File No. 33-44186
811-6485
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 22 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 24 |X|
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SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive office)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
|X| immediately upon filing pursuant to paragraph (b) of rule 485
|_| on (date) pursuant to paragraph (b) of rule 485
|_| 60 days after filing pursuant to paragraph (a)(i) of rule 485
|_| on (date) pursuant to paragraph (a)(i) of rule 485
|_| 75 days after filing pursuant to paragraph (a) (ii) of rule 485
|_| on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-1 Notice for
Registrant's most recent fiscal year will be filed with the Commission on or
about December 21, 1996.
<PAGE>
File No. 33-44186
811-6485
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<CAPTION>
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
POST-EFFECTIVE AMENDMENT NO. 22
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
<S> <C>
Form N-1A Part A-Item No. Location in Prospectus
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1. Cover Page Cover Page
2. Synopsis Summary of Series Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Organization and
Capitalization
5. Management of Fund Management Services
5a. Manager's Discussion of Fund Performance Management Services
6. Capital Stock and Other Securities Organization and Capitalization
7. Purchase of Securities Being Offered Alternative Distribution
System; Purchase of Shares;
Administration, Shareholder
Services and Distribution Plans
8. Redemption or Repurchase Telephone Transactions;
Redemption of Shares; Exchange Privilege
9. Legal Proceedings Not applicable
Part B-Item No. Location in Statement of Additional Information
- --------------- -----------------------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information; Appendix B
13. Investment Objectives and Policies Investment Objectives, Policies and Risks; Investment Limitations
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers; General Information
Holders of Securities
16. Investment Advisory and Other Services Management and Expenses; Distribution Services
17. Brokerage Allocation Portfolio Transactions; Administration, Shareholder Services and Distribution
Plans
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing of Purchase and Redemption of Series Shares; Valuation
Securities Being Offered
20. Tax Status Taxes
21. Underwriters Distribution Services
22. Calculation of Performance Data Performance
23. Financial Statements General Information; Appendix C
</TABLE>
<PAGE>
PROSPECTUS
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
A SERIES OF
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
100 Park Avenue o New York, NY 10017 o New York Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450 -- all continental United States
For Retirement Plan Information -- Toll-Free Telephone: (800) 445-1777
November 20, 1996
Seligman Henderson Emerging Markets Growth Fund (the "Fund") is a series of
Seligman Henderson Global Fund Series, Inc. (the "Corporation"), an open-end
diversified management investment company. The Fund seeks to achieve its
objective of long-term capital appreciation by investing at least 65% of its
assets in equity securities of companies in emerging markets. There can be no
assurance that the Fund's investment objective will be achieved. Because of the
special risks involved with investing in securities of emerging market
companies, an investment in the Fund should be considered speculative and not
appropriate for individuals who require safety of principal or stable income
from their investments. For a description of the Fund's investment objective and
policies, and the risk factors associated with an investment in the Fund, see
"Investment Objective, Policies And Risks."
The Fund is managed by J. & W. Seligman & Co. Incorporated (the "Manager").
Seligman Henderson Co. (the "Subadviser") supervises and directs the Fund's
investments.
The Fund offers three classes of shares. Class A shares are sold subject to
an initial sales load of up to 4.75% and an annual service fee currently charged
at a rate of up to .25% of the average daily net asset value of the Class A
shares. Class A shares purchased in an amount of $1,000,000 or more are sold
without an initial sales load but are subject to a contingent deferred sales
load ("CDSL") of 1% on redemptions within 18 months of purchase. Class B shares
are sold without an initial sales load but are subject to a CDSL, if applicable,
of 5% on redemptions in the first year after purchase of such shares, declining
to 1% in the sixth year and 0% thereafter, an annual distribution fee of .75%
and an annual service fee of up to .25% of the average daily net asset value of
the Class B shares. Class B shares will automatically convert to Class A shares
on the last day of the month that precedes the eighth anniversary of their date
of purchase. Class D shares are sold without an initial sales load but are
subject to a CDSL of 1% imposed on redemptions within one year of purchase, an
annual distribution fee of up to .75% and an annual service fee of up to .25% of
the average daily net asset value of the Class D shares. Any CDSL payable upon
redemption of shares will be assessed on the lesser of the current net asset
value or the original purchase price of the shares redeemed. No CDSL will be
imposed on shares acquired through the reinvestment of dividends or
distributions received from any Class of shares. See "Alternative Distribution
System." Shares of the Fund may be purchased through any authorized investment
dealer.
This Prospectus sets forth concisely the information a prospective investor
should know about the Fund before investing. Please read it carefully before you
invest and keep it for future reference. Additional information about the Fund,
including a Statement of Additional Information, has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
available upon request without charge by calling or writing the Fund at the
telephone numbers or the address set forth above. The Statement of Additional
Information is dated the same date as this Prospectus and is incorporated herein
by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page
Summary Of Fund Expenses.............................. 2
Financial Highlights.................................. 3
Alternative Distribution System....................... 4
Investment Objective, Policies And Risks.............. 5
Management Services................................... 11
Purchase Of Shares.................................... 12
Telephone Transactions................................ 18
Redemption Of Shares.................................. 19
Administration, Shareholder Services
And Distribution Plan................................ 21
Exchange Privilege.................................... 21
Further Information About Transactions In The Fund.... 23
Dividends And Distributions........................... 23
Federal Income Taxes.................................. 24
Shareholder Information............................... 25
Advertising The Fund's Performance.................... 27
Organization And Capitalization....................... 27
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SUMMARY OF FUND EXPENSES
CLASS A CLASS B CLASS D
------- ------- -------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
LOAD ALTERNATIVE) LOAD ALTERNATIVE) LOAD ALTERNATIVE)
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) ................... 4.75% None None
Sales Load on Reinvested Dividends....................... None None None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds,
whichever is lower).................................... None; 5% in 1st year 1% in 1st year
except 1% 4% in 2nd year None thereafter
in first 18 months 3% in 3rd
if initial sales and 4th years
load was waived 2% in 5th year
in full due to size 1% in 6th year
of purchase None thereafter
Redemption Fees.......................................... None None None
Exchange Fees............................................ None None None
ANNUALIZED FUND OPERATING EXPENSES* CLASS A CLASS B CLASS D
------- ------- -------
(as a percentage of average net assets)
Management Fees.......................................... 1.25% 1.25% 1.25%
12b-1 Fees .............................................. .22% 1.00%** 1.00%**
Other Expenses (After expense reimbursement)............. 1.00% 1.00% 1.00%
---- ---- ----
Total Fund Operating Expenses............................ 2.47% 3.25% 3.25%
==== ==== ====
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The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of the Fund bear directly or
indirectly. The sales load on Class A shares is a one-time charge paid at the
time of purchase of shares. Reductions in initial sales loads are available in
certain circumstances. The CDSLs on Class B and Class D shares are one-time
charges paid only if shares are redeemed within six years or one year of
purchase, respectively. Class A shares are not subject to an initial sales load
for purchases of $1,000,000 or more; however, such shares are subject to a CDSL,
a one time charge, only if the shares are redeemed within eighteen months of
purchase. The expense table and example below reflect a voluntary undertaking by
the Manager and the Subadviser to reimburse a portion of "Other Expenses" such
that total operating expenses for the current fiscal year other than 12b-1 fees
will not exceed annualized rates of 2.25% of the average net assets of each
respective class. In the absence of these undertakings, it is estimated that
"Total Fund Operating Expenses" would equal approximately 2.89% for Class A
shares and 3.67% for Class B and Class D shares. There is no guarantee that
these undertakings will continue past the end of the current fiscal year. For
more information concerning reductions in sales loads and for a more complete
description of the various costs and expenses, including management fees, see
"Purchase Of Shares," "Redemption Of Shares" and "Management Services" herein.
The Fund's Administration, Shareholder Services and Distribution Plan to which
the caption "12b-1 Fees" relates, is discussed under "Administration,
Shareholder Services and Distribution Plan," herein.
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EXAMPLE 1 YEAR 3 YEARS
An investor would pay the following expenses on a $1,000
investment, assuming (i) a 5% annual return and
(ii) redemption at the end of the period shown...................Class A $71 $121
Class B+ $83 $130
Class D $43++ $100
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5%
ANNUAL RETURN USED IN THIS EXAMPLE IS A HYPOTHETICAL RATE.
*Estimated based on period 5/28/96 (commencement of operations) to 9/30/96.
**Includes an annual distribution fee of up to .75% and an annual service fee
of up to .25%. Pursuant to the Rules of the National Association of
Securities Dealers, Inc., the aggregate deferred sales loads and annual
distribution fees on Class B and Class D shares of the Fund may not exceed
6.25% of total gross sales, subject to certain exclusions. The maximum
sales charge rule is applied separately to each class. The 6.25% limitation
is imposed on the Fund rather than on a per shareholder basis. Therefore, a
long-term Class B or Class D shareholder of the Fund may pay more in total
sales loads (including distribution fees) than the economic equivalent of
6.25% of such shareholder's investment in such shares.
+Assuming (i) a 5% annual return and (ii) no redemption at the end of the
period, the expenses on a $1,000 investment would be $33 for 1 year and
$100 for 3 years.
++Assuming (i) a 5% annual return and (ii) no redemption at the end of one
year, the expenses on a $1,000 investment would be $33.
2
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FINANCIAL HIGHLIGHTS
The financial highlights for the Fund's shares for the period presented below
are unaudited. This information is derived from the financial and accounting
records of the Fund. Financial statements and notes with respect to the other
series of the Corporation are contained in the Corporation's fiscal 1995 Annual
Report and April 30, 1996 Mid-Year Report, which are incorporated by reference
in the Fund's Statement of Additional Information, copies of which 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 Class' beginning
net asset value to its ending net asset value so that they may understand the
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amount. The total return
based on net asset value measures each Class' performance assuming investors
purchased shares of the Class at the net asset value as of the beginning of the
period, invested dividends and capital gains at net asset value and then sold
their shares at the net asset value per share on the last day of the period. The
total return computations do not reflect any sales loads investors may incur in
purchasing shares of any Class. Total returns for periods of less than one year
are not annualized.
Average commission rate paid represents the average commissions paid by the
Fund to purchase or sell securities. It is determined by dividing the total
commission dollars paid by the number of shares purchased and sold during the
period for which commissions were paid.
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CLASS A CLASS B CLASS D
----------------- ----------------- -----------------
MAY 28, 1996* MAY 28, 1996* MAY 28, 1996*
TO TO TO
SEPTEMBER 30, 1996 SEPTEMBER 30, 1996 SEPTEMBER 30, 1996
----------------- ----------------- -----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................... $ 7.14 $ 7.14 $ 7.14
------- ------ -------
Net investment loss..................................... (0.02) (0.03) (0.03)
Net realized and unrealized investment loss............. (0.02) (0.02) (0.02)
Net realized and unrealized investment loss
from foreign currency transactions.................... (0.05) (0.05) (0.05)
------- ------ -------
Decrease from investment operations..................... (0.09) (0.10) (0.10)
Dividends paid.......................................... -- -- --
Distributions from net gain realized.................... -- -- --
------- ------ -------
Net decrease in net asset value......................... (0.09) (0.10) (0.10)
------- ------ -------
Net asset value end of period........................... $ 7.05 $ 7.04 $ 7.04
======= ====== =======
Total Return Based On Net Asset Value: ................. (1.26)% (1.40)% (1.40)%
RATIOS/SUPPLEMENTAL DATA:**
Expenses to average net assets.......................... 2.22%+ 3.00%+ 3.00%+
Net investment loss to average net assets............... (0.63)%+ (1.41)%+ (1.41)%+
Portfolio turnover...................................... 6.18% 6.18% 6.18%
Average commission rate paid............................ $0.0151 $0.0151 $0.0151
Net assets, end of period (000's omitted)............... $19,715 $10,317 $13,417
Without management fee waiver:**
Net investment loss per share........................... $ (0.04) $ (0.05) $ (0.05)
Expenses to average net assets.......................... 2.89%+ 3.67%+ 3.67%+
Net investment loss to average net assets............... (1.30)%+ (2.08)%+ (2.08)%+
</TABLE>
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*Commencement of operations.
**The Manager and Subadviser, at their discretion, waived a portion of their
fees.
+Annualized.
3
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers three classes of shares. Class A shares are sold to investors
who have concluded that they would prefer to pay an initial sales load and have
the benefit of lower continuing fees. Class B shares are sold to investors
choosing to pay no initial sales load, a higher distribution fee and a CDSL with
respect to redemptions within six years of purchase and who desire shares to
convert automatically to Class A shares after eight years. Class D shares are
sold to investors choosing to pay no initial sales load, a higher distribution
fee and, with respect to redemptions within one year of purchase, a CDSL. The
Alternative Distribution System allows investors to choose the method of
purchasing shares that is most beneficial in light of the amount of the
purchase, the length of time the shares are expected to be held and other
relevant circumstances. Investors should determine whether under their
particular circumstances it is more advantageous to incur an initial sales load
and be subject to lower ongoing fees, as discussed below, or to have the entire
initial purchase price invested in the Fund with the investment thereafter being
subject to higher ongoing fees and either a CDSL for a six-year period with
automatic conversion to Class A shares after eight years or a CDSL for a
one-year period with no automatic conversion to Class A shares.
Investors who expect to maintain their investment for an extended period of
time might choose to purchase Class A shares because over time the accumulated
continuing distribution fees of Class B and Class D shares may exceed the
initial sales load and lower distribution fee of Class A shares. This
consideration must be weighed against the fact that the amount invested in the
Fund will be reduced by the amount of the initial sales load on Class A shares
deducted at the time of purchase. Furthermore, the higher distribution fees on
Class B and Class D shares will be offset to the extent any return is realized
on the additional funds initially invested therein that would have been equal to
the amount of the initial sales load on Class A shares.
Investors who qualify for reduced initial sales loads, as described under
"Purchase Of Shares" below, might also choose to purchase Class A shares because
the sales load deducted at the time of purchase would be less. However,
investors should consider the effect of the 1% CDSL imposed on shares on which
the initial sales load was waived in full because the amount of Class A shares
purchased reached $1,000,000 or more. In addition, Class B shares will be
converted into Class A shares after a period of approximately eight years, and
thereafter investors will be subject to lower ongoing fees. Shares purchased
through reinvestment of dividends and distributions on Class B shares also will
convert automatically to Class A shares along with the underlying shares on
which they were earned.
Alternatively, some investors might choose to have all of their funds
invested initially in Class B or Class D shares, although remaining subject to a
higher continuing distribution fee and for a six-year or one-year period, a CDSL
as described below. For example, an investor who does not qualify for reduced
sales loads would have to hold Class A shares for more than 6.33 years for the
Class B or Class D distribution fee to exceed the initial sales load plus the
distribution fee on Class A shares. This example does not take into account the
time value of money, which further reduces the impact of the Class B and Class D
shares' 1% distribution fee, fluctuations in net asset value or the effect of
the return on the investment over this period of time.
Investors should bear in mind that total asset based charges (i.e., the
higher continuing distribution fee plus the CDSL) on Class B shares that are
redeemed may exceed the total asset based sales charges that would be payable on
the same amount of Class A or Class D shares, particularly if the Class B shares
are redeemed shortly after purchase or if the investor qualifies for a reduced
sales load on the Class A shares.
Investors should understand that the purpose and function of the initial
sales loads (and deferred sales load, when applicable) with respect to Class A
shares is the same as those of the deferred sales loads and higher distribution
fees with respect to Class B and Class D shares in that the sales loads and
distribution fees applicable to a Class provide for the financing of the
distribution of the shares of the Fund.
Class B and Class D shares are subject to the same ongoing distribution fees
but Class D shares are subject
4
<PAGE>
to a CDSL for a shorter period of time (one year as opposed to six years) than
Class B shares. However, unlike Class D shares, Class B shares automatically
convert to Class A shares after eight years, which are subject to lower ongoing
distribution fees.
The three classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and, potentially, certain
other class expenses and has exclusive voting rights with respect to any matter
to which a separate vote of any class is required by the Investment Company Act
of 1940, as amended (the "1940 Act"), or Maryland law. The net income
attributable to each class and dividends payable on the shares of each class
will be reduced by the amount of distribution and other expenses to be paid by
each class. Class B and Class D shares bear higher distribution fees, which will
cause Class B and Class D shares to pay lower dividends than the Class A shares.
The three classes also have separate exchange privileges.
The Directors of the Corporation believe that no conflict of interest
currently exists between the Class A, Class B and Class D shares of the Fund. On
an ongoing basis, the Directors, in the exercise of their fiduciary duties
pursuant to the 1940 Act and Maryland law, will seek to ensure that no such
conflict arises. For this purpose, the Directors will monitor the Fund for the
existence of any material conflict among the classes and will take such action
as is reasonably necessary to eliminate any such conflicts that may develop.
DIFFERENCES BETWEEN CLASSES. The primary differences between Class A, Class B
and Class D shares are their sales load structures and ongoing expenses as set
forth below. The primary differences between Class B and Class D shares are that
Class D shares are subject to a shorter CDSL period and a lower CDSL rate but
Class B shares automatically convert to Class A shares after eight years,
resulting in a reduction in ongoing fees. Investors in Class B shares should
take into account whether they intend to redeem their shares within the CDSL
period and, if not, whether they intend to remain invested until the end of the
conversion period and thereby take advantage of the reduction in ongoing fees
resulting from the conversion to Class A shares. Other investors, however, may
elect to purchase Class D shares if they determine that it is advantageous to
have all their assets invested initially and they are uncertain as to the length
of time they intend to hold their assets in the Fund or another mutual fund in
the Seligman Group for which the exchange privilege is available. Although Class
D shareholders are subject to a shorter CDSL period at a lower rate, they forgo
the Class B automatic conversion feature, making their investment subject to
higher distribution fees for an indefinite period of time. Each class has
advantages and disadvantages for different investors, and investors should
choose the class that best suits their circumstances and their objectives.
<TABLE>
<CAPTION>
Annual 12b-1 Fees
Initial (as a % of average
Sales Load daily net assets) Other Information
--------- -------------- ---------------
<S> <C> <C> <C>
Class A Maximum initial Service fee of up to Initial sales load
sales load of 4.75% 25%. waived or reduced for
of the public certain purchases. CDSL
offering price. of 1% on redemptions
within 18 months of purchase
on shares on which initial sales load was waived
in full due to the size of the purchase.
Class B None Service fee of up to CDSL of:
.25%; Distribution 5% in 1st year
fee of .75% 4% in 2nd year
until Conversion.* 3% in 3rd and
4th years 2% in 5th year 1% in 6th year
0% after 6th year.
Class D None Service fee of up to CDSL of 1% on
.25%; Distribution redemptions within
fee of up to .75%. one year of
purchase.
</TABLE>
* Conversion occurs at the end of the month which precedes the 8th anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to
the Class B shares acquired in the exchange will apply, and the holding period
of the shares exchanged will be tacked onto the holding period of the shares
acquired.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund is a series of Seligman Henderson Global Fund Series, Inc., an
open-end investment company incorporated under the laws of the state of Maryland
on November 22, 1991.
5
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The investment objective of the Fund is long-term capital appreciation. The
Fund seeks to achieve its objective by investing at least 65% of its assets in
equity securities of companies in emerging markets. The investment objective is
a fundamental policy and may not be changed without shareholder approval. There
can be no assurance that the Fund's investment objective will be achieved.
The Fund seeks to benefit from policies of economic development that are
being adopted by many developing or emerging countries. These policies include
domestic price reform, reducing internal budget deficits, privatizations,
encouraging foreign investments and developing capital markets. Countries
adopting such policies have normally experienced an acceleration of economic
growth that, in many cases, has resulted in higher returns in the longer term
than those of more developed countries. Examples of countries successfully
adopting policies of economic development include South Korea, Taiwan, Malaysia,
Thailand, Chile, Poland and Argentina. Examples of countries in the course of
adopting policies of economic development include China, India, Russia and
Brazil.
An emerging market is a market in any country that the International Bank for
Reconstruction and Development (the "World Bank") generally considers to be an
emerging country. There are currently more than 150 countries which are
considered to be emerging countries, approximately 60 of which currently have
stock markets. These countries generally include every nation in the world
except the United States, Canada, Japan, Australia, New Zealand and most nations
located in Western Europe such as Austria, Belgium, Denmark, Finland, France,
Germany, Great Britain, Ireland, Italy, the Netherlands, Norway, Spain, Sweden
and Switzerland.
Currently, investing in many emerging markets is not feasible or may involve
unacceptable risks. The Fund will focus its investments on those emerging
countries in which it believes the economies are developing strongly and in
which markets are becoming more sophisticated. The Fund intends to invest
primarily in markets in some or all of the following emerging countries:
Argentina, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Ghana,
Greece, Hungary, India, Indonesia, Jordan, Kenya, Malaysia, Mexico, Morocco,
Namibia, Nigeria, Pakistan, Peru, the Philippines, Poland, Portugal, Russia,
Slovakia, South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Turkey,
Uruguay, Venezuela and Zimbabwe. As more markets develop, the Fund expects to
expand and further diversify its investments.
A company in an emerging market is defined as a company: (i) the principal
securities trading market for the equity securities of which is an emerging
market; (ii) that (alone or on a consolidated basis) derives 50% or more of its
total revenue from either goods produced, sales made or services performed in
emerging countries; or (iii) organized under the laws of, and with a principal
office in, an emerging country.
The Subadviser will implement a top down method in selecting investments on
behalf of the Fund, i.e., first identifying geographic regions and individual
countries and then identifying specific securities within these areas. For
allocating investments among geographic regions and individual countries, the
Subadviser will consider for each country such factors as current and forecast
economic growth; valuation, size and potential of securities markets; expected
levels of inflation; the balance of payments and external reserves; the outlook
for the currency and interest rates; and financial, social and political
conditions influencing investment opportunities. The Subadviser will select
securities for inclusion in the Fund's portfolio based on, among other factors,
evaluation of a company's growth prospects, quality of management, liquidity and
the relative valuation of the securities in the markets that the Subadviser has
selected for investment.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the U.S. dollar. The Fund will normally
invest its assets in equity securities, including common stock, preferred stock,
warrants or rights to subscribe to or purchase such securities, securities
convertible into or exchangeable for such securities, equity interests in
trusts, partnerships and other investment companies, and sponsored or
unsponsored American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs") and Global Depositary Receipts ("GDRs"). Under normal conditions, the
Fund will maintain investments in at least three emerging countries. Equity
securities in which the Fund will
6
<PAGE>
invest may be listed on a U.S. or foreign stock exchange or traded in U.S. or
foreign over-the-counter markets.
For capital appreciation, the Fund may invest up to 5% of its assets in
governmental and corporate debt securities that, at the time of purchase, are
rated Baa or lower by Moody's Investors Services, Inc. ("Moody's") or BBB or
lower by Standard & Poor's Corporation ("S&P"), or if unrated, deemed to be of
comparable quality by the Subadviser. The Fund will not invest in debt
securities rated lower than C by Moody's or C by S&P, or in the case of unrated
securities, debt securities that are, in the opinion of the Subadviser, of
equivalent quality. Securities rated Baa/BBB or lower lack high quality
investment characteristics and may also have speculative characteristics.
(Appendix A to the Statement of Additional Information contains a description of
these securities ratings.) Debt securities are interest-rate sensitive;
accordingly, their value tends to decrease when interest rates rise and increase
when interest rates fall.
As noted above, the Fund may invest in securities represented by ADRs, EDRs,
and GDRs (collectively, "Depositary Receipts"). ADRs are receipts generally
issued by a domestic bank or trust company that represent the deposit of a
security of a foreign issuer. ADRs may be publicly traded on exchanges or
over-the-counter in the United States and are quoted and settled in dollars at a
price that generally reflects the dollar equivalent of the home country share
price. EDRs and GDRs are receipts similar to ADRs and are typically issued by
foreign banks or trust companies and traded in Europe. Depositary Receipts may
be issued pursuant to sponsored or unsponsored programs. In sponsored programs,
the issuer has made arrangements to have its securities traded in the form of a
Depositary Receipt. In unsponsored programs, the 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 Depositary Receipts are not obligated to disclose material
information in the United States and, therefore, the import of such information
may not be reflected in the market value of such securities. For purposes of the
Fund's investment policies, the Fund's investments in Depositary Receipts will
be deemed to be investments in the underlying securities.
By investing in foreign securities, the Fund 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 United States.
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 events in
any one country will have on the Fund's entire investment portfolio. Of course,
a decline in the value of the Fund's investments in one country may offset
potential gains from investments in another country.
RISK FACTORS. Investing in emerging markets entails a substantial degree of
risk and, as such, an investment in the Fund should be considered speculative
and not appropriate for individuals who require safety of principal or stable
income from their investments. Additionally, an investment in the Fund should
not be considered to be a complete investment program.
Investments in securities of companies in emerging or developing countries
may involve risks that are not associated with domestic investments, and there
can be no assurance that the Fund's foreign investments will present less risk
than a portfolio of domestic securities. For example, companies in emerging
markets may generally be smaller, less seasoned and more recently organized than
many domestic companies. Foreign issuers may lack uniform accounting, auditing
and financial reporting standards, practices and requirements, and there is
generally less publicly available information about foreign issuers than there
is about U.S. issuers. Governmental regulation and supervision of foreign stock
exchanges, brokers and listed companies
7
<PAGE>
may be less pervasive than is customary in the United States. Prices of
securities traded in the securities markets of emerging or developing countries
tend to be volatile. Foreign securities settlements may in some instances be
subject to delays and related administrative uncertainties which could result in
temporary periods when assets of the Fund are uninvested and no return is earned
thereon and may involve a risk of loss to the Fund. Foreign securities markets
may have substantially less volume, and far fewer traded issues, than U.S.
markets. Fixed brokerage commissions and transaction costs on foreign securities
exchanges are generally higher than in the United States. 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 the Fund could lose its entire
investment in a certain market), limitations on the removal of moneys or other
assets of the Fund, high 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.
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.
Investments in foreign securities will usually be made in foreign currencies,
and the Fund may temporarily hold foreign currencies. The value of Fund
investments that are traded 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. The
Fund may incur costs in connection with conversions between various currencies.
