or, to hedge the U.S. dollar value of securities it owns.
A Portfolio may enter into a forward contract to sell or buy the amount of
a foreign currency it believes may experience a substantial movement against the
U.S. dollar. In this case the contract would approximate the value of some or
all of the Portfolio's securities denominated in such foreign currency. Under
normal circumstances, the portfolio manager will limit forward currency
contracts to not greater than 75% of a Portfolio's position in any one country
as of the date the contract is entered into. This limitation will be measured at
the point the hedging transaction is entered into by the Portfolio. Under
extraordinary circumstances, the Subadviser may enter into forward currency
contracts in excess of 75% of a Portfolio's position in any one country as of
the date the contract is entered into. The precise matching of the forward
contract amounts and the value of securities involved will not generally be
possible since the future value of such securities in foreign currencies will
change as a consequence of market movement in the value of those securities
between the date the forward contract is entered into and the date it matures.
The projection of short-term currency market movement is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Under certain circumstances, a Portfolio may commit a substantial
portion or the entire value of its assets to the consummation of these
contracts. The Subadviser will consider the effect a substantial commitment of
its assets to forward contracts would have on the investment program of a
Portfolio and its ability to purchase additional securities.
Except as set forth above and immediately below, each Portfolio will also
not enter into such forward contracts or maintain a net exposure to such
contracts where the consummation of the contracts would oblige the Portfolio to
deliver an amount of foreign currency in excess of the value of the Portfolio's
securities or other assets denominated in that currency. A Portfolio, in order
to avoid excess transactions and transaction costs, may nonetheless maintain a
net exposure to forward contracts in excess of the value of the Portfolio's
securities or other assets denominated in that currency provided the excess
amount is "covered" by cash and/or liquid, high-grade debt securities,
denominated in any currency, having a value at least equal at all times to the
amount of such excess. Under normal circumstances, consideration of the prospect
for currency parties will be incorporated into the longer term investment
decisions made with regard to overall diversification strategies. However, the
Subadviser believes that it is important to have the flexibility to enter into
such forward contracts when it determines that the best interests of the
Portfolio will be served.
At the maturity of a forward contract, a Portfolio may either sell the
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute precision
the market value of portfolio securities at the expiration of the forward
contract. Accordingly, it may be necessary for a Portfolio to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security is less than the amount of foreign
currency the Portfolio is obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received upon
the sale of the portfolio security if its market value exceeds the amount of
foreign currency a Portfolio is obligated to deliver. However, a Portfolio may
use liquid, high-grade debt securities, denominated in any currency, to cover
the amount by which the value of a forward contract exceeds the value of the
securities to which it relates.
If a Portfolio retains the portfolio security and engages in offsetting
transactions, the Portfolio will incur a gain or a loss (as described below) to
the extent that there has been movement in forward contract prices. If the
Portfolio engages in an offsetting transaction, it may subsequently enter into a
new forward contract to sell the foreign currency. Should forward prices decline
during the period between the Portfolio's entering into a forward contract for
the sale of a foreign currency and the date it enters into an offsetting
contract for the purchase of the foreign currency, the Portfolio will realize a
gain to the extent the price of the currency it has agreed to sell exceeds the
price of the currency it has agreed to purchase. Should forward prices increase,
the Portfolio will suffer a loss to the extent the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
3
<PAGE>
Each Portfolio's dealing in forward foreign currency exchange contracts
will be limited to the transactions described above. Of course, a Portfolio is
not required to enter into forward contracts with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate by
the Subadviser. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange at
a future date. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of a hedged currency, at the same time,
they tend to limit any potential gain which might result from an increase in the
value of that currency.
Shareholders should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to a Portfolio at one rate, while offering a lesser rate of
exchange should the Portfolio desire to resell that currency to the dealer.
Portfolio Turnover
The portfolio turnover rate for each Portfolio 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
portfolio turnover rates for the years 1995 and 1994 of the Seligman Bond
Portfolio, Seligman Capital Portfolio, Seligman Common Stock Portfolio, Seligman
Henderson International Portfolio and Seligman Income Portfolio were 114.42% and
237.23%; 122.20% and 67.39%; 55.48% and 15.29%; 41.40% and 47.34%; and 51.22%
and 29.76%, respectively. For the year 1995 and the period from October 11, 1994
(commencement of operations) through December 31, 1994, the portfolio turnover
rates of the Seligman Communications and Information Portfolio, Seligman
Frontier Portfolio and Seligman Henderson Global Smaller Companies Portfolio,
respectively, were 96.62% and 0%; 106.48% and 0%; and 55.65% and 0%,
respectively. For the period from May 1, 1995 (commencement of operations)
through December 31, 1995, the portfolio turnover rate of the Seligman
High-Yield Bond Portfolio was 67.55%. It is anticipated that the annual rates of
portfolio return for each of the Seligman Henderson Global Growth Opportunities
Portfolio and the Seligman Henderson Global Technology Portfolio will not exceed
100%.
Investment Restrictions
The Fund has adopted the several investment restrictions enumerated below.
Except as otherwise indicated below, restrictions No. 1 through 9 may not be
changed without the affirmative vote of the holders of a majority of a
Portfolio's outstanding voting securities; restrictions No. 10 through 16 may be
changed by the Fund's Board of Directors. Under these restrictions, none of the
Portfolios may:
1. Borrow money, except from banks for temporary purposes (but not for the
purpose of purchasing portfolio securities) in an amount not to exceed 10%
of the value of the total assets of the Portfolio; except that the Seligman
Capital Portfolio, Seligman Common Stock Portfolio and Seligman
Communications and Information Portfolio may borrow to purchase securities
provided that such borrowings are made only from banks, do not exceed
one-third of the respective Portfolio's net assets (taken at market) and
are secured by not more than 10% of such assets (taken at cost); except
that the Seligman Frontier Portfolio and the Seligman High-Yield Bond
Portfolio will not purchase additional portfolio securities if it has
outstanding borrowings in excess of 5% of the value of its total assets;
and except that each of the Seligman Henderson Portfolios may borrow money
from banks to purchase securities in amounts not in excess of 5% of its
total assets.
2. Mortgage, pledge or hypothecate any of its assets, except to secure
borrowings permitted by paragraph 1 and provided that this limitation does
not prohibit escrow, collateral or margin arrangements in connection with
(a) the purchase or sale of covered options (including stock index
options), (b) the purchase or sale of interest rate or stock index futures
contracts or options on such contracts by any of the Fund's Portfolios
otherwise permitted to engage in transactions involving such instruments or
(c) in connection with the Fund's purchase of fidelity insurance and errors
and omissions insurance, and provided, further, that Seligman High-Yield
Bond Portfolio may mortgage, pledge or hypothecate its assets, but the
value of such encumbered assets may not exceed 10% of that Portfolio's net
asset value. This investment restriction No. 2 may be changed, with respect
to the Seligman High-Yield Bond Portfolio, by the Fund's Board of
Directors.
3. Make "short" sales of securities (except that each of the Seligman
Henderson Portfolios may make short sales "against-the-box"), or purchase
securities on "margin" except for short-term credits necessary for the
purchase or sale of securities, provided that for purposes of this
limitation, initial and variation payments or deposits in connection with
transactions involving interest rate or stock index futures contracts and
options on such contracts by any Portfolio permitted to engage in
transactions involving such instruments will not be deemed to be the
purchase of securities on margin.
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<PAGE>
4. With respect to 75% of its securities portfolio (or 100% of its securities
portfolio, in the case of the Seligman High-Yield Bond Portfolio), purchase
securities of any issuer if immediately thereafter more than 5% of its
total assets valued at market would be invested in the securities of any
one issuer, other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; or buy more than 10% of the
voting securities of any one issuer.
5. Invest more than 25% of the market value of its total assets in securities
of issuers in any one industry (except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities), provided that for
the purpose of this limitation, mortgage-related securities do not
constitute an industry; provided further that the Seligman Communications
and Information Portfolio will invest at least 65% of the value of its
total assets in securities of companies principally engaged in the
communications, information and related industries, except when investing
for temporary defensive purposes; and provided further that the Seligman
Cash Management Portfolio may invest more than 25% of its gross assets: (i)
in the banking industry; (ii) in the personal credit institution or
business credit institution industries; or (iii) in any combination of (i)
and (ii).
6. Purchase or hold any real estate, except that the Seligman Bond Portfolio
and each of the Seligman Henderson Portfolios may engage in transactions
involving securities secured by real estate or interests therein, and each
of the Seligman Henderson Portfolios may purchase securities issued by
companies or investment trusts that invest in real estate or interests
therein.
7. Purchase or sell commodities and commodity futures contracts; except that
the Board of Directors may authorize any Portfolio other than the Seligman
Cash Management Portfolio and the Seligman High-Yield Bond Portfolio to
engage in transactions involving interest rate and/or stock index futures
and related options solely for the purposes of reducing investment risk and
not for speculative purposes.
8. Underwrite the securities of other issuers, provided that the disposition
of investments otherwise permitted to be made by any Portfolio (such as
investments in securities that are not readily marketable without
registration under the 1933 Act and repurchase agreements with maturities
in excess of seven days) will not be deemed to render a Portfolio engaged
in an underwriting investment if not more than 10% of the value of such
Portfolio's total assets (taken at cost) would be so invested and except
that in connection with the disposition of a security a Portfolio may be
deemed to be an underwriter as defined in the 1933 Act.
9. Make loans, except loans of securities, provided that purchases of notes,
bonds or other evidences of indebtedness, including repurchase agreements,
are not considered loans for purposes of this restriction; provided further
that each of the Seligman Henderson Global Portfolios may not make loans of
money or securities other than (a) through the purchase of securities in
accordance with the Fund's investment objective, (b) through repurchase
agreements and (c) by lending portfolio securities in an amount not to
exceed 33 1/3% of the funds total assets.
10. Purchase illiquid securities for any Portfolio including repurchase
agreements maturing in more than seven days and securities that cannot be
sold without registration or the filing of a notification under Federal or
state securities laws, if, as a result, such investment would exceed 15% of
the value of such Portfolio's net assets.
11. Invest in oil, gas or other mineral exploration or development programs;
provided, however, that this investment restriction shall not prohibit a
Portfolio from purchasing publicly-traded securities of companies engaging
in whole or in part in such activities.
12. Purchase securities of any other investment company, except in connection
with a merger, consolidation, acquisition or reorganization and except to
the extent permitted by Section 12 of the Investment Company Act of 1940
(the "1940 Act").
13. Purchase securities of companies which, together with predecessors, have a
record of less than three years' continuous operation, if as a result of
such purchase, more than 5% of such Portfolio's net assets would then be
invested in such securities; except that the Seligman Communications and
Information Portfolio, the Seligman Frontier Portfolio, each of the
Seligman Henderson Portfolios and the Seligman High-Yield Bond Portfolio
may each invest no more than 5% of total assets, at market value, in
securities of companies which, with their predecessors, have been in
operation less than three continuous years, excluding from this limitation
securities guaranteed by a company that, including predecessors, has been
in operation at least three continuous years.
14. Purchase securities of companies for the purpose of exercising control.
5
<PAGE>
15. Purchase securities from or sell securities to any of its officers or
Directors, except with respect to its own shares and as permissible under
applicable statutes, rules and regulations. In addition, the Seligman
High-Yield Bond Portfolio may not 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.
16. 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 and rights not listed on the New York or American
Stock Exchange. For this purpose, warrants acquired by the Fund in units or
attached to securities may be deemed to have been purchased without cost.
If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in such percentage resulting from a change in the
value of assets will not constitute a violation of such restriction. In order to
permit the sale of the Fund's shares in certain states, the Fund may make
commitments more restrictive than the investment restrictions decribed above.
Should the Fund determine that any such commitment is no longer in the best
interest of the Fund it will revoke the committment by terminating sales in the
state involved. The Fund also intends to comply with the diversification
requirements under Section 817(h) of the Internal Revenue Code of 1986, as
amended. For a description of these requirements see the Prospectus of Canada
Life of America Variable Annuity Account 2 and the Disclosure Statement of
Canada Life of America Annuity Account 3, each established by Canada Life
Insurance Company of America ("Canada Life") or the Prospectus of the Variable
Contract Account-9 established by MBL Life Assurance Corporation ("MBL Life").
Under the 1940 Act, a "vote of a majority of the outstanding voting
securities" of the Fund or of a particular Portfolio means the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the Fund or of
such Portfolio or (2) 67% or more of the shares of the Fund or of such Portfolio
present at a shareholder's meeting if more than 50% of the outstanding shares of
the Fund or of such Portfolio are represented at the meeting in person or by
proxy.
DIRECTORS AND OFFICERS
Directors and Officers of the Fund, together with information as to their
principal business occupations during the past five years, are shown below. Each
Director who is an "interested person" of the Fund, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, New York 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief
(58) Executive Officer and Chairman of the
Executive Committee
Managing Director, Chairman and President,
J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and
Seligman Advisors, Inc., advisers; Chairman
and Chief Executive Officer, the Seligman
Group of Investment Companies; Chairman,
Seligman Financial Services, Inc.,
broker/dealer; Seligman Holdings, Inc.,
holding company; Seligman Services, Inc.,
broker/dealer; and Carbo Ceramics Inc.,
ceramic proppants for oil and gas industry;
Director or Trustee, Seligman Data Corp.,
shareholder service agent; Kerr-McGee
Corporation, diversified energy company; and
Sarah Lawrence College; and a Member of the
Board of Governors of the Investment Company
Institute; formerly, Chairman, Seligman
Securities, Inc., broker/dealer and J. & W.
Seligman Trust Company, trust company; and
Director, Daniel Industries, Inc.,
manufacturer of oil and gas metering
equipment.
BRIAN T. ZINO* Director, President and Member of the
(43) Executive Committee
Director and Managing Director (formerly,
Chief Administrative and Financial Officer),
J. & W. Seligman & Co. Incorporated,
investment managers and advisers and
Seligman Advisors, Inc., advisers; President
(with the exception of Seligman Quality
Municipal Fund, Inc. and Seligman Select
Municipal Fund, Inc.) and Director or
Trustee, the Seligman Group of Investment
Companies; Chairman, Seligman Data Corp.,
shareholder service agent; Director,
Seligman Financial Services, Inc.,
broker/dealer; Seligman Services, Inc.,
broker/dealer; and Senior Vice President,
Seligman Henderson Co., advisers; formerly,
Director and Secretary, Chuo Trust - JWS
Advisors, Inc., advisers; and Director,
Seligman Securities, Inc., broker/dealer;
and J.& W. Seligman Trust Company, trust
company.
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<PAGE>
FRED E. BROWN* Director
(83)
Director and Consultant, J. & W. Seligman &
Co. Incorporated, investment managers and
advisers and Seligman Advisors, Inc.,
advisers; Director or Trustee, the Seligman
Group of Investment Companies; Seligman
Financial Services, Inc., broker/dealer;
Seligman Services Inc., broker/dealer;
Trudeau Institute, nonprofit biomedical
research organization; Lake Placid Center
for the Arts, cultural organization; and
Lake Placid Education Foundation, education
foundation; formerly, Director, Seligman
Securities, Inc., broker/dealer and J. & W.
Seligman Trust Company, trust company.
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy
at Tufts University; Director or Trustee,
the Seligman Group of Investment Companies;
Chairman, American Council on Germany; a
Governor of the Center for Creative
Leadership; Director, USLIFE, insurance;
National Committee on U.S.-China Relations;
National Defense University; the Institute
for Defense Analysis; and Raytheon Co.,
electronics; and Consultant, Thomson CSF,
electronics; formerly, Ambassador, U.S.
State Department; Distinguished Policy
Analyst at Ohio State University and Olin
Distinguished Professor of National Security
Studies at the United States Military
Academy. From June, 1987 to June, 1992, he
was the Supreme Allied Commander, Europe and
the Commander-in-Chief, United States
European Command.
Tufts University, Packard Avenue, Medford,
MA 02155
ALICE S. ILCHMAN Director
(61)
President, Sarah Lawrence College; Director
or Trustee, the Seligman Group of Investment
Companies; Chairman, The Rockefeller
Foundation, charitable foundation; and
Director, NYNEX, telephone company; and the
Committee for Economic Development;
formerly, Trustee, The Markle Foundation,
philanthropic organization; and Director,
International Research and Exchange Board,
intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(63)
Chairman of the Board and Chief Executive
Officer, Kerr-McGee Corporation, energy and
chemicals; Director or Trustee, the Seligman
Group of Investment Companies; Director,
Kimberly-Clark Corporation, consumer
products, Bank of Oklahoma Holding Company,
American Petroleum Institute, Oklahoma City
Chamber of Commerce, Baptist Medical Center,
Oklahoma Chapter of the Nature Conservancy,
Oklahoma Medical Research Foundation and
United Way Advisory Board; Chairman,
Oklahoma City Public Schools Foundation; and
Member of the Business Roundtable and
National Petroleum Council.
123 Robert S. Kerr Avenue, Oklahoma City, OK
73102
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies;
Municipal Art Society of New York;
Commonwealth Aluminum Corporation; U.S.
Council for International Business; and
U.S.-New Zealand Council; Chairman, American
Australian Association; Member of the
American Law Institute and Council on
Foreign Relations; and Member of the Board
of Governors of the Foreign Policy
Association and New York Hospital.
125 Broad Street, New York, NY 10004
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<PAGE>
BETSY S. MICHEL Director
(54)
Attorney; Director or Trustee, the Seligman
Group of Investment Companies; Trustee,
Geraldine R. Dodge Foundation, charitable
foundation; and Chairman of the Board of
Trustees of St. George's School (Newport,
RI); formerly, Director, The National
Association of Independent Schools
(Washington, DC).
St. Bernard's Road, P.O. Box 449, Gladstone,
NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law
firm; Director or Trustee, the Seligman
Group of Investment Companies and Public
Service Enterprise Group, public utility.
Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(69)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies, The Houston Exploration Company,
The Brooklyn Museum, The Brooklyn Union Gas
Company, The Committee for Economic
Development, Dow Jones & Co., Inc. and
Public Broadcasting Service; formerly,
Co-Chairman of the Policy Council of the Tax
Foundation; Director, Tesoro Petroleum
Companies, Inc.; and Director and President,
Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY
10017
RONALD T. SCHROEDER* Director and Member of the Executive
(48) Committee
Director, Managing Director and Chief
Investment Officer, Institutional, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Seligman
Advisors, Inc., advisers; Director or
Trustee, the Seligman Group of Investment
Companies; Director, Seligman Holdings,
Inc., holding company; Seligman Financial
Services, Inc., broker/dealer; Seligman
Henderson Co., advisers; and Seligman
Services, Inc., broker/dealer; formerly,
President, the Seligman Group of Investment
Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal
Fund, Inc.; and Director, J. & W. Seligman
Trust Company, trust company; Seligman Data
Corp., shareholder service agent; and
Seligman Securities, Inc., broker/dealer.
ROBERT L. SHAFER Director
(64)
Director, various corporations; Director or
Trustee, the Seligman Group of Investment
Companies; and USLIFE Corporation, life
insurance; formerly, Vice-President, Pfizer
Inc., pharmaceuticals.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(61)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises,
Inc.; Director or Trustee, the Seligman
Group of Investment Companies; Red Man Pipe
and Supply Company, piping and other
materials; and C-SPAN.
300 Crescent Court, Suite 700, Dallas, TX
75201
LORIS D. MUZZATTI Vice President and Portfolio Manager
(39)
Managing Director (formerly, Vice President
and Portfolio Manager), J. & W. Seligman &
Co. Incorporated, investment managers and
advisers; Vice President and Portfolio
Manager, two other open-end investment
companies in the Seligman Group of
Investment Companies.
8
<PAGE>
CHARLES C. SMITH, JR. Vice President and Portfolio Manager
(40)
Managing Director (formerly, Senior Vice
President and Senior Investment Officer), J.
& W. Seligman & Co. Incorporated, investment
managers and advisers; Vice President and
Portfolio Manager, two other open-end
investment companies in the Seligman Group
of Investment Companies and Tri-Continental
Corporation, closed-end investment company.
PAUL H. WICK Vice President and Portfolio Manager
(33)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and
advisers; Vice President and Portfolio
Manager, two other open-end investment
companies in the Seligman Group of
Investment Companies; and Portfolio Manager,
Seligman Henderson Co., adviser; formerly,
Senior Vice President, Portfolio Management,
Chuo Trust-JWS Advisors, Inc., adviser.
ARSEN MRAKOVCIC Vice President and Portfolio Manager
(31)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and
advisers; and Vice President and Portfolio
Manager, one other open-end investment
company in the Seligman Group of Investment
Companies; formerly, Portfolio Assistant, J.
& W. Seligman & Co. Incorporated.
LEONARD J. LOVITO Vice President and Portfolio Manager
(36)
Vice President, Investment Officer, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Vice President and
Portfolio Manager, two other open-end
investment companies in the Seligman Group
of Investment Companies.
DANIEL J. CHARLESTON Vice President and Portfolio Manager
(36)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and
advisers; and Vice President and Portfolio
Manager, one other open-end investment
company in the Seligman Group of Investment
Companies.
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Seligman Financial
Services, Inc., broker/dealer; Seligman
Advisors, Inc., advisers and Seligman Data
Corp., shareholder service agent; Vice
President, the Seligman Group of Investment
Companies and Seligman Services, Inc,
broker/dealer; and Treasurer, Seligman
Holdings, Inc., holding company; and
Seligman Henderson Co., advisers; formerly,
Senior Vice President, Seligman Securities,
Inc., broker/dealer; and Vice President,
Finance J. & W. Seligman Trust Company,
trust company.
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation,
and Corporate Secretary, J. & W. Seligman &
Co. Incorporated, investment managers and
advisers; and Seligman Advisors, Inc.,
advisers; Corporate Secretary, the Seligman
Group of Investment Companies; Seligman
Financial Services, Inc., broker/dealer;
Seligman Henderson Co., advisers; Seligman
Services, Inc., broker/dealer and Seligman
Data Corp., shareholder service agent;
formerly, Secretary, J. & W. Seligman Trust
Company, trust company; and attorney, Seward
and Kissel, law firm.
9
<PAGE>
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp.,
shareholder service agent; formerly,
Treasurer, American Investors Advisors, Inc.
and the American Investors Family of Funds.
The Executive Committee of the Board acts on behalf of the Board
between meetings to determine the value of securities and assets owned by the
Fund for which no market valuation is available and to elect or appoint officers
of the Fund to serve until the next meeting of the Board.
Compensation Table
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits from Registrant
Name and Compensation From Accrued as part of and Fund Complex
Position with Registrant Registrant (1) Fund Expenses Paid to Directors (2)
------------------------ ----------------- ------------------- ---------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
John R. Galvin, Director $ 1,470.28 N/A $ 41,252.75
Alice S. Ilchman, Director 2,423.68 N/A 68,000.00
Frank A. McPherson, Director 1,470.28 N/A 41,252.75
John E. Merow, Director 2,352.26 N/A 66,000.00(d)
Betsy S. Michel, Director 2,316.55 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 881.98 N/A 24,747.25
James C. Pitney, Director 2,423.68 N/A 68,000.00
James Q. Riordan, Director 2,423.68 N/A 70,000.00
Herman J. Schmidt, Director* 881.98 N/A 24,747.25
Robert L. Shafer, Director 2,423.68 N/A 70,000.00
James N. Whitson, Director 2,352.26 N/A 68,000.00(d)
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
* Retired May 18, 1995.
(d) Deferred. The total amounts of deferred compensation (including interest)
payable by the Fund to Messrs. Merow, Pitney and Whitson as of December 31, 1995
were $10,892, $3,536 and $6,483, respectively. Mr. Pitney no longer defers
current compensation.
General Galvin and Mr. McPherson became Directors on May 18, 1995.
The Fund has a compensation arrangement under which outside directors may elect
to defer receiving their fees. Under this arrangement, interest is accrued on
the deferred balances. The annual cost of such fees and interest is included in
the directors' fees and expenses and the accumulated balance thereof is included
in "Liabilities" in the Fund's financial statements.
Directors and officers of the Fund are also trustees, directors and
officers of some or all of the other investment companies in the Seligman Group.
As of September 30, 1996, no Directors or officers of the Fund owned directly or
indirectly shares of any of the Portfolios.
10
<PAGE>
MANAGEMENT AND EXPENSES
Under the Management Agreements and subject to the control of the Board of
Directors, the Manager (or in the case of each of the Seligman Henderson
Portfolios, the Manager and Seligman Henderson Co. (the "Subadviser")) manages
the investment of the assets of the Fund, including making purchases and sales
of portfolio securities consistent with the Fund's investment objectives and
policies, and administers its business and other affairs. The Manager provides
the Fund with such office space, administrative and other services and executive
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of directors and/or officers of the Fund who are employees
or advisors of the Manager.
The Management Agreements (and the Subadvisory Agreements, in the case of
each of the Seligman Henderson Portfolios) provide that the Manager (and the
Subadviser, in the case of each of the Seligman Henderson Portfolios) 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
their duties under the Management (and Subadvisory) Agreements, except for
willful misfeasance, bad faith, gross negligence, or reckless disregard of their
obligations and duties under the Management (and Subadvisory) Agreements.
The Fund pays all its expenses other than those assumed by the Manager or
Subadviser, including fees and expenses of independent attorneys and auditors,
taxes and governmental fees (including fees and expenses for qualifying the Fund
and its shares under Federal and state securities laws), expenses of printing
and distributing reports, notices and proxy materials to shareholders, expenses
of printing and filing reports and other documents with governmental agencies,
fees and expenses of directors of the Fund not employed by the Manager or any of
its affiliates (including the Subadviser), insurance premiums and extraordinary
expenses such as litigation expenses.
The Seligman Bond Portfolio, Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio and Seligman Income
Portfolio each pay the Manager a management fee for its services, calculated
daily and payable monthly, at an annual rate of .40% of the daily net assets of
each Portfolio. The Seligman High-Yield Bond Portfolio pays the Manager a
management fee for its services calculated daily and payable monthly at an
annual rate of .50% of the daily net assets of the Portfolio. The Seligman
Communications and Information Portfolio and Seligman Frontier Portfolio each
pay the Manager a management fee for its services, calculated daily and payable
monthly, at an annual rate of .75% of the daily net assets of each Portfolio.
Each of the Seligman Henderson Portfolios pay the Manager a management fee,
calculated daily and payable monthly, equal to an annual rate of 1.00% of the
average daily net assets of each Portfolio, of which .90% is paid to the
Subadviser for the services described below. The following table indicates the
management fees paid or reimbursed, in the case of Seligman Cash Management
Portfolio, for the year 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Seligman Bond Portfolio $ 15,262 $ 14,043 $ 17,252
Seligman Capital Portfolio 28,551 23,120 21,941
Seligman Cash Management Portfolio* 18,365 12,837 14,216
Seligman Common Stock Portfolio 94,380 84,124 93,118
Seligman Communications and Information Portfolio 123,216 349** N/A
Seligman Frontier Portfolio 29,219 99** N/A
Seligman Henderson International Portfolio 25,312 11,417 1,656**
Seligman Henderson Global Smaller Companies Portfolio 17,210 159** N/A
Seligman High-Yield Bond Portfolio 3,941** N/A N/A
Seligman Income Portfolio 45,797 42,854 45,567
</TABLE>
- ------------------------
* The Manager, at its discretion, waived all of its fees.
** Fees paid from commencement of operations.
The Manager is a successor firm to an investment banking business founded
in 1864 which has thereafter provided investment services to individuals,
families, institutions and corporations. See Appendix A for further information
about the Manager.
On December 29, 1988, a majority of the outstanding voting securities of
the Manager was purchased by Mr. William C. Morris and a simultaneous
recapitalization of the Manager occurred.
11
<PAGE>
The Management Agreement with respect to the Seligman Bond Portfolio,
Seligman Capital Portfolio, Seligman Cash Management Portfolio, Seligman Common
Stock Portfolio and Seligman Income Portfolio was approved by the Board of
Directors on September 30, 1988 and by shareholders at a Special Meeting held on
December 16, 1988. The Management Agreement with respect to the Seligman
Henderson International Portfolio was approved by the Board of Directors on
March 18, 1993. The Management Agreements with respect to the Seligman
Communications and Information Portfolio, the Seligman Frontier Portfolio, and
the Seligman Henderson Global Smaller Companies Portfolio were approved by the
Board of Directors on July 21, 1994. The Management Agreement with respect to
the Seligman High-Yield Bond Portfolio was approved by the Board of Directors on
March 16, 1995. The Management Agreement with respect to the Seligman Henderson
Global Growth Opportunities Portfolio and the Seligman Henderson Global
Technology Portfolio was approved by the Board of Directors on March 21, 1996.
The Management Agreements will continue in effect until December 31 of each
year, with respect to each Portfolio (except for the Seligman Henderson Global
Growth Opportunities Portfolio and Seligman Henderson Global Technology
Portfolio, for which the Management Agreement is in effect until December 31,
1997 and then December 31 of each year thereafter), if (1) such continuance is
approved in the manner required by the 1940 Act (by a vote of a majority of the
Board of Directors or of the outstanding voting securities of the Portfolios and
by a vote of a majority of the Directors who are not parties to the Management
Agreements or interested persons of any such party) and (2) if the Manager shall
not have notified the Fund at least 60 days prior to the anniversary date of the
previous continuance that it does not desire such continuance. The Management
Agreements may be terminated at any time with respect to any or all Portfolios,
by the Fund, without penalty, on 60 days' written notice to the Manager. The
Manager may terminate the Management Agreements at any time upon 60 days written
notice to the Fund. The Management Agreements will terminate automatically in
the event of their assignment. The Fund has agreed to change its name upon
termination of the Management Agreements if continued use of the name would
cause confusion in the context of the Manager's business.
Under the Subadvisory Agreements between the Manager and the Subadviser,
the Subadviser supervises and directs the investment of the assets of each of
the Seligman Henderson Portfolios, including making purchases and sales of
portfolio securities consistent with each of the Seligman Henderson Portfolio's
investment objectives and policies. For these services the Subadviser is paid a
fee equal to an annual rate of .90% of each of the Seligman Henderson
Portfolio's average daily net assets. The Subadvisory Agreement with respect to
Seligman Henderson International Portfolio was approved by the Board of
Directors at a meeting held on March 18, 1993. The Subadvisory Agreement with
respect to Seligman Henderson Global Smaller Companies Portfolio was approved by
the Board of Directors at a meeting held on July 21, 1994. The Subadvisory
Agreements with respect to Seligman Henderson Global Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio were approved by
the Board of Directors at a meeting held on March 21, 1996. The Subadvisory
Agreements will continue in effect until December 31 of each year, with respect
to each Portfolio (except for the Seligman Henderson Global Growth Opportunities
Portfolio and the Seligman Henderson Global Technology Portfolio for which the
Subadvisory Agreement is in effect until December 31, 1997 and then December 31
of each year thereafter), and from year to year thereafter if (1) such
continuance is approved in the manner required by the 1940 Act (by a vote of a
majority of the Board of Directors or of the outstanding voting securities of
the Portfolios and by a vote of a majority of the Directors who are not parties
to the Subadvisory Agreements or interested persons of any such party) and (2)
if the Subadviser shall not have notified the Manager in writing at least 60
days prior to such December 31 or prior to December 31 of any year thereafter
that it does not desire such continuance. The Subadvisory Agreements may be
terminated at any time by the Fund, on 60 days written notice to the Subadviser.
The Subadvisory Agreements will terminate automatically in the event of their
assignment or upon the termination of the relevant Management Agreement.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The firm
currently manages approximately $23 billion in assets, and is recognized as a
specialist in global equity investing.
Officers, directors and employees of the Manager are permitted to engage in
personal securities transactions, subject to the Manager's Code of Ethics (the
"Ethics Code"). The Ethics Code proscribes certain practices with regard to
personal securities transactions and personal dealings, provides a framework for
the reporting and monitoring of personal securities transactions by the
Manager's Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The Ethics
Code prohibits each of the officers, directors and employees (including all
portfolio managers) of the Manager from purchasing or selling any security that
the officer, director or employee knows or believes (i) was recommended by the
Manager for purchase or sale by any client, including the Fund, within the
preceding two weeks, (ii) has been reviewed by the Manager for possible purchase
or sale within the preceding two weeks, (iii) is being purchased or sold by any
client, (iv) is being considered by a research analyst, (v) is being acquired in
a private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest they
may have in the securities or issuers that they recommend for purchase by any
client.
12
<PAGE>
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. In turn, the order desk maintains a list of securities
that may not be purchased due to a possible conflict with clients. All officers,
directors and employees are also required to disclose all securities
beneficially owned by them on December 31 of each year.
PORTFOLIO TRANSACTIONS, VALUATION AND REDEMPTION
As provided in the Management Agreements, the Manager (or in the case of
each of the Seligman Henderson Portfolios, the Manager or the Subadviser)
purchases and sells securities for the Fund. Purchase and sale orders are placed
by the Manager or the Subadviser.
The Management Agreements and the Subadvisory Agreements recognize that in
the purchase and sale of portfolio securities the Manager or the Subadviser will
seek the most favorable price and execution, and, consistent with that policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the manager for its use, as well as to the general
attitude toward and support of investment companies demonstrated by such brokers
or dealers. Such services include supplemental investment research, analysis and
reports concerning issuers, industries and securities deemed by the Manager or
Subadviser to be beneficial to the Fund. In addition, the Manager or the
Subadviser is authorized to place orders with brokers who provide supplemental
investment and market research and statistical and economic analysis although
the use of such brokers may result in a higher brokerage charge to the Fund that
the use of brokers selected solely on the basis of seeking the most favorable
price and execution and although such research and analysis may be useful to the
Manager or the Subadviser in connection with its services to clients other than
the Fund.
In over-the-counter markets, the Fund deals with primary market makers
unless a more favorable execution or price is believed to be obtainable. The
Fund may buy securities from or sell securities to dealers acting as principal,
except dealers with which its directors and/or officers are affiliated.