The Funds'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 Fund. 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) and, in some cases, exchange controls. Currency hedging
techniques may be unavailable in certain emerging countries and the Fund will
engage in only limited hedging activities in any event. Furthermore, foreign
investors are subject to many restrictions in markets of 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
type of companies in which foreigners may invest.
The Fund may invest in sovereign debt. The actions of governments concerning
their respective economies could have an important effect on their ability or
willingness to service their sovereign debt. Such actions could have significant
effects on market conditions and on the prices of securities and instruments
held by the Fund, including the securities and instruments of foreign private
issuers. Factors which may influence the ability or willingness of foreign
sovereigns to service debt include, but are not limited to, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
its debt service burden to the economy as a whole, its balance of payments
(including export performance) and cash flow situation, its access to
international credits and investments, fluctuations in interest and currency
rates and reserves, and its government's policies towards the International
Monetary Fund, the World Bank and other international agencies. If a foreign
sovereign defaults on all or a portion of its foreign debt, the Fund may have
8
<PAGE>
limited legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign sovereign debt securities to obtain recourse
will be subject to the political climate in the prevailing country.
DERIVATIVES. The Fund may invest in financial instruments commonly known as
"derivatives" only for hedging or investment purposes. The Fund will not invest
in derivatives for speculative purposes, i.e., where the derivative investment
exposes the Fund 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. The Fund 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 Fund's investment objective, and the risk
associated with the investment. The only types of derivatives in which the Fund
is currently permitted to invest are stock purchase rights and warrants, and, as
described more fully below, forward currency exchange contracts and put options.
The Fund may not invest in rights and warrants, if, at the time of
acquisition, the investment in rights and warrants would exceed 5% of the Fund's
net assets (valued at the lower of cost or market). In addition, no more than 2%
of net assets may be invested in warrants not listed on the New York or American
Stock Exchanges. For purposes of this restriction, 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, the Fund may enter into forward currency exchange contracts
(agreements to purchase or sell foreign currencies at a future date). The Fund
will usually enter into these contracts to fix the U.S. dollar value of a
security 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. The
Fund may also use these contracts to hedge the U.S. dollar value of securities
it already owns.
Although the Fund will seek to benefit by using forward contracts,
anticipated currency movements may not be accurately predicted and the Fund may
therefore incur a gain or loss on a forward contract. A forward contract may
help reduce the Fund's 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. The Fund may purchase put options on portfolio
securities in an attempt to hedge against a decrease in the price of a security
held by the Fund. The Fund will not purchase options for speculative purposes.
Purchasing a put option gives the Fund the right to sell, and obligates the
writer to buy, the underlying security at the exercise price at any time during
the option period.
When the Fund purchases an option, it is required to pay a premium to the
party writing the option and a commission to the broker selling the option. If
the option is exercised by the Fund, the premium and the commission paid may be
greater than the amount of the brokerage commission charged if the security were
to be purchased or sold directly. See "Investment Objective, Policies and Risks"
in the Statement of Additional Information.
BORROWING. The Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes and may invest the funds in
additional securities. Such borrowing will not exceed 10% of the Fund's total
assets and will be made at prevailing interest rates.
Investment gains realized with additional funds borrowed will generally cause
the net asset value of the Fund's shares to rise faster than could be the case
without borrowings. Conversely, if investment results fail to cover the cost of
borrowings, the net asset value of the Fund's shares could decrease faster than
if there had been no borrowings. Borrowing, when used in this manner, is a
speculative practice known as "leveraging."
9
<PAGE>
LENDING OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities
to brokers, dealers and other institutional investors in an amount not to exceed
331/3% of the Fund's total assets taken at market value, for which it will
receive collateral in cash or securities issued or guaranteed by the U.S.
Government to be maintained in an amount equal to at least 100% of the current
market value of the loaned securities. 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.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
commercial banks or broker/dealers under which the Fund acquires a U.S.
Government or a short-term money market instrument subject to resale at a
mutually agreed-upon price and time. The resale price reflects an agreed upon
interest rate effective for the period the Fund holds the instrument that is
unrelated to the interest rate on the instrument.
The Fund's repurchase agreements will at all times be fully collateralized,
and the Fund will make payment for such securities only upon physical delivery
or evidence of book entry transfer to the account of its custodian. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default of the seller, including possible delays and expenses in liquidating the
underlying security, decline in the value of the underlying security and loss of
interest.
OTHER INVESTMENT COMPANIES. Certain emerging markets have restrictions that
preclude or limit direct foreign investment in the securities of their
companies. However, indirect foreign investment is permitted in certain emerging
markets through governmentally authorized investment vehicles or companies
including closed-end investment companies which may be acquired at prices in
excess of their net asset values. In accordance with the 1940 Act, the Fund may
invest up to 10% of its assets in shares of other investment companies. If the
Fund invests in other investment companies, shareholders would bear not only
their proportionate share of Fund expenses (including operating expenses and
advisory fees), but also similar expenses of the underlying investment
companies.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933 (the
"1933 Act")) and other securities that are not readily marketable, such as
repurchase agreements of more than one week's duration. The Fund may purchase
restricted securities that may be offered and sold only to "qualified
institutional buyers" under Rule 144A of the 1933 Act, and the Manager, acting
pursuant to procedures approved by the Corporation's Board of Directors, may
determine, when appropriate, that specific Rule 144A securities are liquid and
not subject to the 15% limitation on illiquid securities. Should this
determination be made, the Manager, acting pursuant to such procedures, will
carefully monitor the security (focusing on such factors, among others, as
trading activity and availability of information) to determine that the Rule
144A security continues to be liquid. It is not possible to predict with
assurance exactly how the market for Rule 144A securities will further evolve.
This investment practice could have the effect of increasing the level of
illiquidity in the Fund to the extent that qualified institutional buyers become
for a time uninterested in purchasing Rule 144A securities.
SHORT SALES. The Fund may sell securities short "against-the-box." A short
sale "against-the-box" is a short sale in which the Fund 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.
TEMPORARY INVESTMENTS. When the Subadviser believes that market conditions
warrant a temporary defensive position, the Fund 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
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.
The Fund's
10
<PAGE>
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 Appendix A to the Statement of Additional
Information. The Fund'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.
Except as noted above, the foregoing investment policies are not fundamental
and the Board of Directors of the Corporation may change such policies without
the vote of a majority of the Fund's outstanding voting securities. A more
detailed description of the Fund's investment policies, including a list of
those restrictions on the Fund's investment activities which cannot be changed
without such a vote, appears in the Statement of Additional Information. Under
the 1940 Act, a "vote of a majority of the outstanding voting securities" of the
Fund means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund or (2) 67% or more of the shares present at a
shareholders' meeting if more than 50% of the outstanding shares are represented
at the meeting in person or by proxy.
MANAGEMENT SERVICES
THE MANAGER. The Board of Directors provides broad supervision over the
affairs of the Fund. Pursuant to a Management Agreement between J. & W. Seligman
& Co. Incorporated and Seligman Henderson Global Fund Series, Inc., on behalf of
the Fund and the Corporation's other series, the Manager administers the
business and other affairs of the Fund. The address of the Manager is 100 Park
Avenue, New York, NY 10017.
The Manager also serves as manager of sixteen other investment companies
which, together with the Corporation, comprise the "Seligman Group." These
companies 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 High
Income Fund Series, Seligman Income Fund, Inc., Seligman New Jersey Municipal
Fund, Inc., Seligman Pennsylvania Municipal Fund Series, Seligman Portfolios,
Inc., Seligman Quality Municipal Fund, Inc., Seligman Select Municipal Fund,
Inc., Seligman Municipal Fund Series, Inc., Seligman Municipal Series Trust and
Tri-Continental Corporation. 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 individual and institutional accounts having
a September 30, 1996 value of approximately $3.6 billion.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Corporation. Mr. Morris owns a
majority of the outstanding voting securities of the Manager.
The Manager provides senior management for Seligman Data Corp., a
wholly-owned subsidiary of certain investment companies in the Seligman Group,
which performs, at cost, certain recordkeeping functions for the Fund, maintains
the records of shareholder accounts and furnishes dividend paying, redemption
and related services.
The Manager is entitled to receive a management fee, calculated daily and
payable monthly, equal to an annual rate of 1.25% of the average daily net
assets of the Fund, of which 1.15% is paid to the Subadviser for services
described below. The management fee is higher than that of most domestic
investment companies but is comparable to that of most international and global
equity funds.
Annualized expense ratios for the period May 28, 1996 (commencement of
operations) to September 30, 1996 amount to 2.22%, 3.00% and 3.00% for Classes
A, B and D, respectively.
The Fund pays all of its expenses other than those assumed by the Manager or
the Subadviser, including fees for necessary professional and brokerage
services, costs of regulatory compliance, costs associated with maintaining
corporate existence, custody and shareholder service, shareholder relations and
insurance costs.
THE SUBADVISER. Seligman Henderson Co. serves as Subadviser to the Fund
pursuant to a Subadvisory Agreement between the Manager and the Subadviser (the
"Subadvisory Agreement"). The Subadvisory Agreement provides that the Subadviser
will supervise and direct the Fund's global investments in accordance
11
<PAGE>
with the Fund's investment objective, policies and restrictions. The Subadviser
was founded in 1991 as a joint venture between the Manager and Henderson
International, Inc., a controlled affiliate of Henderson Administration Group
plc. The Subadviser was created to provide international and global investment
management services to institutional and individual investors and investment
companies in the United States. The Subadviser also serves as Subadviser to
Seligman Henderson Global Growth Opportunities Fund, Seligman Henderson
International Fund, Seligman Henderson Global Smaller Companies Fund, and
Seligman Henderson Global Technology Fund, the other series of Seligman
Henderson Global Fund Series, Inc., Seligman Capital Fund, Inc., Seligman Common
Stock Fund, Inc., Seligman Communications and Information Fund, Inc., Seligman
Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman Income Fund, Inc., the
International, Global Growth Opportunities, Global Smaller Companies and Global
Technology Portfolios of Seligman Portfolios, Inc. and Tri-Continental
Corporation. The address of the Subadviser is 100 Park Avenue, New York, NY
10017.
PORTFOLIO MANAGERS. Mr. Peter Bassett has responsibility for directing and
overseeing the investments of the Fund.
Mr. Bassett has been head of Emerging Market Investments and Divisional
Director, Henderson Investment Management, Henderson Administration Group plc,
since 1993. He was previously Deputy Head of Far East Desk and Director, Touche
Remnant Investment Management.
The Manager's discussion of Fund performance as well as a line graph
illustrating comparative performance information between the Fund and
appropriate broad-based indices will be included in the Fund's next Annual
Report to shareholders.
PORTFOLIO TRANSACTIONS. The Management Agreement and Subadvisory Agreement
each recognize that in the purchase and sale of portfolio securities for the
Fund, the Manager and the Subadviser will seek the most favorable price and
execution, and, consistent with that policy, may give consideration to the
research, statistical and other services furnished by brokers or dealers to the
Manager and the Subadviser. The use of brokers who provide investment and market
research and securities and economic analysis may result in a higher brokerage
charges to the Fund than the use of brokers selected on the basis of the most
favorable brokerage commission rates, and research and analysis received may be
useful to the Manager or the Subadviser in connection with its services to other
clients as well as to the Fund. In over-the-counter markets, orders are placed
with primary market makers unless a more favorable execution or price is
believed to be obtainable.
Consistent with the Rules of the National Association of Securities Dealers,
Inc., and subject to seeking the most favorable price and execution available
and such other policies as the Directors of the Corporation may determine, the
Manager and Subadviser may consider sales of shares of the Fund and, if
permitted by applicable laws, may consider sales of shares of the other mutual
funds in the Seligman Group as a factor in the selection of brokers or dealers
to execute portfolio transactions for the Fund.
PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" which may result in the payment by the Fund of dealer
spreads or underwriting commissions and other transactions costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
These costs may be higher for the types of securities in which the Fund shall
invest. Although it is the policy of the Fund to hold securities for investment,
changes in the securities held by the Fund will be made from time to time when
the Subadviser believes such changes will strengthen the Fund's portfolio. The
portfolio turnover of the Fund is not expected to exceed 100%.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager,
acts as general distributor of the Fund's shares. Its address is 100 Park
Avenue, New York, NY 10017.
The Fund issues three classes of shares: Class A shares are sold to
investors choosing the initial sales load alternative; Class B shares are sold
to investors choosing to pay no initial sales load, a higher distribution fee
and a CDSL with respect to redemptions within six years of purchase and who
desire shares to convert automatically to Class A shares after eight years; and
Class D shares are sold to investors choosing no initial sales load, a higher
distribution fee and a CDSL on re-
12
<PAGE>
demptions within one year of purchase. See "Alternative Distribution System"
above.
Shares of the Fund may be purchased through any authorized investment dealer.
All orders will be executed at the net asset value per share next computed after
receipt of the purchase order plus, in the case of Class A shares, a sales load
which, except for shares purchased under one of the reduced sales load plans,
will vary with the size of the purchase as shown in the schedule under "Class A
Shares -- Initial Sales Load" below.
THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE FUND IS $1,000; SUBSEQUENT
INVESTMENTS MUST BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR INVESTMENT OF
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE RIGHT TO RETURN
INVESTMENTS THAT DO NOT SATISFY THESE MINIMUMS. EXCEPTIONS TO THESE MINIMUMS ARE
AVAILABLE FOR ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK(R)
SERVICE OR THE SELIGMAN TIME HORIZON MATRIXSM.
No purchase order may be placed for Class B shares for an amount of $250,000
or more.
Orders received by an authorized dealer before the close of the New York
Stock Exchange ("NYSE") (normally, 4:00 p.m. Eastern time) and accepted by SFSI
before the close of business (5:00 p.m. Eastern time) on the same day will be
executed at the Fund's net asset value determined as of the close of the NYSE on
that day plus, in the case of Class A shares, any applicable sales load. Orders
accepted by dealers after the close of the NYSE, or received by SFSI after the
close of business, will be executed at the Fund's net asset value as next
determined plus, in the case of Class A shares, any applicable sales load. The
authorized dealer through which a shareholder purchases shares is responsible
for forwarding the order to SFSI promptly.
Payment for dealer purchases may be made by check or by wire. To wire
payments, dealer orders must first be placed through SFSI's order desk and
assigned a purchase confirmation number. Funds in payment of the purchase may
then be wired to Mellon Bank, N.A., ABA #043000261, A/C Seligman Henderson
Emerging Markets Growth Fund (A, B or D), A/C #107-1011. WIRE TRANSFERS MUST
INCLUDE THE PURCHASE CONFIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND
ACCOUNT NUMBER. Persons other than dealers who wish to wire payment should
contact Seligman Data Corp. for specific wire instructions. Although the Fund
makes no charge for this service, the transmitting bank may impose a wire
service fee.
Current shareholders may purchase additional shares of the Fund at any time
through any authorized dealer or by sending a check payable to "Seligman Group
of Funds," directly to P.O. Box 3936, New York, NY 10008-3936. Checks for
investment must be in U.S. dollars drawn on a domestic bank. The check should be
accompanied by an investment slip (provided on the bottom of shareholder account
statements or with periodic reports) and include the shareholder's name,
address, account number and class of shares (A, B or D). If a shareholder does
not provide the required information, Seligman Data Corp. will seek further
clarification and may be forced to return the check to the shareholder. Orders
sent directly to Seligman Data Corp. will be executed at the Fund's net asset
value next determined after the order is accepted plus, in the case of Class A
shares, any applicable sales load.
Seligman Data Corp. may charge a $10.00 service fee for checks returned to it
as uncollectable. This fee may be deducted from the shareholder's account. For
the protection of the Fund and its shareholders, no redemption proceeds will be
remitted to a shareholder with respect to shares purchased by check (unless
certified) until Seligman Data Corp. receives notice that the check has cleared,
which may be up to 15 days from the credit of the shares to the shareholder's
account.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Friday, as of the close of trading on the NYSE (normally, 4:00
p.m. Eastern time) on each day that the NYSE is open for business. Net asset
value is calculated separately for each class. Securities traded on a U.S. or
foreign exchange or over-the-counter market are valued at the last sales price
on the primary exchange or market on which they are traded. United Kingdom
securities and securities for which there are no recent sales transactions are
valued based on quotations provided by primary market makers in such securities.
Any securities for which recent market quotations are not readily avail-
13
<PAGE>
able are valued at fair value determined in accordance with procedures approved
by the Corporation's Board of Directors. Short-term holdings maturing in 60 days
or less are generally valued at amortized cost if their original maturity was 60
days or less. Short-term holdings with more than 60 days remaining to maturity
will be valued at current market value until the 61st day prior to maturity, and
will then be valued on an amortized cost basis based on the value of such date
unless the Board determines that this amortized cost value does not represent
fair market value.
Although the legal rights of Class A, Class B and Class D shares are
substantially identical, the different expenses borne by each class will result
in different net asset values and dividends. The net asset value of Class B and
Class D shares will generally be lower than the net asset value of Class A
shares as a result of the higher distribution fees charged to Class B and Class
D shares. In addition, net asset value per share of the three classes will be
affected to the extent any other expenses differ among classes.
CLASS A SHARES--INITIAL SALES LOAD. Class A shares are subject to an initial
sales load which varies with the size of the purchase as shown in the following
schedule, and an annual service fee of up to .25% of the average daily net asset
value of Class A shares. See "Administration, Shareholder Services and
Distribution Plan" below. There is no initial sales load on purchases of Class A
shares of $1,000,000 or more ("NAV sales"); however, such shares are subject to
a CDSL of 1% if redeemed within 18 months of purchase.
Class A Shares--Sales Load Schedule
Sales Load as a Regular
Percentage of Dealer
----------------------
Net Amount Discount
Invested as a % of
Offering (Net Asset Offering
Amount of Purchase Price Value) Price
------------------------ -------- ------------ -------
Less than $ 50,000 4.75% 4.99% 4.25%
$ 50,000- 99,999 4.00 4.17 3.50
100,000- 249,999 3.50 3.63 3.00
250,000- 499,999 2.50 2.56 2.25
500,000- 999,999 2.00 2.04 1.75
1,000,000- or more* 0 0 0
* Shares acquired at net asset value pursuant to the above schedule will be
subject to a CDSL of 1% if redeemed within 18 months of purchase. See
"Purchase of Shares--Contingent Deferred Sales Load."
SFSI shall pay broker/dealers, from its own resources, a fee on NAV sales,
calculated as follows; 1.00% of NAV sales up to but not including $2 million;
.80% of NAV sales from $2 million up to but not including $3 million; .50% of
NAV sales from $3 million up to but not including $5 million; and .25% of NAV
sales from $5 million and above. The calculation of the fee will be based on
assets held by a "single person" as defined below.
SFSI shall pay broker/dealers, from its own resources, an additional fee on
assets of certain Class A shares of the Seligman Mutual Funds participating in
an "eligible employee benefit plan" (as defined below under "Special Programs")
that are attributable to the particular broker/dealer. The shares eligible for
the fee are those on which an initial sales load was not paid because either the
participating eligible employee benefit plan has at least (i) $500,000 invested
in the Seligman Mutual Funds or (ii) 50 eligible employees to whom such plan is
made available. Class A shares representing only an initial purchase of Seligman
Cash Management Fund are not eligible for the fee. Such shares will become
eligible for the fee once they are exchanged for shares of another Seligman
Mutual Fund. The payment is based on cumulative net asset value sales during a
single calendar year, or portion thereof. The payment schedule, for each
calendar year, is as follows: 1.00% of sales up to but not including $2 million;
.80% of sales from $2 million up to but not including $3 million; .50% of sales
from $3 million up to but not including $5 million; and .25% of sales from $5
million and above.
REDUCED SALES LOADS. Reductions in sales loads apply to purchases of Class A
shares by a "single person," including an individual, members of a family unit
comprising husband, wife and minor children purchasing securities for their own
account, or a trustee or other fiduciary purchasing for a single fiduciary
account or single trust. Purchases made by a trustee or other fiduciary for a
fiduciary account may not be aggegated with purchases made on behalf of any
other fiduciary or individual account.
Shares purchased without an initial sales load in accordance with the sales
load schedule or pursuant to a Volume Discount, Right of Accumulation or Letter
of Intent are subject to a CDSL of 1% on redemptions within 18 months of
purchase.
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<PAGE>
O VOLUME DISCOUNTS are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the Seligman Mutual
Funds that are sold with an initial sales load, reaches levels indicated in the
above sales load schedule.
O THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in shares of the other Seligman Mutual Funds sold with an initial sales
load with the total net asset value of shares of those Seligman Mutual Funds
already owned that were sold with an initial sales load and the total net asset
value of shares of Seligman Cash Management Fund that were acquired by the
investor through an exchange of shares of another Seligman Mutual Fund on which
there was an initial sales load to determine reduced sales loads in accordance
with the sales load schedule. An investor or a dealer purchasing shares on
behalf of an investor must indicate whether the investor has existing accounts
when making investments or opening new accounts.
O A LETTER OF INTENT allows an investor to purchase Class A shares over a
13-month period at reduced initial sales loads, based upon the total amount of
shares the investor intends to purchase plus the total net asset value of shares
of the other Seligman Mutual Funds already owned that were sold with an initial
sales load and the total net asset value of shares of Seligman Cash Management
Fund that were acquired through an exchange of shares of another Seligman Mutual
Fund on which there was an initial sales load. An investor or a dealer
purchasing shares on behalf of an investor must indicate whether the investor
has existing accounts when making investments or opening new accounts. For more
information concerning terms of Letters of Intent, see "Terms and Conditions" on
page 29.
SPECIAL PROGRAMS. The Fund may sell Class A shares at net asset value to
present and retired directors, trustees, officers, employees and their spouses
(and family members of the foregoing) of the Fund, the other investment
companies in the Seligman Group, the Manager and other companies affiliated with
the Manager. Family members are defined to include lineal descendants and lineal
ancestors, siblings (and their spouses and children) and any company or
organization controlled by any of the forgoing. Such sales also may be made to
employee benefit and thrift plans for such persons and to any investment
advisory, custodial, trust or other fiduciary account managed or advised by the
Manager or any affiliate.
Class A shares also may be issued without an initial sales load in connection
with the acquisition of cash and securities owned by other investment companies
and personal holding companies; to any registered unit investment trust which is
the issuer of periodic payment plan certificates, the net proceeds of which are
invested in Fund shares; to separate accounts established and maintained by an
insurance company which are exempt from registration under Section 3(c)(11) of
the 1940 Act; to registered representatives and employees (and their spouses and
minor children) of any dealer that has a sales agreement with SFSI; to
shareholders of mutual funds with objectives and policies similar to the Fund
who purchase shares with redemption proceeds of such funds; to financial
institution trust departments; to registered investment advisers exercising
discretionary investment authority with respect to the purchase of Fund shares;
to accounts of financial institutions or broker/dealers that charge account
management fees, provided the Manager or one of its affiliates has entered into
an agreement with respect to such accounts; pursuant to sponsored arrangements
with organizations which make recommendations to or permit group solicitations
of, its employees, members or participants in connection with the purchase of
shares of the Fund; to other investment companies in the Seligman Group; and to
"eligible employee benefit plans" which have at least (i) $500,000 invested in
the Seligman Group of Mutual Funds or (ii) 50 eligible employees to whom such
plan is made available. "Eligible employee benefit plan" means any plan or
arrangement, whether or not tax qualified, which provides for the purchase of
Fund shares. Sales of shares to such plans must be made in connection with a
payroll deduction system of plan funding or other system acceptable to Seligman
Data Corp.
Section 403(b) plans sponsored by public educational institutions are not
eligible for net asset value purchases based on the aggregate investment made by
the plan or number of eligible employees. Employee benefit plans eligible for
net asset value sales, as described above, will be subject to a CDSL of 1% for
terminations at the
15
<PAGE>
plan level only, within 18 months of such sales. Sales pursuant to the Merrill
Lynch MLII multi-manager 401(k) product are available at net asset value and are
not subject to a CDSL.
CLASS B SHARES. Class B shares are sold without an initial sales load but are
subject to a CDSL if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original price, whichever is less.
Years since purchase CDSL
- ----------------- ----
less than 1 year 5%
1 year or more but less than 2 years 4%
2 years or more but less than 3 years 3%
3 years or more but less than 4 years 3%
4 years or more but less than 5 years 2%
5 years or more but less than 6 years 1%
6 years or more 0%
Class B shares are also subject to an annual distribution fee of .75% and an
annual service fee of up to .25% of the average daily net asset value of the
Class B shares. SFSI will make a 4% payment to dealers in respect of purchases
of Class B shares. Approximately eight years after purchase, Class B shares will
convert automatically to Class A shares, which are subject to an annual service
fee of .25% but no distribution fee. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert automatically to
Class A shares along with the underlying shares on which they were earned.
Conversion occurs at the end of the month which precedes the eighth anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to the
Class B shares acquired in the exchange will apply, and the holding period of
the shares exchanged will be tacked onto the holding period of the shares
acquired. Class B shareholders of the Fund exercising the exchange privilege
will continue to be subject to the Fund's CDSL schedule if such schedule is
higher or longer than the CDSL schedule relating to the new Class B shares. In
addition, Class B shares of the Fund acquired by exchange will be subject to the
Fund's CDSL schedule if such schedule is higher or longer than the CDSL schedule
relating to the Class B shares of the fund from which the exchange has been
made.
CLASS D SHARES. Class D shares are sold without an initial sales load but are
subject to a CDSL if the shares are redeemed within one year, an annual
distribution fee of up to .75% and an annual service fee of up to .25%, of the
average daily net asset value of the Class D shares. SFSI will make a 1% payment
to dealers in respect of purchases of Class D shares. Unlike Class B shares,
Class D shares do not automatically convert to Class A shares after eight years.