Brokerage commissions of each Portfolio (except the Seligman Bond
Portfolio, Seligman Cash Management Portfolio, Seligman Henderson Global Growth
Opportunities Portfolio, Seligman Henderson Global Technology Portfolio and
Seligman High-Yield Bond Portfolio) for the years 1995, and if applicable, 1994
and 1993, are set forth in the following table:
<TABLE>
<CAPTION>
Brokerage Commissions
Total Brokerage Commission Paid to Others for
Brokerage Commissions Paid to Execution and
Execution (2) Paid (1) Seligman Securities (2) Statistical Services
- ------------- -------- ----------------------- --------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Seligman Capital Portfolio $20,041 $ 8,412 $ 7,285 N/A N/A $ 275 $ 20,041 $ 8,412 $7,010
Seligman Common
Stock Portfolio 34,600 12,559 12,006 N/A N/A 1,984 34,600 12,559 10,022
Seligman Communications
and Information Portfolio 32,247 134 N/A N/A N/A N/A 32,247 134 N/A
Seligman Frontier Portfolio 12,086 111 N/A N/A N/A N/A 12,086 111 N/A
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Brokerage Commissions
Total Brokerage Commission Paid to Others for
Brokerage Commissions Paid to Execution and
Execution (2) Paid (1) Seligman Securities (2) Statistical Services
- ------------- -------- ----------------------- --------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Seligman Henderson
International Portfolio 12,389 5,503 824 N/A N/A N/A 12,389 5,503 824
Seligman Henderson Global
Smaller Companies Portfolio 12,794 180 N/A N/A N/A N/A 12,794 180 N/A
Seligman Income Portfolio 6,746 2,839 2,152 N/A N/A 635 6,746 2,839 1,517
</TABLE>
- ---------------
Notes:
(1) Not including any spreads on principal transactions on a net basis.
(2) Brokerage commissions paid by Seligman Capital Portfolio, Seligman
Common Stock Portfolio and Seligman Income Portfolio, respectively, to
Seligman Securities, Inc. were 4%, 48% and 30%, respectively, of total
brokerage commissions paid for 1993. The aggregate dollar amount of
each Portfolio's transactions for which Seligman Securities, Inc. acted
as broker was 2%, 51% and 40%, respectively, of the total dollar amount
of all commission transactions for 1993. Under procedures adopted by
the Board of Directors, and in accordance with Section 17(e) under the
1940 Act, Seligman Securities, Inc., an affiliate of the Manager, acted
as broker, for the Fund. Section 11(a) of the Securities Exchange Act
of 1934 prohibits members of U.S. securities exchanges from executing
exchange transactions for their affiliates and institutional accounts.
Under this provision, Seligman Securities, Inc. acted as broker for any
of the Portfolios only as permitted under regulations adopted by the
SEC. In accordance with such regulations, the Management Agreement
permitted Seligman Securities, Inc. to effect such transactions except
on the floor of a national securities exchange and to retain
compensation in connection with such transactions. As of March 31,
1993, Seligman Securities, Inc. ceased functioning as a broker for the
Fund and its clients.
When two or more of the investment companies in the Seligman Group or other
investment advisory clients of the Manager desire to buy or sell the same
security at the same time, the securities purchased or sold are allocated by the
Manager in a manner believed to be equitable to each. There may be possible
advantages or disadvantages of such transactions with respect to price or the
size of positions readily obtainable or saleable.
Valuation. The net asset value per share of each Portfolio is determined as
of the close of trading on the New York Stock Exchange, currently 4:00 p.m. New
York City time, each day that the New York Stock Exchange is open. Currently,
the New York Stock Exchange is closed on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The following supplements information contained in the Prospectus
regarding the manner in which securities are valued.
It is the policy of the Seligman Cash Management Portfolio to use its best
efforts to maintain a constant per share price equal to $1.00. Instruments held
by the Seligman Cash Management Portfolio are valued on the basis of amortized
cost. This involves valuing an instrument at its cost initially and, thereafter,
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which the value, as determined by amortized cost, is higher or
lower than the price the Portfolio would receive if it sold the instrument.
The foregoing method of valuation is permitted by Rule 2a-7 adopted by the
SEC. Under this rule, the Seligman Cash Management Portfolio must maintain an
average-weighted portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of one year or less, and invest only in
securities determined by the Fund's Directors to be of high quality with minimal
credit risks. In accordance with the rule, the Directors have established
procedures designed to stabilize, to the extent reasonably practicable, the
price per share as computed for the purpose of sales and redemptions of the
Seligman Cash Management Portfolio at $1.00. Such procedures include review of
the portfolio holdings by the Seligman Cash Management Portfolio and
determination as to
14
<PAGE>
whether the net asset value of the Seligman Cash Management Portfolio,
calculated by using available market quotations or market equivalents, deviates
from $1.00 per share based on amortized cost. The rule also provides that the
extent of any deviation between the net asset value based upon available market
quotations or market equivalents, and $1.00 per share net asset value, based on
amortized cost, must be examined by the Directors. In the event that a deviation
of .5 of 1% or more exists between the Portfolio's $1.00 per share net asset
value and the net asset value calculated by reference to market gestations, or
if there is any deviation which the Board of Directors believes would result in
a material dilution to shareholders or purchasers, the Board of Directors will
promptly consider what action, if any, should be initiated. Any such action may
include: selling portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding dividends
or paying distributions from capital or capital gains; redeeming shares in kind;
or establishing a net asset value per share by using available market
quotations.
With respect to each of the Seligman Henderson Portfolios, portfolio
securities, including open short positions, are valued at the last sale price on
the securities exchange or securities market on which such securities primarily
are traded. Securities traded on a foreign exchange or over-the-counter market
are valued at the last sales price on the primary exchange or market on which
they are traded. United Kingdom securities and securities for which there are
not recent sales transactions are valued based on quotations provided by primary
market makers in such securities. Any securities for which recent market
quotations are not readily available, including restricted securities, are
valued at fair value determined in accordance with procedures approved by the
Board of Directors. Short-term obligations with less than sixty days remaining
to maturity are generally valued at amortized cost. Short-term obligations with
more than sixty days remaining to maturity will be valued at current market
value until the sixtieth day prior to maturity, and will then be valued on an
amortized cost basis based on the value on such date unless the Board of
Directors determines that this amortized cost value does not represent fair
market value.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. The values of such securities used in computing the net asset value of
the shares of the Portfolio are determined as of such times. Foreign currency
exchange rates are also generally determined prior to the close of the New York
Stock Exchange. Occasionally, events affecting the value of such securities and
such exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange, which will not be reflected in the
computation of net asset value. If during such periods events occur which
materially affect the value of such securities, the securities will be valued at
their fair market value as determined in accordance with procedures approved by
the Board of Directors.
For purposes of determining the net asset value per share of the Portfolio
all assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a pricing service
that takes into account the quotes provided by a number of such major banks.
Redemption. The procedures for redemption of Fund shares under ordinary
circumstances are set forth in the Prospectus. In unusual circumstances, payment
may be postponed, if the orderly liquidation of portfolio securities is
prevented by the closing of, or restricted trading on the New York Stock
Exchange during periods of emergency, or such other periods as ordered by the
SEC. It is not anticipated that shares will be redeemed for other than cash or
its equivalent. However, the Fund reserves the right to pay the redemption price
to the Canada Life Accounts and VCA-9 in whole or in part, by a distribution in
kind from the Fund's investment portfolio, in lieu of cash, taking the
securities at their value employed for determining such redemption price, and
selecting the securities in such manner as the Board of Directors may deem fair
and equitable. If shares are redeemed in this way, brokerage costs will
ordinarily be incurred by the Canada Life Accounts and VCA-9 in converting such
securities into cash.
CUSTODIANS AND INDEPENDENT AUDITORS
Custodians. With the exception of each of the Seligman Henderson
Portfolios, Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, Missouri 64105, serves as custodian for the Fund, and in such capacity
holds in a separate account assets received by it from or for the account of
each of the Fund's Portfolios.
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, New York
11201, serves as custodian for each of the Seligman Henderson Portfolios, and in
such capacity holds in a separate account assets received by it from or for the
account of each of these Portfolios of the Fund.
Independent Auditors. Ernst & Young LLP, independent auditors, have been
selected as auditors of the Fund and certify the annual financial statements of
the Fund. Their address is 787 Seventh Avenue, New York, New York 10019.
15
<PAGE>
FINANCIAL STATEMENTS
Audited financial statements as of December 31, 1995 for the Fund's
Portfolios (except Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio which had not commenced
operations) and unaudited financials for all Portfolios of the Fund as of June
30, 1996 are incorporated herein by reference to the Fund's 1995 Annual Report
and unaudited June 30, 1996 Mid-Year Report. Unaudited financial statements for
the period May 1, 1996 to September 30, 1996 for the Seligman Henderson Global
Growth Opportunities Portfolio and the Seligman Henderson Global Technology
Portfolio are included herein as Appendix B.
16
<PAGE>
APPENDIX A
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 underwriting.
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.
17
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
o Establishes J. & W. Seligman Trust Company, and J. & W. Seligman Valuations
Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global and
international investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today offers
five separate series: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund, Seligman Henderson Global Growth Opportunities Fund and
Seligman Henderson Emerging Markets Growth Fund.
18
<PAGE>
APPENDIX B
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (unaudited) September 30, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
Shares Value
------ ------
COMMON STOCKS -- 80.8%
APPAREL AND TEXTILES -- 1.0%
Liz Claiborne (US) 200 $ 7,450
--------
AUTOMOTIVE AND RELATED -- 1.7%
Valeo (France) 250 13,793
--------
BUSINESS SERVICES AND SUPPLIES -- 1.2%
Interpublic Group of Companies (US) 200 9,450
--------
COMPUTER AND TECHNOLOGY RELATED -- 6.2%
CMG* (UK) 1,100 12,142
First Data (US) 100 8,162
Informix* (US) 200 5,588
Microsoft* (US) 100 13,181
Objective Systems Integrator* (US) 100 2,056
Sterling Software* (US) 100 7,637
--------
48,766
--------
CONSTRUCTION AND PROPERTY -- 1.5%
Metacorp (Malaysia) 4,000 11,490
--------
CONSUMER GOODS AND SERVICES -- 8.0%
Oakley* (US) 200 8,500
PepsiCo (US) 300 8,475
Puma* (Germany) 360 11,402
R.J. Reynolds (Malaysia) 4,000 11,410
SMH Neuenberg (Switzerland) 67 10,125
Tabacalera (Series A) (Spain) 300 12,797
--------
62,709
--------
DIVERSIFIED -- 1.8%
CITIC Pacific* (China) 3,000 13,578
--------
DRUGS AND HEALTH CARE -- 11.0%
Amgen *(US) 100 6,319
Columbia/HCA Healthcare (US) 100 5,688
Guidant (US) 100 5,525
Hogy Medical (Japan) 200 10,148
Pharmacia & Upjohn (ADRs)(Sweden) 335 13,948
Pharmacia & Upjohn (US) 275 11,344
Richter Gedeon (GDRs) (Hungary) 480 25,056
United Healthcare (US) 200 8,325
--------
86,353
--------
- ----------
* Non-income producing security.
See Notes to Financial Statements.
19
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (unaudited)(continued) September 30, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
Shares Value
------ ------
ELECTRIC AND GAS UTILITIES -- 1.7%
Shandong Huaneng Power (ADRs) (China) 1,500 $ 13,500
--------
ELECTRONICS -- 2.3%
Daitec (Japan) 300 18,266
--------
ENTERTAINMENT AND LEISURE -- 8.1%
Accor (France) 110 13,591
Granada Group (UK) 900 12,070
International Game Technology (US) 400 8,200
Sol Melia* (Spain) 470 12,091
Sun International Hotels* (US) 200 10,250
Viacom (Class B) (US) 200 7,100
--------
63,302
--------
FINANCIAL SERVICES -- 4.2%
American International Group (US) 100 10,075
Donaldson, Lufkin & Jenrette (US) 100 3,513
MBNA (US) 200 6,950
Sanyo Shinpan Finance (Japan) 200 12,213
--------
32,751
--------
INDUSTRIAL GOODS AND SERVICES -- 1.4%
ABB (Switzerland) 9 11,010
--------
MANUFACTURING AND INDUSTRIAL EQUIPMENT -- 3.4%
Asahi Diamond (Japan) 1,000 11,674
Larsen & Toubro (GDSs) (India) 1,000 14,500
--------
26,174
--------
MEDIA -- 1.4%
Chubu Nippon Broadcasting (Japan) 500 11,225
--------
MEDICAL PRODUCTS AND TECHNOLOGY -- 0.7%
Arterial Vascular Engineering* (US) 200 5,400
--------
PUBLISHING -- 1.8%
Elsevier (Netherlands) 855 14,148
--------
RESOURCES -- 1.3%
WMC (Australia) 1,600 10,293
--------
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
20
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (unaudited)(continued) September 30, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
Shares Value
------ ------
RETAILING -- 7.4%
British Biotech* (UK) 3,200 $ 10,597
Guangnan Holdings (Hong Kong) 2,000 1,332
Home Depot (US) 100 5,688
Joshin Denki (Japan) 2,000 25,504
Saks Holdings* (US) 200 7,000
Tsutsumi Jewelry (Japan) 200 7,813
--------
57,934
--------
SUPPORT SERVICES -- 1.7%
Societe Industrielle de Transports
Automobiles (France) 65 13,381
--------
TECHNOLOGY -- 1.4%
SGS-Thompson Microelectronics* (France) 230 10,997
--------
TELECOMMUNICATIONS -- 8.0%
DDI (Japan) 2 16,182
L.M. Ericsson Telefon (Series B) (Sweden) 470 11,840
Telebras (ADRs) (Brazil) 330 26,066
WorldCom* (US) 400 8,600
--------
62,688
--------
TRANSPORTATION -- 3.6%
Kobenhavns Lufthavne (Denmark) 140 13,994
Lufthansa (Germany) 100 14,164
--------
28,158
--------
Total Common Stocks (Cost $634,795) 632,816
--------
PREFERRED STOCKS -- 1.8% (Cost $12,988)
AUTOMOTIVE AND RELATED -- 1.8%
Porsche (Non-Voting) (Germany)* 20 13,679
--------
Total Investments -- 82.6% (Cost $647,783) 646,495
Other Assets Less Liabilities -- 17.4% 136,286
--------
Net Assets -- 100.0% $782,781
========
- ------------
* Non-income producing security.
See Notes to Financial Statements.
21
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (unaudited) (continued) September 30, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 111.2%
BROADCASTING -- 0.8%
Bell Cablemedia (ADRs)* (UK) 450 $ 7,538
--------
COMMERCIAL SERVICES -- 3.5%
CRT Group (UK) 8,700 33,715
--------
COMMUNICATIONS INFRASTRUCTURE -- 13.4%
Act Networks* (US) 400 11,250
Cabletron Systems (US) 300 20,512
Cisco Systems* (US) 400 24,825
3Com* (US) 300 18,019
U.S. Robotics (US) 600 38,850
Verilink* (US) 600 14,663
--------
128,119
--------
COMPUTER HARDWARE/PERIPHERALS -- 9.7%
Hewlett-Packard (US) 200 9,750
Intevac* (US) 1,000 17,500
Mylex* (US) 1,200 18,900
Sun Microsystems* (US) 400 24,825
Verifone* (US) 500 22,375
--------
93,350
--------
COMPUTER SOFTWARE -- 24.8%
Azlan Group (UK) 2,680 29,415
Dialogic* (US) 650 22,913
FORE Systems* (US) 500 20,719
GT Interactive Software* (US) 300 6,862
Informix* (US) 300 8,381
Logica (UK) 2,810 33,108
Metatools* (US) 400 8,500
Microsoft* (US) 175 23,067
Network General (US) 500 11,500
PC Dos Group International* (US) 125 1,703
Performance Technologies* (US) 200 2,450
SAP (Germany) 105 17,345
State of the Art* (US) 1,500 17,250
Synopsys* (US) 100 4,612
Xionics Document Technologies* (US) 2,000 29,500
--------
237,325
--------
CONTRACT MANUFACTURING -- 5.2%
IKOS Systems* (US) 600 12,038
Technology Modeling* (US) 1,000 13,250
Venture Manufacturing (Singapore) 14,000 24,460
--------
49,748
--------
- -------------
* Non-income producing security.
See Notes to Financial Statements.
22
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (unaudited) (continued) September 30, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
Shares Value
------ -----
DRUGS AND HEALTH CARE -- 2.0%
Pharmacia & Upjohn (ADRs) (Sweden) 460 $ 19,152
--------
ELECTRONICS -- 12.8%
Astec (UK) 12,600 29,001
Benchmark Electronics* (US) 200 6,000
HADCO* (US) 250 7,984
Intel (US) 300 28,631
Lernout & Hauspie Speech Products* (Belgium) 480 11,400
Macromedia* (US) 525 10,894
Sanmina* (US) 700 28,350
--------
122,260
--------
INDUSTRIAL GOODS & SERVICES -- 4.3%
Canon (Japan) 1,000 19,667
Siliconeware Precision Industries (GDRs) (Taiwan) 2,750 21,862
--------
41,529
--------
INFORMATION SERVICES -- 10.0%
Abacus Direct* (US) 500 10,313
Applix* (US) 600 15,900
BTG* (UK) 480 17,662
Electronic Data Systems (US) 375 23,016
First Data (US) 350 28,569
--------
95,460
--------
INTERNET/ONLINE -- 7.1%
America Online* (US) 525 18,703
CSK (Japan) 1,000 31,162
Verity* (US) 1,500 18,469
--------
68,334
--------
PRINTING AND PUBLISHING -- 0.3%
News Corp. (ADRs) (Australia) 150 2,550
--------
SEMICONDUCTORS -- 1.2%
S3* (US) 600 11,887
--------
- ---------------------------------------------------
* Non-income producing security.
See Notes to Financial Statements.
23
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (unaudited) (continued) September 30, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
Shares Value
------ --------
TELECOMMUNICATIONS -- 16.1%
Airtouch Communications* (US) 400 $ 11,050
DDI (Japan) 2 16,182
L.M. Ericsson Telefon (Series B) (Sweden) 700 17,635
Korea Mobile Telecommunications (Korea) 426 6,443
Millicom International Cellular (Luxembourg) 400 16,200
Natural Microsystems* (US) 300 14,325
Nokia (Finland) 710 31,728
Northern Telecom (US) 400 23,100
Paging Network* (US) 225 4,472
T-Netix* (US) 350 4,484
Telecom Italia Mobile* (Italy) 3,840 8,521
---------
154,140
---------
Total Investments -- 111.2% (Cost $1,023,215) 1,065,107
Other Assets Less Liabilities -- (11.2)% (106,936)
---------
Net Assets -- 100.0% $ 958,171
=========
- -------------
* Non-income producing security.
See Notes to Financial Statements.
24
<PAGE>
Seligman Portfolios, Inc.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) September 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Seligman Henderson Seligman Henderson
Global Growth Global
Opportunities Technology
Portfolio Portfolio
------------------- -------------------
<S> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Common Stocks ............................................................. $632,816 $1,065,107
Preferred Stock ........................................................... 13,679 --
-------- ----------
Total Investments ......................................................... 646,495 1,065,107
Cash ...................................................................... 300,929 --
Receivable from associated companies ...................................... 2,575 1,999
Interest and dividends receivable ......................................... 1,634 1,886
Other ..................................................................... 998 998
-------- ----------
Total Assets .............................................................. 952,631 1,069,990
-------- ----------
LIABILITIES:
Payable for securities purchased .......................................... 163,382 94,332
Payable to custodian ...................................................... -- 10,544
Unrealized depreciation on foreign currency contracts ..................... -- 72
Accrued expenses, taxes, and other ........................................ 6,468 6,871
-------- ----------
Total Liabilities ......................................................... 169,850 111,819
-------- ----------
NET ASSETS ................................................................ $782,781 $ 958,171
======== ==========
COMPOSITION OF NET ASSETS:
Capital Stock, at par ..................................................... $ 80 $ 96
Additional paid-in-capital ................................................ 782,799 919,213
Undistributed net investment income ....................................... 1,327 1,609
Accumulated net realized loss ............................................. -- (4,593)
Net unrealized appreciation (depreciation)
of investments ...................................................... (2,693) 42,187
Net unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currency contracts ........................... 1,268 (341)
-------- ----------
NET ASSETS ................................................................ $782,781 $ 958,171
======== ==========
Shares of Capital Stock
($001 par value) outstanding: ......................................... 79,793 96,122
======== ==========
Net Asset Value per share ................................................. $ 9.81 $ 9.97
======== ==========
</TABLE>
- --------
See Notes to Financial Statements
25
<PAGE>
Seligman Portfolios, Inc.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations (unaudited) For the period May 1, 1996* to September 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Seligman Henderson Seligman Henderson
Global Growth Global Technology
Opportunities Portfolio Portfolio
----------------------- ------------------
<S> <C> <C>
Investment income:
Interest .................................................................. $ 1,807 $ 3,902
Dividends** ............................................................... 943 574
-------- --------
Total investment income ................................................... 2,750 4,476
-------- --------
Expenses:
Auditing fee .............................................................. 3,276 3,336
Custody and related services .............................................. 2,163 1,918
Management fee ............................................................ 1,211 1,905
Legal fee ................................................................. 1,129 1,129
Shareholder reports and communications .................................... 1,120 1,120
Registration .............................................................. 997 1,131
Directors' fees and expenses .............................................. 771 771
Miscellaneous ............................................................. 745 835
-------- --------
Total expenses before reimbursement ....................................... 11,412 12,145
Reimbursement of expenses ................................................. (9,726) (9,492)
-------- --------
Total expenses after reimbursement ........................................ 1,686 2,653
-------- --------
Net investment income ..................................................... 1,064 1,823
-------- --------
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions:
Net realized gain (loss) on investments ................................... -- (4,593)
Net realized gain (loss) from foreign currency transactions ............... 263 (214)
Net unrealized appreciation (depreciation) of investments ................. (2,693) 42,187
Net change in unrealized appreciation (depreciation) on translation
of assets and liabilities denominated in foreign currency contracts ... 1,268 (341)
-------- --------
Net gain (loss) on investments and foreign currency transactions .......... (1,162) 37,039
-------- --------
Increase (decrease) in net assets from operations ......................... ($ 98) $ 38,862
======== ========
- -------------------------------------------
* Commencement of operations
**Net of foreign tax withheld as follows: $ 135 $ 73
See Notes to Financial Statements
</TABLE>
26
<PAGE>
Seligman Portfolios, Inc
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets (unaudited) For the period May 1, 1996* to September 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Seligman Henderson Seligman Henderson
Global Growth Global
Opportunities Technology
Portfolio Portfolio
------------------- -------------------
<S> <C> <C>
Operations:
Net Investment income ..................................................... $ 1,064 $ 1,823
Net realized loss on investments .......................................... -- (4,593)
Net realized gain (loss) from
foreign currency transactions ......................................... 263 (214)
Net unrealized appreciation (depreciation)
of investments ........................................................ (2,693) 42,187
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currency contracts ............................. 1,268 (341)
-------- --------
Increase (decrease) in net assets from operations ......................... (98) 38,862
-------- --------
Capital share transactions:
Net proceeds from sale of shares .......................................... 841,334 969,172
Cost of shares repurchased ................................................ (58,465) (49,873)
-------- --------
Increase in net assets from capital share
transactions .......................................................... 782,869 919,299
-------- --------
Increase in net assets .................................................... 782,771 958,161
-------- --------
Net Assets:
Beginning of period ....................................................... 10 10
-------- --------
End of period ............................................................. $782,781 $958,171
======== ========
</TABLE>
- ------------------------------------
* Commencement of operations
See Notes to Financial Statements
27
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Seligman Henderson Global Growth Opportunities Portfolio and Seligman
Henderson Global Technology Portfolio (the "Portfolios") are two of the twelve
separate portfolios of Seligman Portfolios, Inc. (the "Fund"). Shares of the
Portfolios are currently provided as the investment medium for Canada Life of
America Variable Annuity Account 2 ("CLVA-2") and Canada Life of America Annuity
Account 3 ("CLVA-3"), each established by Canada Life Insurance Company of
America ("CLICA"). Shares of the Portfolios are also provided as the investment
medium for Canada Life of New York Variable Annuity Account 2 ("CLNYVA-2"),
established by Canada Life Insurance Company of New York ("CLNY"). Shares of the
Portfolios are also provided as the investment medium for other variable annuity
accounts established by CLICA or its affiliates ("Canada Life Separate
Accounts").
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in US Government and agencies, bonds, convertible
securities, and stocks are valued at the most current market values or, in
their absence, at fair market values determined in accordance with
procedures approved by the Fund's Board of Directors. Securities traded on
national exchanges are valued at the last sales prices or, in their absence
and in the case of over-the-counter securities, a mean of closing bid and
asked prices. Short-term holdings maturing in 60 days or less are valued at
amortized cost.
b. The Portfolios may invest up to 100% of their total assets in foreign
securities. Investments in foreign securities will usually be denominated
in foreign currencies, and the Portfolios may temporarily hold funds in
foreign currencies. The Portfolios may also invest in US dollar-denominated
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs"),
and Global Depositary Shares ("GDSs"). ADRs and ADSs are issued by domestic
banks or trust companies and evidence ownership of securities issued by
foreign corporations. ADRs and ADSs are traded on United States exchanges
or over-the-counter. EDRs, GDRs, and GDSs are similar to ADRs and ADSs and
are typically issued by foreign banks or trust companies and are traded in
Europe. The books and records of the Portfolios are maintained in US
dollars. Foreign currency amounts are translated into US dollars on the
following basis:
(i) market value of investment securities, other assets and
liabilities, at the closing daily rate of exchange as reported by a
pricing service;
(ii) purchases and sales of investment securities, income and
expenses, at the rate of exchange prevailing on the respective dates
of such transactions.
The net asset values per share of the Portfolios will be affected by
changes in currency exchange rates for investments in securities
denominated in foreign currencies. Changes in foreign currency exchange
rates may also affect the value of dividends and interest earned, gains and
losses realized on sales of securities and net investment income and gains,
if any, to be distributed to shareholders of the Portfolios.
The rate of exchange between the US dollar and other currencies is
determined by the forces of supply and demand in the foreign exchange
markets.
Net realized foreign exchange gains and losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales
of foreign currencies, currency gains or losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amounts of dividends, interest and foreign withholding taxes recorded
on the Portfolios' books, and the US dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of portfolio securities and other foreign
currency denominated assets and liabilities at period end, resulting from
changes in exchange rates.
The Portfolios separate that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the Portfolios.
Similarly, the Portfolios separate the effect of changes in foreign
exchange rates from the fluctuations arising from changes in the market
prices of portfolio securities sold during the period.
28
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
c. The Portfolios may enter into forward currency contracts in order to
hedge their exposure to changes in foreign currency exchange rates on their
foreign portfolio holdings, or other amounts receivable or payable in
foreign currency. A forward contract is a commitment to purchase or sell a
foreign currency at a future date at a negotiated forward rate. Certain
risks may arise upon entering into these contracts from the potential
inability of counterparties to meet the terms of their contracts. The
contracts are valued daily at current exchange rates and any unrealized
gain or loss is included in net unrealized appreciation or depreciation of
assets and liabilities denominated in foreign currency and forward currency
contracts. The gain or loss, if any, arising from the difference between
the settlement value of the forward contract and the closing of such
contract, is included in net realized gain or loss from foreign currency
transactions. For federal income tax purposes, certain open forward
currency contracts are treated as sold on the last day of the fiscal year
and any gains or losses are recognized immediately. As a result, the amount
of income distributable to shareholders may vary from the amount recognized
for financial statement purposes.
d. The Portfolios' policy is to comply with the requirements of the
Internal Revenue Code applicable to Regulated Investment Companies and to
distribute substantially all of their taxable net income and net gain
realized to shareholders.
e. Investment transactions are recorded on trade dates. Interest income is
recorded on the accrual basis. The Portfolios amortize market discounts and
premiums on purchases of portfolio securities. Dividends receivable and
payable are recorded on ex-dividend dates. The Portfolios may enter into
repurchase agreements with commercial banks and with broker/dealers deemed
to be creditworthy by the Manager. Securities purchased subject to
repurchase agreement are deposited with the Portfolios' custodian and,
pursuant to the terms of the repurchase agreements, must have an aggregate
market value greater than or equal to the repurchase price plus accrued
interest at all times. Procedures have been established to monitor, on a
daily basis, the market value of the repurchase agreements' underlying
securities to ensure the proper level of collateral.
f. Expenses directly attributable to the each Portfolio are charged to such
Portfolio, and expenses that are applicable to more than one portfolio of
the Fund are allocated among them.
g. The treatment for financial statement purposes of distributions made
during the year from net investment income or net realized gains may differ
from their ultimate treatment for federal income tax purposes. These
differences primarily are caused by differences in the timing of the
recognition of certain components of income, expense or capital gain and
the recharacterization of foreign exchange gains or losses to either
ordinary income or realized capital gain for federal income tax purposes.
Where such differences are permanent in nature, they are reclassified in
the components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassifications have no effect on
net assets, results of operations, or net asset values per share of the
Portfolios.
3. Purchases and sales of portfolio securities, excluding US Government
obligations and short-term investments, for the period from May 1, 1996
(commencement of operations) to September 30, 1996, were as follows:
Portfolio Purchases Sales
- ----------------------------------------------- -------------- ------------
Seligman Henderson Global Growth Opportunities $647,783 $ -
Seligman Henderson Global Technology 1,057,951 30,143
Identified cost of investments sold is used for both financial statement and
federal income tax purposes.
At September 30, 1996, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities, including the effects of foreign currency transactions,
were as follows:
Unrealized Unrealized
Portfolio Appreciation Depreciation
- ----------------------------------------------- ------------- -------------
Seligman Henderson Global Growth Opportunities $15,299 $16,587
Seligman Henderson Global Technology 72,902 31,010
29
<PAGE>
Seligman Portfolios, Inc
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. J & W Seligman & Co Incorporated (the "Manager") manages the affairs of the
Fund and provides or arranges for the necessary personnel and facilities,
exclusive of and in addition to those retained by the Fund Compensation of all
officers of the Fund, all directors of the Fund who are employees or consultants
of the Manager, and all personnel of the Fund and the Manager is paid by the
Manager or by Seligman Henderson Co (the "Subadviser"), a 50%-owned affiliate of
the Manager The Manager's fee is calculated daily and payable monthly, equal to
an annual rate of 100% of the average daily net assets of each Portfolio, of
which 090% is paid to the Subadviser The Manager and Subadviser have agreed to
reimburse expenses, other than management fee, which exceed 040% per annum of
the average daily net assets of each of the Portfolios For the period from May
1, 1996 (commencement of operations) to September 30, 1996, the Manager and
Subadviser waived their fees and the Subadviser reimbursed expenses for the
Seligman Henderson Global Growth Opportunities Portfolio and the Seligman
Henderson Global Technology Portfolio, totalling $9,726 and $9,492, respectively
Seligman Financial Services, Inc (the "Distributor"), agent for the CLVA-2
Contracts and an affiliate of the Manager, received concessions of $286,902 from
Canada Life Insurance Company of America and $10,225 from Canada Life Insurance
Company of New York, after commissions paid to dealers
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or the Subadviser
Fees of $2,028 were incurred by the Portfolios for the legal services of
Sullivan & Cromwell, a member of which firm is a director of the Fund
The Fund has a compensation arrangement under which directors who receive fees
may elect to defer receiving such fees Interest is accrued on the deferred
balances The cost of such fees and interest is included in directors' fees and
expenses, and the accumulated balance thereof at September 30, 1996, is included
in other liabilities Deferred fees and the related accrued interest are not
deductible for federal income tax purposes until such amounts are paid
5. At September 30, 1996, the Seligman Henderson Global Technology Portfolio had
an outstanding foreign currency contract to purchase foreign currency as
follows:
<TABLE>
<CAPTION>
Foreign In Exchange Settlement Unrealized
Contract Currency For US $ Date US $ Value Depreciation
- ---------------------- ----------------- ----------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Japanese Yen 1,358,043 12,268 10/01/96 12,196 $72
</TABLE>
6. At September 30, 1996, there were 20,000,000 shares of Capital Stock
authorized for each of the Portfolios, at a par value of $001 per share
Transactions in shares of Capital Stock, for the period from May 1, 1996
(commencement of operations) to September 30, 1996, were as follows:
Seligman Seligman
Henderson Henderson
Global Growth Global
Opportunities Technology
Portfolio Portfolio
----------------- ---------------
Sale of shares ........... 85,901 101,310
Shares repurchased ....... (6,109) (5,189)
----------------- ---------------
Increase in shares ....... 79,792 96,121
================= ===============
30
<PAGE>
Seligman Portfolios, Inc
- --------------------------------------------------------------------------------
Financial Highlights (unaudited)
- --------------------------------------------------------------------------------
The Portfolios' financial highlights are presented below The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from a Portfolio's beginning net asset value
to the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts
The total return based on net asset value measures a Portfolio's performance
assuming investors purchased shares of a Portfolio at net asset value as of the
beginning of the period, reinvested dividends and capital gains paid at net
asset value, and then sold their shares at the net asset value per share on the
last day of the period The total returns exclude the effect of all
administration fees and asset based sales charges associated with variable
annuity contracts The total returns for periods of less than one year are not
annualized Average commission rate paid represents the average commission paid
by the Portfolios to purchase or sell portfolio securities It is determined by
dividing the total commission dollars paid by the number of shares purchased and
sold during the period for which commissions were paid
<TABLE>
<CAPTION>
Seligman Henderson Seligman Henderson
Global Growth Global
Opportunities Technology
Portfolio Portfolio
------------------ ------------------
5/1/96* 5/1/96*
to to
9/30/96 9/30/96
------------------ ------------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period .......................................... 10.000 $ 10.000
--------- ---------
Net investment income ......................................................... 0.035 0.038
Net realized and unrealized loss on investments ............................... (0.275) (0.056)
Net realized and unrealized gain (loss) from
foreign currency transactions ........................................... 0.050 (0.012)
--------- ---------
Net decrease in net asset value ............................................... (0.190) (0.030)
--------- ---------
Net asset value, end of period ................................................ 9.810 $ 9.970
========= =========
Total Return Based On Net Asset Value: ........................................ (1.90)% (0.30)%
Ratios/Supplemental Data:
Expenses to average net assets ................................................ 1.40+ 1.40%+
Net investment income to average net assets ................................... 0.88+ 0.96%+
Portfolio turnover ............................................................ -- 7.02%
Average commission rate paid .................................................. 0.0594 $ 0.0561
Net assets, end of period (000's omitted) ..................................... 783 $ 958
Without management fee waiver and expense
reimbursement:**
Net investment loss per share ................................................. 0.282) ($ 0.159)
Ratios:
Expenses to average net assets ........................................... 9.47+ 6.41%+
Net investment loss to average net assets ................................ (7.19+% (4.05)%+
</TABLE>
- -------------------------------------------------------------------
* Commencement of operations
** The Manager and Subadviser, at its discretion, waived management fees,
and the Subadviser reimbursed expenses for the period presented
+ Annualized
See Notes to Financial Statements
31
<PAGE>
The Registrant's Annual Report to Shareholders, dated December 31, 1995 and
Mid-Year Report, dated June 30, 1996, are incorporated into this Registration
Statement by reference to Registrant's Form N-30D filings, filed with the
Securities and Exchange Commission on march 8, 1996 and August 29, 1996,
repectively.