CONTINGENT DEFERRED SALES LOAD. A CDSL will be imposed on any redemption of
Class B or Class D shares which were purchased during the preceding six years
(for Class B shares) or twelve months (for Class D shares). The amount of any
CDSL will initially be used by SFSI to defray the expense of the payment of 4%
(in the case of Class B shares) or 1% (in the case of Class D shares) made by it
to Service Organizations (as defined under "Administration, Shareholder Services
and Distribution Plan") at the time of sale. Pursuant to an agreement with FEP
Capital, L.P. ("FEP") to fund payments in respect of Class B shares, SFSI has
agreed to sell any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on any redemption of Class A shares
purchased during the preceding eighteen months if such shares were acquired at
net asset value pursuant to the sales load schedule provided under "Class A
Shares--Initial Sales Load." Employee benefit plans eligible for net asset sales
as described above under "Special Programs" may be subject to a CDSL of 1% for
terminations at the plan level only, on redemptions of shares purchased within
eighteen months prior to plan termination. No CDSL will be imposed on shares
acquired through the investment of dividends or distributions from any Class A,
Class B or Class D shares of mutual funds in the Seligman Group.
To minimize the application of a CDSL to a redemption, shares acquired
pursuant to the investment of dividends and distributions (which are not subject
to a CDSL) will be redeemed first; followed by shares held for a period of time
longer than the applicable CDSL period.
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<PAGE>
Shares held for the longest period of time within the applicable period will
then be redeemed. Additionally, for those shares determined to be subject to a
CDSL, the CDSL will be assessed on the current net asset value or original
purchase price, whichever is less.
For example, assume an investor purchased 100 Class D shares in January at a
price of $10.00 per share. During the first year, 5 additional Class D shares
were acquired through investment of dividends and distributions. In January of
the following year, an additional 50 Class D shares were purchased at a price of
$12.00 per share. In March of that year, the investor chooses to redeem
$1,500.00 from the account which now holds 155 shares with a total value of
$1,898.75 ($12.25 per share). The CDSL for this transaction would be calculated
as follows:
Total shares to be redeemed
(122.449 @ $12.25) as follows:................. $1,500.00
===========
Dividend/Distribution shares (5 @ $12.25)........ $ 61.25
Shares held more than 1 year
(100 @ $12.25)................................. 1,225.00
Shares less than 1 year old subject to
CDSL (17.449 @ $12.25)......................... 213.75
-----------
Gross proceeds of redemption..................... $1,500.00
Less CDSL (17.449 shares @ $12.00 =
$209.39 x 1% = $2.09).......................... (2.09)
-----------
Net proceeds of redemption....................... $1,497.91
===========
For federal income tax purposes, the amount of the CDSL will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.
The CDSL will be waived or reduced in the following instances:
(a) on redemption following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended
(the "Code"); (b) in connection with (i) distributions from retirement plans
qualified under section 401(a) of the Code when such redemptions are necessary
to make distributions to plan participants (such payments include, but are not
limited to death, disability, retirement, or separation of service), (ii)
distributions from a custodial account under section 403(b)(7) of the Code or an
individual retirement account (an "IRA") due to death, disability, or attainment
of age 59 1/2, and (iii) a tax-free return of an excess contribution to an IRA;
(c) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund; (d) in whole or in part, in connection with shares sold
to any state, county, or city or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable investment laws from paying a
sales load or commission in connection with the purchase of shares of any
registered investment management company; (e) pursuant to an automatic cash
withdrawal service; and (f) in connection with the redemption of shares of the
Fund if the Fund is combined with another mutual fund in the Seligman Group, or
another similar reorganization transaction.
If, with respect to a redemption of any Class A, Class B or Class D shares
sold by a dealer, the CDSL is waived because the redemption qualifies for a
waiver as set forth above, the dealer shall remit to SFSI promptly upon notice
an amount equal to the payment or a portion of the payment made by SFSI at the
time of sale of such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the Seligman Mutual Funds. In
some instances, these bonuses or incentives may be offered only to certain
dealers which employ registered representatives who have sold or may sell a
significant amount of shares of the Fund and/or certain other mutual Funds
managed by the Manager during a specified period of time. Such bonus or other
incentive may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying reg-
17
<PAGE>
istered representatives and members of their families to places within or
outside the United States. The cost to SFSI of such promotional activities and
payments shall be consistent with the Rules of the National Association of
Securities Dealers, Inc. as then in effect.
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER/DEALER REPRESENTATIVE, will have the ability to effect the following
transactions via telephone: (i) redemption of Fund Shares, (ii) exchange of Fund
shares for shares of the same class of another Seligman Mutual Fund, (iii)
change of a dividend and/or capital gain distribution option, and (iv) change of
address. All telephone transactions are effected through Seligman Data Corp. at
(800) 221-2450.
FOR INVESTORS WHO PURCHASE SHARES BY COMPLETING AND SUBMITTING AN ACCOUNT
APPLICATION (EXCEPT THOSE ACCOUNTS REGISTERED AS TRUSTS (UNLESS THE TRUSTEE AND
SOLE BENEFICIARY ARE THE SAME PERSON), CORPORATIONS OR GROUP RETIREMENT PLANS):
Unless an election is made otherwise on the Account Application, a shareholder
and the shareholder's broker/dealer of record, as designated on the Account
Application, will automatically receive telephone services.
FOR INVESTORS WHO PURCHASE SHARES THROUGH A BROKER/DEALER: Telephone services
for a shareholder and the shareholder's representative may be elected by
completing a supplemental election application available from the broker/dealer
of record.
FOR ACCOUNTS REGISTERED AS IRAS: Telephone services will include only
exchanges or address changes.
FOR ACCOUNTS REGISTERED AS TRUSTS (UNLESS THE TRUSTEE AND SOLE BENEFICIARY
ARE THE SAME PERSON), CORPORATIONS OR GROUP RETIREMENT PLANS: Telephone
redemptions are not permitted. Additionally, group retirement plans are not
permitted to change a dividend or gain distribution option.
All Seligman Mutual Funds with the same account number (i.e., registered
exactly the same) as an existing account, including any new fund in which the
shareholder invests in the future, will automatically include telephone services
if the existing account has telephone services. Telephone services may also be
elected at any time on a supplemental election application.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone services, authorizes each of the other owners to effect telephone
transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares via telephone. In
these circumstances, the shareholder or the shareholder's representative should
consider using other redemption or exchange procedures. (see "Redemption Of
Shares" below). Use of these other redemption or exchange procedures will result
in the request being processed at a later time than if a telephone transaction
had been used, and the Fund's net asset value may fluctuate during such periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. These will include:
recording all telephone calls requesting account activity, requiring that the
caller provide certain requested personal and/or account information at the time
of the call for the purpose of establishing the caller's identity, and sending a
written confirmation of redemptions, exchanges or address changes to the address
of record each time activity is initiated by telephone. As long as the Fund and
Seligman Data Corp. follow instructions communicated by telephone that were
reasonably believed to be genuine at the time of their receipt, neither they nor
any of their affiliates will be liable for any loss to the shareholder caused by
an unauthorized transaction. In any instance where the Fund or Seligman Data
Corp. is not reasonably satisfied that instructions received by telephone are
genuine, the requested transaction will not be executed, and neither they nor
any of their affiliates will be liable for any losses which may occur due to a
delay in implementing the transaction. If the Fund
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<PAGE>
or Seligman Data Corp. does not follow the procedures described above, the Fund
or Seligman Data Corp. may be liable for any losses due to unauthorized or
fraudulent instructions. Telephone transactions must be effected through a
representative of Seligman Data Corp., i.e., requests may not be communicated
via Seligman Data Corp.'s automated telephone answering system. Shareholders, of
course, may refuse or cancel telephone services. TELEPHONE SERVICES MAY BE
TERMINATED BY A SHAREHOLDER AT ANY TIME BY SENDING A WRITTEN REQUEST TO SELIGMAN
DATA CORP. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A SHAREHOLDER'S
BROKER/DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHAREHOLDER. Written
acknowledgment of termination of telephone services will be sent to the
shareholder at the address of record.
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit form without charge
(except a CDSL, if applicable) at any time by SENDING A WRITTEN REQUEST to
Seligman Data Corp., 100 Park Avenue, New York, NY 10017. The redemption request
must be signed by all persons in whose name the shares are registered. A
shareholder may redeem shares that are not in book credit form by surrendering
certificates in proper form to the same address. Certificates should be sent by
registered mail. Share certificates must be endorsed for transfer or accompanied
by an endorsed stock power signed by all share owners exactly as their name(s)
appear(s) on the account registration. The shareholder's letter of instruction
or endorsed stock power should specify the Fund name, account number, class of
shares (A, B or D) and the number of shares or dollar amount to be redeemed. The
Fund cannot accept conditional redemption requests. If the redemption proceeds
are (i) $50,000 or more, (ii) to be paid to someone other than the shareholder
of record (regardless of the amount) or (iii) to be mailed to other than the
address of record, (regardless of the amount), the signature(s) of the
shareholder(s) must be guaranteed by an eligible financial institution
including, but not limited to, the following: banks, trust companies, credit
unions, securities brokers and dealers, savings and loan associations and
participants in the Securities Transfer Association Medallion Program (STAMP),
the Stock Exchange Medallion Program (SEMP) or the New York Stock Exchange
Medallion Signature Program (MSP). The Fund reserves the right to reject a
signature guarantee where it is believed that the Fund will be placed at risk by
accepting such guarantee. A signature guarantee is also necessary in order to
change the account registration. Notarization by a notary public is not an
acceptable signature guarantee. ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED BY
SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY A CORPORATION, EXECUTOR,
ADMINISTRATOR, TRUSTEE, CUSTODIAN OR RETIREMENT PLAN. FOR FURTHER INFORMATION
WITH RESPECT TO REDEMPTION REQUIREMENTS, PLEASE CONTACT THE SHAREHOLDER SERVICES
DEPARTMENT OF SELIGMAN DATA CORP. FOR ASSISTANCE.
In the case of Class A shares (except for shares purchased without an initial
sales load due to the size of the purchase), and in the case of Class B shares
redeemed after six years and Class D shares redeemed after one year, a
shareholder will receive the net asset value per share next determined after
receipt of a request in good order. If Class A shares which were purchased
without an initial sales load because the purchase amount was $1,000,000 or
more, are redeemed within eighteen months of purchase, a shareholder will
receive the net asset value per share next determined after receipt of a request
in good order, less a CDSL of 1% described under "Purchase of Shares--Class A
Shares--Initial Sales Load" above. If Class B shares are redeemed within six
years of purchase, a shareholder will receive the net asset value per share next
determined after receipt of a request in good order less the applicable CDSL as
described under "Purchase of Shares--Class B Shares" above. If Class D shares
are redeemed within one year of purchase, a shareholder will receive the net
asset value per share next determined after receipt of a request in good order,
less a CDSL of 1% as described under "Purchase Of Shares--Class D Shares" above.
A shareholder also may "sell" shares to the Fund through an investment dealer
and, in that way, be certain, providing the order is timely, of receiving the
net asset value established at the end of the day on which the dealer is given
the repurchase order (less any applicable CDSL).
19
<PAGE>
The Fund makes no charge for this transaction, but the dealer may charge a
service fee. "Sell" or repurchase orders received from an authorized dealer
before the close of the NYSE and received by SFSI, the repurchase agent, before
the close of business on the same day will be executed at the net asset value
per share determined as of the close of the NYSE on that day, less any
applicable CDSL. Repurchase orders received from authorized dealers after the
close of the NYSE or not received by SFSI prior to the close of business, will
be executed at the net asset value determined as of the close of the NYSE on the
next trading day, less any applicable CDSL. Shares held in a "street name"
account with a broker/dealer may be sold to the Fund only through a
broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares payable
to the address of record may be made, once per day, in an amount of up to
$50,000 per account. Telephone redemption requests received by Seligman Data
Corp. at (800) 221-2450 between 8:30 a.m. and 4:00 p.m. Eastern time on any
business day will be processed as of the close of business on that day.
Redemption requests by telephone will not be accepted within 30 days following
an address change. Qualified Plans, IRAs or other retirement plans are not
eligible for telephone redemptions. The Fund reserves the right to suspend or
terminate its telephone redemption service at any time without notice.
For more information about telephone redemptions, and the circumstances under
which a shareholder may bear the risk of loss for a fraudulent transaction, see
"Telephone Transactions" above.
GENERAL. With respect to shares redeemed, a check for the proceeds will be
sent to the shareholder's address of record within seven calendar days after
acceptance of the redemption order and will be made payable to all of the
registered owners on the account. With respect to shares repurchased by the
Fund, a check for the proceeds will be sent to the investment dealer within
seven calender days after acceptance of the repurchase order and will be made
payable to the investment dealer. The Fund will not remit the proceeds from
redemptions of shares purchased by check (unless certified) until Seligman Data
Corp. receives notice that the check has cleared, which may be up to 15 days
from the credit of the shares to the shareholder's account. The proceeds of a
redemption or repurchase may be more or less than the shareholder's cost.
The Fund reserves the right to redeem shares owned by a shareholder whose
investment in the Fund has a value of less than a minimum amount specified by
the Corporation's Board of Directors, which is presently $500. Shareholders
would be sent a notice before such redemption is processed stating that the
value of their investment in the Fund is less than the specified minimum and
that they have sixty days to make an additional investment.
REINSTATEMENT PRIVILEGE. If a shareholder redeems Class A Shares and then
decides to reinvest them, or to shift the investment to one of the other
Seligman Mutual Funds, a shareholder may, within 120 calendar days of the date
of the redemption, use all or any part of the proceeds of the redemption to
reinstate, free of an initial sales load, all or any part of the investment in
Class A shares of the Fund or of any of the other Seligman Mutual Funds. If a
shareholder redeems shares and the redemption was subject to a CDSL, the
shareholder may reinstate the investment in shares of the same class of the Fund
or of any of the other Seligman Mutual Funds within 120 calendar days of the
date of redemption and receive a credit for the CDSL paid. Such investment will
be reinstated at the net asset value per share established as of the close of
the NYSE on the day the request is received. Seligman Data Corp. must be
informed that the purchase represents a reinstated investment. REINSTATED SHARES
MUST BE REGISTERED EXACTLY AND BE OF THE SAME CLASS AS THE SHARES PREVIOUSLY
REDEEMED.
Generally, exercise of the Reinstatement Privilege does not alter the
Federal income tax status of any capital gain realized on a sale of Fund shares,
but to the extent that any shares are sold at a loss and the proceeds are
reinvested in shares of the same Fund, some or all of the loss will not be
allowed as a deduction, depending upon the percentage of the proceeds
reinvested.
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<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
Under the Fund's Administration, Shareholder Services and Distribution Plan
(the "Plan"), the Fund may pay to SFSI an administration, shareholder services
and distribution fee in respect of the Fund's Class A, Class B and Class D
shares. Payments under the Plan may include, but are not limited to: (i)
compensation to securities dealers and other organizations ("Service
Organizations") for providing distribution assistance with respect to assets
invested in the Fund, (ii) compensation to Service Organizations for providing
administration, accounting and other shareholder services with respect to Fund
shareholders, and (iii) otherwise promoting the sale of shares of the Fund,
including paying for the preparation of advertising and sales literature and the
printing and distribution of such promotional materials and prospectuses to
prospective investors and defraying SFSI's costs incurred in connection with its
marketing efforts with respect to shares of the Fund. The Manager, in its sole
discretion, may also make similar payments to SFSI from its own resources, which
may include the management fee that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
respect of Class A shares will be used primarily to compensate Service
Organizations which enter into agreements with SFSI. Such Service Organizations
will receive from SFSI a continuing fee of up to .25% on an annual basis,
payable quarterly, of the average daily net assets of Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors of the
Corporation.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class B and Class D shares at an annual rate of up to 1% of the respective
average daily net asset value of the Class B and Class D shares. Proceeds from
the Class B distribution fees are used to pay Service Organizations a continuing
fee of up to .25% on an annual basis of the average daily net asset value of
Class B shares attributable to particular Service Organizations for providing
personal service and/or the maintenance of shareholder accounts and will also be
used by SFSI to defray the expense of the payment of 4% made by it to Service
Organizations at the time of the sale of Class B shares. Proceeds from the Class
D distribution fees are used primarily to compensate service organizations for
administration, shareholder services and distribution assistance (including a
continuing fee of up to .25% on an annual basis of the average daily net asset
value of Class D shares attributable to particular service organizations for
providing personal service and/or maintenance of shareholder accounts) and will
initially be used by SFSI to defray the expense of the payment of 1% made by it
to service organizations at the time of sale of Class D shares. The amounts
expended by SFSI in any one year upon the initial purchase of Class B and Class
D shares may exceed the amounts received by it from Plan payments retained.
Expenses of administration, shareholder services and distribution of Class B and
Class D shares in one fiscal year may be paid from Class B and Class D Plan
fees, respectively, received in any other fiscal year.
The Plan was approved by the Directors of the Corporation on March 21, 1996
and the initial shareholder of each class on May 10, 1996. The Plan will be
reviewed by the Directors annually.
Seligman Services, Inc. ("SSI"), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts as broker/dealer of record for most shareholder
accounts that do not have a designated broker/dealer of record, including all
such shareholder accounts established after April 1, 1995 and will receive
compensation for providing personal service and account maintenance to its
accounts of record.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any part or all of an investment in the Fund for shares of any of the other
mutual funds in the Seligman Group. Exchanges may be made by mail, or by
telephone if the shareholder has telephone services.
21
<PAGE>
Class A, Class B and Class D shares may be exchanged only for Class A, Class
B and Class D shares, respectively, of another Seligman Mutual Fund on the basis
of relative net asset value.
If shares that are subject to a CDSL are exchanged for shares of another
Seligman Mutual Fund, then for purposes of assessing the CDSL payable upon
disposition of the exchanged shares, the applicable holding period shall be
reduced by the holding period of the original shares.
Class B shareholders of the Fund exercising the exchange privilege will
continue to be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL schedule relating to the new Class B shares. In addition,
Class B shares of the Fund acquired through exchange will be subject to the
Fund's CDSL schedule if such schedule is higher or longer than the CDSL schedule
relating to the Class B shares of the fund from which the exchange has been
made.
The Seligman Mutual Funds available under the Exchange Privilege are:
o SELIGMAN CAPITAL FUND, INC. seeks aggressive capital appreciation. Current
income is not an objective.
o SELIGMAN CASH MANAGEMENT FUND, INC. invests in high-quality money market
instruments. Shares are sold at net asset value.
o SELIGMAN COMMON STOCK FUND, INC. seeks favorable current income and
long-term growth of both income and capital value without exposing capital to
undue risk.
o SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC. invests in shares of
companies in the communications, information and related industries to produce
capital gain. Income is not an objective.
o SELIGMAN FRONTIER FUND, INC. seeks to produce growth in capital value;
income may be considered but will only be incidental to the fund's investment
objective.
o SELIGMAN GROWTH FUND, INC. seeks longer-term growth in capital value and an
increase in future income.
o SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. consists of the Fund, the
Seligman Henderson Global Growth Opportunities Fund, the Seligman Henderson
Global Smaller Companies Fund, the Seligman Henderson Global Technology Fund and
the Seligman Henderson International Fund, which seek long-term capital
appreciation, primarily by investing in companies either globally or
internationally.
o SELIGMAN HIGH INCOME FUND SERIES seeks high current income by investing in
debt securities. The Fund consists of the Seligman U.S. Government Securities
Series (which does not currently offer Class B shares) and the Seligman
High-Yield Bond Series.
o SELIGMAN INCOME FUND, INC. seeks high current income and the possibility
of improvement of future income and capital value.
o SELIGMAN NEW JERSEY MUNICIPAL FUND, INC. invests in investment grade New
Jersey municipal securities. (Does not currently offer Class B shares.)
o SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES invests in investment grade
Pennsylvania municipal securities. (Does not currently offer Class B shares.)
o SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and a
National Series. The National Municipal Series seeks to provide maximum income
exempt from regular Federal income taxes; individual state series, each seeking
to maximize income exempt from regular Federal income taxes and from personal
income taxes in designated states, are available for Colorado, Georgia,
Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York,
Ohio, Oregon and South Carolina. (Does not currently offer Class B shares.)
o SELIGMAN MUNICIPAL SERIES TRUST includes the Seligman California Municipal
Quality Series, the Seligman California Municipal High-Yield Series, the
Seligman Florida Municipal Series and the Seligman North Carolina Municipal
Series, each of which invests in municipal securities of its designated state.
(Does not currently offer Class B shares.)
All permitted exchanges will be based on the net asset values of the
respective funds determined at the close of the NYSE on that day. Telephone
requests for exchanges received between 8:30 a.m. and 4:00 p.m. Eastern time, on
any business day, by Seligman Data Corp. at (800) 221-2450, will be processed as
of the close of business on that day. The registration of an account into which
an exchange is made must be iden-
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tical to the registration of the account from which shares are exchanged. When
establishing a new account by an exchange of shares, the shares being exchanged
must have a value of at least the minimum initial investment required by the
mutual fund into which the exchange is being made. The method of receiving
distributions, unless otherwise indicated, will be carried over to the new fund
account, as will telephone services. Account services, such as Invest-A-Check(R)
Service, Directed Dividends and Automatic Cash Withdrawal Service will not be
carried over to the new fund account unless specifically requested and permitted
by the new fund. Exchange orders may be placed to effect an exchange of a
specific number of shares, an exchange of shares equal to a specific dollar
amount or an exchange of all shares held. Shares for which certificates have
been issued may not be exchanged via telephone and may be exchanged only upon
receipt of an exchange request together with certificates representing shares to
be exchanged in proper form.
The Exchange Privilege via mail is generally applicable to investments in
group retirement plans, although some restrictions may apply. The terms of the
exchange offer described herein may be modified at any time; and not all of the
mutual funds in the Seligman Group are available to residents of all states.
Before making any exchange, a shareholder should contact an authorized
investment dealer or Seligman Data Corp. to obtain prospectuses of any of the
Seligman Mutual Funds.
A broker/dealer representative of record will be able to effect exchanges on
behalf of a shareholder only if the shareholder has telephone services or the
broker/dealer has entered into a Telephone Exchange Agreement with SFSI wherein
the broker/dealer must agree to indemnify SFSI and the Seligman Mutual Funds
from any loss or liability incurred as a result of the acceptance of telephone
exchange orders.
Written confirmation of all exchanges will be forwarded to the shareholder to
whom the exchanged shares are registered and a duplicate confirmation will be
sent to the broker/dealer of record listed on the account. SFSI reserves the
right to reject any telephone exchange request. Any rejected telephone exchange
order may be processed by mail. For more information about telephone exchange
privileges, which unless objected to, are assigned to most shareholders
automatically, and the circumstances under which shareholders may bear the risk
of loss for a fraudulent transaction, see "Telephone Transactions" above.
Exchanges of shares are sales, and may result in a gain or loss for Federal
income tax purposes.
FURTHER INFORMATION ABOUT TRANSACTIONS IN THE FUND
Because excessive trading (including short-term, "market timing" trading) can
hurt the Fund's performance, the Fund may refuse any exchange (1) from any
shareholder account from which there have been two exchanges in the preceding
three month period, or (2) where the exchanged shares equal in value the lesser
of $1,000,000 or 1% of the Fund's net assets. The Fund may also refuse any
exchange or purchase order from any shareholder account if the shareholder or
the shareholder's broker/dealer has been advised that previous patterns of
purchases and redemptions or exchanges have been considered excessive. Accounts
under common ownership or control, including those with the same taxpayer ID
number and those administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered one account for this
purpose. Additionally, the Fund reserves the right to refuse any order for the
purchase of shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends payable from the Fund's net investment income are distributed to
shareholders in December. Payments vary in amount depending on income received
from portfolio securities and the cost of operations. The Fund intends to
distribute substantially all of any taxable net long-term and short-term gain
realized on investments to shareholders at least annually. Such distributions
will generally be taxable to shareholders in the year in which they are declared
by the Fund if paid before February 1 of the following year.
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Shareholders may elect (1) to receive both dividends and gain distributions
in shares; (2) to receive dividends in cash and gain distributions in shares; or
(3) to receive both dividends and gain distributions in cash. Cash dividends and
gain distributions are paid by check. In the case of prototype retirement plans,
dividends and gain distributions are reinvested in additional shares. Unless
another election is made, dividends and capital gain distributions will be
credited to shareholder accounts in additional shares. Shares acquired through a
dividend or gain distribution and credited to a shareholder's account are not
subject to an initial sales load or a CDSL. Dividends and gain distributions
paid in shares are invested on the payable date using the net asset value of the
ex-dividend date. Shareholders may elect to change their dividend and gain
distribution options by writing Seligman Data Corp. at the address listed below.
If the shareholder has telephone services, changes may also be telephoned to
Seligman Data Corp. between 8:30 a.m. and 6:00 p.m. Eastern time, by either the
shareholder or the broker/dealer of record on the account. For information about
telephone services, see "Telephone Transactions." These elections must be
received by Seligman Data Corp. before the record date for the dividend or
distribution in order to be effective for such dividend or distribution.
The per share dividends from net investment income on Class B and Class D
shares will be lower than the per share dividends on Class A shares as a result
of the higher distribution fees applicable with respect to Class B and Class D
shares. Per share dividends of the three classes may also differ as a result of
differing class expenses. Distributions of net capital gains, if any, will be
paid in the same amount for Class A, Class B and Class D shares. See "Purchase
Of Shares--Valuation."
Shareholders exchanging shares of one mutual fund for shares of another
Seligman Mutual Fund will continue to receive dividends and gains as elected
prior to such exchange unless otherwise specified. In the event that a
shareholder redeems all shares in an account between the record date and the
payable date, the value of dividends or gain distributions declared will be paid
in cash regardless of the existing election.
FEDERAL INCOME TAXES
The Fund intends to qualify as a regulated investment company under the Code.
For each year so qualified, the Fund will not be subject to Federal income taxes
on its net investment income and capital gains, if any, realized during any
taxable year, which it distributes to its shareholders, provided that at least
90% of its net investment income and net short-term capital gains are
distributed to shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to the shareholders, whether
received in cash or reinvested in additional shares, and, to the extent
designated as derived from the Fund's dividend income that would be eligible for
the dividends received deduction if the Fund were not a regulated investment
company, they are eligible, subject to certain restrictions, for the 70%
dividends received deduction for corporations.
Distributions of net capital gains, i.e., the excess of net long-term capital
gains over any net short-term losses, are taxable as long-term capital gain,
whether received in cash or invested in additional shares, regardless of how
long shares have been held by the shareholders; such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Any gain or loss realized upon a sale or redemption of shares in the Fund by
a shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less, any loss
realized will be treated as long-term capital loss to the extent that it offsets
the long-term capital gain distribution. In addition, no loss will be allowed on
the sale or other disposition of shares of the Fund if, within a period
beginning 30 days before the date of such sale or disposition and ending 30 days
after such date, the holder acquires (such as through dividend reinvestment)
securities that are substantially identical to the shares of the Fund.
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In determining gain or loss on shares of the Fund that are sold or exchanged
within 90 days after acquisition, a shareholder generally will not be permitted
to include in the tax basis attributable to such shares the sales load incurred
in acquiring such shares to the extent of any subsequent reduction of the sales
load by reason of the Exchange or Reinstatement Privilege offered by the Fund.
Any sales load not taken into account in determining the tax basis of shares
sold or exchanged within 90 days after acquisition will be added to the
shareholder's tax basis in the shares acquired pursuant to the Exchange or
Reinstatement Privilege.
The Fund will generally be subject to an excise tax of 4% on the amount of
any income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned by the Fund.
Furthermore, dividends declared in October, November or December payable to
shareholders of record on a specified date in such a month and paid in the
following January will be treated as having been paid by the Fund and received
by each shareholder in December. Under this rule, therefore, shareholders may be
taxed in one year on dividends or distributions actually received in January of
the following year.
Portions of the Fund's investment income may be subject to foreign income
taxes withheld at source. The Fund intends to operate so as to meet the
requirements of the Code to enable it, subject to certain limitations imposed by
the Code, to "pass through" to its shareholders credit for foreign taxes paid,
but there can be no assurance that the Fund will be able to do so. See "Taxes"
in the Statement of Additional Information.
If the Fund purchases shares in certain foreign investment entities, referred
to as "passive foreign investment companies," the Fund itself may be subject to
U.S. Federal income tax, and an additional charge in the nature of interest, on
a portion of any "excess distribution" from such company or gain from the
disposition of such shares, even if the distribution or gain is paid by the Fund
as a dividend to its shareholders. If the Fund were able and elected to treat a
passive foreign investment company as a "qualified electing fund," in lieu of
the treatment described above, the Fund would be required each year to include
in income, and distribute to shareholders in accordance with the distribution
requirements set forth above, the Fund's pro rata share of the ordinary earnings
and net capital gains of the company, whether or not distributed to the Fund.
Shareholders are urged to consult their tax advisors concerning the effect of
Federal income taxes in their individual circumstances.
UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
(SOCIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND
CERTIFIES THAT THE SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING, THE
CORPORATION IS REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY A PORTION OF
DISTRIBUTIONS AND OTHER REPORTABLE PAYMENTS TO THE SHAREHOLDER. THE RATE OF
BACKUP WITHHOLDING IS 31%. SHAREHOLDERS SHOULD BE AWARE THAT, UNDER REGULATIONS
PROMULGATED BY THE INTERNAL REVENUE SERVICE, THE CORPORATION MAY BE FINED $50
ANNUALLY FOR EACH ACCOUNT FOR WHICH A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
IS NOT PROVIDED. IN THE EVENT THAT SUCH A FINE IS IMPOSED, THE FUND MAY CHARGE A
SERVICE FEE OF UP TO $50 THAT MAY BE DEDUCTED FROM THE SHAREHOLDER'S ACCOUNT AND
OFFSET AGAINST ANY UNDISTRIBUTED DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. THE
FUND ALSO RESERVES THE RIGHT TO CLOSE ANY ACCOUNT WHICH DOES NOT HAVE A
CERTIFIED TAXPAYER IDENTIFICATION NUMBER.
SHAREHOLDER INFORMATION
Shareholders will be sent reports semi-annually regarding the Fund. General
information about the Fund may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, NY 10017 or by telephoning the
Corporate Communications/Investor Relations Department toll-free at (800)
221-7844 from all continental United States, except New York or (212) 850-1864
in New York State and the Greater New York City area. Information about
shareholder accounts may be requested by writing Shareholder Services, Seligman
Data Corp. at the same address or by toll-free telephone by dialing (800)
221-2450 from all continental United States. Seligman Data Corp. may be
telephoned Monday through Friday (except holidays), between the hours of 8:30
a.m. and 6:00 p.m. Eastern time, and calls will be answered by a service
representative.
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24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BALANCE,
MOST RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS,
FORM 1099-DIVS AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF
CHECKS, ACCOUNT STATEMENTS AND OTHER INFORMATION, SELIGMAN DATA CORP. SHOULD BE
NOTIFIED IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGE. ADDRESS CHANGES MAY BE
TELEPHONED TO SELIGMAN DATA CORP. IF THE SHAREHOLDER HAS TELEPHONE SERVICES. FOR
MORE INFORMATION ABOUT TELEPHONE SERVICES, SEE "TELEPHONE TRANSACTIONS" ABOVE.
ACCOUNT SERVICES. Shareholders are sent confirmation of financial
transactions in their account. Other investor services are available. These
include:
o INVEST-A-CHECK(R) SERVICE enables a shareholder to authorize additional
purchases of shares automatically by electronic funds transfer from the
shareholder's savings or checking account, if the bank that maintains the
account is a member of the Automated Clearing House ("ACH"), or by preauthorized
checks to be drawn on the shareholder's checking account at regular monthly
intervals in fixed amounts of $100 or more per fund, or regular quarterly
intervals in fixed amounts of $250 or more per fund, to purchase shares.
Accounts may be established concurrently with the Invest-A-Check(R) Service only
if accompanied by a $100 minimum in conjunction with the monthly investment
option, or a $250 minimum in conjunction with the quarterly investment option.
(See "Terms and Conditions" on page 29).
o AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder of Seligman
Cash Management Fund to exchange a specified amount, at regular monthly
intervals in fixed amounts of $100 or more per fund, or regular quarterly
intervals in fixed amounts of $250 or more per fund, from shares of any class of
the Cash Management Fund into shares of the same class of any other Seligman
Mutual Fund registered in the same name. The shareholder's Cash Management Fund
account must have a value of at least $5,000 at the initiation of the service.
Exchanges will be made at the public offering price.
o DIVIDENDS FROM OTHER INVESTMENTS permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in additional
shares of the Fund or another Seligman Mutual Fund. (Dividend checks must meet
or exceed the required minimum purchase amount and include the shareholder's
name, account number, the name of the Fund and the class of shares in which the
investment is to be made.)
o AUTOMATIC CD TRANSFER SERVICE permits a shareholder to instruct a bank to
invest the proceeds of a maturing bank certificate of deposit ("CD") in shares
of any designated Seligman Mutual Fund. Shareholders who wish to use this
service should contact Seligman Data Corp. or a broker to obtain the necessary
documentation. Banks may charge a penalty on CD assets withdrawn prior to
maturity. Accordingly, it will not normally be advisable to liquidate a CD
before its maturity.
o AUTOMATIC CASH WITHDRAWAL SERVICE permits payments at regular intervals to
be made to a shareholder who owns or purchases shares worth $5,000 or more held
as book credits. Holders of Class A shares purchased at net asset value because
the purchase amount was $1,000,000 or more should bear in mind that withdrawals
will be subject to a 1% CDSL if made within eighteen months of purchase of such
shares. Holders of Class B shares may elect to use this service immediately,
although certain withdrawals may be subject to a CDSL. Please contact Seligman
Data Corp. at (800) 221-2450 for more information. Holders of Class D shares may
elect to use this service with respect to shares that have been held for at
least one year. (See "Terms and Conditions" on page 29).
o Directed Dividends allows a shareholder to pay dividends to another person
or to direct the payment of such dividends to another Seligman Mutual Fund for
purchase at net asset value. Dividends on Class A, Class B and Class D shares
may only be directed to shares of the same class of another Seligman Mutual
Fund.
o Overnight Delivery to service shareholder requests is available for a
$15.00 fee which may be deducted from a shareholder's account, if requested.
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o COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of
charge for the current year and most recent prior year. Copies of year-end
statements for prior years are available for a fee of $10.00 per year, per
account, with a maximum charge of $150 per account. Statement requests should be
forwarded, along with a check, to Seligman Data Corp.
o TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for all
types of tax-deferred retirement plans. SFSI makes available plans, plan forms
and custody agreements for:
--Individual Retirement Accounts (IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and certain
non-profit organizations who wish to make deferred compensation arrangements;
and
--Pension and Profit Sharing Plans for sole proprietorships, corporations
and partnerships.
These types of plans may be established only upon receipt of a written
application form. The Fund may register an IRA investment for which an account
application has not been received as an ordinary taxable account.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, New York 10017 or telephone toll-free (800) 445-1777
from all continental United States. You also may receive information through an
authorized dealer.
ADVERTISING THE FUND'S PERFORMANCE
From time to time the Fund shall advertise its "total return" and "average
annual total return", each of which are calculated separately for Class A, Class
B and Class D shares. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. The "total return" shows what an
investment in shares of Class A, Class B and Class D of the Fund would have
earned over a specified period of time (for example, one, five and ten year
periods or since inception) assuming the payment of the maximum sales load, if
any (or CDSL upon redemption, if applicable), when the investment was made and
that all distributions and dividends paid by the Fund were reinvested on the
reinvestment dates during the period. The "average annual total return" is the
annual rate required for the initial payment to grow to the amount which would
be received at the end of the specified period (one, five and ten year periods
or since inception), i.e., the average annual compound rate of return. The total
return and average annual total return may also be presented without the effect
of an initial sales load or CDSL, as applicable. The waiver by the Manager and
Subadviser of their fees and reimbursement of certain expenses during certain
periods would positively affect the performance results quoted.
From time to time, reference may be made in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Service, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's Class A, Class B and Class D shares, the Lipper analysis assumes
investment of all dividends and distributions paid but does not take into
account applicable sales loads. The Fund may also refer in advertisements or in
other promotional material to articles, comments, listings and columns in the
financial press pertaining to the Fund's performance. Examples of such financial
press publications include BARRON'S, BUSINESS WEEK, CDA/WEISENBERGER MUTUAL FUND
INVESTMENT REPORT, CHRISTIAN SCIENCE MONITOR, FINANCIAL PLANNING, FINANCIAL
TIMES, FINANCIAL WORLD, FORBES, FORTUNE, INDIVIDUAL INVESTOR, INVESTMENT
ADVISOR, INVESTORS BUSINESS DAILY, KIPLINGER'S, LOS ANGELES TIMES, MONEY
MAGAZINE, MORNINGSTAR, INC., PENSIONS AND INVESTMENTS, SMART MONEY, THE NEW YORK
TIMES, U.S.A. TODAY, U.S. NEWS AND WORLD REPORT, THE WALL STREET JOURNAL,
WASHINGTON POST, WORTH MAGAZINE and YOUR MONEY.
ORGANIZATION AND CAPITALIZATION
The Fund is a series of Seligman Henderson Global Fund Series, Inc., an
open-end investment company incorporated under the laws of the state of Maryland
on November 22, 1991. The Directors of the Corporation are authorized to issue,
create and classify shares of capital stock in separate series without further
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action by shareholders. To date, shares of five series have been authorized,
which shares constitute interests in the Fund, the Seligman Henderson Global
Growth Opportunities Fund, the Seligman Henderson Global Smaller Companies Fund,
the Seligman Henderson Global Technology Fund and the Seligman Henderson
International Fund. Shares of capital stock of each series have a par value
$.001 divided into three classes. Each share of the Fund's Class A, Class B and
Class D common stock is equal as to earnings, assets and voting privileges,
except that each class bears its own separate distribution and, potentially,
certain other class expenses and has exclusive voting rights with respect to any
matter to which a separate vote of any class is required by the 1940 Act or
Maryland law. The Fund has adopted a Plan (the "Multiclass Plan") pursuant to
Rule 18f-3 under the 1940 Act permitting the issuance and sale of multiple
classes of common stock. In accordance with the Articles of Incorporation, the
Board of Directors of the Corporation may authorize the creation of additional
classes of common stock with such characteristics as are permitted by the
Multiclass Plan and Rule 18f-3. The 1940 Act requires that where more than one
class exists, each class must be preferred over all other classes in respect of
assets specifically allocated to such class. All shares have non-cumulative
voting rights for the election of directors. Each outstanding share is fully
paid and non assessable, and each is freely transferable. There are no
liquidation, conversion or preemptive rights. The Corporation acts as its own
transfer agent.
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<PAGE>
TERMS AND CONDITIONS
GENERAL ACCOUNT INFORMATION
Investments will be made in as many shares, including fractions to the
third decimal place, as can be purchased at the net asset value plus a sales
load, if applicable, at the close of business on the day payment is received. If
a check in payment of a purchase of shares is dishonored for any reason,
Seligman Data Corp. will cancel the purchase and may redeem additional shares,
if any, held in the shareholder's account in an amount sufficient to reimburse
the Fund for any loss it may have incurred and charge a $10.00 return check fee.
Shareholders will receive dividends from investment income and any distributions
from gain realized on investments in shares or in cash according to the option
elected. Dividend and gain options may be changed by notifying Seligman Data
Corp. These option changes must be received by Seligman Data Corp. before the
record date for the dividend or distribution in order to be effective for such
dividend or distribution. Stock certificates will not be issued unless
requested. Replacement stock certificates will be subject to a surety fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The
application is subject to acceptance by the shareholder's bank and Seligman Data
Corp. The electronic funds transfer ("ACH debit") or preauthorized check in the
amount specified will be drawn automatically on the shareholder's bank on the
fifth day (unless otherwise specified) of each month (or on the prior business
day if such day of the month falls on a weekend or holiday) in which an
investment is scheduled and invested at the public offering price at the close
of business on the same date. After the initial investment, the value of shares
held in the shareholder's account must equal not less than two regularly
scheduled investments. If an ACH debit or preauthorized check is not honored by
the shareholder's bank, or if the value of shares held falls below the required
minimum, the Invest-A-Check(R) Service may be suspended. In the event that a
check or ACH debit is returned as uncollectable, Seligman Data Corp. will cancel
the purchase, redeem shares held in the shareholder's account for an amount
sufficient to reimburse the Fund for any loss it may have incurred as a result,
and charge a $10.00 return check fee. This fee may be deducted from the
shareholder's account. The Invest-A-Check(R) Service may be reinstated upon
written request indicating that the cause of interruption has been corrected.
The Invest-A-Check(R) Service may be terminated by the shareholder or Seligman
Data Corp. at any time by written notice. The shareholder agrees to hold the
Fund and its agents free from all liability which may result from acts done in
good faith and pursuant to these terms. Instructions for establishing
Invest-A-Check(R) Service are given on the Account Application. In the event a
shareholder exchanges all of the shares from one Seligman Mutual Fund to
another, The Invest-A-Check(R) Service will be terminated in the Seligman Mutual
Fund that was closed as a result of the exchange of all shares and the
shareholder must re-apply for the Invest-A-Check(R) Service in the Seligman
Mutual Fund into which the exchange was made. In the event of a partial
exchange, the Invest-A-Check(R) Service will be continued, subject to the above
conditions, in the Seligman Mutual Fund from which the exchange was made.
Accounts established in conjunction with the Invest-A-Check(R) Service must be
accompanied by a minimum initial investment of at least $100 in connection with
the monthly investment option or $250 in connection with the quarterly
investment option. If a shareholder uses the Invest-A-Check(R) Service to make
an IRA investment, the purchase will be credited as a current year contribution.
If a shareholder uses the Invest- A-Check(R) Service to make an investment in a
pension or profit sharing plan, the purchase will be credited as a current year
employer contribution.
AUTOMATIC CASH WITHDRAWAL SERVICE
The Automatic Cash Withdrawal Service is available to Class A shareholders,
to Class B shareholders and to Class D shareholders with respect to Class D
shares held for one year or more. A sufficient number of full and fractional
shares will be redeemed to provide the amount required for a scheduled payment.
Redemptions will be made at the net asset value at the close of business on the
specific day designated by the shareholder of each month (or on the prior
business day if the day specified falls on a weekend or holiday), less, in the
case of Class B shares, any applicable CDSL. Automatic withdrawals of Class A
shares which were purchased at net asset value because the purchase amount was
$1,000,000 or more will be subject to a CDSL if made within 18 months of
purchase of such shares. A shareholder may change the amount of scheduled
payments or may suspend payments by written notice to Seligman Data Corp. at
least ten days prior to the effective date of such a change or suspension. The
Service may be terminated by the shareholder or Seligman Data Corp. at any time
by written notice. It will be terminated upon proper notification of the death
or legal incapacity of the shareholder. This Service is considered terminated in
the event a withdrawal of shares, other than to make scheduled withdrawal
payments, reduces the value of shares remaining on deposit to less than $5,000.
Continued payments in excess of dividend income invested will reduce and
ultimately exhaust capital. Withdrawals, concurrent with purchases of shares of
this or any other investment company, will be disadvantageous because of the
payment of duplicative sales loads, if applicable. For this reason, additional
purchases of Fund shares are discouraged when the Withdrawal Service is in
effect.
LETTER OF INTENT -- CLASS A SHARES ONLY
Seligman Financial Services, Inc. will hold in escrow shares equal to 5% of
the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid directly to the shareholder or credited to the
shareholder's account. Upon completion of the specified minimum purchase within
the thirteen-month period, all shares held in escrow will be deposited into the
shareholder's account or delivered to the shareholder. A shareholder may include
toward completion of a Letter of Intent the total asset value of shares of the
Seligman Mutual Funds on which an initial sales load was paid as of the date of
the Letter. If the total amount invested within the thirteen-month period does
not equal or exceed the specified minimum purchase, the shareholder will be
requested to pay the difference between the amount of the sales load paid and
the amount of the sales load applicable to the total purchase made. If, within
20 days following the mailing of a written request, the shareholder has not paid
this additional sales load to Seligman Financial Services, Inc., sufficient
escrowed shares will be redeemed for payment of the additional sales load.
Shares remaining in escrow after this payment will be released to the
shareholder's account. The intended purchase amount may be increased at any time
during the thirteen-month period by filing a revised Agreement for the same
period, provided that the Dealer furnishes evidence that an amount representing
the reduction in sales load under the new Agreement, which becomes applicable on
purchases already made under the original Agreement, will be refunded to the
Fund and that the required additional escrowed shares will be purchased by the
shareholder.
Shares of Seligman Cash Management Fund, Inc. which have been acquired by
an exchange of shares of another Seligman Mutual Fund on which there is an
initial sales load may be taken into account in completing a Letter of Intent,
or for Right of Accumulation. However, shares of the Cash Management Fund which
have been purchased directly may not be used for purposes of determining reduced
sales loads on additional purchases of the other Seligman Mutual Funds.
11/96
29
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS
GROWTH FUND
- --------------------------------------------------------------------------------
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, New York 10017
SUBADVISER
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
CUSTODIAN
Morgan Stanley Trust Company (NY)
1 Pierrepont Plaza
Brooklyn, New York 11201
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
EQSHE1S 11/96
================================================================================
PROSPECTUS
================================================================================
SELIGMAN
HENDERSON
EMERGING
MARKETS
GROWTH FUND
================================================================================
November 20, 1996
[LOGO]
- --------------------------------------------------------------------------------
AN INTERNATIONAL CAPITAL APPRECIATION FUND
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
A Series Of
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
STATEMENT OF ADDITIONAL INFORMATION
November 20, 1996
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone: (800) 221-2450 - all continental United States
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information expands upon and supplements the
information contained in the current Prospectus of Seligman Henderson Emerging
Markets Growth Fund (the "Fund"), a series of Seligman Henderson Global Fund
Series, Inc. (the "Corporation"), dated November 20, 1996. It should be read in
conjunction with the Prospectus, which may be obtained by writing or calling the
Fund at the above address or telephone numbers. This Statement of Additional
Information, although not in itself a Prospectus, is incorporated by reference
into the Prospectus in its entirety.
The Fund offers three classes of shares. Class A shares may be purchased at
net asset value plus a sales load of up to 4.75%. Class A shares purchased in an
amount of $1,000,000 or more are sold without an initial sales load but are
subject to a contingent deferred sales load ("CDSL") of 1% (of the current net
asset value or the original purchase price whichever is less) if such shares are
redeemed within 18 months of purchase. Class B shares may be purchased at net
asset value and are subject to a contingent deferred sales load ("CDSL"), if
applicable, in the following amount (as a percentage of the current net asset
value or the original purchase price, whichever is less) if redemption occurs
within the indicated number of years of purchase of such shares: 5% (less than 1
year), 4% (1 but less than 2 years), 3% (2 but less than 4 years), 2% (4 but
less than 5 years), 1% (5 but less than 6 years) and 0% (6 or more years). Class
B shares automatically convert to Class A shares after approximately eight years
resulting in lower ongoing fees. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert automatically to
Class A shares along with the underlying shares on which they were earned. Class
D shares may be purchased at net asset value and are subject to a CDSL of 1% if
redeemed within one year of purchase.
Each Class A, Class B and Class D share represents an identical legal
interest in the investment portfolio of the Fund and has the same rights except
for certain class expenses and except that Class B and Class D shares bear a
higher distribution fee that generally will cause the Class B and Class D shares
to have a higher expense ratio and pay lower dividends than Class A shares. Each
Class has exclusive voting rights with respect to its distribution plan.
Although holders of Class A, Class B and Class D shares have identical legal
rights, the different expenses borne by each Class will result in different net
asset values and dividends. The three classes also have different exchange
privileges.
TABLE OF CONTENTS
Page
Investment Objective, Policies and Risks.... 2
Investment Limitations...................... 4
Directors And Officers...................... 6
Management And Expenses..................... 11
Administration, Shareholder Services
And Distribution Plan..................... 13
Portfolio Transactions...................... 13
Purchase And Redemption Of Fund Shares...... 14
Distribution Services....................... 16
Valuation................................... 16
Taxes....................................... 17
Performance Information..................... 19
General Information......................... 19
Financial Statements........................ 20
Appendix A.................................. 21
Appendix B.................................. 24
Appendix C.................................. 26
EQSHM1A
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund seeks long-term capital appreciation by investing at least 65% of
net assets in equity securities of companies in markets of emerging countries.
The following information regarding the Fund's investment policies supplements
the information contained in the Prospectus.
PURCHASING PUT OPTIONS ON SECURITIES. The Fund may purchase put options to
protect its portfolio holdings in an underlying security against a decline in
market value. This hedge protection is provided during the life of the put
option since the Fund as holder of the put option, can sell the underlying
security at the put exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be profitable, the market
price of the underlying security must decline sufficiently below the exercise
price to cover the premium and transaction costs. By using put options in this
manner, The Fund will reduce any profit it might otherwise have realized in the
underlying security by the premium paid for the put option and by transaction
costs.
Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, the Fund would let the 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. The Fund's maximum financial exposure will be limited to these
costs.
The Fund 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.
The Fund's ability to engage in option transactions may be limited by tax
considerations.
FOREIGN CURRENCY TRANSACTIONS. A forward foreign currency exchange contract is
an agreement to purchase or sell a specific currency at a future date and at a
price set at the time the contract is entered into. The Fund will generally
enter into forward foreign currency exchange contracts to fix the 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.
The Fund may enter into a forward contract to sell or buy the amount of a
foreign currency it believes may experience a substantial movement against the
U.S. dollar. Under normal circumstances, the portfolio manager will limit
forward currency contracts to not greater than 75% of the Fund's portfolio
position in any one country as of the date the contract is entered into. This
limitation will be measured at the point the hedging transaction is entered into
by the Fund. Under extraordinary circumstances, the Subadviser may enter into
forward currency contracts in excess of 75% of the Fund's portfolio position in
any one country as of the date the contract is entered into. The precise
matching of the forward contract amounts and the value of the 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,
the Fund may commit up to the entire value of its assets which are denominated
in foreign currencies to the consummation of these contracts. The Subadviser
will consider the effect a substantial commitment of its assets to forward
contracts would have on the investment program of the Fund and its ability to
purchase additional securities.
Except as set forth above and immediately below, the Fund will also not
enter into such forward contracts or maintain a net exposure to such contracts
where the consummation of the contracts would oblige the Fund to deliver an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. The Fund in order to
avoid excess transactions and transaction costs, may nonetheless maintain a net
exposure to forward contracts in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency provided the excess
amount is "covered" by cash or liquid, high-grade debt securities, denominated
in any currency at least equal at all times to the amount of such excess. Under
normal circumstances, consideration of the prospect for currency parities will
be incorporated into the longer-term investment decisions made with regard to
overall diversification strategies. However, the Subadviser believes that
2
<PAGE>
it is important to have the flexibility to enter into such forward contracts
when it determines that the best interests of the Fund will be served.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of the forward contract.
Accordingly, it may be necessary for the Fund to purchase additional foreign
currency on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver. However, the Fund may use liquid, high-grade
debt securities, denominated in any currency, to cover the amount by which the
value of a forward contract exceeds the value of the securities to which it
relates.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. Of course, the Fund is
not required to enter into forward contracts with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate by
the 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 the hedged currency, at the same time,
they tend to limit any potential gain which might result from an increase in the
value of that currency.
Shareholders should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to the Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to resell that currency to the dealer.
Investment income received by the Fund from sources within foreign countries
may be subject to foreign income taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries which entitle the Fund
to a reduced rate of such taxes or exemption from taxes on such income. It is
impossible to determine the effective rate of foreign tax in advance since the
amounts of the Fund's assets to be invested within various countries is not
known.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term. A
repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation, subject to resale at
an agreed upon price and date. Such resale price reflects an agreed upon
interest rate effective for the period of time the instrument is held by the
Fund and is unrelated to the interest rate on the instrument. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default by the seller, including possible delays and expenses in liquidating the
securities underlying the agreement, decline in value and the underlying
securities and loss of interest. Repurchase agreements usually are for short
periods, such as one week or less, but may be for longer periods. However, as a
matter of fundamental policy, the Fund will not enter into repurchase agreements
3
<PAGE>
of more than one week's duration if more than 10% of its net assets would be so
invested. The Fund to date has not entered into any repurchase agreements and
has no present intention of doing so in the future.