32
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A - Financial Highlights from June 21, 1988 (commencement of
operations) to June 30, 1996 for Seligman Capital Portfolio,
Seligman Cash Management Portfolio, Seligman Common Stock
Portfolio, Seligman Bond Portfolio (formerly, Seligman Fixed
Income Securities Portfolio) and Seligman Income Portfolio;
from May 3, 1993 (commencement of operations) to June 30,
1996 for the Seligman Henderson International Portfolio
(formerly, Seligman Henderson Global Portfolio); from
October 11, 1994 (commencement of operations) to June 30,
1996 for Seligman Communications and Information Portfolio,
Seligman Frontier Portfolio and Seligman Henderson Global
Smaller Companies Portfolio; from May 1, 1995 (commencement
of operations) to June 30, 1996 for Seligman High-Yield Bond
Portfolio; and from May 1, 1996 (commencement of operations)
to September 30, 1996 for Seligman Henderson Global Growth
Opportunities Portfolio and Seligman Henderson Global
Technology Portfolio.
Part B - Financial Statements are included in the Fund's audited 1995
Annual Report and unaudited 1996 Mid-Year Report which are
incorporated by reference in the Fund's Statement of
Additional Information. These Financial Statements are:
Portfolios of Investments as of December 31, 1995 and June
30, 1996; Statements of Assets and Liabilities as of
December 31, 1995 and June 30, 1996; Statements of
Operations for the year/period ended December 31, 1995 and
for the six months ended June 30, 1996 (for the period May
1, 1996 (commencement of operations) to June 30, 1996 for
the Seligman Henderson Global Growth Opportunities and
Seligman Henderson Global Technology Portfolios); Statements
of Changes in Net Assets for the years ended December 31,
1995 and 1994 for Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio,
Seligman Bond Portfolio, Seligman Henderson International
Portfolio and Seligman Income Portfolio; for the year ended
December 31, 1995 and for the period October 11, 1994
(commencement of operations) to December 31, 1994 for
Seligman Communications and Information Portfolio, Seligman
Frontier Portfolio and Seligman Henderson Global Smaller
Companies Portfolio; for the period May 1, 1995
(commencement of operations) to December 31, 1995 for
Seligman High-Yield Bond Portfolio; and for the six months
ended June 30, 1996 for all Portfolios (except the Seligman
Henderson Global Growth Opportunities and Seligman Henderson
Global Technology Portfolios for which the period is May 1,
1996 (commencement of operations) to June 30, 1996); Notes
to Financial Statements; Financial Highlights for the five
years ended December 31, 1995 for Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman
Common Stock Portfolio, Seligman Bond Portfolio, and
Seligman Income Portfolio; for the period May 3, 1993
(commencement of operations) to December 31, 1995 for
Seligman Henderson International Portfolio; for the period
October 11, 1994 (commencement of operations) to December
31, 1995 for Seligman Communications and Information
Portfolio, Seligman Frontier Portfolio and Seligman
Henderson Global Smaller Companies Portfolio; for the period
May 1, 1995 (commencement of operations) to December 31,
1995 for Seligman High-Yield Bond Portfolio; and for the six
months ended June 30, 1996 for all Portfolios (except the
Seligman Henderson Global Growth Opportunities and Seligman
Henderson Global Technology Portfolios for which the period
is May 1, 1996 (commencement of operations) to June 30,
1996); Report of Independent Auditors. Also included in the
Fund's Statement of Additional Information are unaudited
financial statements for the period May 1, 1996
(commencement of operations) to September 30, 1996 for each
of the Seligman Henderson Global Growth Opportunities and
Seligman Henderson Global Technology Portfolios.
(b) Exhibits: All Exhibits have been previously filed, except Exhibits
marked with an asterisk (*) which are filed herewith.
<PAGE>
PART C. OTHER INFORMATION (cont'd)
(1) Form of Articles of Amendment and Restatement of Articles of
Incorporation.*
(2) By-laws of Registrant. (Incorporated by reference to Pre-Effective
Amendment No. 2 filed on May 24, 1988.)
(3) N/A.
(4) N/A.
(5) (a) Form of Management Agreement in respect of Seligman
Henderson Global Growth Opportunities Portfolio and Seligman
Henderson Global Technology Portfolio. (Incorporated by
reference to Post-Effective No. 17 filed on February 15, 1996.)
(b) Form of Subadvisory Agreement in respect of Seligman Henderson
Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio. (Incorporated by reference to
Post-Effective No. 17 filed on February 15, 1996.)
(c) Form of Management Agreement in respect of Seligman High-Yield
Bond Portfolio. (Incorporated by reference to Post-Effective
Amendment No. 14 filed on February 14, 1995.)
(d) Management Agreement in respect of Seligman Communications and
Information and Seligman Frontier Portfolios. (Incorporated by
reference to Post-Effective Amendment No. 15 filed on March 31,
1995.)
(e) Management Agreement in respect of Seligman Henderson Global
Smaller Companies Portfolio (formerly, Seligman Henderson Global
Emerging Companies Portfolio). (Incorporated by reference to
Post-Effective Amendment No. 15 filed on March 31, 1995.)
(f) Subadvisory Agreement in respect of Seligman Henderson Global
Smaller Companies Portfolio. (Incorporated by reference to
Post-Effective Amendment No. 15 filed on March 31, 1995.)
(g) Management Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective
Amendment No. 15 filed on March 31, 1995.)
(h) Subadvisory Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective
Amendment No. 15 filed on March 31, 1995.)
(i) Management Agreement in respect of Seligman Capital, Seligman
Cash Management, Seligman Common Stock, Seligman Fixed Income
Securities, and Seligman Income Portfolios. (Incorporated by
reference to Post-Effective Amendment No. 15 filed on March 31,
1995.)
(6) N/A.
(7) N/A.
(8) (a) Custodian Agreement and Sub-Custodian Agreement in respect
of Seligman Capital, Seligman Cash Management, Seligman Common
Stock, Seligman Fixed Income Securities, and Seligman Income
Portfolios. (Incorporated by reference to Pre-Effective
Amendment No. 2 filed on May 24, 1988.)
(b) Form of First Amendment to Custodian Agreement in respect of
Seligman Communications and Information and Seligman Frontier
Portfolios. (Incorporated by reference to Post-Effective
Amendment 13 filed on September 30, 1994.)
(c) Recordkeeping Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective
Amendment No. 10 filed on April 26, 1993.)
(d) First Amendment to Recordkeeping Agreement in respect of
Seligman Henderson Global Smaller Companies Portfolio.
(Incorporated by reference to Post-Effective Amendment No. 13
filed on September 30, 1994.)
<PAGE>
PART C. OTHER INFORMATION (cont'd)
(e) Second Amendment to Custodian Agreement in respect of Seligman
High-Yield Bond Portfolio. (Incorporated by reference to
Post-Effective Amendment No. 18 filed on May 2, 1996.)
(f) Second Amendment to Recordkeeping Agreement in respect of
Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 18, filed May 2,
1996.)
(g) Custodian Agreement between Registrant and Morgan Stanley Trust
Company in respect of the Seligman Henderson Portfolios.*
(9) Other Material Contracts.
(a) Waiver of Buy/Sell Agreement between the Registrant and The
Mutual Benefit Life Insurance Company. (Incorporated by
reference to Post-Effective Amendment No. 10 filed on April 26,
1993.)
(b) Buy/Sell Agreement between Registrant and Canada Life Insurance
Company of America. (Incorporated by reference to Post-Effective
Amendment No. 10 filed on April 26, 1993.)
(c) Buy/Sell Agreement between Registrant and Canada Life Insurance
Company of America. (Incorporated by reference to Post-Effective
Amendment No. 13 filed on September 30, 1994.)
(d) Agency Agreement between Investors Fiduciary Trust Company,
acting as Transfer and Dividend Disbursing Agent, and the Fund
in respect of Seligman Capital, Seligman Cash Management,
Seligman Common Stock, Seligman Fixed Income Securities, and
Seligman Income Portfolios. (Incorporated by reference to
Pre-Effective Amendment No. 2 filed on May 24, 1988.)
(e) First Amendment to Agency Agreement between Investors Fiduciary
Trust Company, acting as Transfer and Dividend Disbursing Agent,
and the Fund in respect of Seligman Henderson Global Portfolio.
(Incorporated by reference to Post-Effective Amendment No. 10
filed on April 26, 1993.)
(f) Second Amendment to Agency Agreement between Investors Fiduciary
Trust Company, acting as Transfer and Dividend Disbursing Agent,
and the Fund in respect of Seligman Communications and
Information, Seligman Frontier, and Seligman Henderson Global
Smaller Companies Portfolios. (Incorporated by reference to
Post-Effective Amendment No. 13 filed on September 30, 1994.)
(g) Third Amendment to Agency Agreement between Investors Fiduciary
Trust Company, acting as Transfer and Dividend Disbursing Agent,
and the Fund in respect of Seligman High-Yield Bond Portfolio.
(Incorporated by reference to Post-Effective Amendment No. 18,
filed May 2, 1996.)
(h) Fourth Amendment to Agency Agreement between Investors Fiduciary
Trust Company, acting as Transfer and Dividend Disbursing Agent,
and the Fund in respect of Seligman Henderson Global Growth
Opportunities Portfolio and Seligman Henderson Global Technology
Portfolio. (Incorporated by reference to Post-Effective
Amendment No. 18, filed May 2,
1996.)
(10) Opinion and Consent of Counsel.
(Incorporated by reference to Post-Effective Amendment No. 18,
filed May 2, 1996.)
(11) Consent of independent auditors.*
(12) N/A.
<PAGE>
PART C. OTHER INFORMATION (cont'd)
(13) (a) Representation Re: Initial Capital (Purchase Agreement for
Seligman Capital, Seligman Cash Management, Seligman Common
Stock, Seligman Fixed Income Securities, and Seligman Income
Portfolios). (Incorporated by reference to Pre-Effective
Amendment No. 2 filed on May 24, 1988.)
(b) Representation Re: Initial Capital (Purchase Agreement for
Seligman Henderson Global Portfolio). (Incorporated by reference
to Post-Effective Amendment No. 10 filed on April 26, 1993.)
(c) Representation Re: Initial Capital (Purchase Agreement for
Seligman High-Yield Bond Portfolio). (Incorporated by reference
to Post-Effective Amendment No. 15 filed on March 31, 1995.)
(d) Representation Re: Initial Capital (Purchase Agreement for
Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio). (Incorporated
by reference to Post-Effective Amendment No. 18, filed May 2,
1996.)
(14) The Seligman 401(K) Retirement Plan Marketing. (Incorporated by
reference to Post-Effective Amendment No. 3 filed on May 1, 1989.)
(15) N/A.
(16) N/A.
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) N/A.
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
As of September 30, 1996, there were eight record holders of Capital
Stock of the Registrant.
Item 27. Indemnification - Incorporated by reference to Registrant's Post-
Effective Amendment #6 (File No. 33-15253) as filed with the
Commission on May 1, 1991.
Item 28. Business and Other Connections of Investment Adviser
J. & W. Seligman & Co. Incorporated, a Delaware Corporation
("Manager"), is the Registrant's investment manager. The Manager also
serves as investment manager to sixteen other associated investment
companies. They are Seligman Capital Fund, Inc., Seligman Cash
Management Fund, Inc., Seligman Common Stock Fund, Inc., Seligman
Communications and Information Fund, Inc., Seligman Frontier Fund,
Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund
Series, Inc., Seligman High Income Fund Series, Seligman Income Fund,
Inc., Seligman New Jersey Municipal Fund, Inc., Seligman Pennsylvania
Municipal Fund Series, Seligman Quality Municipal Fund, Inc.,
Seligman Select Municipal Fund, Inc., Seligman Municipal Fund Series,
Inc., Seligman Municipal Series Trust and Tri-Continental
Corporation.
<PAGE>
PART C. OTHER INFORMATION (cont'd)
The Subadviser also serves as subadviser to eight other associated
investment companies. They are Seligman Capital Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information
Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc.,
Seligman Henderson Global Fund Series, Inc., Seligman Income Fund,
Inc. and Tri-Continental Corporation.
The Manager and Subadviser have an investment advisory service
division which provides investment management or advice to private
clients. The list required by this Item 28 of officers and directors
of the Manager and the Subadviser, respectively, together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by the Manager and the
Subadviser, respectively, pursuant to the Investment Advisers Act of
1940 (SEC File Nos. 801-5798 and 801-4067), which were filed on
August 7, 1996 and October 3, 1996, respectively.
Item 29. N/A
Item 30. Location of Accounts and Records - All accounts, books and other
documents required to be maintained by Section 31(a) of the 1940 Act
and the Rules (17 CFR 270.31a-1 to 31a-3) promulgated thereunder will
be maintained by the following:
Custodian and Recordkeeping Agent for Seligman Bond Portfolio,
Seligman Capital Portfolio, Seligman Cash Management Portfolio,
Seligman Common Stock Portfolio, Seligman Communications and
Information Portfolio, Seligman Frontier Portfolio, Seligman
High-Yield Bond Portfolio, and Seligman Income Portfolio: Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri
64105.
Custodian for Seligman Seligman Henderson International Portfolio,
Henderson Global Growth Opportunities Portfolio, Seligman Henderson
Global Smaller Companies Portfolio and Seligman Henderson Global
Technology Portfolio: Morgan Stanley Trust Company, One Pierrepont
Plaza, Brooklyn, New York 11201.
Recordkeeping Agent for Seligman Henderson Global Growth
Opportunities Portfolio, Seligman Henderson International Portfolio,
Seligman Henderson Global Smaller Companies Portfolio and Seligman
Henderson Global Technology Portfolio: Investors Fiduciary Trust
Company, 127 West 10th Street, Kansas City, Missouri 64105.
Transfer, Redemption and Other Shareholder Account Services for all
Portfolios: Investors Fiduciary Trust Company, 127 West 10th Street,
Kansas City, Missouri 64105.
Item 31. Management Services - None not discussed in the Prospectus or
Statement of Additional Information for the Registrant.
Item 32. Undertakings -
(1) The Registrant undertakes 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.
(2) The Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the removal of a director or directors and to
assist in communications with other shareholders as required by
Section 16(c) of the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment pursuant to Rule
485(b) of the Securities Act of 1933 and has duly caused this Post-Effective
Amendment No. 19 to the 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 1st day of November, 1996.
SELIGMAN PORTFOLIOS, 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. 19 to the Registration
Statement has been signed below by the following persons, in the capacities
indicated on November 1, 1996.
Signature Title
--------- -----
/s/ WILLIAM C. MORRIS Chairman of the Board (Principal
- ----------------------------- executive officer) and Director
William C. Morris
/s/ BRIAN T. ZINO Director and President
- -----------------------------
Brian T. Zino
/s/ THOMAS G. ROSE Treasurer
- -----------------------------
Thomas G. Rose
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ BRIAN T. ZINO
--------------------------------
James C. Pitney, Director ) *Brian T. Zino, Attorney-In-Fact
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
SELIGMAN PORTFOLIOS, INC.
Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
24(b)(1) Form of Articles of Amendment and Restatement of
Articles of Incorporation
24(b)(8)(g) Custody Agreement in respect of Registrant's
Seligman Henderson
Portfolios
24(b)(11) Consent of Independent Auditors
27 Financial Data Schedules for period
ended June 30, 1996
[The text of this Exhibit is a composite restatement of all charter
documents of the Registrant currently on file with the State Department of
Assessments and Taxation of the State of Maryland.]