OTHER INVESTMENT POLICIES
BORROWING. The Fund may from time to time borrow money for temporary,
extraordinary or emergency purposes in an amount up to 10% of its total assets
from banks at prevailing interest rates and invest the funds in additional
securities. The Fund's borrowings are limited so that immediately after such
borrowing the value of the Fund's assets (including borrowings) less its
liabilities (not including borrowings) is at least three times the amount of the
borrowings. Should the Fund, for any reason, have borrowings that do not meet
the above test then within three business days, the Fund must reduce such
borrowings so as to meet the foregoing test. Under these circumstances, the Fund
may have to liquidate portfolio securities at a time when it is disadvantageous
to do so. Gains made with additional funds borrowed will generally cause the net
asset value of the Fund's shares to rise faster than could be the case without
borrowings. Conversely, if investment results fail to cover the cost of
borrowings, the net asset value of the Fund could decrease faster than if there
had been no borrowings.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash collateral
and obtain additional income or receive an agreed upon amount of interest from
the borrower. Loans made by the Fund will generally be short-term. Loans are
subject to termination at the option of the Fund or the borrower. The Fund may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Fund does not have the right
to vote securities on loan, but would terminate the loan and regain the right to
vote if that were considered important with respect to the investment.
Except as described below under "Investment Limitations," the Fund's
investment policies are not fundamental and the Board of Directors of the
Corporation may change such policies without the vote of a majority of the
Fund's outstanding voting securities (as defined on page 5).
PORTFOLIO TURNOVER. The Fund may generally change its portfolio investments at
any time in accordance with the Subadviser's appraisal of factors affecting any
particular issuer or the market or economy in general. The Fund anticipates that
its annual rate of portfolio turnover will not exceed 100%.
INVESTMENT LIMITATIONS
Under the Fund's fundamental policies, which cannot be changed except by
vote of a majority of the Fund's outstanding voting securities, the Fund may
not:
1. As to 75% of the value of its total assets, invest more than 5% of its
total assets, at market value, in the securities of any one issuer (except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities).
2. Invest more than 25% of its total assets, at market value, in the
securities of issuers principally engaged in the same industry (except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities).
3. Own more than 10% of the outstanding voting securities of any issuer, or
more than 10% of any class of securities of one issuer.
4. Invest more than 5% of the value of its total assets, at market value, in
the securities of issuers which, with their predecessors, have been in
business less than three years; provided, however, that securities
guaranteed by a company that (including predecessors) has been in
operation at least three continuous years shall be excluded from this
limitation.
5. Purchase securities of open-end or closed-end investment companies, except
as permitted by the Investment Company Act of 1940, as amended (the "1940
Act") and other applicable law.
4
<PAGE>
6. Invest in warrants if, at the time of acquisition, the investment in
warrants, valued at the lower of cost or market value, would exceed 5% of
the Fund's net assets. For purposes of this restriction, warrants acquired
by the Fund in units or attached to securities may be deemed to have been
purchased without cost.
7. 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 Fund's total assets.
8. Issue senior securities or borrow money except from banks and then in
amounts not in excess of 10% of its total assets, as described in the
Prospectus and on page 4 herein.
9. Buy any securities or other property on margin (except for such short-term
credits as are necessary for the clearance of transactions).
10. Invest in companies for the purpose of exercising control or management.
11. Underwrite securities of other issuers except to the extent that the Fund
may be deemed an underwriter when purchasing or selling portfolio
securities.
12. Purchase or retain securities of any issuer (other than the shares of the
Fund) if to the Fund's knowledge, those officers and directors of the Fund
and the officers and directors of the Manager or Subadviser, who
individually own beneficially more than 1/2 of 1% of the outstanding
securities of such issuer, together own beneficially more than 5% of such
outstanding securities.
13. Purchase or sell real estate (although it may purchase securities secured
by real estate interests or interests therein, or issued by companies or
investment trusts that invest in real estate or interests therein).
14. Make short sales except short sales against-the-box.
Although not a fundamental policy subject to shareholder vote, as long as
the Fund's shares are registered in certain states, it shall not (i) invest in
interests in oil, gas or other mineral exploration or development programs or in
mineral leases, (ii) invest more than 2% of its assets in warrants not listed on
the New York or American Stock Exchange, (iii) invest in real estate limited
partnerships or (iv) invest in commodities except for commodity futures
contracts and options as permitted pursuant to Regulation 4.5 under the
Commodities Exchange Act.
Under the 1940 Act, a "vote of a majority of the outstanding voting
securities" of the Fund means the affirmative vote of the lesser of (l) more
than 50% of the outstanding shares of the Fund or (2) 67% or more of the shares
present at a shareholders' meeting if more than 50% of the outstanding shares
are represented at the meeting in person or by proxy.
5
<PAGE>
DIRECTORS AND OFFICERS
Directors and officers of the Corporation, together with information as to
their principal business occupations during the past five years are shown below.
Each Director who is an "interested person" of the Fund, as defined in the 1940
Act, is indicated by an asterisk. Unless otherwise indicated, their addresses
are 100 Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer
(58) 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, J. & W. Seligman
Trust Company, trust company and Seligman Securities,
Inc., broker/dealer.
BRIAN T. ZINO* Director, President and Member of the Executive
(43) 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,
(except 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;
Senior Vice President, Seligman Henderson Co., advisers;
formerly, Director and Secretary, Chuo Trust - JWS
Advisors, Inc., advisors; and Director, J. & W. Seligman
Trust Company, trust company and Seligman Securities,
Inc., broker/dealer.
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief Investment
Officer, Institutional, J. & W. Seligman & Co.
Incorporated, investment managers and 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.
6
<PAGE>
FRED E. BROWN* Director
(83)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Director
or Trustee, the Seligman Group of Investment Companies;
Seligman Financial Services, Inc., broker/dealer;
Seligman Services, Inc., broker/dealer; Trudeau
Institute, Inc., non-profit biomedical research
organization; Lake Placid Center for the Arts, cultural
organization; and Lake Placid Education Foundation,
education foundation; formerly, Director, J. & W.
Seligman Trust Company, trust company; and Seligman
Securities, Inc., broker/dealer.
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman of the American Council
on Germany; a Governor of the Center for Creative
Leadership; Director, USLIFE, insurance; National
Committee on U.S.-China Relations, National Defense
University; the Institute for Defense Analysis; 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, New York 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
7
<PAGE>
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan & Cromwell, law
firm; Director or Trustee, the Seligman Group of
Investment Companies; The Municipal Art Society of New
York, Commonwealth Aluminum Corporation, the U.S.
Council for International Business and the U.S.-New
Zealand Council; Chairman, American Australian
Association; Member of the American Law Institute and
Council on Foreign Relations; Member of the Board of
Governors of Foreign Policy Association and New York
Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(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, D.C.).
St. Bernard's Road, Gladstone, NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of Investment
Companies and Public Service Enterprise Group, public
utility.
Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(69)
Director, Various Corporations; Director or Trustee, the
Seligman Group of Investment Companies; The Houston
Exploration Company; The Brooklyn Museum; The Brooklyn
Union Gas Company; The Committee for Economic
Development; Dow Jones & Co. Inc. and Public
Broadcasting Service; formerly, Co-Chairman of the
Policy Council of the Tax Foundation; Director and Vice
Chairman, Mobil Corporation; Director and President,
Bekaert Corporation; and Director, Tesoro Petroleum
Companies, Inc.
675 Third Avenue, Suite 3004, New York, NY 10017
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.
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 75202
8
<PAGE>
PETER BASSETT Vice President and Portfolio
(41)
Portfolio Manager, Seligman Henderson Co., advisers; and
Henderson Administration Group, plc, investment
management; formerly, Portfolio Manager, Touche Remnant
& Co., investment management.
IAIN C. CLARK Vice President
(46)
Managing Director and Chief Investment Officer, Seligman
Henderson Co., advisers; Director and Senior Portfolio
Manager, Henderson Administration Group, plc, investment
management.
NITIN MEHTA Vice President
(35)
Portfolio Manager, Seligman Henderson Co., advisers; and
Henderson Administration Group, plc, investment
management; formerly, Head of Currency Management and
Derivatives, Quorum Capital Management; Investment
Officer, International Finance Corp, investment
management; and Director of Equities, Shearson Lehman
Global Asset Management.
ARSEN MRAKOVCIC Vice President
(31)
Managing Director (formerly, Vice President, Investment
Officer), J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Vice President and
Portfolio Manager, one other open-end investment company
with the Seligman Group of Investment Companies;
formerly, Portfolio Assistant, J. & W. Seligman & Co.
Incorporated.
BRIAN ASHFORD-RUSSELL Vice President
(37)
Portfolio Manager, Seligman Henderson Co., advisers; and
Henderson Administration Group plc, investment
management; formerly, Portfolio Manager, Touche Remnant
& Co., investment management.
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 with the Seligman Group of Investment
Companies; Portfolio Manager, Seligman Henderson Co.,
advisers; Senior Vice President and Portfolio Manager,
Chuo Trust-JWS Advisors, Inc., advisers.
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; Seligman
Financial Services, Inc., broker/dealer; Seligman
Advisors, Inc., advisers and Seligman Data Corp.,
shareholder service agent; Vice President, the Seligman
Group of Investment Companies and Seligman Services,
Inc., broker/dealer; and Treasurer, Seligman Holdings,
Inc., holding company; and Seligman Henderson Co.,
advisers; formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Senior Vice
President, J. & W. Seligman Trust Company, trust
company.
9
<PAGE>
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 & Kissel, law firm.
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
Corporation to serve until the next meeting of the Board.
<TABLE>
<CAPTION>
Compensation Table
------------------
Pension or Total Compensation
Aggregate Retirement Benefits from Registrant and
Compensation Accrued as part of Fund Complex Paid
Position with Registrant from Registrant (1) Fund Expenses to Directors (2)
- ------------------------ ------------------- ------------- ----------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
John R. Galvin, Director $1,782.50 N/A $41,252.75
Alice S. Ilchman, Director 2,926.56 N/A 68,000.00
Frank A. McPherson, Director 1,782.50 N/A 41,252.75
John E. Merow, Director 2,855.12(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,819.40 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 1,072.62 N/A 24,747.25
James C. Pitney, Director 2,926.56 N/A 68,000.00
James Q. Riordan, Director 2,926.56 N/A 70,000.00
Herman J. Schmidt, Director* 1,072.62 N/A 24,747.25
Robert L. Shafer, Director 2,926.56 N/A 70,000.00
James N. Whitson, Director 2,855.12(d) N/A 68,000.00(d)
</TABLE>
(1) Based on remuneration received by Directors for three series of the
Corporation for the year ended October 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
(d) Deferred. The total amounts of deferred compensation (including interest)
payable to Messrs. Merow, Pitney and Whitson as of December 31, 1995 were
$61,903, $59,807 and $8,200, respectively. Mr. Pitney no longer defers
current compensation.
* Retired May 18, 1995.
10
<PAGE>
The Corporation has a compensation arrangement under which outside directors
may elect to defer receiving their fees. Under this arrangement, interest will
be accrued on the deferred balances. The annual cost of such interest will be
included in the directors' fees and expenses, and the accumulated balance
thereof will be included in other liabilities in the Fund's financial
statements.
Directors and officers of the Corporation are also directors and officers of
some or all of the other investment companies in the Seligman Group.
As of October 15, 1996, the Directors and Officers of the Corporation owned
35,492 shares or 1.3% of the Fund's Class A capital stock. No Directors or
Officers owned Class B or Class D capital stock. As of October 15, 1996, no
person was known to the management of the Fund to be the beneficial owner of
more than 5% of the outstanding shares of any class of its capital stock except
as set forth in the following table:
<TABLE>
<CAPTION>
Title of Class Name & Address of Beneficial Owner Shares Owned Percent of Class
-------------- ---------------------------------- ------------ ----------------
<S> <C> <C> <C>
Class A Merrill Lynch Pierce Fenner & Smith 760,690 27.0%
P.O. Box 45286
Jacksonville, FL 32232-5286
Class B Merrill Lynch Pierce Fenner & Smith 820,554 54.7%
P.O. Box 45286
Jacksonville, FL 32232-5286
Class D Merrill Lynch Pierce Fenner & Smith 981,676 50.4%
P.O. Box 45286
Jacksonville, FL 32232-5286
</TABLE>
MANAGEMENT AND EXPENSES
Under the Management Agreement dated March 19, 1992, subject to the control
of the Board of Directors, J. & W. Seligman & Co. Incorporated (the "Manager")
administers the business and other affairs of the Fund. 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 the Directors of the Corporation who are employees or
consultants of the Manager and of the officers and employees of the Corporation.
The Manager also provides senior management for Seligman Data Corp., the Fund's
shareholder service agent.
The Fund pays the Manager a management fee for its services, calculated
daily and payable monthly, equal to 1.25% per annum of the daily net assets of
the Fund of which 1.15% is paid to Seligman Henderson Co. (the "Subadviser").
The Fund pays all its expenses other than those assumed by the Manager and
the Subadviser, including brokerage commissions; administration, shareholder
services and distribution fees; fees and expenses of independent attorneys and
auditors; taxes and governmental fees, including fees and expenses for
qualifying the Fund and its shares under Federal and State securities laws; cost
of stock certificates and expenses of repurchase or redemption of shares;
expenses of printing and distributing reports, notices and proxy materials to
shareholders; expenses of printing and filing reports and other documents with
governmental agencies; expenses of shareholders' meetings; expenses of corporate
data processing and related services; shareholder record keeping and shareholder
account services fees and disbursements of transfer agents and custodians;
expenses of disbursing dividends and distributions; fees and expenses of
directors of the Fund not employed by (or serving as a Director of) the Manager
or its affiliates; insurance premiums; and extraordinary expenses such as
litigation expenses. The Manager has undertaken to one state securities
administrator, so long as required, to reimburse the Fund for each year in the
amount by which total expenses, including the management fee, but excluding
interest, taxes, brokerage commissions, distribution fees and extraordinary
expenses, in any year that they exceed 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets and 1 1/2%
thereafter. Such reimbursements, if any will be made monthly.
11
<PAGE>
The Management Agreement provides that the Manager will not be liable to the
Fund for any error of judgment or mistake of law, or for any loss arising out of
any investment, or for any act or omission in performing its duties under the
Agreement, except for willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties under the Agreement.
The Management Agreement was initially approved by the Board of Directors at
a meeting held on March 19, 1992 and by the shareholders of the Corporation at
their first meeting held on May 20, 1993. The Management Agreement will continue
in effect until December 31 of each year if (1) such continuance is approved in
the manner required by the 1940 Act (i.e., by a vote of a majority of the Board
of Directors or of the outstanding voting securities of the Fund and by a vote
of a majority of the Directors who are not parties to the Management Agreement
or interested persons of any such party) and (2) if the Manager has not notified
the Fund at least 60 days prior to December 31 of any year that it does not
desire such continuance. The Management Agreement may be terminated by the Fund,
without penalty, on 60 days' written notice to the Manager and will terminate
automatically in the event of its assignment. The Fund has agreed to change its
name upon termination of the Management Agreement if continued use of the name
would cause confusion in the context of the Manager's business.
The Manager is a successor firm to an investment banking business founded in
1864 which has thereafter provided investment services to individuals, families,
institutions and corporations. On December 29, 1988, a majority of the
outstanding voting securities of the Manager was purchased by Mr. William C.
Morris and a simultaneous recapitalization of the Manager occurred. See Appendix
B for further history of the Manager.
Under the Subadvisory Agreement, dated March 21, 1996, the Subadviser
supervises and directs 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. For these services, the Subadviser is paid a
fee as described above. The Subadvisory Agreement was approved by the Board of
Directors at a meeting held on March 21, 1996, and by the initial shareholder of
each Class of the Fund on May 10, 1996. The Subadvisory Agreement will continue
in effect until December 31 of each year if (1) such continuance is approved in
the manner required by the 1940 Act (by a vote of a majority of the Board of
Directors or of the outstanding voting securities of the Fund and by a vote of a
majority of the Directors who are not parties to the Subadvisory Agreement or
interested persons of any such party) and (2) if the Subadviser shall not have
notified the Manager in writing at least 60 days prior to December 31 of any
year that it does not desire such continuance. The Subadvisory Agreement may be
terminated at any time by the Fund, on 60 days' written notice to the
Subadviser. The Subadvisory Agreement will terminate automatically in the event
of its assignment or upon the termination of the Management Agreement.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The firm
currently manages approximately $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 Managers' 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 for 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 require portfolio managers to disclose any interest they may
have in the securities or issuers that they recommend for purchase by any
client.
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages
12
<PAGE>
and (ii) each employee from engaging in short-term trading (a purchase and sale
or vice-versa within 60 days). Any profit realized pursuant to either of these
prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. The order desk maintains a list of securities that may not
be purchased due to a possible conflict with clients. All officers, directors
and employees are also required to disclose all securities beneficially owned by
them on December 31 of each year.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
The Fund has adopted an Administration, Shareholder Services and
Distribution Plan for each Class (the "Plan") in accordance with Section 12(b)
of the 1940 Act and Rule 12b-1 thereunder.
The Plan was approved by the Board of Directors on March 21, 1996, including
a majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of the Fund and who have no direct or indirect financial interest in
the operation of the Plan or in any agreement related to the Plan (the
"Qualified Directors"). The Plan was approved by the initial shareholder of each
Class of the Fund on May 10, 1996. The Plan will continue in effect through
December 31 of each year so long as such continuance is approved annually by a
majority vote of both the Directors and the Qualified Directors of the
Corporation, cast in person at a meeting called for the purpose of voting on
such approval. The Plan may not be amended to increase materially the amounts
payable to Service Organizations with respect to a Class without the approval of
a majority of the outstanding voting securities of the Class. If the amount
payable with respect to Class A shares under the Plan is proposed to be
increased materially, the Fund will either, (i) permit holders of Class B shares
to vote as a separate class on the proposed increase or (ii) establish a new
class of shares subject to the same payment under the Plan as existing Class A
shares, in which case the Class B shares will thereafter convert into the new
class instead of into Class A shares. No material amendment to the Plan may be
made except by a majority of both the Directors and Qualified Directors.
The Plan requires that the Treasurer of the Corporation shall provide to the
Directors and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
PORTFOLIO TRANSACTIONS
The Management and Subadvisory Agreements recognize that in the purchase and
sale of portfolio securities, of the Fund, the Manager and 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 Subadviser for their use, as well as to
the general attitude toward and support of investment companies demonstrated by
such brokers or dealers. Such services include supplemental investment research,
analysis and reports concerning issuers, industries and securities deemed by the
Manager and Subadviser to be beneficial to the Fund. In addition, the Manager
and Subadviser are authorized to place orders with brokers who provide
supplemental investment and market research and statistical and economic
analysis although the use of such brokers may result in a higher brokerage
charge to the Fund than the use of brokers selected solely on the basis of
seeking the most favorable price and execution, although such research and
analysis may be useful to the Manager and the Subadviser in connection with its
services to clients other than the Fund.
In over-the counter markets, the Fund deals with responsible primary market
makers unless a more favorable execution or price is believed to be obtainable.
The Fund may buy securities from or sell securities to dealers acting as
principal, except dealers with which its directors and/or officers are
affiliated.
When two or more of the investment companies in the Seligman Group or other
investment advisory clients of the Manager and Subadviser desire to buy or sell
the same security at the same time, the securities purchased or sold are
allocated by the Manager and Subadviser in a manner believed to be equitable to
each. There may be possible advantages or disadvantages of such transactions
with respect to price or the size of positions readily obtainable or saleable.
13
<PAGE>
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund issues three classes of shares: Class A shares may be purchased at
a price equal to the next determined net asset value per share, plus a sales
load. Class A shares purchased at net asset value without an initial sales load
due to the size of the purchase are subject to a CDSL of 1% if such shares are
redeemed within 18 months of purchase. Class B shares may be purchased at a
price equal to the next determined net asset value without an initial sales
load, but a CDSL may be charged on redemptions within six years of purchase.
Class D shares may be purchased at a price equal to the next determined net
asset value without an initial sales load, but a CDSL may be charged on
redemptions within one year of purchase. See "Alternative Distribution System,"
"Purchase Of Shares," and "Redemption Of Shares" in the Prospectus.
SPECIMEN PRICE MAKE-UP
Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold at a maximum sales load of 4.75% and Class
B and Class D shares are sold at net asset value*. Using the Fund's net asset
value at September 30, 1996, the maximum offering price of the Fund's shares is
as follows:
Class A
Net asset value per Class A share........................... $7.05
----
Maximum sales load (4.75% of offering price)................ .35
---
Offering price to public.................................... $7.40
=====
Class B and Class D
Net asset value and offering price per share*............... $7.04
====
- ----------
* Class B shares are subject to a CDSL declining from 5% in the first year
after purchase to 0% after six years. Class D shares are subject to a CDSL
of 1% on redemptions within one year of purchase. See "Redemption Of
Shares" in the Prospectus.
CLASS A SHARES - REDUCED INITIAL SALES LOADS
Reductions Available. Shares of any Seligman Mutual Fund sold with an
initial sales load in a continuous offering will be eligible for the following
reductions:
Volume Discounts are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other mutual
funds in the Seligman Group which are sold with an initial sales load, reaches
levels indicated in the sales load schedule set forth in the Prospectus.
The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of the Fund and Class A shares of the other mutual
funds in the Seligman Group sold with an initial sales load with the total net
asset value of shares of those Seligman Mutual Funds already owned that were
sold with an initial sales load and the total net asset value of shares of
Seligman Cash Management Fund which were acquired through an exchange of shares
of another mutual fund in the Seligman Group on which there was an initial sales
load at the time of purchase, to determine reduced sales loads in accordance
with the schedule in the Prospectus. The value of the shares owned, including
the value of shares of Seligman Cash Management Fund acquired in an exchange of
shares of another mutual fund in the Seligman Group on which there was an
initial sales load at the time of purchase will be taken into account in orders
placed through a dealer, however, only if Seligman Financial Services, Inc.
("SFSI") is notified by the investor or the dealer of the amount owned at the
time the purchase is made and is furnished sufficient information to permit
confirmation.
A Letter of Intent allows an investor to purchase Class A shares over a
13-month period at reduced initial sales loads in accordance with the schedule
in the Prospectus, based on the total amount of Class A shares of the Fund that
the letter states the investor intends to purchase plus the total net
14
<PAGE>
asset value of shares that were sold with an initial sales load of the other
mutual funds in the Seligman Group already owned and the total net asset value
of shares of Seligman Cash Management Fund, Inc. which were acquired through an
exchange of shares of another mutual fund in the Seligman Group on which there
was an initial sales load at the time of purchase. Reduced sales loads also may
apply to purchases made within a 13-month period starting up to 90 days before
the date of execution of a letter of intent. For more information concerning the
terms of the letter of intent see "Terms and Conditions - Letter of Intent "
accompanying the Account Application in the Prospectus.
Class A shares purchased without an initial sales load in accordance with
the sales load schedule in the Fund's prospectus, or pursuant to a Volume
Discount, Right of Accumulation or Letter of Intent are subject to a CDSL of 1%
on redemptions of such shares within 18 months of purchase.
PERSONS ENTITLED TO REDUCTIONS. Reductions in initial sales loads apply to
purchases of Class A shares by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
trustee or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code,
organizations tax exempt under Section 501 (c)(3) or (13), and non-qualified
employee benefit plans that satisfy uniform criteria are considered "single
persons" for this purpose. The uniform criteria are as follows:
1. Employees must authorize the employer, if requested by the Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
Prospectus, reports and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
ELIGIBLE EMPLOYEE BENEFIT PLANS. The table of sales loads in the Prospectus
applies to sales to "eligible employee benefit plans" (as defined in the
Prospectus), except that the Fund may sell shares at net asset value to
"eligible employee benefit plans," of which have at least (i) $500,000 invested
in the Seligman Group of Mutual Funds or (ii) 50 eligible employees to whom such
plan is made available. Such sales must be made in connection with a payroll
deduction system of plan funding or other systems acceptable to Seligman Data
Corp., the Fund's shareholder service agent. Such sales are believed to require
limited sales effort and sales-related expenses and therefore are made at net
asset value. Contributions or account information for plan participation also
should be transmitted to Seligman Data Corp. by methods which it accepts.
Additional information about "eligible employee benefit plans" is available from
investment dealers or SFSI.
PAYMENT IN SECURITIES. In addition to cash, the Fund may accept securities
in payment for Fund shares sold at the applicable public offering price (net
asset value plus any applicable sales load), although the Fund does not
presently intend to accept securities in payment for Fund shares. Generally, the
Fund will only consider accepting securities (l) to increase its holdings in a
portfolio security, or (2) if the Manager determines that the offered securities
are a suitable investment for the Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that the
Fund would not accept securities with a value of less than $100,000 per issue in
payment for shares. The Fund may reject in whole or in part offers to pay for
Fund shares with securities, may require partial payment in cash for applicable
sales loads, and may discontinue accepting securities as payment for Fund shares
at any time without notice. The Fund will not accept restricted securities in
payment for shares. The Fund will value accepted securities in the manner
provided for valuing portfolio securities of the Fund. Any securities accepted
by the Fund in payment for Fund shares will have an active and substantial
market and have a value which is readily ascertainable (See "Valuation"). In
accordance with Texas securities regulations, should the Fund accept securities
in payment for shares, such transactions would be limited to a bona-fide
reorganization, statutory merger, or to other acquisitions of portfolio
securities (except for municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) which meet the investment
objectives and policies of the Fund; are acquired for investment and not for
resale; are liquid securities which are not restricted as to transfer either by
law or liquidity of market; and have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a listing on the
American Stock Exchange, the New York Stock Exchange ("NYSE") or NASDAQ.
15
<PAGE>
FURTHER TYPES OF REDUCTIONS. Class A shares may be issued without a sales
load in connection with the acquisition of cash and securities owned by other
investment companies and personal holding companies to financial institution
trust departments, to registered investment advisers exercising investment
discretionary authority with respect to the purchase of Fund shares, or pursuant
to sponsored arrangements with organizations which make recommendations to, or
permit group solicitation of, its employees, members or participants in
connection with the purchase of shares of the Fund, to separate accounts
established and maintained by an insurance company which are exempt from
registration under Section 3(c)(11) of the 1940 Act, to registered
representatives and employees (and their spouses and minor children) of any
dealer that has a sales agreement with SFSI and shareholders of mutual funds
with investment objectives similar to the Fund's who purchase shares with
redemption proceeds of such funds and to certain unit investment trusts as
described in the Prospectus.
Class A shares may be issued without a sales load to present and retired
directors, trustees, officers, employees (and their family members, as defined
in the Prospectus) of the Fund, the other Seligman Mutual Funds, the Manager and
other companies affiliated with the Manager. Such sales may also be made to
employee benefit plans and thrift plans for such persons and to any investment
advisory, custodial, trust or other fiduciary account managed or advised by the
Manager or any affiliate. These sales may be made for investment purposes only,
and shares may be resold only to the Fund.
Class A shares may be sold at net asset value to these persons since such
shares require less sales effort and lower sales related expenses as compared
with sales to the general public.
MORE ABOUT REDEMPTIONS. The procedures for redemption of Fund shares under
ordinary circumstances are set forth in the Prospectus. In unusual
circumstances, payment may be postponed, or the right of redemption postponed
for more than seven days, if the orderly liquidation of portfolio securities is
prevented by the closing of, or restricted trading on, the NYSE during periods
of emergency, or such other periods as ordered by the Securities and Exchange
Commission. Payment may be made in securities, subject to the review of some
state securities commissions. If payment is made in securities, a shareholder
may incur brokerage expenses in converting these securities to cash.
DISTRIBUTION SERVICES
SFSI, an affiliate of the Manager, acts as general distributor of the shares
of the Fund and of the other mutual funds in the Seligman Group. The Corporation
on behalf of the Fund, and SFSI are parties to a Distributing Agreement dated
January 1, 1993. As general distributor of the Fund's capital stock, SFSI allows
commissions to all dealers, as indicated in the Prospectus.
VALUATION
Net asset value per Fund share of each class of the Fund is determined as of
the close of the NYSE (normally, 4:00 p.m. Eastern time), on each day that the
NYSE is open. Currently, the NYSE is closed on New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The Fund will also determine net asset value for each class on
each day in which there is a sufficient degree of trading in the Fund's
portfolio securities that the net asset value of Fund shares might be materially
affected. Net asset value per share for a class is computed by dividing such
class share of the value of the net assets of the Fund (i.e., the value of its
assets less liabilities) by the total number of outstanding shares of such
class. All expenses of the Fund, including the Manager's fee, are accrued daily
and taken into account for the purpose of determining net asset value. The net
asset value of Class B and Class D shares will generally be lower than the net
asset value of Class A shares as a result of the larger distribution fee with
respect to such shares.
Portfolio securities, including open short positions and options written,
are valued at the last sale price on the securities exchange or securities
market on which such securities primarily are traded. Securities traded on a
U.S. or foreign exchange or over-the counter market are valued at the last sales
price on the primary exchange or market on which they are traded. United Kingdom
securities for which there are no recent sales transactions are valued based on
quotations provided by primary market makers in such securities. Other
securities not listed on an exchange or securities market, or securities in
which there were no transactions, are valued at the average of the most recent
bid and asked price, except in the case of open short positions where the asked
price is available. Any securities for which recent market quotations are not
readily available including restricted securities are
16
<PAGE>
valued at fair value as determined in accordance with procedures approved by the
Board of Directors. Short-term obligations with less than sixty days remaining
to maturity are generally valued at amortized cost. Short-term obligations with
more than sixty days remaining to maturity will be valued at current market
value until the sixtieth day prior to maturity, and will then be valued on an
amortized cost basis based on the value on such date unless the Board determines
that this amortized cost value does not represent fair market value. Expenses
and fees, including the investment management fee, are accrued daily and taken
into account for the purpose of determining the net asset value of Fund shares.
Premiums received on the sale of call options will be included in the net asset
value, and the current market value of the options sold by the Fund will be
subtracted from net asset value.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of the shares of the
Fund are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the value of such securities and such exchange rates may occur between
the times at which they are determined and the close of the NYSE, which will not
be reflected in the computation of net asset value. If during such periods
events occur which materially affect the value of such securities, the
securities will be valued at their fair market value as determined in accordance
with procedures approved by the Board of Directors.
For purposes of determining the net asset value per share of the Fund, all
assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a pricing service
that takes into account the quotes provided by a number of such major banks.
TAXES
FOREIGN INCOME TAXES. Investment income received by the Fund from sources within
foreign countries may be subject to foreign income taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which entitle the Fund to a reduced rate of such taxes or exemption from taxes
on such income. It is impossible to determine the effective rate of foreign tax
in advance since the amount of the Fund's assets to be invested within various
countries is not known.
U.S. FEDERAL INCOME TAXES. The Fund intends for each taxable year to qualify for
tax treatment as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code"). Qualification relieves the Fund of
Federal income tax liability on that part of its net ordinary income and net
realized capital gains which it pays out to its shareholders. Such qualification
does not, of course, involve governmental supervision of management or
investment practices or policies. Investors should consult their own counsel for
a complete understanding of the requirements the Fund must meet to qualify for
such treatment. The information set forth in the Prospectus and the following
discussion relate solely to the US Federal income taxes on dividends and
distributions by the Fund and assumes that the Fund qualifies as a regulated
investment company. Investors should consult their own counsel for further
details, including their possible entitlement to foreign tax credits that might
be "passed through" to them under the rules described below, and the application
of state and local tax laws to his or her particular situation.
The Fund intends to declare and distribute dividends in the amounts and at
the times necessary to avoid the application of the 4% Federal excise tax
imposed on certain undistributed income of regulated investment companies. The
Fund will be required to pay the 4% excise tax to the extent it does not
distribute to its shareholders during any calendar year at least 98% of its
ordinary income for the calendar year plus 98% of its capital gain net income
for the twelve months ended October 31 of such year. Certain distributions of
the Fund which are paid in January of a given year but are declared in the prior
October, November or December to shareholders of record as of a specified date
during such a month will be treated as having been distributed to shareholders
and will be taxable to shareholders as if received in December.
17
<PAGE>
Dividends of net ordinary income and distributions of any net realized
short-term capital gain are taxable to shareholders as ordinary income. Since
the Fund expects to derive a substantial portion of its gross income (exclusive
of capital gains) from sources other than qualifying dividends, it is expected
that only a small portion, if any, of the Fund's dividends or distributions will
qualify for the dividends received deduction for corporations.
The excess of net long-term capital gains over the net short-term capital
losses realized and distributed by the Fund to its shareholders will be taxable
to the shareholders as long-term capital gains, irrespective of the length of
time a shareholder may have held Fund shares. Any dividend or distribution
received by a shareholder on shares of the Fund shortly after the purchase of
such shares will have the effect of reducing the net asset value of such shares
by the amount of such dividend or distribution. Furthermore, such dividend or
distribution, although in effect a return of capital, would be taxable to the
shareholder as described above. If a shareholder has held shares in the Fund for
six months or less and during that period has received a distribution taxable to
the shareholder as a long-term capital gain, any loss recognized by the
shareholder on the sale of those shares during that period will be treated as a
long-term capital loss to the extent of the distribution.
Dividends and distributions are taxable in the manner discussed regardless
of whether they are paid to the shareholder in cash or are reinvested in
additional shares of the Fund's common stock.
The Fund generally will be required to withhold tax at the rate of 31% with
respect to distributions of net ordinary income and net realized capital gains
payable to a noncorporate shareholder unless the shareholder certifies on his
Account Application that the social security or taxpayer identification number
provided is correct and that the shareholder has not been notified by the
Internal Revenue Service that he is subject to backup withholding.
Income received by the Fund from sources within various foreign countries
may be subject to foreign income tax. If more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of the stock or
securities of foreign corporations, the Fund may elect to "pass through" to the
Fund's shareholders the amount of foreign income taxes paid by the Fund.
Pursuant to such election, shareholders would be required: (i) to include in
gross income, even though not actually received, their respective pro-rata
shares of the Fund's gross income from foreign sources; and (ii) either to
deduct their pro-rata share of foreign taxes in computing their taxable income,
or to use it as a foreign tax credit against Federal income tax (but not both).
No deduction for foreign taxes could be claimed by a shareholder who does not
itemize deductions.
Shareholders who choose to utilize a credit (rather than a deduction) for
foreign taxes will be subject to the limitation that the credit may not exceed
the shareholder's U.S. tax (determined without regard to the availability of the
credit) attributable to his or her total foreign source taxable income. For this
purpose, the portion of dividends and distributions paid by the Fund from its
foreign source income will be treated as foreign source income. The Fund's gains
from the sale of securities will generally be treated as derived from U.S.
sources, however, and certain foreign currency gains and losses likewise will be
treated as derived from U.S. sources. The limitation on the foreign tax credit
is applied separately to foreign source "passive income," such as the portion of
dividends received from the Fund which qualifies as foreign source income. In
addition, the foreign tax credit is allowed to offset only 90% of the
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of the foreign income taxes paid by the
Fund.
The Fund intends for each taxable year to meet the requirements of the Code
to "pass through" to its shareholders foreign income taxes paid, but there can
be no assurance that the Fund will be able to do so. Each shareholder will be
notified within 60 days after the close of each taxable year of the Fund whether
the foreign taxes paid by the Fund will "pass through" for that year, and, if
so, the amount of each shareholder's pro-rata share (by country) of (i) the
foreign taxes paid, and (ii) the Fund's gross income from foreign sources. Of
course, shareholders who are not liable for Federal income taxes, such as
retirement plans qualified under Section 401 of the Code, will not be affected
by any such "pass through" of foreign tax credits.
INVESTMENTS IN PASSIVE FOREIGN INVESTMENT COMPANIES. If the Fund purchases
shares in certain foreign investment entities, referred to as "passive foreign
investment companies," the Fund itself may be subject to US Federal income tax,
and an additional charge in the nature of interest, on a portion of any "excess
distribution" from such company or gain from the disposition of such shares,
even if the distribution or gain is paid by the Fund as a dividend to its
shareholders. If the Fund were able and elected to treat a passive foreign
investment
18
<PAGE>
company as a "qualified electing fund," in lieu of the treatment described
above, the Fund would be required each year to include in income, and distribute
to shareholders in accordance with the distribution requirements set forth
above, the Fund's pro rata share of the ordinary earnings and net capital gains
of the company, whether or not distributed to the Fund.
CERTAIN FOREIGN CURRENCY TRANSACTIONS. Gains or losses attributable to foreign
currency contracts, or to fluctuations in exchange rates that occur between the
time the Fund accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund actually
collects such receivables or pays such liabilities are treated as ordinary
income or ordinary loss. Similarly, gains or losses on disposition of debt
securities denominated in a foreign currency attributable to fluctuations in the
value of the foreign currency between the date of acquisition of the security
and the date of disposition also are treated as ordinary gain or loss. These
gains or losses increase or decrease the amount of the Fund's net investment
income available to be distributed to its shareholders as ordinary income.
OPTIONS TRANSACTIONS. A special "marked-to-market" system governs the taxation
of "section 1256 contracts," which include certain listed options. The Fund may
invest in such section 1256 contracts. In general, gain or loss on section 1256
contracts will be taken into account for tax purposes when actually realized. In
addition, any section 1256 contracts held at the end of a taxable year will be
treated as sold at fair market value (that is, marked-to-market), and the
resulting gain or loss will be recognized for tax purposes. In general, gain or
loss recognized by the Fund on the actual or deemed disposition of a section
1256 contract will be treated as 60% long-term and 40% short-term capital gain
or loss, regardless of the period of time the section 1256 contract is actually
held by the Fund. The Fund can elect to exempt its section 1256 contracts which
are part of a "mixed" straddle from the application of section 1256.
PERFORMANCE INFORMATION
The Fund may from time to time advertise its total return and average annual
total return in advertisements or in information furnished to present or
prospective shareholders. Total return and average annual total return are
computed separately for Class A, Class B and Class D shares. The amounts shall
be computed by deducting the maximum sales load of $47.50 (4.75% of the public
offering price) or CDSL, if applicable, assuming all of the dividends and
distributions paid by the Fund over the relevant time period were reinvested,
and redemption at the end of the applicable periods. The average annual total
return will be determined by calculating the annual rate required for the
initial payment to grow to the amount which would have been received upon
redemption (i.e., the average annual compound rate of return).
GENERAL INFORMATION
CAPITAL STOCK. The Board of Directors is authorized to classify or reclassify
and issue any unissued capital stock of the Corporation into any number of
series or classes without further action by shareholders. To date, shares of
five series have been authorized, which shares constitute interests in the Fund,
the Seligman Henderson Global Growth Opportunities Fund, the Seligman Henderson
Global Smaller Companies Fund, the Seligman Henderson Global Technology Fund and
the Seligman Henderson International Fund. The 1940 Act requires that where more
than one series or class exists, each series or class must be preferred over all
other series or classes in respect of assets specifically allocated to such
series or class.
Rule 18f-2 under the 1940 Act provides that any matter required by the
provisions of the 1940 Act or applicable state law, or otherwise, to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Corporation shall not be deemed to have been effectively
acted upon unless approved by the holders of a majority of the outstanding
shares of each class or series affected by such matter. Rule 18f-2 further
provides that a class or series shall be deemed to be affected by a matter
unless it is clear that the interests of each class or series in the matter are
substantially identical or that the matter does not affect any interest of such
class or series. However, the Rule exempts the selection of independent public
accountants, the approval of principal distributing contracts and the election
of directors from the separate voting requirements of the Rule.
19
<PAGE>
CUSTODIAN AND RECORDKEEPING AGENT. Morgan Stanley Trust Company (NY), One
Pierrepont Plaza, Brooklyn, New York 11201, serves as custodian for the Fund.
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri
64105, maintains, under the general supervision of the Manager, certain
accounting records and determines the net asset value for the Fund.
AUDITORS. Deloitte & Touche LLP, independent auditors, are the auditors of the
Fund. Their address is Two World Financial Center, New York, NY 10281.
FINANCIAL STATEMENTS
The Annual Report to shareholders for the Corporation's fiscal year ended
October 31, 1995, as well as the Mid-Year Report for the six months ended April
30, 1996 are incorporated by reference into this Statement of Additional
Information. The Reports contain schedules of the investments of the
Corporation's other series as well as certain other financial information as of
the applicable date. These Reports will be furnished without charge to investors
who request copies of the Fund's Statement of Additional Information. Unaudited
financial statements for the period May 28, 1996 (commencement of operations) to
September 30, 1996 are included herein as Appendix C.
20
<PAGE>
APPENDIX A
MOODY'S INVESTORS SERVICE, 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" indicate the
highest quality repayment ability of the rated issue.
21
<PAGE>
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.
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 high degree of safety and 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 degree of safety and capacity to pay interest and repay principal
although it is somewhat more susceptible in the long term 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 a satisfactory degree
of safety and 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.
22
<PAGE>
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.
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.
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.
23
<PAGE>
APPENDIX B
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of J. & W.
Seligman & Co. In the years that followed, the Seligman Complex played a major
role in the geographical expansion and industrial development of the United
States.
THE SELIGMAN COMPLEX:
...Prior to 1900
o Helps finance America's fledgling railroads through underwritings.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
o Becomes a prominent underwriter of corporate securities, including New
York Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and
urban development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o Participates in hundreds of successful underwritings including those for
some of the Country's largest companies: Briggs Manufacturing, Dodge
Brothers, General Motors, Minneapolis-Honeywell Regulatory Company, Maytag
Company United Artists Theater Circuit and Victor Talking Machine Company.
o Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion in
assets and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
o Establishes Investment Advisory Service.
...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.
24
<PAGE>
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
o Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global
investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund. o Launches Seligman Henderson Global Fund Series, Inc., which today
offers 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.
25
<PAGE>
Appendix C
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
================================================================================
PORTFOLIO OF INVESTMENTS (unaudited) September 30, 1996
================================================================================
SHARES VALUE
------------ -------------
COMMON STOCKS 88.8%
AUTOMOTIVE MANUFACTURING 3.2%
Qingling Motors* (China) ............................. 1,800,000 $ 692,487
Tata Engineering (GDRs) (India) ...................... 53,000 695,360
------------
1,387,847
------------
CONSTRUCTION & PROPERTY 3.0%
Citic Pacific (China) ................................ 147,000 665,330
Grupo Ara (Mexico) ................................... 137,000 290,639
Grupo Tribasa (ADRs)* (Mexico) ....................... 61,300 337,150
-------------
1,293,119
-------------
CONSUMER GOODS & SERVICES 8.1%
Companhia Cervejari Brahma (Brazil) .................. 59,500 758,625
Hanjaya Mandala Sampoerna (Indonesia) ................ 50,000 486,213
Hellenic Bottling (Greece) ........................... 17,600 599,336
Panamerican Beverages (Mexico) ....................... 13,600 559,300
San Miguel (Class B) (Philippines) ................... 176,000 576,939
South African Breweries (South Africa) ............... 20,200 538,429
-------------
3,518,842
-------------
DRUGS & HEALTH CARE 6.2%
EGIS (Hungary) ....................................... 13,000 895,146
Pliva (GDRs)* (Croatia) .............................. 20,000 987,500
Richter Gedeon (GDRs) (Hungary) ...................... 16,000 835,200
-------------
2,717,846
-------------
ELECTRIC UTILITIES 6.6%
BSES (GDRs)*+ (India) ................................ 31,000 534,750
Cemig (ADRs) (Brazil) ................................ 32,600 973,804
Companhia Energetica de Sao Paulo (ADRs)* (Brazil) ... 38,700 346,806
Electricity Generating Public Company (Thailand) ..... 150,000 472,014
Huaneng Power International (ADRs)* (China) .......... 14,000 232,750
Korea Electric Power (ADRs) (South Korea) ............ 17,000 320,875
-------------
2,880,999
-------------
FINANCIAL SERVICES 15.1%
Bangkok Bank (Thailand) ............................... 75,000 979,428
Bank Internasional (Indonesia) ........................ 424,000 620,630
Commercial International Bank+(Egypt) ................. 30,000 465,000
Grupo Financiero Banamex Accival (B Shares) (Mexico) .. 131,000 284,163
Guangdong Investments (China) ......................... 940,000 662,486
Komercni Banka (GDRs) (Czech Republic) ................ 23,000 646,875
Krung Thai Bank (Thailand) ............................ 229,000 981,828
Malayan Banking (Malaysia) ............................ 64,000 635,787
Metropolitan Bank & Trust (Philippines) ............... 25,000 595,578
Zagrebacka Banka (GDRs)*+ (Croatia) ................... 35,000 678,300
-------------
6,550,075
-------------
INDUSTRIAL GOODS & SERVICES 4.8%
ALFA (Mexico) ......................................... 154,300 685,369
Skoda Plzen (Czech Republic) .......................... 19,000 733,479
United Engineers (Malaysia) ........................... 88,000 681,109
-------------
2,099,957
-------------
26
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
================================================================================
PORTFOLIO OF INVESTMENTS (unaudited) (continued) September 30, 1996
================================================================================
SHARES VALUE
------------ -------------
LEISURE & HOTELS 2.6%
Grupo Televisa (GDRs)*(Mexico) ........................ 19,300 557,288
Shangri-La Asia (China) ............................... 420,000 559,420
-------------
1,116,708
-------------
MANUFACTURING 4.3%
Crompton Greaves (GDRs)+ (India) ...................... 130,000 829,400
Fraser & Neave Holding (Malaysia) ..................... 126,000 603,232
Samsung Electronics (GDRs)+(South Korea) .............. 17,000 422,875
-------------
1,855,507
-------------
METALS 5.6%
China Steel (GDRs) (Taiwan) ........................... 24,500 497,718
Hindalco Industries (GDRs)+(India) .................... 30,000 888,750
Pohang Iron & Steel (ADRs) (Souh Korea) ............... 24,000 513,000
Usinas Siderurgicas de Minas Gerais (ADRs)+(Brazil) ... 51,600 510,417
-------------
2,409,885
-------------
RESOURCES 7.1%
Anglo-American Corporation of South Africa
(South Africa) ...................................... 10,000 612,402
Exploration & Production (Thailand) ................... 43,000 635,960
Gencor (South Africa) ................................. 168,000 599,537
Perez (ADRs) (Argentina) .............................. 61,600 776,259
Quimica Minera Chile (ADRs) (Chile) ................... 8,500 474,938
-------------
3,099,096
-------------
RETAILING 10.3%
Cifra (ADRs) *(Mexico) ................................ 364,250 524,884
Disco (ADRs)* (Argentina) ............................. 36,000 706,500
Jeronimo Martins & Filho (Portugal) ................... 7,000 637,266
Matahari Putra Prima (Indonesia) ...................... 136,000 147,838
Matahari Putra Prima Rights* (Indonesia) .............. 136,000 92,948
Metro Cash & Carry (South Africa) ..................... 170,000 580,460
Migros Turk (Turkey) .................................. 725,000 645,459
Santa Isabel (ADRs) (Chile) ........................... 22,500 576,563
SM Prime Holdings (Philippines) ....................... 2,400,000 558,033
-------------
4,469,951
-------------
TELECOMMUNICATIONS 8.0%
Portugal Telecom (ADRs) (Portugal) .................... 18,000 463,500
Portugal Telecom (Portugal) .......................... 6,000 154,352
SPT Telecom* (Czech Republic) ......................... 4,900 605,095
Telebras (ADRs) (Brazil) .............................. 19,700 1,556,058
Telefonica del Peru (Peru) ............................ 30,000 686,250
-------------
3,465,255
-------------
27
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
================================================================================
PORTFOLIO OF INVESTMENTS (unaudited) (continued) September 30, 1996
================================================================================
SHARES VALUE
------------ -------------
MISCELLANEOUS 3.9%
Formosa Fund* (Taiwan) ................................ 90 794,250
Taipei Fund* (Taiwan) ................................. 90 769,500
Taiwan Opportunities Fund* (Taiwan) ................... 13,000 130,650
-------------
1,694,400
-------------
TOTAL INVESTMENTS 88.8%
(Cost $38,506,201) 38,559,487
OTHER ASSETS LESS LIABILITIES 11.2% 4,889,944
-------------
NET ASSETS 100.0% $43,449,431
=============
- --------------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
28
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES (unaudited) September 30, 1996
================================================================================
ASSETS:
Investments, at value:
Common stocks (cost $38,506,201) ............................. $ 38,559,487
Cash ........................................................... 5,816,035
Receivable for Capital Stock sold .............................. 535,885
Receivable for securities sold ................................. 219,035
Receivable from associated companies ........................... 49,724
Receivable for interest and dividends .......................... 38,598
Other .......................................................... 50,433
------------
TOTAL ASSETS ................................................... 45,269,197
------------
LIABILITIES:
Payable for securities purchased ............................... 1,560,280
Payable for Capital Stock repurchased .......................... 75,232
Net unrealized depreciation on foreign currency contracts ...... 829
Accrued expenses, taxes, and other ............................. 183,425
------------
TOTAL LIABILITIES .............................................. 1,819,766
------------
NET ASSETS ..................................................... $ 43,449,431
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.001 par value; 100,000,000 shares
authorized; 6,164,733 shares outstanding):
Class A...................................................... $2,794
Class B...................................................... 1,465
Class D...................................................... 1,905
Additional paid-in-capital ..................................... 43,684,817
Accumulated net investment loss ................................ (150,524)
Accumulated net realized loss .................................. (143,867)
Net unrealized appreciation of investments ..................... 264,450
Net unrealized depreciation on translation of assets and
liabilities denominated in foreign currencies and foreign
currency contracts .......................................... (211,609)
------------
NET ASSETS ..................................................... $ 43,449,431
============
NET ASSET VALUE PER SHARE:
Class A ($19,715,327 / 2,794,378 shares)..................... $7.05
Class B ($10,317,088 / 1,465,154 shares)..................... $7.04
Class D ($13,417,016 / 1,905,201 shares)..................... $7.04
- -------------------
See Notes to Financial Statements.
29
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
================================================================================
STATEMENT OF OPERATIONS (unaudited) For the period May 28, 1996* to
September 30, 1996
================================================================================
INVESTMENT INCOME:
Dividends ......................................................... $ 99,015
Interest .......................................................... 78,970
---------
Total investment income (net of foreign taxes withheld of $4,457).. 177,985
---------
EXPENSES:
Distribution and service fees ..................................... 69,783
Shareholder account services ...................................... 65,197
Management fees ................................................... 64,628
Auditing and legal fees ........................................... 26,061
Shareholder reports and communications ............................ 23,014
Registration ...................................................... 22,420
Custody and related services ...................................... 21,613
Directors' fees and expenses ...................................... 1,500
Miscellaneous ..................................................... 494
---------
Total expenses .................................................... 294,710
---------
Net investment loss ............................................... (116,725)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on investments .................................. (143,867)
Net realized loss from foreign currency transactions .............. (33,799)
Net unrealized appreciation of investments ........................ 264,450
Net unrealized depreciation on translations
of assets and liabilities denominated in foreign
currencies and foreign currency contracts ....................... (211,609)
---------
Net loss on investments and foreign currency transactions.......... (124,825)
---------
DECREASE IN NET ASSETS FROM OPERATIONS............................. ($241,550)
========
- -----------------
* Commencement of operations.
See Notes to Financial Statements.