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
ARTICLES OF INCORPORATION
OF
SELIGMAN PORTFOLIOS, INC.
WE, THE UNDERSIGNED, RONALD T. SCHROEDER AND CARL J. WHITE, being the
President and Secretary, respectively, of Seligman Portfolios, Inc. (herein, the
"Corporation"), certify that there are no shares of the Corporation outstanding
or entitled to vote, and further certify that by action of the Board of
Directors on April 12, 1988, following the organizational meeting, the entire
Board of Directors unanimously approved the following as the Articles of
Amendment and Restatement of the Corporation.
FIRST: I, the subscriber, Nina O. Shenker, whose post office address is One
Bankers Trust Plaza, New York, New York 10006, being more than 18 years of age,
do, under and by virtue of the General Laws of the State of Maryland authorizing
the formation of corporations, form a corporation.
SECOND: Name. The name of the corporation (which is hereinafter called the
"Corporation") is
SELIGMAN PORTFOLIOS, INC.
THIRD: Purposes and Powers. The purposes for which the Corporation is
formed and the business or objects to be carried on or promoted by it are to
engage in the business of an open-end investment company, and in connection
therewith, to hold part or all of its funds in cash, to acquire by purchase,
subscription, contract, exchange or otherwise, and to own, hold for investment,
resale or otherwise, sell, assign, negotiate, exchange, transfer or otherwise
dispose of, or turn to account or realize upon, and generally to deal in and
with, all forms of stocks, bonds, debentures, notes, evidences of interest,
evidences of indebtedness, warrants, certificates of deposit, bankers'
acceptances, repurchase agreements, options on securities and other securities,
commodity futures
<PAGE>
contracts and options thereon, irrespective of their form, the name by which
they may be described, or the character or form of the entities by which they
are issued or created (hereinafter sometimes called "Securities"), and to make
payment therefor by any lawful means; to exercise any and all rights, powers and
privileges of individual ownership or interest in respect of any and all such
Securities; including the right to vote thereon and to consent and otherwise act
with respect thereto; to do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any and all such Securities;
to acquire or become interested in any such Securities as aforesaid,
irrespective of whether or not such Securities be fully paid or subject to
further payments, and to make payments thereon as called for or in advance of
calls or otherwise.
And, in general, to do any or all such other things in connection with the
objects and purposes of the Corporation hereinbefore set forth, as are, in the
opinion of the Board of Directors of the Corporation, necessary, incidental,
relative or conducive to the attainment of such objects and purposes; and to do
such acts and things; and to exercise any and all such powers to the same extent
authorized or permitted to a Corporation under any laws that may be now or
hereafter applicable or available to the Corporation.
In addition, the Corporation may issue, sell, acquire through purchase,
exchange, or otherwise hold, dispose of, resell, transfer, reissue or cancel
shares of its capital stock in any manner and to the extent now or hereafter
permitted by the laws of Maryland and by these Amended and Restated Articles of
Incorporation.
The foregoing matters shall each be construed as purposes, objects and
powers, and none of such matters shall be in any wise limited by reference to,
or inference from, any other of such matters or any other Article of these
Amended and Restated Articles of Incorporation, but shall be regarded as
independent purposes, objects and powers and the enumeration of specific
purposes, objects and powers shall not be construed to limit or restrict in any
manner the meaning of general terms or the general powers of the Corporation now
or hereafter conferred by the laws of the State of Maryland, nor shall the
expression of one thing be deemed to exclude another, although it be of like
nature, not expressed.
Nothing herein contained shall be construed as giving the Corporation any
rights, powers or privileges not permitted to it by law.
FOURTH: Principal Office. The post office address of the principal office
of the Corporation in this State is c/o The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202. The resident agent of the Corporation
is The Corporation Trust Incorporated, the post office address of which is 32
South Street,
-2-
<PAGE>
Baltimore, Maryland 21202. Said resident agent is a Corporation of the State of
Maryland.
FIFTH: Capital Stock.
A. The total number of shares of all classes of stock which the Corporation
has authority to issue is 1,000,000,000 shares of Common Stock ("Shares") of the
par value of $.001 each, having an aggregate par value of $1,000,000. The Shares
shall initially constitute twelve classes, designated as:
"Seligman Bond Portfolio";
"Seligman Capital Portfolio";
"Seligman Cash Management Portfolio";
"Seligman Common Stock Portfolio";
"Seligman Communications and Information Portfolio";
"Seligman Frontier Portfolio";
"Seligman Henderson Global Growth Opportunities Portfolio";
"Seligman Henderson Global Smaller Companies Portfolio";
"Seligman Henderson Global Technology Portfolio";
"Seligman Henderson International Portfolio";
"Seligman High-Yield Bond Portfolio";
and "Seligman Income Portfolio"
each consisting of 100,000,000 shares except for Seligman Bond Portfolio which
consists of 80,000,000 shares; Seligman Capital Portfolio which consists of
80,000,000 shares; Seligman Henderson Global Growth Opportunities Portfolio
which consists of 20,000,000 shares; and Seligman Henderson Global Technology
Portfolio which consists of 20,000,000 shares (such twelve classes together with
any further class or classes of shares from time to time created by the Board of
Directors, being herein referred to individually as a "Class" and collectively
as "Classes"). The Board of Directors of the Corporation shall have the power
and authority (a) to increase and decrease the aggregate number of Shares of
stock or the number of Shares of stock of any Class that the Corporation has
authority to issue and (b) to classify or reclassify any unissued shares from
time to time by setting or changing the preferences, conversion or other rights,
voting powers, restric-tions, limitations as to dividends, qualifications, or
terms or conditions of redemption of such unissued Shares, provided that, upon
the creation of any further class or classes, the Board of Directors shall, for
purposes of identification, also have the power and authority to designate a
name for the existing class that includes issued Shares of Common Stock.
B. A description of the relative preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of all Classes of Shares is as follows,
unless otherwise set forth
-3-
<PAGE>
in the Articles Supplementary filed with the Maryland State Department of
Assessments and Taxation describing any further Class or Classes from time to
time created by the Board of Directors:
(i) Assets Belonging to Class. All consideration received by the
Corporation for the issue or sale of Shares of a particular Class, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Class for
all purposes, subject only to the rights of creditors, and shall be so
recorded upon the books of the account of the Corporation. Such
consideration, assets, income, earnings, profits and proceeds, including
any proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any General Asset Items (as
hereinafter defined) allocated to that Class as provided in the following
sentence, are herein referred to as "assets belonging to" that Class. In
the event that there are any assets, income, earnings, profits or proceeds
thereof, funds or payments which are not readily identifiable as belonging
to any particular Class (collectively "General Asset Items"), the Board of
Directors shall allocate such General Asset Items to and among any one or
more of the Classes created from time to time in such manner and on such
basis as it, in its sole discretion, deems fair and equitable; and any
General Asset Items so allocated to a particular Class shall belong to that
Class. Each such allocation by the Board of Directors shall be conclusive
and binding upon the stockholders of all Classes for all purposes.
(ii) Liabilities Belonging to Class. The assets belonging to each
particular Class shall be charged with the liabilities of the Corporation
in respect of that Class and with all expenses, costs, charges and reserves
attributable to that Class, and shall be so recorded upon the books of
account of the Corporation. Such liabilities, expenses, costs, charges and
reserves, together with any General Liability Items (as hereinafter
defined) allocated and charged to that Class as provided in the following
sentence, are herein referred to as "liabilities belonging to" that Class.
In the event there are any general liabilities, expenses, costs, charges or
reserves of the Corporation which are not readily identifiable as belonging
to any particular Class (collectively "General Liability Items"), the Board
of Directors shall allocate and charge such General Liability Items to and
among any one or more of the Classes created from time to time in such
manner and on such basis as the Board of Directors in its sole discretion
deems fair and equitable; and any General Liability Items so allocated and
charged to a particular Class shall belong
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to that Class. Each such allocation and charge by the Board of Directors
shall be conclusive and binding upon the stockholders of all Classes for
all purposes.
(iii) Dividends. Dividends and distributions on Shares of a particular
Class may be paid to the holders of Shares of that Class at such times, in
such manner and from such of the income and capital gains, accrued or
realized, from the assets belonging to that Class, after providing for
actual and accrued liabilities belonging to that Class, as the Board of
Directors may determine.
(iv) Liquidation. In event of the liquidation or dissolution of the
Corporation, the stockholders of each Class that has been created shall be
entitled to receive, as a Class, when and as declared by the Board of
Directors, the excess of the assets belonging to that Class over the
liabilities belonging to that Class. The assets so distributable to the
stockholders of any particular Class shall be distributed among such
stockholders in proportion to the number of Shares of that Class held by
them and recorded on the books of the Corporation.
(v) Voting. On each matter submitted to vote of the stockholders, each
holder of a Share shall be entitled to one vote for each such Share
standing in his name on the books of the Corporation irrespective of the
Class thereof and all Shares of all Classes shall vote as a single Class
("Single Class Voting"); provided, however, that (A) as to any matter with
respect to which a separate vote of any Class is required by the Investment
Company Act of 1940 or would be required under the Maryland General
Corporation Law, such requirements as to a separate vote by that Class
shall apply in lieu of Single Class Voting as described above; (B) in the
event that the separate vote requirements referred to in (A) above apply
with respect to one or more Classes, then, subject to (C) below, the Shares
of all other Classes shall vote as a single Class; and (C) as to any matter
which does not affect the interest of a particular Class, only the holders
of Shares of the one or more affected Classes shall be entitled to vote.
(vi) Equality. All Shares of each particular Class shall represent an
equal proportionate interest in the assets belonging to that Class (subject
to the liabilities belonging to that Class), and each Share of any
particular Class shall be equal to each other Share of that Class; but the
provisions of this sentence shall not restrict any distinctions permissible
under these Amended and Restated Articles of Incorporation that may exist
with respect to stockholder elections to receive dividends or distributions
in cash or Shares of the same Class or that may otherwise exist with
respect to dividends and distributions on Shares of the same Class.
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C. No holder of Shares shall be entitled as such, as a matter of right, to
purchase or subscribe for any part of any new or additional issue of Shares or
securities of the Corporation. All Shares now or hereafter authorized, and of
any Class, shall be "subject to redemption" and "redeemable", in the sense used
in the General Laws of the State of Maryland authorizing the formation of
corporations, at the redemption or repurchase price for shares of that Class,
determined in the manner set out in these Amended and Restated Articles of
Incorporation or in any amendment hereto. In the absence of any contrary
specification as to the purpose for which Shares are repurchased by it, all
Shares so repurchased shall be deemed to be "acquired for retirement" in the
sense contemplated by the laws of the State of Maryland. Shares retired by
repurchase or retired by redemption shall thereafter have the status of
authorized by unissued Shares of the Corporation. All persons who shall acquire
Shares shall acquire the same subject to the provisions of these Amended and
Restated Articles of Incorporation.
SIXTH: Directors. The Corporation has thirteen directors in office, each of
whom will serve as directors until their successors are elected and qualify; the
names of the thirteen directors in office are William C. Morris, Ronald T.
Schroeder, Fred E. Brown, Alice S. Ilchman, John E. Merow, Betsy S. Michel,
Douglas R. Nichols, Jr., James C. Pitney, James Q. Riordan, Herman J. Schmidt,
Robert L. Shafer, James N. Whitson and Brian T. Zino. The number of directors in
office may be changed from time to time in such lawful manner as the By-Laws of
the Corporation shall provide.
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SEVENTH: Provisions for Defining, Limiting and Regulating the Powers of the
Corporation, Directors and Stockholders.
A. Board of Directors: The Board of Directors shall have the general
management and control of the business and property of the Corporation, and
may exercise all the powers of the Corporation, except such as are by
statute or by these Amended and Restated Articles of Incorporation or by
the By-Laws conferred upon or reserved to the stockholders. In furtherance
and not in limitation of the powers conferred by statute, the Board of
Directors is hereby empowered: (1) To authorize the issuance and sale, from
time to time, of Shares of any Class whether for cash at not less than the
par value thereof or for such other consideration as the Board of Directors
may deem advisable, in the manner and to the extent now or hereafter
permitted by the laws of Maryland; provided, however, the consideration (or
the value thereof as determined by the Board of Directors) per share to be
received by the Corporation upon the sale of shares of any Class (including
Treasury Shares) shall not be less than the net asset value (determined as
provided in Article NINTH hereof) per Share of that Class outstanding at
the time (determined by the Board of Directors) as of which the computation
of such net asset value shall be made; (2) to authorize the execution and
performance by the Corporation of an agreement or agreements with J. & W.
Seligman & Co. Incorporated, a Delaware corporation, or any successor to
such corporation ("Seligman") providing for the investment and other
operations of the Corporation; (3) to authorize the execution and
performance by the Corporation of an agreement or agreements, which may be
exclusive contracts, with Seligman Marketing, Inc., a Delaware corporation,
or any other person, as distributor, providing for the distribution of
Shares of any Class; (4) to authorize the execution and performance by the
Corporation of an agreement with The Mutual Benefit Life Insurance Company
("Mutual Benefit") on behalf of Mutual Benefit Variable Contract Account 9,
regarding the sale of Shares of the Corporation of any class to such
Account in accordance with the provisions of these Articles of
Incorporation; and (5) to specify, in instances in which it may be
desirable, that Shares of any Class repurchased by the Corporation are not
acquired for retirement and to specify the purpose for which such Shares
are repurchased. The Corporation may in its By-Laws confer powers on the
Board of Directors in addition to the powers expressly conferred by
statute.
B. Quorum; Adjournment; Majority Vote: No presence in person or by
proxy of the holders of one-third of the Shares of all Classes issued and
outstanding and entitled to vote thereat shall constitute a quorum for the
transaction of any business at all meetings of the shareholders except as
otherwise provided by law or in these Amended and Restated Articles of
Incorporation and
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except that where the holders of Shares of any Class are entitled to a
separate vote as a Class (a "Separate Class") or where the holders of
Shares of two or more (but not all) Classes are required to vote as a
single Class (a "Combined Class"), the presence in person or by proxy of
the holders of one-third of the Shares of that Separate Class or Combined
Class, as the case may be, issued and outstanding and entitled to vote
thereat shall constitute a quorum for such vote. If, however, a quorum with
respect to all Classes, a Separate Class or a Combined Class, as the case
may be, shall not be present or represented at any meeting of the
shareholders, the holders of a majority of the Shares of all Classes, such
Separate Class or such Combined Class, as the case may be, present in
person or by proxy and entitled to vote shall have power to adjourn the
meeting from time to time as to all Classes, such Separate Class or such
Combined Class, as the case may be, without notice other than announcement
at the meeting, until the requisite number of Shares entitled to vote at
such meeting shall be present. At such adjourned meeting at which the
requisite number of Share entitled to vote thereat shall be represented any
business may be transacted which might have been transacted at the meeting
as originally notified. The absence from any meeting of stockholders of the
number of Shares in excess of one-third of the Shares of all Classes or of
the affected Class or Classes, as the case may be, which may be required by
the laws of the State of Maryland, the Investment Company Act of 1940 or
any other applicable law, or these Amended and Restated Articles of
Incorporation, for action upon any given matter shall not prevent action of
such meeting upon any other matter or matters which may properly come
before the meeting, if there shall be present thereat, in person or by
proxy, holders of the number of Shares required for action in respect of
such other matter or matters. Notwithstanding any provision of law
requiring any action to be taken or authorized by the holders of a greater
proportion than a majority of the Shares of all Classes or of the Shares of
a particular Class or Classes, as the case may be, entitled to vote
thereon, such action shall be valid and effective if taken or authorized by
the affirmative vote of the holders of a majority of the Shares of all
Classes or of such Class or Classes, as the case may be, outstanding and
entitled to vote thereon.
EIGHTH: Redemptions and Repurchases.
A. The Corporation shall under some circumstances redeem, and may under
other circumstances redeem or repurchase, Shares as follows:
1. Obligation of the Corporation to Redeem Shares: Each holder of
Shares of any Class shall be entitled at his option to require the
Corporation to redeem all or any part of the Shares of that Class owned by
such holder, upon written or telegraphic request to the Corporation or its
designated agent, accompanied by surrender of any certificate or
certificates for such shares, or such other
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evidence of ownership as shall be specified by the Board of Directors, for
the proportionate interests per Share in the assets of the Corporation
belonging to that Class, or the cash equivalent thereof (being the net
asset value per Share of that Class determined as provided in Article NINTH
hereof), subject to and in accordance with the provisions of paragraph B of
this Article.
2. Right of the Corporation to Redeem Shares. In addition the Board of
Directors may, from time to time in its discretion, authorize the
Corporation to require the redemption of all or any part of the outstanding
Shares of any Class, for the proportionate interest per Share in the assets
of the Corporation belonging to that Class, or the cash equivalent thereof
(being the net asset value per Share of that Class determined as provided
in Article NINTH hereof), subject to and in accordance with the provisions
of paragraph B of this Article, upon the sending of written notice thereof
to each stockholder any of whose Shares are so redeemed and upon such terms
and conditions as the Board of Directors shall deem advisable.
3. Right of the Corporation to Repurchase Shares. In addition the
Board of Directors may, from time to time in its discretion, authorize the
officers of the Corporation to repurchase Shares of any Class, either
directly or through an agent, subject to and in accordance with the
provisions of paragraph B of this Article. The price to be paid by the
Corporation upon any such repurchase shall be determined, in the discretion
of the Board of Directors, in accordance with any provision of the
Investment Company Act of 1940 or any rule or regulation thereunder,
including any rule or regulation made or adopted pursuant to Section 22 of
the Investment Company Act of 1940 by the Securities and Exchange
Commission or any securities association registered under the Securities
Exchange Act of 1934.
B. The following provisions shall be applicable with respect to redemptions
and repurchases of Shares of any Class pursuant to paragraph 4 hereof:
1. The time as of which the net asset value per Share of a particular
Class applicable to any redemption pursuant to subparagraph A(1) or A(2) of
this Article shall be computed shall be such time as may be determined by
or pursuant to the direction of the Board of Directors (which time may
differ from Class to Class).
2. Any certificates for Shares of any Class to be redeemed or
repurchased shall be surrendered in proper form for transfer, together with
such proof of the authenticity of signatures as may be required by
resolution of the Board of Directors.
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<PAGE>
3. Payment of the redemption or repurchase price by the Corporation or
its designated agent shall be made in cash within seven days after the time
used for determination of the redemption or repurchase price, but in no
event prior to delivery to the Corporation or its designated agent of any
certificate or certificates for the Shares of the particular Class so
redeemed or repurchased, or of such other evidence of ownership as shall be
specified by the Board of Directors; except that any payment may be made in
whole or in part in securities or other assets of the Corporation belonging
to that Class if, in the event of the closing of the New York Stock
Exchange or the happening of any event at any time prior to actual payment
which makes the liquidation of Securities in orderly fashion impractical or
impossible, the Board of Directors shall determine that payment in cash
would be prejudicial to the best interests of the remaining stockholders of
that Class. In making any such payment in whole or in part in Securities or
other assets of the Corporation belonging to that Class, the Corporation
shall, as nearly as may be practicable, deliver Securities or other assets
of a gross value (determined in the manner provided in Article NINTH
hereof) representing the same proportionate interest in the Securities and
other assets of the Corporation belonging to that class as is represented
by the Shares of that Class so to be paid for. Delivery of the Securities
included in any such payment shall be made as promptly as any necessary
transfers on the books of the several corporations whose Securities are to
be delivered may be made.
4. The right of the holder of Shares of any Class redeemed or
repurchased by the Corporation as provided in this Article to receive
dividends thereon and all other rights of such holder with respect to such
Shares shall forthwith cease and terminate from and after the time of which
the redemption or repurchase price of such Shares has been determined
(except the right of such holder to receive (a) the redemption or
repurchase price of such Shares from the Corporation or its designated
agent, in cash and/or in securities or other assets of the Corporation
belonging to that Class, and (b) any dividend to which such holder had
previously become entitled as the record holder of such Shares on the
record date for such dividend, and, with respect to such Shares otherwise
entitled to vote, except the right of such holder to vote at a meeting of
stockholders such Shares owned of record by him on the record date for such
meeting).
NINTH: Determination of Net Asset Value. For the purposes referred to in
Articles SEVENTH and EIGHTH hereof the net asset value per Share of any Class
shall be determined by or pursuant to the direction of the Board of Directors in
accordance with the following provisions:
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A. Such net asset value per Share of a particular Class on any day shall be
computed an follows:
The net asset value per Share of that Class shall be the quotient
obtained by dividing the "net value of the assets" of the Corporation
belonging to that Class by the total number of Shares of that Class at the
time deemed to be outstanding (including Shares sold whether paid for and
issued or not, and excluding Shares redeemed or repurchased on the basis of
previously determined values, whether paid for, received and held in
treasury, or not).
The "net value of the assets" of the Corporation belonging to a
particular Class shall be the "gross value" of the assets belonging to that
Class after deducting the amount of all expenses incurred and accrued and
unpaid belonging to that Class, such reserves belonging to that Class as
may be set up to cover taxes and any other liabilities, and such other
deductions belonging to that Class as in the opinion of the officers of the
Corporation are in accordance with accepted accounting practice.
The "gross value" of the assets belonging to a particular Class shall
be the amount of all cash and receivables and the market value of all
Securities and other assets held by the Corporation and belonging to that
Class at the time as of which the determination is made. Securities held
shall be valued at market value or, in the absence of readily available
market quotations, at fair value, both as determined pursuant to methods
approved by the Board of Directors and in accordance with applicable
statutes and regulations.
B. The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are redeemed by it to be necessary or desirable and are consistent with
the provisions of the Investment Company Act of 1940 and the rules and
regulations thereunder.
TENTH: Determination Binding. Any determination made by or pursuant to the
direction of the Board of Directors in good faith, and so far as accounting
matters are involved in accordance with accepted accounting practices, as to the
amount of the assets, obligations or liabilities of the Corporation belonging to
any Class, as to the amount of the net income of the Corporation belonging to
any Class for any period or amounts that are any time legally available for
payment of dividends on Shares of any Class, as to the amount of any reserves or
charges set upon with respect to any Class and the propriety thereof, as to the
time of or purpose for treating any reserves or charges with respect to any
Class, as to the use, alteration or cancellation of any reserves or charges with
respect to any Class (whether or not any obligation or liability for which such
reserves or charges shall have been created shall have been paid or discharged
or shall be
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then or thereafter required to be paid or discharged), as to the price or
closing bid or asked price of any security owned or held by the Corporation and
belonging to any Class, as to the market value of any security or fair value of
any other asset owned by the Corporation and belonging to any Class, as to the
number of Shares of any Class outstanding or deemed to be outstanding, as to the
impracticability or impossibility of liquidating Securities in an orderly
fashion, as to the extent to which it is practicable to deliver the
proportionate interest in the Securities and other assets of the Corporation
belonging to any Class redeemed or repurchased in payment for any such Shares,
as to the method of payment for any such Shares redeemed or repurchased, or as
to any other matters relating to the issue, sale, redemption, repurchase, and/or
other acquisition or disposition of Securities or Shares of the Corporation,
shall be final and conclusive and shall be binding upon the Corporation and all
holders of Shares of all Classes past, present and future, and Shares of all
Classes are issued and sold on the condition and understanding that any and all
such determinations shall be binding as aforesaid. No provision of these Amended
and Restated Articles of Incorporation shall be effective to bind any person to
waive compliance with any provision of the Securities Act of 1933 or the
Investment Company Act of 1940 or of any valid rule, regulation or order of the
Securities and Exchange Commission thereunder.
ELEVENTH: Liability and Indemnification of Directors and Officers.
A. A director or officer of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except to the extent such exemption from
liability or limitation thereof is not permitted by law (including the
Investment Company Act of 1940) as currently in effect or as the same may
hereafter be amended. No amendment, modification or repeal of this Article
ELEVENTH, Paragraph A shall adversely affect any right or protection of a
director or officer that exists at the time of such amendment, modification or
repeal.
B. The Corporation shall indemnify to the fullest extent permitted by law
(including the Investment Company Act of 1940) as currently in effect or as the
same may hereafter be amended, any person made or threatened to be made a party
to any action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a director or officer of the Corporation or serves or
served at the request of the Corporation any other enterprise as a director or
officer. To the fullest extent permitted by law (including the Investment
Company Act of 1940) as currently in effect or as the same may hereafter be
amended, expenses incurred by any such person in defending any such action, suit
or proceeding shall be paid or reimbursed by the Corporation promptly upon
receipt by it of an undertaking of such person to repay such expenses if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation. The rights provided to any person by this
Article ELEVENTH, Paragraph B shall be enforceable against the
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Corporation by such person who shall be presumed to have relied upon it in
serving or continuing to serve as a director or officer as provided above. No
amendment of this Article ELEVENTH, Paragraph B shall impair the rights of any
person arising at any time with respect to events occurring prior to such
amendment. For purposes of this Article ELEVENTH, Paragraph B, the term
"Corporation" shall include any predecessor of the Corporation and any
constituent corporation (including any constituent of a constituent) absorbed by
the Corporation in a consolidation or merger; the term "other enterprise" shall
include any corporation, partnership, joint venture or trust.
TWELFTH: Amendments. The Corporation reserves the right to take any lawful
action and to make any amendment of these Amended and Restated Articles of
Incorporation, including the right to make any amendment which changes the terms
of any Shares of any Class now or hereafter authorized by classification,
reclassification, or otherwise, and to make any amendment authorizing any sale,
lease, exchange or transfer of the property and assets of the Corporation or
belonging to any Class or Classes as an entirety, or substantially as an
entirety, with or without its good will and franchise, if a majority of all the
Shares of all Classes or of the affected Class or Classes, as the case may be,
at the time issued and outstanding and entitled to vote, vote in favor of any
such action or amendment, or consent thereto in writing, and reserves the right
to make any amendment of these Amended and Restated Articles of Incorporation in
any form, manner or substance now or hereafter authorized or permitted by law.
IN WITNESS WHEREOF, the undersigned President and Secretary of Seligman
Portfolios, Inc. have executed the foregoing Articles of Amendment And
Restatement and hereby acknowledge the same to be the act of Seligman
Portfolios, Inc., and further acknowledge that, to the best of their knowledge,
information and belief the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated the 12th day of April, 1988.
/s/ Ronald T. Schroeder
----------------------------
Ronald T. Schroeder
/s/ Carl J. White
----------------------------
Carl J. White
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CUSTODY AGREEMENT
This Custody Agreement is dated May 1, 1996 between MORGAN STANLEY
TRUST COMPANY, a New York State chartered trust company (the "Custodian"), and
SELIGMAN PORTFOLIOS, INC., a Maryland corporation (the "Client").
1. Appointment and Acceptance; Accounts. (a) The Client hereby
appoints the Custodian as a custodian of Property (as defined below) owned or
under the control of the Client that are delivered to the Custodian, or any
Subcustodian as appointed below, from time to time to be held in custody for the
benefit of the Client.
(b) The Client shall deliver to the Custodian each document and other
item listed in Appendix 1. In addition, the Client shall deliver to the
Custodian any additional documents or items as the Custodian may reasonably
request for the performance of its duties under this Agreement.
(c) The Client instructs the Custodian to establish on the books and
records of the Custodian the accounts listed in Appendix 2 (the "Accounts") in
the name of the Client. Upon receipt of Authorized Instructions (as defined
below) and appropriate documentation, the Custodian shall open additional
Accounts for the Client. Upon the Custodian's confirmation to the Client of the
opening of such additional Accounts, or of the closing of Accounts, Appendix 2
shall be deemed automatically amended or supplemented accordingly. The Custodian
shall record in the Accounts and shall have general responsibility for the
safekeeping of all securities ("Securities"), cash, cash equivalents and other
property (all such Securities, cash, cash equivalents and other property being
collectively the "Property") of the Client that are delivered to the Custodian
for custody.
(d) The procedures the Custodian and the Client will use in
performing activities in connection with this Agreement are set forth in a
client services guide provided to the Client by the Custodian, as such guide may
be amended from time to time by the Custodian by written notice to the Client
(the "Client Services Guide").
2. Subcustodians. The Property may be held in custody and deposit
accounts that have been established by the Custodian with one or more (i)
domestic banks qualified under the Investment Company Act of 1940, as amended
(the "Act") to act as custodian or (ii) foreign banks or other institutions that
are "Eligible Foreign Custodians" (as defined in Rule 17f-5 of the Act) as
listed on Exhibit A (the "Subcustodians"), as such Exhibit may be amended from
time to time by written notice from the Custodian to the Client, or (iii)
through the facilities of one or more securities depositories or clearing
agencies permitted by Rule 17f-4 of the Act; provided however, that the
Custodian shall provide written notice of any proposed amendment to Exhibit A at
least ninety (90) days prior to the proposed effective date of such amendment to
Exhibit A. Unless notified in writing to the contrary by the Client during the
ninety (90) day notice period,
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the Custodian shall assume that the Client has obtained all necessary approval
of any new Subcustodian and the proposed amendment shall become effective as of
the proposed effective date. The Custodian shall hold Property through a
Subcustodian, securities depository or clearing agency only if (a) such
Subcustodian and any securities depository or clearing agency in which such
Subcustodian or the Custodian holds Property, or any of their creditors, may not
assert any right, charge, security interest, lien, encumbrance or other claim of
any kind to such Property except a claim of payment for its safe custody or
administration and (b) beneficial ownership of such Property may be freely
transferred without the payment of money or value other than for safe custody or
administration. Any Subcustodian may hold Property in a securities depository
and may utilize a clearing agency.
3. Records. With respect to Property held by a Subcustodian:
(a) The Custodian may hold Property for all of its
customers with a Subcustodian in a single account identified as
belonging to the Custodian for the benefit of its customers;
(b) The Custodian shall identify on its books as belonging
to the Client any Property held by a Subcustodian for the Custodian's
account;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any other property held by the
Subcustodian other than property of the Custodian's customers held
solely for the benefit of customers of the Custodian; and
(d) In the event the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian shall be
required by its agreement with the Custodian to identify on its books
such Property as being held for the account of the Custodian as
custodian for its customers or in such other manner as is required by
local law or market practice.
4. Access to Records. The Custodian shall allow the Client's
accountants reasonable access to the Custodian's records relating to the
Property held by the Custodian as such accountants may reasonably require in
connection with their examination of the Client's affairs and/or confirmation of
the contents of these records. The Custodian shall also obtain from any
Subcustodian (and shall require each Subcustodian to use reasonable efforts to
obtain from any securities depository or clearing agency in which it deposits
Property) an undertaking, to the extent consistent with the laws and regulations
of the jurisdiction or jurisdictions to which such Subcustodian, securities
depository or clearing agency is subject, to permit independent public
accountants such reasonable access to the records of such Subcustodian,
securities depository or clearing agency or confirmation of the contents of
these records as may be reasonably required in connection with the examination
of the Client's affairs or to take such other action as the Custodian in its
judgment may deem sufficient to ensure such reasonable access.
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5. Reports. The Custodian shall provide such reports and other
information to the Client and to such persons as the Client directs as the
Custodian and the Client may agree from time to time including but not limited
to an identification of entities having possession of Property of the Client and
notification of any transfer to or from each account maintained by a foreign
Subcustodian for the Custodian on behalf of the Client.
6. Payment of Monies. The Custodian shall make, or cause any
Subcustodian to make, payments from monies being held in the Accounts only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
The Custodian may act as the Client's agent or act as a principal in
foreign exchange transactions at such rates as are agreed from time to time
between the Client and the Custodian.
7. Transfer of Securities. The Custodian shall make, or cause any
Subcustodian to make, transfers, exchanges or deliveries of Securities only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
8. Corporate Action. (a) The Custodian shall notify the Client of
details of all corporate actions affecting the Client's Securities promptly upon
its receipt of such information.
(b) The Custodian shall take, or cause any Subcustodian to
take, such corporate action only in accordance with Authorized
Instructions or as provided in this Section 8 or Section 9.
(c) In the event the Client does not provide timely
Authorized Instructions to the Custodian, the Custodian shall act in
accordance with the default option provided by local market practice
and/or the issuer of the Securities.
(d) Fractional shares resulting from corporate action
activity shall be treated in accordance with local market practices.
9. General Authority. In the absence of Authorized Instructions to
the contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for reasonable
expenses of handling Property or other similar items relating to its
duties under this Agreement, provided that all such payments shall be
accounted for to the Client;
(b) receive and collect all income and principal with
respect to Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of interim
receipts or temporary securities for securities
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in definitive form and the exchange of warrants, or other documents
of entitlement to securities, for the securities themselves);
(d) surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
(e) execute in the Client's name such ownership and
other certificates as may be required to obtain the payment of income
from Securities;
(f) pay or cause to be paid, from the Accounts, any and
all taxes and levies in the nature of taxes imposed on Property by
any governmental authority in connection with custody of and
transactions in such Property;
(g) endorse for collection, in the name of the Client,
checks, drafts and other negotiable instruments;
(h) take non-discretionary action on mandatory corporate
actions; and
(i) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and other
dealings with the Property.
10. Authorized Instructions; Authorized Persons. (a) Except as
otherwise provided in Sections 6 through 9, 13 and 17, all payments of monies,
all transfers, exchanges or deliveries of Property and all responses to
corporate actions shall be made or taken only upon receipt by the Custodian of
Authorized Instructions; provided that such Authorized Instructions are timely
received by the Custodian. "Authorized Instructions" of the Client means
instructions from an Authorized Person received by telecopy, tested telex,
electronic link or other electronic means or by such other means as may be
agreed in writing between the Client and the Custodian.