30
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
================================================================================
STATEMENT OF CHANGES IN NET ASSET (unaudited)
================================================================================
5/28/96*
TO
9/30/96
--------
OPERATIONS:
Net investment loss..................................................($116,725)
Net realized loss on investments..................................... (143,867)
Net realized loss from foreign currency transactions................. (33,799)
Net change in unrealized appreciation of investments ..................264,450
Net change in unrealized depreciation on translation of assets and
liablilites denominated in foreign currencies and foreign
currency contracts ............................................... (211,609)
---------
Decrease in net assets from operations............................... (241,550)
---------
CAPITAL SHARE TRANSACTIONS: SHARES
-------------------
5/28/96* to 9/30/96
-------------------
Net proceeds from sale of shares:
Class A .......................................... 2,518,895 17,853,276
Class B .......................................... 1,489,192 10,543,316
Class D .......................................... 1,581,974 11,200,411
Exchanged from associated funds:
Class A .......................................... 471,144 3,346,321
Class B .......................................... 1,690 11,693
Class D .......................................... 396,313 2,801,876
--------- -----------
Total................................................ 6,459,208 45,756,893
--------- -----------
Cost of shares repurchased:
Class A .......................................... (79,353) (559,131)
Class B .......................................... (16,179) (113,138)
Class D .......................................... (28,486) (199,480)
Exchanged into associated funds:
Class A .......................................... (116,308) (813,967)
Class B .......................................... (9,549) (66,909)
Class D .......................................... (44,600) (313,287)
--------- -----------
Total................................................ (294,475) (2,065,912)
--------- -----------
Increase in net assets from capital share
transactions 6,164,733 43,690,981
========= -----------
Increase in net assets........................................... 43,449,431
NET ASSETS:
Beginning of period ............................................. --
-----------
End of period ................................................... $43,449,431
===========
- -------------------
* Commencement of operations.
See Notes to Financial Statements.
31
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Seligman Henderson Emerging Markets Growth Fund (the "Series") is one of five
separate series of Seligman Henderson Global Fund Series, Inc. (the "Fund"). The
other series are the "International Fund," the "Global Growth Opportunities
Fund," the "Global Smaller Companies Fund," and the "Global Technology Fund."
The Series offers three classes of shares -- Class A shares, Class B shares and
Class D shares and had no operations prior to its commencement on May 28, 1996,
other than those relating to organizational matters.
Class A shares are sold with an initial sales charge of up to 4.75% and a
continuing service fee of up to 0.25% on an annual basis. Class A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
charge but are subject to a contingent deferred sales load ("CDSL") of 1% on
redemptions made within 18 months of purchase. Class B shares are sold without
an initial sales charge but are subject to a distribution fee of up to 0.75% and
a service fee of up to 0.25% on an annual basis, and a CDSL, if applicable, of
5% on redemptions in the first year after purchase, declining to 1% in the sixth
year, and 0% thereafter. Class B shares will automatically convert to Class A
shares on the last day of the month that precedes the eight anniversary of their
date of purchase. Class D shares are sold without an initial sales charge but
are subject to a distribution fee of up to 0.75% and a service fee of up to
0.25% on an annual basis, and a CDSL of 1% imposed on certain redemptions made
within one year of purchase. The three classes of shares for the Series
represent interests in the same portfolio of investments, have the same rights
and are generally identical in all respects except that each class bears its
separate distribution and certain class expenses and has exclusive voting rights
with respect to any matter to which a separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. 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 which mature
in more than 60 days are valued at current market quotations. Short-term
holdings maturing in 60 days or less are valued at amortized cost.
b. Investments in foreign securities will usually be denominated in foreign
currency, and the Series may temporarily hold funds in foreign currencies. The
books and records of the Series 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 Series' net asset values 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
sales of securities and net investment income and gains, if any, to be
distributed to
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
shareholders of the Fund. 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 Series' 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 Series separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of securities held in the portfolio. Similarly, the
Series separates the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the period.
c. The Series may enter into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its 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 on translation of assets and liabilities denominated in foreign
currencies 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.
d. There is no provision for federal income or excise tax. The Series will elect
to be taxed as a regulated investment company and intends to distribute
substantially all taxable net income and net gain realized, if any, annually.
Withholding taxes on foreign dividends and interest have been provided for in
accordance with the Series' understanding of the applicable country's tax rules
and rates.
e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized of 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 will have no effect on net assets, results of operations, or
net asset value per share of the Series.
f. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. Dividends receivable and payable are recorded on ex-dividend dates.
Interest income is recorded on an accrual basis.
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
g. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares based
upon the relative value of shares of each class. Class-specific expenses, which
include distribution and service fees and any other items that can be
specifically attributed to a particular class, are charged directly to such
class.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the period ended September 30, 1996, amounted to $40,265,256
and $1,615,188, respectively.
At September 30, 1996, the cost of investments of the Series for federal
income tax purposes was substantially the same as the cost for financial
reporting purposes, and the tax basis gross unrealized appreciation and
depreciation of portfolio securities, including the effects of foreign currency
translations, amounted to $1,986,195 and $1,932,909, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides or arranges for the necessary personnel and facilities.
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and the
Manager is paid by the Manager or by Seligman Henderson Co. (the "Subadviser"),
a 50%-owned affiliate of the Manager. The Manager receives a fee, calculated
daily and payable monthly, equal to 1.25% per annum of the Series' average daily
net assets, of which 1.15% is paid the Subadviser. During the period ended
September 30, 1996, the Manager and Subadviser, at their discretion, waived a
portion of their fees equal to $75,340. The management fee reflected in the
statement of operations represents 0.58% per annum of the Series' average daily
net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Series' shares and an affiliate of the Manager, received
concessions of $26,829 from sales of Class A shares, after commissions of
$712,356 paid to dealers.
The Series has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Series pursuant
to the Plan. For the period ended September 30, 1996, fees incurred by the
Series aggregated $11,591, or 0.22% per annum of the average daily net assets of
Class A shares.
The Series has a Plan with respect to Class B and Class D shares under which
service organizations can enter into agreements with the Distributor and receive
a continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class B and Class D shares for which the organizations are
responsible; and fees, for Class D shares only, for providing other distribution
assistance of up to 0.75% on an annual basis of such average daily net assets.
Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
this fee to a third party (the "Purchaser"), which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
For the period ended September 30, 1996, fees incurred under the Plan,
equivalent to 1% per annum at the average net assets of Class B and Class D
shares, amounted to $24,955 and $33,237, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the
period ended September 30, 1996, such charges amounted to $716 for the Series.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amount of such payments
and the Class B shares distribution fees retained by the Distributor for the
period ended September 30, 1996, amounted to $27,068.
Seligman Services, Inc., an affiliate of Manager, is eligible to receive
commissions from certain sales of the Series' shares, as well as distribution
and fees pursuant to the Plan. For the period ended September 30, 1996, Seligman
Services, Inc. received commissions of $3,109 from sales of the Series and
distribution and service fees of $568, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Series at cost $65,197 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Subadviser, the Distributor, Seligman Services, Inc. and/or
Seligman Data Corp.
Fees of $7,000 were incurred by the Series for the period ended September
30, 1996 for the legal services of Sullivan & Cromwell, a member of which firm
is a director of the Fund.
The Series has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. Deferred fees and the related accrued interest are not deductible for
federal income tax purposes until such amounts are paid. The cost of such fees
and interest is included in directors' fees and expenses, and the accumulated
balance hereof at September 30, 1996, of $300, is included in other liabilities.
5. At September 30, 1996, the Series had outstanding foreign exchange currency
contracts to purchase foreign currencies as follows:
<TABLE>
<CAPTION>
Foreign In Exchange Settlement Unrealized
Contract Currency For US$ Date Value US$ Depreciation
<S> <C> <C> <C> <C> <C> <C>
Indonesian Rupiahs 410,292,145 177,003 10/01/96 176,637 $(366)
Mexican Pesos 2,192,000 291,102 10/01/96 290,639 (463)
------
$(829)
------
</TABLE>
35
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
The Series' financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from each Class' beginning net asset value to
the ending net asset value so that they may understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts, based on average shares outstanding.
The total return based on net asset value measures each Class' performance
assuming investors purchased shares at net asset value as of the beginning of
the period, reinvested dividends and capital gains paid at net asset value, and
then sold their shares wazzu at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Series. The total
returns for periods of less than one year are not annualized.
Average commission rate paid represents the average commissions paid by the
Series 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 commission were paid.
<TABLE>
<CAPTION>
Class A Class B Class D
------- ------- -------
May 28, 1996* May 28, 1996* May 28, 1996*
to to to
September 30, 1996 September 30, 1996 September 30, 1996
------------------ ------------------ ------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $7.14 $7.14 $7.14
----- ----- -----
Net investment loss (0.02) (0.03) (0.03)
Net realized and unrealized investment loss (0.02) (0.02) (0.02)
Net realized and unrealized investment loss
from foreign currency transactions (0.05) (0.05) (0.05)
----- ----- -----
Decrease from investment operations (0.09) (0.10) (0.10)
Dividends paid - - -
Distributions from net gain realized - - -
----- ----- -----
Net decrease in net asset value (0.09) (0.10) (0.10)
----- ----- -----
Net asset value, end of period $7.05 $7.04 $7.04
===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: (1.26)% (1.40)% (1.40)%
RATIOS/SUPPLEMENTAL DATA:**
Expenses to average net assets 2.22% + 3.00% + 3.00% +
Net investment loss to average net assets (0.63)%+ (1.41%)+ (1.41)%+
Portfolio turnover 6.18% 6.18% 6.18%
Average commission rate paid $0.0151 $0.0151 $0.0151
Net assets, end of period (000's omitted) $19,715 $10,317 $13,417
Without management fee waiver:**
Net investment loss per share $(0.04) $(0.05) $(0.05)
Expenses to average net assets 2.89% + 3.67% + 3.67% +
Net investment loss to average net assets (1.30)%+ (2.08)%+ (2.08)%+
</TABLE>
- ----------------------------
* Commencement of operations.
**The Manager and Subadviser, at their discretion, waived a portion of their
fees.
+ Annualized.
See Notes to Financial Statements.
36
<PAGE>
File No. 33-44186
811-6485
The Registrant's Annual Report to Shareholders, dated October 31, 1995 and
Mid-Year Report, dated April 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 January 6, 1996 and June 28, 1996,
respectively.
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION
- ------- -----------------
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Part A - Financial highlights for the period May 28, 1996
(commencement of operations) to September 30, 1996 for the
Seligman Henderson Emerging Markets Growth Fund (unaudited).
Part B - Financial statements are included in the Registrant's Annual
Report to Shareholders, dated October 31, 1995 and Mid-Year
Report, dated April 30, 1996, which are incorporated by
reference in the Statement of Additional Information. These
financial statements are: Portfolios of Investments as of
October 31, 1995 and April 30, 1996; Statements of Assets
and Liabilities as of October 31, 1995 and April 30, 1996;
Statements of Operations for the year ended October 31, 1995
and the six months ended April 30, 1996; Statements of
Changes in Net Assets for the years ended October 31, 1995
and 1994 and for the six months ended April 30, 1996 for the
Seligman Henderson International Fund and the Seligman
Henderson Global Smaller Companies Fund; for the year ended
October 31, 1995 and the period May 23, 1994 (commencement
of operations) to October 31, 1994 and for the six months
ended April 30, 1996 for the Seligman Henderson Global
Technology Fund and for the six months ended April 30, 1996
for the Seligman Henderson Global Growth Opportunities Fund;
Notes to Financial Statements; Financial Highlights from
commencement of operations of each of these four Series
through April 30, 1996; Report of Independent Auditors.
Unaudited financial statements for the Seligman Henderson
Emerging Markets Growth Fund are included in Appendix C to
the Statement of Additional Information. These financial
statements are: Portfolio of Investments as of September 30,
1996; Statement of Assets and Liabilities as of September
30, 1996; Statement of Operations for the period May 28,
1996 (commencement of operations) to September 30, 1996;
Statement of Changes in Net Assets for the period May 28,
1996 (commencement of operations) to September 30, 1996;
Notes to Financial Statements; Financial Highlights for the
period May 28, 1996 (commencement of operations) to
September 30, 1996.
(b) Exhibits: Exhibits listed below have been previously filed
and are incorporated by reference herein, except Exhibits
marked with an asterisk (*) which are attached hereto.
(1) Form of Amended and Restated Articles of Incorporation of Registrant*
(2) By-Laws of Registrant are incorporated by reference to Exhibit 2 of
the Registrant's Registration Statement on Form N-1A, filed on
November 26, 1991.
(3) N/A
(4) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson International Fund are incorporated by
reference to Exhibit 4 of the Registrant's Post-Effective Amendment
No. 6, filed on April 23, 1993 and Post-Effective Amendment No. 8,
filed on September 21, 1993. Specimen Stock Certificate for Class B
Shares with respect to Seligman Henderson International Fund is
incorporated by reference to Form SE filed on April 16, 1996.
(4a) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson Global Smaller Companies Fund
(formerly, Seligman Henderson Global Emerging Companies Fund) are
incorporated by reference to Exhibit 4a to the Registrant's
Post-Effective Amendment No. 10, filed on August 10, 1992. Specimen
Stock Certificate for Class B Shares with respect to Seligman
Henderson Global Emerging Companies Fund is incorporated by reference
to Form SE filed on April 16, 1996.
(4b) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson Global Technology Fund are incorporated
by reference to Exhibit 4b of the Registrant's Post-Effective
Amendment No. 11, filed on May 10, 1994. Specimen Stock Certificate
for Class B Shares with respect to Seligman Henderson Global
Technology Fund is incorporated by reference to Form SE filed on
April 16, 1996.
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
(4c) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson Global Growth Opportunities Fund are
incorporated by reference to Form SE, filed on behalf of the
Registrant on October 30, 1995. Specimen Stock Certificate for Class
B Shares with respect to Seligman Henderson Global Growth
Opportunities Fund is incorporated by reference to Form SE filed on
April 16, 1996.
(4d) Specimen Stock Certificates for Class A, Class B and Class D Shares
with respect to Seligman Henderson Emerging Markets Growth Fund are
incorporated by reference to Form SE, filed on behalf of the
Registrant on May 15, 1996.
(4e) Additional rights of security holders are set forth in Article FIFTH
and SEVENTH of the Registrant's Articles of Incorporation and
Articles I and IV of Registrant's By-Laws which are incorporated by
reference to Exhibit 1a and Exhibit 2, respectively, of the
Registrant's Registration Statement on Form N-1A, filed on November
26, 1991.
(5a) Revised Management Agreement between the Registrant and J. & W.
Seligman & Co. Incorporated is incorporated by reference to
Registrant's Post-Effective Amendment No. 21, filed on May 20, 1996.
(5b) Subadvisory Agreement between the Manager and the Subadviser with
respect to the Seligman Henderson International Fund, the Seligman
Henderson Global Smaller Companies Fund, the Seligman Henderson
Global Technology Fund and the Seligman Henderson Global Growth
Opportunities Fund, is incorporated by reference to Exhibit 5b of the
Registrant's Post-Effective-Amendment No. 17, filed on October 27,
1995.
(5c) Subadvisory Agreement between the Manager and the Subadviser with
respect to the Seligman Henderson Emerging Markets Growth Fund is
incorporated by reference to Registrant's Post-Effective Amendment
No. 21, filed on May 20, 1996.
(6) Distributing Agreement between the Registrant and Seligman Financial
Services, Inc., is incorporated by reference to Exhibit 6 of the
Registrant's Post-Effective-Amendment No. 17, filed October 27, 1995.
(6a) Sales Agreement between Seligman Financial Services, Inc. and Dealers
is incorporated by reference to the Registrant's Post-wazzu Effective
Amendment No. 20, filed on April 19, 1996.
(7a) Directors Deferred Compensation Plan is incorporated by reference to
Exhibit 7a of the Registrant's Pre-Effective Amendment No. 2, filed
on March 26, 1992.
(7b) Amendments to the Amended Retirement Income Plan of J. & W. Seligman
& Co. Incorporated and Trust are incorporated by reference to Exhibit
7b of the Registrant's Post-Effective Amendment No. 11, filed on May
10, 1994.
(7c) Amendments to the Amended Employee's Thrift Plan of Union Data
Service Center, Inc. and Trust are incorporated by reference to
Exhibit 7c of the Registrant's Post-Effective Amendment No. 11, filed
on May 10, 1994.
(8) Custody Agreement, dated May 1, 1996, between Registrant and Morgan
Stanley Trust Company.*
(9) Recordkeeping Agreement between Registrant and Investors Fiduciary
Trust Company is incorporated by reference to Exhibit 9 of the
Registrant's Pre-Effective Amendment No. 2, filed on March 26, 1992.
(10) Opinion and Consent of Counsel is incorporated by reference to
Registrant's Post-Effective Amendment No. 21, filed on May 20, 1996.
(11) Consent of Independent Auditors.*
(12) N/A
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (CONTINUED)
- ------- -----------------------------
(13a) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson International Fund's Class A and Class D Shares
and J. & W. Seligman & Co. Incorporated is incorporated by reference
to Exhibit 13a of the Registrant's Pre-Effective Amendment No. 2,
filed on March 25, 1992 and Post-Effective Amendment No. 8, filed on
September 21, 1993. Form of Purchase Agreement for Initial Capital
between Registrant's Seligman Henderson International Fund's Class B
shares and J. & W. Seligman & Co. Incorporated is incorporated by
reference to Exhibit 13a of the Registrant's Post-Effective Amendment
No. 20, filed on April 19, 1996.
(13b) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Smaller Companies Fund's Class A and Class
D Shares and J. & W. Seligman & Co. Incorporated is incorporated by
reference to Exhibit 13b of the Registrant's Post-Effective Amendment
No. 6, filed on April 22, 1993. Form of Purchase Agreement for
Initial Capital between Registrant's Seligman Henderson Global
Smaller Companies Fund's Class B shares and J. & W. Seligman & Co.
Incorporated is incorporated by reference to Exhibit 13b of the
Registrant's Post-Effective Amendment No. 20, filed on April 19,
1996.
(13c) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Technology Fund's Class A and D Shares and
J. & W. Seligman & Co. Incorporated is incorporated by reference to
Exhibit 13c of the Registrant's Post-Effective Amendment No. 11,
filed on May 10, 1994. Form of Purchase Agreement for Initial Capital
between Registrant's Seligman Henderson Global Technology Fund's
Class B shares and J. & W. Seligman & Co. Incorporated is
incorporated by reference to Exhibit 13c of the Registrant's
Post-Effective Amendment No. 20, filed on April 19, 1996.
(13d) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Growth Opportunities Fund Class A and Class
D Shares and J. & W. Seligman & Co. Incorporated is incorporated by
reference to Exhibit 13d of Post-Effective Amendment No. 18 filed on
February 28, 1996. Form of Purchase Agreement for Initial Capital
between Registrant's Seligman Henderson Global Growth Opportunities
Fund's Class B shares and J. & W. Seligman & Co. Incorporated is
incorporated by reference to Exhibit 13d of the Registrant's
Post-Effective Amendment No. 20, filed April 19, 1996.
(13e) Copy of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Emerging Markets Growth Fund Class A, Class B and
Class D Shares and J. & W. Seligman & Co. Incorporated is
incorporated by reference to Registrant's Post-Effective Amendment
No. 21, filed on May 20, 1996.
(14) Copy of Amended Individual Retirement Account Trust and Related
Documents is incorporated by reference to Exhibit 14 of the
Registrant's Pre-Effective Amendment No. 2, filed on March 26, 1992.
(14a) Copy of Amended Comprehensive Retirement Plans for Money Purchase
and/or Prototype Profit Sharing Plan is incorporated by reference to
Exhibit 14a of Seligman Tax-Exempt Fund Series, Inc. Post-Effective
Amendment No. 24 (File No. 2-86008), filed on November 30, 1992.
(14b) Copy of Amended Basic Business Retirement Plans for Money Purchase
and/or Profit Sharing Plans is Incorporated by reference to Exhibit
14b of Seligman Tax-Exempt Fund Series, Inc. Post-Effective Amendment
No. 24 (File No. 2-86008), filed on November 30, 1992.
(14c) Copy of Amended 403(b)(7) Custodial Account Plan is incorporated by
reference to Exhibit 14c of Seligman New Jersey Tax-Exempt Fund, Inc.
Pre-Effective Amendment No. 1 (File No. 33-13401), filed on January
11, 1988.
(14d) Copy of Amended Simplified Employee Pension Plan (SEP) is
incorporated by reference to Exhibit 14d of the Registrant's
Post-Effective Amendment No. 3, filed on August 10, 1992.
(14e) Copy of the Seligman Family of Funds' (SARSEP) Salary Reduction and
Other Elective Simplified Employee Pension-Individual Retirement
Accounts Contribution Agreement (Under Section 408(k) of the Internal
Revenue Code) is incorporated by reference to Exhibit 14e of the
Registrant's Post-Effective Amendment No. 3, filed on August 10,
1992.
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
(15) Administration, Shareholder Services and Distribution Plans for each
of the Seligman Henderson International Fund, the Seligman Henderson
Global Smaller Companies Fund, the Seligman Henderson Global
Technology Fund and the Seligman Henderson Global Growth
Opportunities Fund and amended form of Administration, Shareholder
Services and Distribution Agreement of the Registrant is incorporated
by reference to Exhibit 15 of the Registrant's Post-Effective
Amendment No. 20, filed April 19, 1996.
(15a) Administration, Shareholder Services and Distribution Plan of
Seligman Henderson Emerging Markets Growth Fund is incorporated by
reference to Registrant's Post-Effective Amendment No. 21, filed on
May 20, 1996.
(16) Schedule for Computation of each Performance Quotation provided in
Registration Statement in response to Item 22 is incorporated by
reference to Exhibit 16 of Registrant's Post-Effective Amendment No.
12, filed on November 29, 1994 and Post-Effective Amendment No. 16,
filed on August 17, 1995.
(17) Financial Data Schedule meeting the requirements of Rule 483 under
the Securities Act of 1933.*
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940 is incorporated by
reference to Exhibit 18 of Registrant's Post-Effective Amendment No.
19 filed on March 5, 1996.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT - None
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
(1) (2)
Number of Record
Title of Class Holders as of October 15, 1996
-------------- ------------------------------
<S> <C> <C>
Seligman Henderson Class A Common Stock (Par Value $.001) 2,824
International Fund Class B Common Stock (Par Value $.001) 138
Class D Common Stock (Par Value $.001) 2,530
Seligman Henderson Class A Common Stock (Par Value $.001) 1,836
Emerging Markets Growth Fund Class B Common Stock (Par Value $.001) 649
Class D Common Stock (Par Value $.001) 881
Seligman Henderson Global Class A Common Stock (Par Value $.001) 7,154
Growth Opportunities Fund Class B Common Stock (Par Value $.001) 452
Class D Common Stock (Par Value $.001) 2,625
Seligman Henderson Global Class A Common Stock (Par Value $.001) 25,096
Smaller Companies Fund Class B Common Stock (Par Value $.001) 5,911
Class D Common Stock (Par Value $.001) 13,609
Seligman Henderson Global Class A Common Stock (Par Value $.001) 56,280
Technology Fund Class B Common Stock (Par Value $.001) 1,507
Class D Common Stock (Par Value $.001) 18,097
</TABLE>
Item 27. Indemnification - Incorporated by reference to Registrant's
Pre-Effective Amendment No. 1 filed with the Securities and Exchange
Commission on February 18, 1992.
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER - 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 High Income Fund
Series, Seligman Income Fund, Inc., Seligman New Jersey Municipal
Fund, Inc., Seligman Pennsylvania Municipal Fund Series, Seligman
Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman
Select Municipal Fund, Inc., Seligman Municipal Fund Series, Inc.,
Seligman Municipal Series Trust and Tri-Continental Corporation.
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 Income Fund, Inc., the Global Portfolio, the Global Smaller
Companies Portfolio, the Global Technology Portfolio and the Global
Growth Opportunities Portfolio of Seligman Portfolios, Inc.
and Tri-Continental Corporation.
The Manager and Subadviser have 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 No.
801-15798 and SEC File No. 801-40670, filed on August 7, 1996 and
October 3, 1996, respectively).
ITEM 29. PRINCIPAL UNDERWRITERS
(a) The names of each investment company (other than the Registrant)
for which Registrant's principal underwriter currently
distributing securities of the Registrant also acts as a
principal underwriter, depositor or investment adviser follow:
Seligman Capital Fund, Inc., Seligman Cash Management Fund,
Inc., Seligman Common Stock Fund, Inc., Seligman Communications
and Information Fund, Inc., Seligman Frontier Fund, Inc.,
Seligman Growth Fund, Inc., Seligman High Income Fund Series,
Seligman Income Fund, Inc., Seligman New Jersey Municipal Fund,
Inc., Seligman Pennsylvania Municipal Fund Series, Seligman
Portfolios, Inc., Seligman Municipal Fund Series, Inc., and
Seligman Municipal Series Trust.
(b) Name of each director, officer or partner of Registrant's
principal underwriter named in response to Item 21:
Seligman Financial Services, Inc.
As of September 30, 1996
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
William C. Morris* Director Chairman of the Board
and Chief Executive
Officer
Brian T. Zino* Director Director and President
Ronald T. Schroeder* Director Director
Fred E. Brown* Director Director
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
Stephen J. Hodgdon* President None
Lawrence P. Vogel* Senior Vice President, Finance Vice President
Ed Lynch* Senior Vice President, Director None
of Marketing
Mark R. Gordon* Senior Vice President,National None
Sales Manager
</TABLE>
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
<TABLE>
<CAPTION>
Seligman Financial Services, Inc.
---------------------------------
As of September 30, 1996
------------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
GERALD I. CETRULO, III Senior Vice President of Sales None
140 West Parkway
Pompton Plains, NJ 07444
BRADLEY W. LARSON Senior Vice President of Sales None
367 Bryan Drive
Danville, CA 94526
D. IAN VALENTINE Senior Vice President of Sales None
307 Braehead Drive
Fredericksburg, VA 22401
BRADLEY F. HANSON Senior Vice President of Sales, None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
KAREN J. BULLOT* Vice President, Retirement Plans None
JOHN CARL* Vice President, Marketing None
MARSHA E. JACOBY* Vice President, National Accounts None
Manager
WILLIAM W. JOHNSON* Vice President, Order Desk None
HELEN SIMON* Vice President, Sales None
Administration Manager
TIM O'CONNELL Vice President, Regional Sales None
14872 Summerbreeze Way
San Diego, CA 92128
JULIANA PERKINS Vice President, Regional Sales None
2348 Adrian Street
Newbury Park, CA 91320
JAMES R. BESHER Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
BRADFORD C. DAVIS Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
JONATHAN G. EVANS Regional Vice Pesident None
222 Fairmont Way
Ft. Lauderdale, FL 33326
DAVID L. GARDNER Regional Vice President None
2504 Clublake Trail
McKinney, TX 75070
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine
Houston, TX 77077
SUSAN R. GUTTERUD Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
</TABLE>
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (continued)
- ------- ------------------
Seligman Financial Services, Inc.
---------------------------------
As of September 30, 1996
------------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
MARK LIEN Regional Vice President None
5904 Mimosa
Sedalia, MO 65301
RANDY D. LIERMAN Regional Vice President None
2627 R.D. Mize Road
Independence, MO 64057
JUDITH L. LYON Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
DAVID L. MEYNCKE Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
MELINDA A. NAWN Regional Vice President None
5850 Squire Hill Court
Cincinnati, OH 45241
ROBERT H. RUHM Regional Vice President None
167 Derby Street
Melrose, MA 02176
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
BRUCE M. TUCKEY Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
ANDREW S. VEASEY Regional Vice President None
14 Woodside
Rumson, NJ 07760
KELLI A. WIRTH-DUMSER Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
JEFFREY S. DEAN* Assistant Vice President, None
Annuity Product Manager
SANDRA FLORIS* Assistant Vice President, Order Desk None
KEITH LANDRY* Assistant Vice President, Order Deak None
FRANK P. MARINO* Assistant Vice President, Mutual
Fund Product Manager None
JOSEPH M. MCGILL* Assistant Vice President and None
Compliance Officer
JOYCE PERESS* Assistant Secretary None
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, NY 10017.
(c) Not applicable.
<PAGE>
File No. 33-44186
811-6485
PART C. OTHER INFORMATION (continued)
- ------- -----------------------------
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
(1) Morgan Stanley Trust Company
1 Pierrepont Plaza
Brooklyn New York 11201;
(2) Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105; and
(3) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
ITEM 31. MANAGEMENT SERVICES - Seligman Data Corp., the Registrant's
shareholder service agent, has an agreement with First Data
Investor Services Group ("FDISG") pursuant to which FDISG
provides a data processing system for certain shareholder
accounting and recordkeeping functions performed by Seligman
Data Corp. For the fiscal periods ended October 31, 1995, 1994
and 1993, the approximate cost of these services was:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Seligman Henderson International Fund $ 17,800 $ 6,738 $ 3,017
Seligman Henderson Global Growth Opportunities Fund* 6,000* -- --
Seligman Henderson Global Smaller Companies Fund 37,800 12,389 5,500
Seligman Henderson Global Technology Fund 108,100 476** --
</TABLE>
* For the period November 1, 1995 (commencement of operations)
to January 31, 1996.
** For the period May 23, 1994 (commencement of opera-
tions) to October 31, 1994.
ITEM 32. UNDERTAKINGS - The Registrant undertakes (1) to furnish a copy
of the Registrant's latest annual report, upon request and
without charge, to every person to whom a prospectus is
delivered and (2) if requested to do so by the holders of at
least ten percent of its outstanding shares, to call a meeting
of shareholders for the purpose of voting upon the removal of
a director or directors and to assist in communications with
other shareholders as required by Section 16(c) of the
Investment Company Act of 1940.
<PAGE>
File No. 33-44186
811-6485
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. 22 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 20th day of November, 1996.
SELIGMAN HENDERSON GLOBAL FUND SERIES, 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. 22 to its
Registration Statement has been signed below by the following persons in the
capacities indicated on November 20, 1996.
Signature Title
--------- -----
/s/ William C. Morris Chairman of the Board (Principal
- --------------------- executive officer) and Director
William C. Morris*
/s/ Brian T. Zino President and Director
- ---------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer (Principal financial and
- --------------------- and accounting officer)
Thomas G. Rose
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director ) /s/ Brian T. Zino
-----------------
Betsy S. Michel, Director ) Brian T. Zino, Attorney-in-fact*
James C. Pitney, Director )
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
File No. 33-44186
811-6485
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
POST-EFFECTIVE AMENDMENT NO. 22
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
24(b)(1) Form of Amended and Restated Articles of Incorporation
of Registrant
24(b)(8) Custody Agreement, dated May 1, 1996
24(b)(11) Consent of Auditors
24(b)(17) Financial Data Schedules for Seligman Henderson Emerging
Markets Growth Fund's Class A, B and D shares
EXHIBIT 24(b)(1)
[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 (the
"Filed Documents"). For clarity of presentation, each of the Seligman
Henderson International Fund Class, the Seligman Henderson Emerging
Markets Growth Fund Class, the Seligman Henderson Global Growth
Opportunities Fund Class, the Seligman Henderson Global Smaller
Companies Fund Class and the Seligman Henderson Global Technology Fund
Class is referred to in this restatement as a "Series" although in the
Filed Documents each is referred to as a "Class".]
ARTICLES OF AMENDMENT AND RESTATEMENT
of
ARTICLES OF INCORPORATION
of
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
FIRST: I, the subscriber, Linda A. Mahon, whose post office address is 130
Liberty Street, 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 HENDERSON GLOBAL FUND SERIES, 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 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 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 Corporation Securities be fully
paid or subject to further payments, and to make payments thereon as called for
or in advance of calls or otherwise;
<PAGE>
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 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
Articles of Incorporation, but shall be regarded as independent purposes,
objects and powers and the enumeration of specific purposes, objects and powers
shall not be construed to limit or restrict in any manner the meaning of general
terms or the general powers of the Corporation now or hereafter conferred by the
laws of the State of Maryland, nor shall the expression of one thing be deemed
to exclude another, although it be of like nature, not expressed.
Nothing herein contained shall be construed as giving the Corporation any
rights, powers or privileges not permitted to it by law.
FOURTH: Principal Office. The post office address of the principal office
of the Corporation in this State is c/o The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202. The resident agent of the Corporation
is The Corporation Trust Incorporated, the post office address of which is 32
South Street, Baltimore, Maryland 21202. Said resident agent is a Corporation of
the State of Maryland.
FIFTH: Capital Stock. A. The total number of shares of all classes of stock
which the Corporation has authority to issue is 2,000,000,000 shares of common
stock ("Shares") of the par value of $.001 each having an aggregate par value of
$2,000,000.00. The Shares shall initially constitute five series known as:
"Seligman Henderson International Fund Class", consisting of
400,000,000 shares;
"Seligman Henderson Emerging Markets Growth Fund Class", consisting of
100,000,000 shares;
"Seligman Henderson Global Growth Opportunities Fund Class", consisting of
500,000,000 shares;
"Seligman Henderson Global Smaller Companies Fund Class", consisting of
500,000,000 shares; and
"Seligman Henderson Global Technology Fund Class", consisting of
500,000,000 shares
(such five series, together with any further series of Shares from time to time
created by the Board of Directors, being herein referred to as "Series"). The
Board of Directors of the Corporation shall have the power and authority to
further classify or reclassify any unissued shares from time to time by setting
or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
-2-
<PAGE>
conditions of redemption of such unissued Shares. Upon the creation of any
further series, the Board of Directors shall, for purposes of identification,
also have the power and authority to designate a name for the existing series
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 Series of Shares is as follows, unless
otherwise set forth in Articles Supplementary filed with the Maryland State
Department of Assessments and Taxation describing any further Series from time
to time created by the Board of Directors:
(i) Assets Belonging to Series. All consideration received by the
Corporation for the issue or sale of Shares of a particular Series,
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 Series 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 Items (as
hereinafter defined) allocated to that Series as provided in the following
sentence, are herein referred to as "assets belonging to" that Series. 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 Series (collectively "General Items"), the Board of
Directors shall allocate such General Items to and among any one or more of
the Series 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 Items
so allocated to a particular Series shall belong to that Series. Each such
allocation by the Board of Directors shall be conclusive and binding upon
the stockholders of all Series for all purposes.
(ii) Liabilities Belonging to Series. The assets belonging to each
particular Series shall be charged with the liabilities of the Corporation
in respect of that Series and with all expenses, costs, charges and
reserves attributable to that Series, and shall be so recorded upon the
books of account of the Corporation. Such liabilities, expenses, costs,
charges and reserves, together with any General Items (as hereinafter
defined) allocated to that Series as provided in the following sentence, so
charged to that Series are herein referred to as "liabilities belonging to"
that Series. 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 Series (collectively "General
Items"), the Board of Directors shall allocate and charge such General
Items to and among any one or more of the Series 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 Items so allocated and
charged to a particular Series shall belong to that Series. Each such
allocation by the Board of Directors shall be conclusive and binding upon
the stockholders of all Series for all purposes.
-3-
<PAGE>
(iii) Dividends. Dividends and distributions on Shares of a particular
Series may be paid to the holders of Shares of that Series at such times,
in such manner and from such of the income and capital gains, accrued or
realized, from the assets belonging to that Series, after providing for
actual and accrued liabilities belonging to that Series, as the Board of
Directors may determine.
(iv) Liquidation. In event of the liquidation or dissolution of the
Corporation, the stockholders of each Series that has been created shall be
entitled to receive, as a Series, when and as declared by the Board of
Directors, the excess of the assets belonging to that Series over the
liabilities belonging to that Series. The assets so distributable to the
stockholders of any particular Series shall be distributed among such
stockholders in proportion to the number of Shares of that Series 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
Series thereof and all Shares of all Series shall vote as a single class
("Single Series Voting"); provided, however, that (a) as to any matter with
respect to which a separate vote of any Series 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
Series shall apply in lieu of Single Series 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 Series, then, subject to (c) below, the
Shares of all other Series shall vote as a single class; and (c) as to any
matter which does not affect the interest of a particular Series, only the
holders of Shares of the one or more affected Series shall be entitled to
vote.
(vi) Equality. All Shares of each particular Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to that Series), and each Share of
any particular Series shall be equal to each other Share of that Series;
but the provisions of this sentence shall not restrict any distinctions
permissible under these Articles of Incorporation that may exist with
respect to stockholder elections to receive dividends or distributions in
cash or Shares of the same Series or that may otherwise exist with respect
to dividends and distributions on Shares of the same Series.
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 Series, 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 Series, determined in the
manner set out in these Articles of Incorporation or in any amendment thereto.
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 but unissued Shares of the Corporation.
All persons who shall acquire Shares shall acquire the same subject to the
provisions of these Articles of Incorporation.
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D. The terms of each Series as further set by the Board of Directors are as
follows:
(1) The common stock of each Series shall have three sub-classes of shares,
which shall be designated Class A Common Stock, class B Common Stock and Class D
Common Stock. The number of authorized shares of Class A Common Stock, of Class
B Common Stock and of Class D Common Stock of each Series shall each consist of
the sum of x and y where: x equals the issued and outstanding shares of such
sub-class; and y equals one-third of the authorized but unissued shares of
Common Stock of all sub-classes of that particular class; provided that at all
times the aggregate authorized, issued and outstanding shares of Class A, Class
B and Class D Common Stock of a particular Series shall not exceed the
authorized number of shares of Common Stock of that Series (i.e., 500,000,000
shares of common stock for each Series, except the Seligman Henderson
International Fund Class which consists of 400,000,000 shares of common stock
and the Seligman Henderson Emerging Markets Growth Fund Class which consists of
100,000,000 shares of common stock, until changed by further action of the Board
of Directors in in accordance with Section 2-208.1 of the Maryland General
Corporation Law or a successor provision); and, in the event application of the
formula above would result, at any time, in fractional shares, the applicable
number of authorized shares of each sub-class shall be rounded down to the
nearest whole number of shares of such sub-class. Any sub-class of common stock
of a Series shall be referred to herein individually as a "Class" and
collectively, together with any further sub-class or sub-classes from time to
time established, as the "Classes."
(2) All Classes shall represent the same interest in the Corporation and
have identical voting, dividend, liquidation, and other rights; provided,
however, that notwithstanding anything in the charter of the to the contrary:
(a) Class A Shares may be subject to such front-end sales loads as may
be established by the Board of Directors from time to time accordance with
the Investment Company Act of 1940, as amended (the "Investment Company
Act") and applicable rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD").
(b) Class D shares may be subject to such contingent deferred sales
charge as may be established from time to time by the Board of Directors in
accordance with the Investment Company Act and applicable rules and
regulations of the NASD.
(c) Expenses related solely to a particular Class (including, without
limitation, distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement, plan
or other arrangement, however designated, 400 which may differ between the
Classes) shall be borne by that Class and shall be appropriately reflected
(in the manner determined by the Board of Directors) in the net asset
value, dividends, distribution and liquidation rights of the shares of that
Class.
(d) At such time as shall be permitted under the Investment Company
Act, any applicable rules and regulations thereunder and the provisions of
any exemptive order applicable to the Corporation, and as may be determined
by the Board of Directors and disclosed in the then current prospectus for
a Series, shares of a particular Class of a Series may be automatically
converted into shares of another Class of a Series; provided, however, that
such conversion shall be subject to the continuing availability of an
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opinion of counsel to the effect that such conversion does not constitute a
taxable event under federal income tax law. The Board of Directors, in its
sole discretion, may suspend any conversion rights if such opinion is no
longer available.
(5) As to any matter with respect to which a separate vote of any Class of
a Series is required by the Investment Company Act or by the Maryland General
Corporation Law (including, without limitation, approval of any plan, agreement
or other arrangement referred to in subsection (c) above), such requirement as
to a separate vote by that Class of a Series shall apply, and, if permitted by
the Investment Company Act or any rules, regulations or orders thereunder and
the Maryland General Corporation Law, the Classes shall vote together as a wazzu
single Class on any such matter that shall have the same effect on each such
Class. As to any matter that does not affect the interest of a particular Class,
only the holders of shares of the affected Class shall be entitled to vote.
SIXTH: Directors. The initial number of directors of the Corporation shall
be two, and the names of those who shall act as such until the first annual
meeting and until their successors are elected and qualified are as follows:
William C. Morris and Ronald T. Schroeder. The number of directors may be
changed from time to time in such lawful manner as the By-Laws of the
Corporation shall provide. Unless otherwise provided by the By-Laws of the
Corporation, the directors of the Corporation need not be stockholders.
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 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 Series 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 Series (including treasury
Shares) shall not be less than the net asset value (determined as provided
in Article NINTH hereof) per Share of that Series outstanding at the time
(determined by the Board of Directors) as of which the computation of such
net asset value shall be made.
2. To authorize the execution and performance by the Corporation of an
agreement or agreements, which may be exclusive contracts, with Seligman
Financial Services, Inc., a Delaware corporation, or any other person, as
distributor, providing for the distribution of Shares of any Series.
3. To specify, in instances in which it may be desirable, that Shares
of any Series repurchased by the Corporation are not acquired for
retirement and to specify the purposes for which such Shares are
repurchased.
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4. 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 the corporation ("Seligman")
providing for the investment and other operations of the Corporation.
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. The presence in person or by proxy
of the holders of one-third of the Shares of all Series 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 Articles of Incorporation and except that where the holders of
Shares of any Series are entitled to a separate vote as a Series (a "Separate
Series") or where the holders of Shares of two or more (but not all) Series are
required to vote as a single Series (a "Combined Series"), the presence in
person or by proxy of the holders of one-third of the Shares of that Separate
Series or Combined Series, 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 Series, a Separate Series or a Combined Series, 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 Series, such
Separate Series or such Combined Series, 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 Shares
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 Series or of the affected Series, 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, these 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 Series or of the Shares of a particular Series, 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 Series or of such Series, 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 Series shall be entitled at his option to require the
Corporation to redeem all or any part of the Shares of that Series owned by
such holder, upon written or telegraphic request to the Corporation or its
designated agent, accompanied by surrender of the certificate or
certificates for such shares, or such other evidence of ownership as shall
be specified by the Board of Directors, for the proportionate interest per
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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 Series
determined as provided in Article NINTH hereof less the amount of any
applicable contingent deferred sales load payable on such redemption),
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 Series, for the proportionate interest per Share in the
assets of the Corporation belonging to that Series, or the cash equivalent
thereof (being the net asset value per Share of that Series 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 Series, 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
and Exchange Act of 1934.
B. The following provisions shall be applicable with respect to redemptions
and repurchases of Shares of any Series pursuant to paragraph A hereof:
1. The time as of which the net asset value per Share of a particular
Series 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. Certificates for Shares of any Series 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.
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 the
certificate or certificates for the Shares of the particular Series 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 Series 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
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<PAGE>
that Series. In making any such payment in whole or in part in Securities
or other assets of the Corporation belonging to that Series, 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 Series 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 Series redeemed or
repurchased by the Corporation as provided in this Article to receive
dividends thereon and all other rights of such holder with respect to such
Shares shall forthwith cease and terminate from and after the time as of
which the redemption or repurchase price of such Shares has been determined
(except the right of such holder to receive (a) the redemption or
repurchase price of such Shares from the Corporation or its designated
agent, 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 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 Series
shall be determined by or pursuant to the direction of the Board of Directors in
accordance with the following provisions:
A. Such net asset value per Share of a particular Series on any day shall
be computed as follows:
The net asset value per Share of that Series shall be the quotient
obtained by dividing the "net value of the assets" of the Corporation
belonging to that Series 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 Series shall be the "gross value" of the assets belonging to
that Series after deducting the amount of all expenses incurred and accrued
and unpaid belonging to that Series, 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 Series 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 Series 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
Series 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.
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B. The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are deemed by it to be necessary or desirable and are consistent with
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 practice, as to the
amount of the assets, obligations or liabilities of the Corporation belonging to
any Series, as to the amount of the net income of the Corporation belonging to
any Series for any period or amounts that are any time legally available for the
payment of dividends of shares of any Series, as to the amount of any reserves
or charges set up with respect to any Series and the propriety thereof, as to
the time of or purpose for creating any reserves or charges with respect to any
Series, as to the use, alteration or cancellation of any reserves or charges
with respect to any Series (whether or not any obligation or liability for which
such reserves or charges shall have been created or shall have been paid or
discharged or shall be then or thereafter required to be paid or discharged), as
to the price or closing bid or asked price of any security owned or held by the
Corporation and belonging to any Series, as to the market value of any security
or fair value of any other asset owned by the Corporation and belonging to any
Series, as to the number of Shares of any Series outstanding or deemed to be
outstanding, as to the impracticability or impossibility of liquidating
Securities in orderly fashion, as to the extent to which it is practicable to
deliver the proportionate interest in the Securities and other assets of the
Corporation belonging to any Series represented by any Shares belonging to any
Series 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 Series past, present and future, and Shares of all Series are
issued and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid. No provision of these Articles of
Incorporation shall be effective to (a) bind any person to waive compliance with
any provision of the Securities Act of 1933 or the Investment Company Act of
1940 or of any valid rule, regulation or order of the Securities and Exchange
Commission thereunder, or (b) protect or purport to protect any director or
officer of the Corporation against any liability to the Corporation or its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ELEVENTH: Liabilities of Director or Officer. A director or officer of the
Corporation shall not be liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a Director or Officer, except
to the extent such exemption from liability or limitation thereof is not
permitted by law (including the Investment Company Act of 1940 as currently in
effect or as the same may hereafter be amended).
No amendment, modification or repeal of this Article ELEVENTH shall
adversely affect any right or protection of a Director or Officer that exists at
the time of such amendment, modification or repeal.
TWELFTH: Indemnification of Directors, Officers and Employees. The
Corporation shall indemnify to the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended) any person made or threatened to be made a party to any
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action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a Director, Officer or employee of the Corporation or
serves or served at the request of the Corporation any other enterprise as a
Director, Officer or employee. To the fullest extent permitted by law (including
the Investment Company Act of 1940 as currently in effect or as the same may
hereafter be amended), expenses incurred by any such person in defending any
such action, suit or proceeding shall be paid or reimbursed by the Corporation
promptly upon receipt by it of an undertaking of such person to repay such
expenses if it shall ultimately be determined that such person is not entitled
to be indemnified by the Corporation. The rights provided to any person by this
Article shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a Director,
Officer or employee as provided above. No amendment of this Article TWELFTH
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 TWELFTH, the
term "Corporation" shall include any predecessor of the Corporation and any
constituent corporation (including any constituent of a constituent) absorbed by
the Corporation in a consolidation or merger; the term "other enterprise" shall
include any corporation, partnership, joint venture, trust or employee benefit
plan; service "at the request of the Corporation" shall include service as a
Director, Officer or employee of the Corporation which imposes duties on, or
involves services by, such Director, Officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed to
be indemnifiable expenses; and action by a person with respect to any employee
benefit plan which such person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be deemed to be action not
opposed to the best interests of the Corporation.
THIRTEENTH: Amendments. The Corporation reserves the right to take any
lawful action and to make any amendment of these Articles of Incorporation,
including the right to make any amendment which changes the terms of any Shares
of any Series 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
Series 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 Series or of the
affected Series, 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
Articles of Incorporation in any form, manner or substance now or hereafter
authorized or permitted by law.
I acknowledge this document to be my act, and state under penalties of
perjury that with respect to all matters and facts therein, to the best of my
knowledge, information and belief such matters and facts are true in all
material respects.
DATE: November 21, 1991 BY: /S/ LINDA A. MAHON
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EXHIBIT 24(b)(8)
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 HENDERSON GLOBAL FUND SERIES, 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
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writing to the contrary by the Client during the ninety (90) day notice period,
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 wazzu 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 in definitive form and the exchange of
3
<PAGE>
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
5
<PAGE>
Agreement and each 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 Custodian harmless from any liability or
6
<PAGE>
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 HENDERSON GLOBAL FUND
SERIES, 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Work Station Account Workstation Sessions
User I.D. Mnemonic Number TE TCC SL FE CM MA TD
- --------- -------- ------ -- --- -- -- -- -- --
</TABLE>
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
CONSENT OF AUDITORS
Seligman Henderson Global Fund Series, Inc.:
We consent to the use in this Post-Effective Amendment No. 22 to Registration
Statement No. 33-44186 of our report dated May 31, 1996, incorporated by
reference in INDEPENDENT the Statement of Additional Information, which is part
of such Registration Statement. We consent to the incorporation by reference in
this Registration Statement of our also report dated December 1, 1995, appearing
in the Annual report to shareholders of the Seligman Henderson Global Technology
Fund, Seligman Henderson Global Smaller Companies Fund, and Seligman
International Fund for the year ended October 31, 1995.
DELOITTE & TOUCHE LLP
New York, New York
November 18, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>051
<NAME> SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-28-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 38506
<INVESTMENTS-AT-VALUE> 38559
<RECEIVABLES> 843
<ASSETS-OTHER> 5867
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 45269
<PAYABLE-FOR-SECURITIES> 1560
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 261
<TOTAL-LIABILITIES> 1821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43691
<SHARES-COMMON-STOCK> 2794<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> (151)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (144)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53
<NET-ASSETS> 19715<F1>
<DIVIDEND-INCOME> 47<F1>
<INTEREST-INCOME> 38<F1>
<OTHER-INCOME> (17)<F1>
<EXPENSES-NET> (119)<F1>
<NET-INVESTMENT-INCOME> (51)<F1>
<REALIZED-GAINS-CURRENT> (144)
<APPREC-INCREASE-CURRENT> 53
<NET-CHANGE-FROM-OPS> (242)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2990<F1>
<NUMBER-OF-SHARES-REDEEMED> (196)<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 43449
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 31<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (119)<F1>
<AVERAGE-NET-ASSETS> 15652<F1>
<PER-SHARE-NAV-BEGIN> 7.14<F1>
<PER-SHARE-NII> (.02)<F1>
<PER-SHARE-GAIN-APPREC> (.07)<F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.05<F1>
<EXPENSE-RATIO> 2.22<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A only. All other data are fund level.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>052
<NAME> SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-28-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 38506
<INVESTMENTS-AT-VALUE> 38559
<RECEIVABLES> 843
<ASSETS-OTHER> 5867
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 45269
<PAYABLE-FOR-SECURITIES> 1560
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 261
<TOTAL-LIABILITIES> 1821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43691
<SHARES-COMMON-STOCK> 1465<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> (151)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (144)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53
<NET-ASSETS> 10317<F1>
<DIVIDEND-INCOME> 22<F1>
<INTEREST-INCOME> 18<F1>
<OTHER-INCOME> (7)<F1>
<EXPENSES-NET> (75)<F1>
<NET-INVESTMENT-INCOME> (42)<F1>
<REALIZED-GAINS-CURRENT> (144)
<APPREC-INCREASE-CURRENT> 53
<NET-CHANGE-FROM-OPS> (242)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1491<F1>
<NUMBER-OF-SHARES-REDEEMED> (26)<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 43449
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (75)<F1>
<AVERAGE-NET-ASSETS> 7355<F1>
<PER-SHARE-NAV-BEGIN> 7.14<F1>
<PER-SHARE-NII> (.03)<F1>
<PER-SHARE-GAIN-APPREC> (.07)<F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.04<F1>
<EXPENSE-RATIO> 3.00<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B only. All other data are fund level.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>054
<NAME> SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND CLASS D
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-28-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 38506
<INVESTMENTS-AT-VALUE> 38559
<RECEIVABLES> 843
<ASSETS-OTHER> 5867
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 45269
<PAYABLE-FOR-SECURITIES> 1560
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 261
<TOTAL-LIABILITIES> 1821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43691
<SHARES-COMMON-STOCK> 1905<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> (151)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (144)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53
<NET-ASSETS> 13417<F1>
<DIVIDEND-INCOME> 30<F1>
<INTEREST-INCOME> 23<F1>
<OTHER-INCOME> (10)<F1>
<EXPENSES-NET> (101)<F1>
<NET-INVESTMENT-INCOME> (58)<F1>
<REALIZED-GAINS-CURRENT> (144)
<APPREC-INCREASE-CURRENT> 53
<NET-CHANGE-FROM-OPS> (242)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1978<F1>
<NUMBER-OF-SHARES-REDEEMED> (73)<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 43449
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 19<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (101)<F1>
<AVERAGE-NET-ASSETS> 9820<F1>
<PER-SHARE-NAV-BEGIN> 7.14<F1>
<PER-SHARE-NII> (.03)<F1>
<PER-SHARE-GAIN-APPREC> (.07)<F1>
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.04<F1>
<EXPENSE-RATIO> 3.00<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class D only. All other data are fund level.
</FN>
</TABLE>