(b) "Authorized Person" means each of the persons or entities
identified on Appendix 3 as amended from time to time by written notice from the
Client to the Custodian. The Client represents and warrants to the Custodian
that each Authorized Person listed in Appendix 3, as amended from time to time,
is authorized to issue Authorized Instructions on behalf of the Client. Prior to
the delivery of the Property to the Custodian, the Custodian shall provide a
list of designated system user ID numbers and passwords that the Client shall be
responsible for assigning to Authorized Persons. The Custodian shall assume that
an electronic transmission received and identified by a system user ID number
and password was sent by an Authorized Person. The Custodian agrees to provide
additional designated system user ID numbers and passwords as needed by the
Client. The Client authorizes the Custodian to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Custodian to the Client, Appendix 3
shall be deemed automatically amended accordingly. The Client authorizes the
Custodian to receive, act and rely upon any Authorized Instructions received by
the Custodian which have been issued, or purport to have been issued, by an
Authorized Person.
4
<PAGE>
(c) Any Authorized Person may cancel/correct or otherwise amend any
Authorized Instruction received by the Custodian, but the Client agrees to
indemnify the Custodian for any liability, loss or expense incurred by the
Custodian and its Subcustodians as a result of their having relied upon or acted
on any prior Authorized Instruction. An amendment or cancellation of an
Authorized Instruction to deliver or receive any security or funds in connection
with a trade will not be processed once the trade has settled.
11. Registration of Securities. (a) In the absence of Authorized
Instructions to the contrary, Securities which must be held in registered form
shall be registered in the name of the Custodian or the Custodian's nominee or,
in the case of Securities in the custody of an entity other than the Custodian,
in the name of the Custodian, its Subcustodian or any such entity's nominee. The
Custodian may, without notice to the Client, cause any Securities to be
registered or re-registered in the name of the Client.
(b) Where the Custodian has been instructed by the Client to hold any
Securities in the name of any person or entity other than the Custodian, its
Subcustodian or any such entity's nominee, the Custodian shall not be
responsible for any failure to collect such dividends or other income or
participate in any such corporate action with respect to such Securities.
12. Deposit Accounts. All cash received by the Custodian for the
Accounts shall be held by the Custodian as a short-term credit balance in favor
of the Client and, if the Custodian and the Client have agreed in writing in
advance that such credit balances shall bear interest, the Client shall earn
interest at the rates and times as agreed between the Custodian and the Client.
The Client acknowledges that any such credit balances shall not be accompanied
by the benefit of any governmental insurance.
13. Short-term Credit Extensions. (a) From time to time, the
Custodian may extend or arrange short-term credit for the Client which is (i)
necessary in connection with payment and clearance of securities and foreign
exchange transactions or (ii) pursuant to an agreed schedule, as and if set
forth in the Client Services Guide, of credits for dividends and interest
payments on Securities. All such extensions of credit shall be repayable by the
Client on demand.
(b) The Custodian shall be entitled to charge the Client interest for
any such credit extension at rates to be agreed upon from time to time or, if
such credit is arranged by the Custodian with a third party on behalf of the
Client, the Client shall reimburse the Custodian for any interest charge. In
addition to any other remedies available, the Custodian shall be entitled to a
right of set-off against the Property to satisfy the repayment of such credit
extensions and the payment of, or reimbursement for, accrued interest thereon.
14. Representations. (a) The Client represents that (i) the
execution, delivery and performance of this Agreement (including, without
limitation, the ability to obtain the short-term extensions of credit in
accordance with Section 13) are within the Client's power and authority and have
been duly authorized by all requisite action (corporate or otherwise) of the
Client and of the beneficial owner of the Property, if other than the Client,
and (ii) this Agreement and each
5
<PAGE>
extension of short-term credit extended to or arranged for the benefit of the
Client in accordance with Section 13 shall at all times constitute a legal,
valid and binding obligation of the Client enforceable against the Client in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
(b) The Custodian represents that (i) the execution, delivery and
performance of this Agreement are within the Custodian's power and authority and
have been duly authorized by all requisite action (corporate or otherwise) of
the Custodian and (ii) this Agreement constitutes the legal, valid and binding
obligation of the Custodian enforceable against the Custodian in accordance with
its terms, except as may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights in general and subject to
the effect of general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
15. Standard of Care; Indemnification. (a) The Custodian shall be
responsible for the performance of only such duties as are set forth in this
Agreement, the Client Services Guide or contained in Authorized Instructions
given to the Custodian which are not contrary to the provisions of any relevant
law or regulation. The Custodian shall be liable to the Client for any loss,
liability or expense incurred by the Client in connection with this Agreement to
the extent that any such loss, liability or expense results from the negligence
or willful misconduct of the Custodian or any Subcustodian.
(b) The Client acknowledges that the Property may be physically held
outside the United States. The Custodian shall not be liable for any loss,
liability or expense resulting from events beyond the reasonable control of the
Custodian, including, but not limited to, force majeure. Except as provided in
the previous sentence, the liability of the Custodian for losses incurred by the
Client in respect of Property shall not be affected by the Custodian's use of
Subcustodians.
(c) In addition, the Client shall indemnify the Custodian and
Subcustodians and any nominee for, and hold each of them harmless from, any
liability, loss or expense (including attorneys' fees and disbursements)
incurred (i) as a result of the Custodian having acted or relied upon any
Authorized Instructions or otherwise acted in accordance with the terms of this
Agreement or (ii) arising out of any such person acting as a nominee or holder
of record of Securities; provided, however, that this indemnity shall not cover
any liability, loss or expense incurred by the Custodian or any Subcustodian
which directly results from the negligence or willful misconduct of the
Custodian or such Subcustodian. The Custodian shall notify the Client promptly
upon becoming aware of any matters which may result in liability, loss or
expense to the Client as provided for in this Agreement. The Client shall be
responsible to promptly instruct the Custodian as to how to pursue the
resolution of any such matters on its behalf.
16. Fees; Liens. The Client shall pay to the Custodian from time to
time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon as well as the Custodian's reasonable out-of-pocket and
incidental expenses. The Client shall hold the
6
<PAGE>
Custodian harmless from any liability or loss resulting from any taxes or other
governmental charges, and any expenses related thereto, which may be imposed or
assessed with respect to the Accounts or any Property held therein. The
Custodian is, and any Subcustodians are, authorized to charge the Accounts for
such items and the Custodian shall have a lien, charge and security interest on
any and all Property for any amount owing to the Custodian from time to time
under this Agreement.
17. Termination. This Agreement may be terminated by the Client or
the Custodian by 60 days written notice to the other, sent by registered mail.
If notice of termination is given, the Client shall, within 30 days following
the giving of such notice, deliver to the Custodian a statement in writing
specifying the successor custodian or other person to whom the Custodian shall
transfer the Property. In either event, the Custodian, subject to the
satisfaction of any lien it may have, shall transfer the Property to the person
so specified. If the Custodian does not receive such statement the Custodian, at
its election, may transfer the Property to a bank or trust company established
under the laws of the United States or any state thereof to be held and disposed
of pursuant to the provisions of this Agreement or may continue to hold the
Property until such a statement is delivered to the Custodian. In such event the
Custodian shall be entitled to fair compensation for its services during such
period as the Custodian remains in possession of any Property and the provisions
of this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect; provided, however, that the Custodian shall
have no obligation to settle any transactions in Securities for the Accounts.
The provisions of Sections 15 and 16 shall survive termination of this
Agreement.
18. Investment Advice. The Custodian shall not supervise, recommend
or advise the Client relative to the investment, purchase, sale, retention or
other disposition of any Property held under this Agreement.
19. Confidentiality. The Custodian, its agents and employees shall
maintain the confidentiality of information concerning the Property held in the
Client's account, including in dealings with affiliates of the Custodian. In the
event the Custodian or any Subcustodian is requested or required to disclose any
confidential information concerning the Property, the Custodian shall, to the
extent legally permissible, promptly notify the Client of such request or
requirement so that the Client may seek a protective order or waive any
objection to the Custodian's or such Subcustodian's compliance with this Section
19. In the absence of such a waiver, if the Custodian or such Subcustodian is
compelled, in the opinion of its counsel, to disclose any confidential
information, the Custodian or such Subcustodian may disclose such information to
such persons as, in the opinion of counsel, is so required.
20. Notices. Any notice or other communication from the Client to the
Custodian, unless otherwise provided by this Agreement or the Client Services
Guide, shall be sent by certified or registered mail to Morgan Stanley Trust
Company, One Pierrepont Plaza, Brooklyn, New York, 11201, Attention: President,
and any notice from the Custodian to the Client is to be mailed postage prepaid,
addressed to the Client at the address appearing below (Attention: Treasurer),
or as it may hereafter be changed on the Custodian's records in accordance with
written notice from the Client.
7
<PAGE>
21. Assignment. This contract may not be assigned by either party
without the prior written approval of the other.
22. Miscellaneous. (a) This Agreement shall bind the successors and
assigns of the Client and the Custodian.
(b) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to its conflicts
of law rules and to the extent not preempted by federal law. The Custodian and
the Client hereby irrevocably submit to the exclusive jurisdiction of any New
York State court or any United States District Court located in the State of New
York in any action or proceeding arising out of this Agreement and hereby
irrevocably waive any objection to the venue of any such action or proceeding
brought in any such court or any defense of an inconvenient forum.
In witness whereof, the parties hereto have set their hands as of the
date first above written.
SELIGMAN PORTFOLIOS, INC.
By______________________
Name:
Title:
Address for record: 100 Park Avenue
New York, NY 10017
Attention: Treasurer
Accepted:
MORGAN STANLEY TRUST COMPANY
By___________________________
Authorized Signature
8
<PAGE>
APPENDIX 1
Account Documentation
REQUIRED DOCUMENTATION FOR CORE CUSTODIAL SERVICES (INCLUDING TAX RECLAIMS):
CUSTODY AGREEMENT
CLIENT SERVICES GUIDE (INCLUDING APPENDICES)
FEE SCHEDULE / BILLING GUIDE
GENERAL ACCOUNT INFORMATION
US TAX AUTHORITY DOCUMENTATION
LOCAL TAX OFFICE LETTER / APPLICATION LETTER
(NON-UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FORM 6166 / REQUEST FOR FOREIGN CERTIFICATION FORM
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
CERTIFICATION OF BENEFICIAL OWNERSHIP, LEGAL NAME, LEGAL RESIDENCY, TAX STATUS
AND TAX IDS
TAX RECLAIM POWER OF ATTORNEY
PREVIOUS TAX RECLAIM FILING INFORMATION
(PREVIOUS FILERS, ONLY)
UK TAX AUTHORITY DOCUMENTATION
SOPHISTICATED INVESTOR (ACCREDITED INVESTOR) LETTER
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
9
<PAGE>
DOCUMENTATION THAT IS REQUIRED FROM AN ENTITY CLASSIFIED AS TAX-EXEMPT
BY ITS LOCAL TAX AUTHORITY:
UK FORM 4338
(EXEMPT NON-UNITED KINGDOM-RESIDENT BENEFICIAL OWNERS, ONLY)
UK FORM 309A
(EXEMPT UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FOREIGN EXEMPTION LETTERS / APPLICATION FOR AUSTRALIAN EXEMPTION LETTER
(EXEMPT BENEFICIAL OWNERS, ONLY)
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL USE THE PROXY VOTING SERVICE:
VOTING POWER OF ATTORNEY
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL DEAL IN CERTAIN SECURITIES:
JGB INDEMNIFICATION LETTER
KOREAN SECURITIES POWER OF ATTORNEY
NEW ZEALAND 'APPROVED ISSUER LEVY' LETTER
SPANISH POWER OF ATTORNEY WITH APOSTILE
10
<PAGE>
APPENDIX 2
Client Accounts
Account Name Account Number Account Mnemonic
- ------------ -------------- ----------------
1. Seligman Henderson 000402644 HSIF
International Fund
2. Seligman Henderson Global 000402685 HGEC
Smaller Companies
Fund -- Foreign
3. Seligman Henderson Global 000402693 HSEC
Smaller Companies
Fund - Domestic
4. Seligman Henderson Global 000403048 HHGT
Technology Fund -- Foreign
5. Seligman Henderson Global 000403055 HSGT
Technology Fund -- Domestic
6. Seligman Henderon Global ? ?
Growth Opportunities
Fund -- Foreign
7. Seligman Henderson Global ? ?
Growth Opportunities
Fund -- Domestic
11
<PAGE>
APPENDIX 3
Part I - Authorized Signatures
The Custodian is directed to accept and act upon Authorized Instructions
received from any of the following persons or entities:
Telephone/ Authorized
Name Organization Title Fax Signature
- ---- ------------ ----- --- ---------
Authorized by: ___________________________
12
<PAGE>
Part II - System User ID numbers
The Custodian is directed to accept and act upon Authorized Instructions
transmitted electronically and identified with the following mnemonics and
system user ID numbers for the following activities:
Work Station Account Workstation Sessions
User I.D. Mnemonic Number TE TCC SL FE CM MA TD
- --------- -------- ------ -- --- -- -- -- -- --
Workstation Session Codes
TE Trade Entry
TCC Trade Cancel/Correct
SL Securities Lending
FE Foreign Exchange
CM Cash Movement
MA Mass Authorization
TD Time Deposit
13
<PAGE>
EXHIBIT A
Subcustodians
14
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Custodians and Independent Auditors" and to the incorporation
by reference of our report dated February 2, 1996 in this Registration Statement
(Form N-1A No. 811-5221) of Seligman Portfolios, Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
October 28, 1996
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<NAME> SELIGMAN CASH MANAGEMENT PORTFOLIO
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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<INVESTMENTS-AT-VALUE> 9152
<RECEIVABLES> 2
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9162
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12
<TOTAL-LIABILITIES> 12
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9150
<SHARES-COMMON-STOCK> 9150
<SHARES-COMMON-PRIOR> 7800
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 9150
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 233
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 233
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 233
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (233)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6869
<NUMBER-OF-SHARES-REDEEMED> (5752)
<SHARES-REINVESTED> 233
<NET-CHANGE-IN-ASSETS> 1350
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 17
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 30
<AVERAGE-NET-ASSETS> 8816
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .026
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.026)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
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<NUMBER> 03
<NAME> SELIGMAN COMMON STOCK PORTFOLIO
<MULTIPLIER> 1000
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 26692
<INVESTMENTS-AT-VALUE> 34185
<RECEIVABLES> 80
<ASSETS-OTHER> 115
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34380
<PAYABLE-FOR-SECURITIES> 24
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1006
<TOTAL-LIABILITIES> 1030
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22940
<SHARES-COMMON-STOCK> 1934
<SHARES-COMMON-PRIOR> 1868
<ACCUMULATED-NII-CURRENT> 324
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<ACCUMULATED-NET-GAINS> 2593
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7493
<NET-ASSETS> 33350
<DIVIDEND-INCOME> 303
<INTEREST-INCOME> 101
<OTHER-INCOME> 0
<EXPENSES-NET> (83)
<NET-INVESTMENT-INCOME> 321
<REALIZED-GAINS-CURRENT> 2374
<APPREC-INCREASE-CURRENT> 804
<NET-CHANGE-FROM-OPS> 3499
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 358
<NUMBER-OF-SHARES-REDEEMED> (292)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4514
<ACCUMULATED-NII-PRIOR> 3
<ACCUMULATED-GAINS-PRIOR> 219
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 63
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 83
<AVERAGE-NET-ASSETS> 31773
<PER-SHARE-NAV-BEGIN> 15.44
<PER-SHARE-NII> .166
<PER-SHARE-GAIN-APPREC> 1.644
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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<INVESTMENTS-AT-VALUE> 4277
<RECEIVABLES> 272
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4572
<PAYABLE-FOR-SECURITIES> 207
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20
<TOTAL-LIABILITIES> 227
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4249
<SHARES-COMMON-STOCK> 432
<SHARES-COMMON-PRIOR> 431
<ACCUMULATED-NII-CURRENT> 119
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (19)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4)
<NET-ASSETS> 4345
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 135
<OTHER-INCOME> 0
<EXPENSES-NET> (13)
<NET-INVESTMENT-INCOME> 122
<REALIZED-GAINS-CURRENT> 79
<APPREC-INCREASE-CURRENT> (360)
<NET-CHANGE-FROM-OPS> (159)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 85
<NUMBER-OF-SHARES-REDEEMED> (84)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (151)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (97)
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18
<AVERAGE-NET-ASSETS> 4295
<PER-SHARE-NAV-BEGIN> 10.44
<PER-SHARE-NII> .282
<PER-SHARE-GAIN-APPREC> (.672)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.05
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> SELIGMAN INCOME PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
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<NAME> SELIGMAN HENDERSON GLOBAL PORTFOLIO
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</TABLE>
<TABLE> <S> <C>
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<NUMBER> 07
<NAME> SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
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</TABLE>
<TABLE> <S> <C>
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<NAME> SELIGMAN FRONTIER PORTFOLIO
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<S> <C>
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<TABLE> <S> <C>
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<SERIES>
<NUMBER> 09
<NAME> SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
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</TABLE>
<TABLE> <S> <C>
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<NUMBER> 10
<NAME> SELIGMAN HIGH-YIELD BOND PORTFOLIO
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<SERIES>
<NUMBER> 11
<NAME> SELIGMAN HENDERSON GLOBAL GROWTH OPP PORT
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<S> <C>
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<SERIES>
<NUMBER> 12
<NAME> SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
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